In response to the original post:
Opioid replacement therapy is a "Cash Cow" and has become a monopoly in itself. Methadone addicts have proven time and again that they are more willing to go without electricity and even food to get the opiates they need. So methadone clinics are a solid business and a good place to park your money because it is highly leveraged subjected to high rates of return.
Looking to change its face and get away from the word “clinic†the opiate divisions are moving to the name “CRC’s outpatient divisionâ€. The clinics from now on will be comprehensive treatment centers, offering outpatient detox, to handle the fast growing demand for specialty methamphetamine care. In October, CRC admitted its first two patients into outpatient treatment at the methadone clinics.
If they can change the image of the opioid type clinics they may make a better impression on the neighborhoods and make it easier to be accepted.
But recent filings with the Securities and Exchange Commission reveal that methadone maintenance has for the last several years been a very central mainstay of CRC’s operations........ The filings also reveal that methadone is by far the most profitable segment of CRC’s now far flung addiction treatment business. ....... CRC grew its methadone operation by about 130 percent, with annual opiate revenues reaching almost $84 million, which equaled 40 percent of CRC’s sales ...... However, during the same period, operating profits from the methadone segment soared by 240 percent, suggesting that CRC has been able to bring substantial economy of scale efficiencies to the business. Marketing prowess also comes into play, as 82 percent of clients are private pay, with clinics averaging 428 clients each, twice the industry norm. And the profitability of CRC’s methadone business far outstrips that of its residential segment, with operating margins from the opiate division reaching an eyepopping 37 percent ...... versus the 26 percent operating margins registered by residential treatment. Despite Karlin’s protestation that debt leverage at CRC has been “modest,†the company has in fact for years been quite a leveraged enterprise, reflecting the desire of big institutional and private equity investors like Credit Suisse, the Ontario Municipal Employees Retirement System and, more recently, Bain Capital, to earn outsize returns.[/b]
