Why Are 20% of Treatment Centers Closing in 2018 and How Do You Stop Yours from Being One of Them? - Circle Social Inc

Why Are 20% of Treatment Centers Closing in 2018 and How Do You Stop Yours from Being One of Them?

Addiction Treatment Centers are closing at alarming rates. Centers that used to have nearly every bed filled, now sit almost empty. Reports out of Florida estimate 20% of treatment centers there have shuttered their doors in the past 6 months. The same is happening in California and Arizona.

Even some of the big guys, like Sovereign Health and Treatment Management, are closing centers and consolidating to fewer locations.

Why is this happening?

There are several general trends producing this effect, as well as some more center-specific ones that we’ll go into detail on more below.

The general trends is that new locations are spreading out across the US. For example, the Midwest and Northeast, where treatments centers were few and far between, now have numerous startups. People are much more willing to go to a center closer to home, especially with all the negative press around shady treatment operators in Florida and California.

In addition, there are just still a lot of centers springing up overnight. So the competition is intense. We have numerous clients that literally did no marketing and had the phone ringing off the hook for years. Then, sometime in the past 1-2 years, the phone just went dead.

There are still the same number of people out there that need help, but there are a lot more people out there to offer that help. You’ve even got the maker of Suboxone running around and certifying doctors and nurse practitioners FOR FREE. They then encourage them to moonlight on the side as “addiction treatment” when all they’re actually offering is a pill/film, which we know is not enough.

So with these new trends and intense competition, how do you prevent your center from befalling the same fate?

Overreliance on Lead Generation

Overreliance on lead generation is the single biggest mistake failing centers have made. Most of the centers that closed down in the last 6 months were overly or entirely dependent on Adwords for admissions. Some depend heavily on rehabs.com or buying calls instead of partnering with proven experts in rehab marketing.

As we’ve written before, this is just stupid and bad business. If your center only has one main source of admits, your entire business is at stake. Diversification of marketing and sales channels is an absolute must for the long-term health of any business. In fact, you need to put into place a multi-step marketing journey if you really want to drive down cost per admit costs.

Not to mention that it’s insanely expensive. The average center pays $4,000-$5,000 per admit when the admits are generated from Adwords or call buying. As insurance reimbursement continues to drop, it is a totally unsustainable model.

At most, 30% of your admissions should come from outbound lead generation. And, as we’ll be going into further below, you should be off-setting that high cost per admission by encouraging alumni referrals upon program completion.

Poor Reputation Management

Try googling your center once. What pops up on the first page of results? I bet you at least 3 of the results are from review sites like Yelp, Cite Health, Glassdoor, or Google Reviews.

Do you have more than 3 stars? Most centers don’t, and that’s a huge problem. We’ve seen centers go from full to 50% census in less than a month after too many negative reviews appeared at the top of the search results.

You see, everybody checks review sites these days. They are the most trusted source of information by potential patients outside of family and friends. If you have too many bad reviews, and it’s the first thing people are seeing when they search for your name, you will lose patients.

The tough part of addiction treatment centers is that, of course, you’re going to get bad reviews. It’s not a matter of if, but when. There are just too many people with life issues, or forced into treatment by family and court systems, to even hope of having everyone leave happy.

But there are things you can do. You can ensure that the happy clients are leaving positive reviews. There are specific processes that should be set up at your center to garner these. If you’ve got fifteen 5 star reviews and a disgruntled patient comes along and leaves a 1 star, it’s not a problem. You’ve still got a 4.9-star review rating. That’s why we help our clients set up specific processes to garner more positive reviews BEFORE they get a negative one.

And you better be starting now, because if you wait until the 1-star review come in, it’s too late, you’re already going to lost tens of thousands of dollars in new patient revenue when they decide to go with a center with higher review scores. Most patients are looking at 2-3 centers at any one time, and they’re obviously going to pick the best one.

Another technique is to use SEO to manage your reputation. Especially if you have a ton of bad reviews and it’s going to take a very long time to get enough positive ones to balance that out, you need to get those reviews off the first page of Google as soon as possible.

That’s where we come in to start ranking web properties and assets, so that all of the content out there that speaks well of your center appears on page one, while all the bad reviews drop past page 2 and, essentially, are never viewed because less than 2% of all Google searchers visit page 2 of search results.

Lack of Relationship Building with Professionals AND Alumni

The best centers with the most stable censuses are ones who have built incredibly strong relationships with both professional partners and their alumni,

Professional partners can be anyone that might send you a referral – therapists, other centers, criminal attorneys, church leaders, athletic directors. These people often do not know where to turn when someone comes to them with an addiction problem and they are looking for a trusted partner to send to.

Now, it’s EXTREMELY important that you maintain those relationships. Where many centers fall flat is that they take the referrals and never provide updates. That’s why we also organize a system for our clients where we regularly communicate with referrers about patient progress.

And you can’t forget about your alumni. I’m still shocked when I find centers with no significant alumni community. The cost of a referral admit from an alumni is usually less than $250. Compared to the $4,000-$5,000 you see with outreach campaigns, that’s a pretty insane difference. Here again, we help our client centers build out strong alumni engagement programs for just this reason.

You can find some really nice alumni engagement apps these days like this one by Spera Health.

The Gold Standard – Clinical Excellence Backed by Outcomes Data

You know that JCAHO accreditation displayed so proudly on your site, the one that’s meant to symbolize a high quality of care? That is your absolute key to the long-term success of your center.

Call and inquiry generation is an unsustainable model for long-term growth, and today’s patients and their families are getting much smarter about what quality treatment looks like. When people have been through 2-3 rehabs already and national media coverage is highlighting the poor quality in the field, they become hyper-aware of clinical outcomes.

If you look on the backend of your site in your Google Analytics, we can guarantee that the majority of your traffic is going to your staff page. People don’t care about all the bs marketing jargon on your homepage, cluttered with words like “elite,” “premiere,” “world-class,” “dual diagnosis.” 95% of the sites on the Internet say that.

They want to know what the credentials and levels of experience of your staff are. They also really want to know how effective your program is.

Which brings us to the next step, outcomes tracking. A lot of centers hem and haw over this. What’s considered a positive outcome? How can we control what happens after they leave our center? Are our outcomes something we really want to show?

You better believe they are. Frankly speaking, if you’re nervous about the quality of your outcomes, you shouldn’t be treating people anyway. Any good treatment program is going to be laser-focused on providing the most effective treatment possible. Building out that data so that you can improve your program SAVES LIVES.

Truly, how can we possibly do the best for our patients if we can’t identify what we’re doing right, what we’re doing wrong, and what we can do to continuously deliver better patient outcomes?

There are even extremely cost-effective apps and services that enable centers to do this that can be up and running within a week. Check out Vista Research Group for just such an affordable option.

All of this, in turn, should be driving your marketing efforts. Patients are looking for great clinical staff, quality programming, and great outcomes. When you show them you deliver on all those fronts, you’ll never have to worry about your census dropping again.

Good Treatment and Good Businesses Go Hand in Hand

At the end of the day, a healthy business provides us with the revenue and ability to retain quality talent that drives clinical outcomes. Too many centers tend to be heavy on clinical and lacking the business acumen, or the exact opposite.

A good balance of both leads to a positive feedback loop where better outcomes lead to a growing center.

Does that sound like a whole lot of stuff you’re not sure how to do? We are industry leaders in addiction treatment marketing and also do the operational consulting needed to get centers back on track. Reach out to us using the form below and we’ll see what we can do to help.



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About the Author

Nick Jaworski is the Chief Growth Officer of Circle Social Inc. Seeing a real need for innovative, ethical recovery center marketing and growth, he launched Circle Social to help the best addiction treatment centers connect with people who needed their help the most. He is also the proud father of the most beautiful girl in the world. You can most often find him sharing thoughts on digital marketing and cracking jokes on Twitter or Snapchat as @NBJaworski.