ALCOHOLISM
& DRUG ABUSE WEEKLY
MONDAY, FEBRUARY 2,
2004
Front page story
FAST-GROWING CRC HEALTH ACQUIRES METHADONE PROVIDER;
COMPANY TO SEEK ROLE IN NATIONAL ISSUES
by Valerie Canady
CRC Health Group, Inc., the nation's largest
for-profit provider of residential and outpatient addiction treatment
services, announced in December the acquisition of National Specialty
Clinics, Inc. (NSC), one of the most prominent providers of
methadone-based treatment for opiate addiction.
This acquisition renders San Jose, Calif.-based CRC
Health the nation's largest provider of methadone treatment, with
services offered to 20,000 methadone patients daily.
Company officials say the acquisition supports CRC's
strategy of building a nationwide network of treatment
alternatives to provide increased access to high-quality care for those
with substance abuse problems.
CRC's acquisition of Comprehensive Addiction
Programs Inc. (CAPS) last year made the fast-growing company the
largest private addiction treatment provider in the country (see ADAW,
March 3, 2003).
The CRC system currently includes 65 traditional
residential and outpatient treatment facilities, medically-assisted
treatment for opiate addiction, and online substance abuse treatment
programs under the eGetGoing umbrella. Services also include detoxification, partial hospitalization and day treatment.
The Nashville, Tenn.-based NSC operates a group of outpatient opiate
treatment clinics. NSC treats more than 9,000 patients and employs 350
professional staff, including physicians, pharmacists, counselors and
nurses. It owns and operates 17 methadone-based clinics in six states:
Georgia, Illinois, Indiana, Kansas, Tennessee and West Virginia.
The acquisition of NSC allows CRC to expand its services into areas of
the country where it previously had no presence. With the acquisition,
CRC now owns a total of 82 facilities, including 47 methadone clinics,
in 22 states, according to Barry Karlin, the company's chairman and
chief executive.
In addition to expanding CRC's regional coverage, the NSC acquisition
improves the company's economics and expands its array of services,
Karlin told ADAW. "NSC is an excellent company all around. High
quality clinics have been around for quite some time. At the end of the day, health care is about
high-quality treatment."
The acquisition also "offers new resources to our particular forms of
treatment," including use of the relatively new medication
buprenorphine to treat opiate addiction, Karlin said. CRC also
plans to offer new programs to treat young adults, he said. "The
linkage of NSC's clinics to the CRC Health Group system allows
methadone-based treatment to be connected to a greater scope of
treatment services," said David Gnass, NSC chief executive.
Gnass added, "CRC is on the forefront of developing innovative
treatment services. Our patients now will have access to all that CRC
provides through its ever-growing capacity."
Although he would not disclose the acquisition price for NSC, Karlin
said both equity and debt financing were involved in the deal.
"We financed both equity and debt [and] raised well over $40 million in
new equity," from a variety of sources, Karlin said. The company also
has raised $130 million through several debt financings and
restructurings, he said.
Future opportunities Karlin
said CRC is always looking for new opportunities, in both the
traditional residential and methadone treatment arenas. "We are a
company that is acquisition-oriented," said Karlin, with the goal of
enabling everyone
to obtain access to treatment.
CRC has "plenty of room to grow and expand, even though we're the
largest provider in the residential and methadone areas," said Karlin.
"In the long scheme of things, we're still a very small part of this
industry."
Karlin said one of CRC's facilities, the Life Center of Galax chemical
dependency facility in Galax, Va., "cross-references" methadone
treatment with its residential program if patients are in need of both
types of services, a model he'd like to see
expanded to other clinics.
CRC operates the country's only accredited Internet-based treatment
system for addiction. Both eGetgoing and the adolescent program
teenGetgoing offer interactive group counseling through live audio and
video (see ADAW, Oct. 6, 2003 and Nov.
18, 2002).
Karlin said he hopes to get more involved in field-wide issues
affecting the industry, as evidenced by his company's recent decision
to become a member of the National Association of Addiction Treatment
Providers (NAATP). "It's an excellent organization," he said.
"It's important we play a role and get more involved in national
issues," he said. "We have some strong ideas we'd like to see happen in this industry."
Near the top of this list would be closure of the estimated treatment
gap of 13 million addicts, Karlin said. "The national issue is
persuading the nation that chemical dependency is a disease … the
single biggest factor preventing society in general from paying for
treatment. Even though [it's been] accepted scientifically as a disease
for several decades, the person on the street has yet to see it."
Karlin believes it's important that a person's quality of life be used
as the primary measure of determining whether treatment is successful.
"We want that to become the national standard — quality-of-life
measures. That's vitally important."
He said his hope is for "CRC and all the providers in the country to
make a real dent, to make a difference in some of these issues."
