Private equity's consolidation of opioid treatment market fails to expand methadone access

PROVIDENCE, R.I. [Brown University] - The acquisition of opioid treatment programs by private equity investors is a growing national trend, prompting questions about the potential to expand access to methadone, a medication that can cut the risk for overdose deaths by more than half. Opioid treatment programs are currently the only settings with the legal authority to dispense methadone for the treatment of opioid use disorders.

But in a new study published in Health Affairs, researchers found that while private equity acquisition of opioid treatment programs consolidates ownership among financial investors, it doesn't change the methadone supply, improve treatment access or decrease opioid-related deaths.

Most experts agree that increasing access to methadone is an important policy goal for addressing the opioid crisis in the U.S., said lead study author Yashaswini Singh, an assistant professor at the Brown University School of Public Health.

"If treatment was expanded under private equity ownership, you would expect to see an increase in methadone shipments, openings of new facilities and a corresponding decrease in opioid-related deaths, and we found none of that," Singh said. "Our findings suggest that we ought to pay more attention to what role investors serve in opioid treatment programs if they're not expanding access and not delivering any tangible public health gains."

Singh is a health care economist whose research focuses on health care consolidation and corporatization. She said the study was inspired by conversations between state and federal policymakers with Singh and fellow researchers at Brown's Center for Advancing Health Policy through Research about the impacts of the trend of for-profit ownership of methadone clinics.

Finding the right data posed some challenges, Singh said, as there are no reporting or disclosure requirements for private equity investments. In collaboration with researchers from the University of Pittsburgh and the RAND Corporation, the team used methods such as algorithmic matching, geocoding and the manual verification of acquisition deals to identify which firms acquired which facilities, and when. To measure methadone access, they looked at methadone shipments to opioid treatment programs.

The researchers identified 357 private-equity acquired opioid treatment programs in 43 states between 2011 and 2022. During this time, the number of programs in the U.S. with any level of private equity investment increased from just 0.26% to 18.9%. The vast majority of the programs were acquired by one of three large private equity-backed platforms, the researchers found.

One pattern the team observed was that while private equity investments in other health care segments tend to be more common in urban areas in populated states such as Florida, the states with the highest levels of private equity investment in opioid treatment programs tended to be those that have been disproportionately affected by the opioid epidemic, such as Tennessee, Ohio and Kentucky.

The researchers found that after private equity acquisition, methadone shipments to opioid treatment programs increased by 13% relative to those that hadn't been acquired, but this was not statistically significant after the researchers adjusted for other factors - for example, the program may have already been expanding, making it a more attractive target for investors. County-level methadone shipments and opioid mortality remained unchanged after acquisition.

The findings should spark additional scrutiny of the impact of private equity investment on access to treatment for opioid use disorders, Singh said.

"When you pair our finding that private equity firms have acquired over two-thirds of the opioid treatment market with the finding that private equity acquisition didn't improve treatment access, I think it raises concerns about what purpose, and whose interests, these investments are actually serving," Singh said.