How Much Do Rehab Owners Make?

Considering Compensation in the Behavioral Health Industry

Opening a rehab center can be an extremely rewarding endeavor – especially for those who have battled substance abuse in the past and emerged victorious. Many would imagine that owning any number of addiction treatment centers to be a lucrative business practice – especially with the constantly growing need for addiction treatment services.

And while it’s true – there’s no shortage of clientele for an owner in the industry – there’s also an unrelenting amount of revenue that goes toward keeping the organization operational. Ultimately, owning an addiction treatment center is an admirable and worthy goal for anyone looking to give back to the community. But how much do rehab owners make?

The answer depends on several variables we will outline below.

That said, careful planning goes into the process of opening rehab centers – and you must have your ducks in a row. Regulatory compliance, certifications, staff challenges, and a varying degree of compensation models – all require efficient planning, and in many cases, expert consultation.

In this article, Ads Up Marketing provides an inside look at the profit potential for addiction treatment facility owners, and how we can help you optimize the business function of your treatment center,

The Need for Addiction Treatment Centers

The most positive aspect of any potential newcomer to the addiction treatment industry is the need for these services. Currently, over 17,000 addiction treatment centers are open in the United States. Almost 4 million people are actively participating at rehab centers – but people are still being turned away for addiction treatment because of a lack of availability.

Let’s face it – when someone decides to enter addiction treatment, giving them the news that they must wait is damaging to their recovery efforts. Many times it’s a split-second decision, and giving them the alternative of not entering a rehab center – well, we know what the outcome of this situation typically entails.

Understanding the need for drug rehab programs demonstrates the existence of a profitable business – but you must create a profitable business model. Let’s dive deeper and look at the potential for those entering the addiction treatment industry.

How Much Do Owners of Rehab Centers Profit?

A recent study highlights the fact that the substance abuse recovery industry is worth around $42 billion. In addition, the industry has experienced annual growth of around 5% per year. A rehab center typically charges anywhere between $15,000 and $75,000 for each client per month.

That’s quite an impressive number. But you must also consider the fact that it’s a wide-ranging window, and the costs of your rehab center can quickly fill mount – cutting into the monthly intake for services rendered.

Before we can create a clear picture regarding the profitability of rehab centers for owners, we must first look at the costs associated with operating a rehab center legally.

Costs Associated With Opening a Rehab Center

There are numerous expenses associated with owning and operating a rehab center. You have your monthly expenses that you’ll need a lot of liquidity to account for – and then your startup costs.

First, let’s go a little more in-depth regarding the initial costs of opening your rehab center. The location of your rehab center will determine a large amount of what your additional costs look like. What do we mean by this?

Well, states and cities have zoning laws when it comes to opening businesses. Each different business requires a different amount regarding permitting and licensing – so location plays a key role in your initial investment in a drug rehab center.

Allocating a Budget for Digital Marketing

Though this may not be the first consideration for many facility owners, the importance of marketing your addiction treatment center cannot be overstated. The reason this expense leads off our list is that many facilities overlook the core nature of digital marketing for effective promotion, and are left without budget space allocated for essential services.

A proactive facility owner will realize that the money invested in marketing will provide an ROI much greater than simply designing a sleek rehab website and waiting for clients to find it online. Treatment center websites are rarely, if ever, a case of ‘build it and they will come.’

Instead, a regimented array of marketing strategies is required to make a rehab owner’s facility as visible as possible online. In turn, this will create the opportunity for increased revenues and income for facility ownership.

Deciding On Programs Offered and Using Space Wisely

You’ll also need to decide what levels of care you’d like to provide. A drug rehab center normally offers four levels of specialized services, including inpatient, outpatient, partial hospitalization, and intensive outpatient. Rehab centers that offer inpatient services require a significant amount of space.

Typically, a facility must have enough room to accommodate anywhere from 12 to 30 beds or more. Keep in mind that if you decide to buy or build the property, you’re on the hook for all the building expenses. This is likely to be a multi-million dollar investment in most areas of the country. You’ll also need to secure a source of funding to help you back the construction of your substance abuse treatment center.

Alternatively, rehab centers may opt to rent the property. This might be the best course of action for treatment facilities that are just getting their foot in the door. This allows you to try your hand at substance abuse treatment without investing a huge lump sum.

The Legal Considerations of Owning an Alcohol and Drug Rehab

After deciding on a location and finding (or constructing) a building, your drug rehab center must be legally sound before moving forward and opening for business. This means all of your treatment programs must be certified and approved. Your drug rehab center must also be inspected and receive the proper certifications. Inspections are conducted on nearly every facet of your facility.

Initially, you’ll need to turn your focus toward specific state codes. This can include your building code and additional guidelines you’re expected to abide by. Then, you’ll need to secure a behavioral health license. This essentially permits you to deploy certain treatment programs.

Finally, accreditation from CARF and/or The Joint Commission are vital components to your startup. Your insurance coverage may have some type of clause requiring you to obtain these forms of recognition, in some cases as part of their credentialing process. This will set you back at least another $3,000 to $5,000 for fees alone, so be sure to set aside the allotted amount.

Your Staff: Choosing the Right Rehab Personnel

Your treatment staff are the backbone of your operation. Without the proper staff in place, rehab programs are doomed to fail. However, with the proper personnel, they can drastically change the entire outlook for your drug and alcohol treatment center. All of your staff must be certified in addiction medicine, and you’ll also need to hire a physician and nurses if you provide medical detox.

You’ll also need general counselors and other hands-on staff. Maintenance, custodians, and other random employees help round out your workforce and ensure everything runs smoothly.

As a general rule, set aside anywhere between $30,000 and $50,000 for each standard employee (maintenance, custodial staff, reception, etc) and upwards of $200,000 per year for specialized positions like doctors and psychiatrists. Clerical workers and administrative staff are also required to handle the back-end portion of your business.

Selecting Addiction Treatment Approaches

Keep in mind, your therapeutic modalities are one of the next-most important dynamics of your facility. Rehab programs must have well-drawn-out therapeutic modality plans to give clients a general idea of what their options are for treatment.

Drug rehabs without these plans are guaranteed to sink, so make sure you put the proper effort into purchasing technology, specialty literature, and educational packets to deploy for your clients.

You’ll want to consider adding programs for all of the following areas. This ensures your staff is fully trained and your facility has programs surrounding each of these areas so you can present them as offerings for future clients:

12-Step Facilitation Model

AA or Alcoholics Anonymous treatment model. This is a type of group therapy you can make available to clients. 12-step alternatives such as SMART Recovery and others can also be offered, either alongside or instead of Anonymous programming.

Group therapy

Multiple types of group therapy can be effective, depending on the client’s personalized treatment plan and background regarding addiction. It’s also a great way to create a sense of fellowship throughout your community.

Cognitive behavioral therapy (CBT) and Dialectical behavioral therapy (DBT)

These two forms of therapy are gaining popularity daily with clients at programs everywhere. Currently, these two forms of behavioral therapy are garnering some of the most successful results among clients in inpatient rehab.

Systemic family counseling

Family counseling can be an impactful way and attractive program offering at your treatment center. patient outcomes regarding family end up much more favorable when the facility they enter offers some type of family dynamic as part of treatment.

Yoga and meditation

Leaning more toward offering holistic options? Yoga, meditation, art therapy, equine therapy – all of these are excellent ways to offer clients non-traditional forms of therapy while combining them with traditional evidence-based practices. Holistic forms of treatment are becoming more popular daily, and it’s a great idea to consider adding them as part of your options for client recovery.

Trauma-informed care

Trauma-informed care is a powerful type of therapy aimed at those who experienced some type of physical or emotional trauma that drives their addiction. Many clients who experienced tours of active combat often fall under this category. PTSD and other ailments are commonly associated with this treatment, so you may want to consider this a must-have form of therapy at your location.

Medication-assisted treatment (MAT)

This is often one of the most popular offerings in the addiction treatment field. Such facilities include Suboxone clinics, methadone providers, and hybrid forms of MAT programs.

Clients who have challenges with opioids such as heroin or fentanyl often use this as their go-to form of therapy, allowing them to function without worrying about suffering the painful symptoms of withdrawal.

Just keep in mind that this requires dispensing prescription medication, and in many states, will require additional certification or compliance paperwork.

Insurance Coverage for Your Clients (and Staff)

As the owner of any number of drug rehabs, proper insurance coverage is of the utmost importance. Your insurance policy should cover clients in the event of an accident and stop you from being held personally responsible should a client end up taking you to court or another emergency arises.

You must also consider offering insurance for all of your employees and staff. If you want to operate the most professional operation possible, these intangibles are critical to the success of your substance use treatment center. The more you have to offer your staff (and clients), the better reputation you’ll have and the higher your odds of success.

How Much Can a Rehab Owner Profit?

So, understanding all of these dynamics and expenses, what’s possible as the owner of a substance abuse treatment facility? Well – that all depends on how you budget your expenses and how you structure your company, as well as your locations and total number of beds.

It can also depend heavily on your census, agreements with insurance providers, and reimbursement schedule. The truth is, there is no concrete figure when it comes to owning a rehab, or even when it comes to selling a rehab facility.

You could potentially earn six figures a year with successful facilities, or end up in the red due to inefficient operations and unexpected obstacles.

In the end, the answer ultimately rests on how efficient you are with planning and operating. And with all of the dynamics that you’re responsible for, covering all of your bases can prove to be a massive challenge. This is why you need a partner like Ads Up Marketing to come in and help you captain the operation effectively and successfully.

Ads Up Marketing Can Help Launch a Successful Rehab

At Ads Up Marketing, our specialty is helping substance abuse treatment owners experience success. Through our group of experts, we’re able to offer our clients specialized help to service specific areas of need, allowing you to obtain the results you deserve from your substance abuse treatment facility. We offer services in the following areas:

• Budgeting and revenue management
• Certification proof and organization
• All facets of rehab marketing
• Media Relations and reputation management
• and much more!

For more information on how we can help you get your new treatment center successfully off the ground – or help optimize and an already existing location – contact us so we can set up an audit and get the ball rolling today!