How Sober Housing Can Boost Revenue for Treatment Centers

Patients suffering from alcoholism and other drug addictions are different from other patients in any other area of the medical industry.  When someone breaks a leg or gets the flu, they voluntarily go to the doctor because they want to get better.  In many cases, alcoholics don’t want to stop drinking and drug addicts don’t want to stop doing drugs.  In fact, if it wasn’t for law enforcement agencies giving these individuals the option of either going to treatment or going to jail, drug treatment centers would be far less successful.  Not at treating patients, but in generating revenue.

Substance abuse patients can also be unreliable.  If they’re not particularly motivated, they may decide not to go to their regularly scheduled treatment session.  If they don’t show up, the treatment facility can’t bill for their services, which translates to a loss of revenue.  From a business perspective, this is a problem.

From a clinical perspective, we all wish we could motivate our patients to commit to their treatment program and get the help they require.  Unfortunately, as we all know, many patients have to hit rock bottom before they get to that point.  For some addicts, incarceration or death catches up to them before they do.  For as sad as that is, it’s a reality that everyone in this field faces. 

For as much as the patients want to think a treatment professionals provide services out of the goodness of their hearts, we all know that operating a rehab center is a business and it needs to make money in order to stay in operation long enough to continue to provide services.  With the unreliability and lack of motivation patients have, how can treatment agencies make up for the loss in revenue?

Substance abuse treatment centers rely on referral sources to send patients their way.  Referral sources might be hospitals or other medical facilities, doctors, therapists, employee assistance programs, law enforcement agencies such as the Department of Probation or the Division of Parole, etc.  All of these entities are important to the survival of every rehab center in terms of where their patients come from.  However, what if a substance abuse treatment center was able to refer patients to itself?

The best way to make this happen is through residential programs.  There are a few names for them: sober homes, halfway houses, recovery residences, etc.  Regardless of the name, a sober home is a residence where recovering addicts live temporarily while undergoing treatment.  There are certainly upscale sober homes where the patients/residents have the means to pay out-of-pocket.  However, the indigent population can really make this business model successful.

Most homeless people are homeless because they have some type of mental health and/or substance abuse addiction that is distorting their ability to live normal lives.  Individuals without mental illnesses or drug addictions have an easier time fending for themselves by having a job and paying their bills.  However, if the patient is less functioning and doesn’t have family members willing to care for them, these individuals are at risk of becoming homeless.  Unfortunately, the homeless population in many areas is enormous and there aren’t enough programs available to provide assistance.

Having a sober home that provides a safe, sober living environment for homeless individuals to achieve recovery opens up many opportunities to receive referrals from many different agencies.  Moreover, it assists in the treatment process by stabilizing the patient.  Recovery is more obtainable when the patient isn’t worried about food and shelter.

The ideal sober house could be anything from a single family home to a larger residential facility such as a former adult home, dormitory, hotel or similar living quarters. From a legal standpoint, the U.S. Supreme Court has classified addiction as a disease and unrelated individuals have the legal right to live in a single family dwelling if they are all recovering addicts because they share the same common interest, that being recovery.  This makes them what is considered to be an unconventional family.

In most counties, the Department of Social Services will pay for room and board.  It’s a small amount per resident that will barely cover expenses so there isn’t much money to be made through the actual sober home itself.  However, once you have these homeless individuals living in your residence, you have much more control over them.  When you send your van to pick them up to go to treatment, they have a choice of either getting in that van or being asked to leave the residence. Now you don’t have to worry about a lack of motivation or patients not showing up for treatment.  The real money to be made is on the treatment side, not the residential.  However, the residential component will make it possible to increase treatment attendance.

With no income and no assets, these patients normally qualify for Medicaid which is how this program will pay off financially.  With a residence full of patients that are attending your intensive outpatient program 3, 4 or 5 days per week, the combination of treatment and housing could be very profitable.  In addition to being profitable, this type of program is clinically sound.  Patients have a much higher chance of recovery when they’ve been removed from the setting that was exacerbating their addiction.

In many sober homes, the residents care for themselves.  They cook, clean, do their own laundry, maintain the grounds and learn how to live like a normal person.  Some may be so low functioning that they’ve never learned how to care for themselves in the first place.  Living in this type of residence will be an excellent experience for them.  This will also keep costs down.

Addicts tend to internalize their experience and feel that they’re the only ones going through the difficulty they are experiencing.  Being around other recovering addicts will make them realize that they’re not alone.  There’s also another fascinating dynamic that occurs in this kind of setting.  If one of the residents relapses, the other residents come down very hard on them, knowing that the relapse jeopardizes all of their recovery efforts.  This keeps a good check and balance within the residence and keeps everyone in line.

It is common for these type of residences to have what’s referred to as a house manager.  The house manager is usually a former patient who has completed the program.  He/she lives in the residence rent-free in exchange for making sure the residents are in compliance with all house rules.

Community opposition is something to take into consideration.  If your sober home is located in the middle of a densely populated residential area, don’t expect the community to be happy about it.  They will complain to their local officials and try to shut you down.  This is something that needs to be thought out carefully.  Even though this type of operation is totally legal, the political heat could be enormous.  The stigma for alcohol and drug abuse is difficult to deal with on a community level.  Everyone feels there should be places to help drug addicts but most people don’t want them in their town.  It is best to find a residence that is somewhat secluded.  If this is not possible, try to get the support of the local officials prior to moving forward with that location.  Meet with the town’s Mayor or other government officials to make sure you have their support, despite the possibility of community opposition.  If you don’t, they will make your life hell and you will be paying more in legal fees to defend your position then you will make from this venture.

If you are successful at having a sober home combined with your treatment program, you will not only be running a profitable operation but you will have a system that turns dysfunctional, homeless individuals with mental health and substance abuse problems into healthy, well-adjusted members of the community.  Having aftercare programs in place to help your residents find permanent housing and employment after your program will ensure the patients’ success rate and strengthen your position within the community.  If done right, this can be both a highly profitable and clinically appropriate way of enhancing an outpatient substance abuse treatment operation.

For more information on setting up this type of sober home to compliment your treatment program, please call Ashlar Consulting Corporation at 305-849-9399 or visit www.AshlarConsultingCorp.com.