Costs Associated With Running a Rehab Facility: What You Need to Know

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In 2003, the United States on average spent an estimated $21 billion on substance abuse treatment. [1]French, M. T., Popovici, I., & Tapsell, L. (2008). The economic costs of substance abuse treatment: updated estimates and cost bands for program assessment and reimbursement. Journal of substance … Continue reading Rehab facilities fall within this umbrella of solutions that can make or break an individual’s recovery. Anyone looking to open a rehab facility can be rest assured knowing that they are potentially saving lives through a proven model of care.

That said, one of the most critical factors in the success of a rehab facility is its funding. A well-funded rehab facility can provide its patients with the best care possible, including access to the latest treatments and therapies and a comfortable and safe environment. By clearly understanding the costs of running a rehab center, and what you need to open a drug rehab facility, you can ensure your facility is well-equipped to provide the best care possible.

Cost 1: Staff

costs of hiring staff

The United States healthcare costs are currently in excess of 17% of the gross domestic product (GDP) and continue to rise year after year, emphasizing the demand to manage costs better. [2]Kaplan, R. S., & Porter, M. E. (2011). How to solve the cost crisis in health care. Harv Bus Rev, 89(9), 46-52. Retrieved April 24, 2022, from … Continue reading One of the most crucial costs associated with running a rehab facility is the cost of staff. A well-trained and experienced staff is essential to providing quality care, which comes at a price. In addition to the salaries of your staff, you will also need to factor in the cost of benefits and the cost of ongoing training and education.

To maximize the quality of care and reduce costs, it is important to carefully consider the staff you hire. In addition to hiring experienced and qualified individuals, you will also want to consider staff who are a good fit for the culture of your facility. A positive and supportive work environment is crucial to maintaining a high level of care, and this starts with the staff.

Cost 2: Supplies and Medications

Cost of SuppliesAnother significant cost associated with running a rehab facility is the cost of supplies and medications. Medications are an essential part of addiction treatment, especially MAT, and the costs can vary depending on the type of medication and the supplier. In addition to medications, you will also need to factor in the cost of supplies such as food, linens, and toiletries.

To help you keep costs down, be sure to:

  • Purchase in bulk when possible. If you have items you know you will need on a regular basis, it is often more cost-effective to purchase them in bulk to lock in a lower price. [3]Agwunobi, J., & London, P. A. (2009). Removing costs from the health care supply chain: lessons from mass retail. Health affairs, 28(5), 1336-1342. https://doi.org/10.1377/hlthaff.28.5.1336
  • Compare prices. Comparing prices between different suppliers ensures you are getting the best deal. Even after using a single vendor for a little while who originally was the cheapest, it’s wise to always reevaluate the market to make sure the price is still the most cost-effective.
  • Check for coupons and discounts. Many times, you can find coupons or discounts for the supplies and medications you need, or entry-level discounts as an incentive to switch to a new vendor. Leveraging these can save you a significant amount of money over time.

Cost 3: Communication With Patients’ External Support Network

An important but often overlooked cost associated with running a rehab facility is the cost of communication with patients’ external support network. This includes family, friends, and any other support system the patient may have outside of the facility.

Maintaining communication with patients’ external support network is important for several reasons:

  • It helps to ensure the patient has a support system in place when they leave the facility.
  • It helps to prevent relapse by providing the patient with a support system they can rely on.
  • It helps to build trust between the facility and the patient’s support network, which can ultimately lead to more referrals that will generate new business.

The cost of communication can vary depending on the type of communication you use. For example, phone calls are typically more taxing on the bandwidth of your employees and are, therefore, more expensive than emails. If you use a third-party provider for your communication requirements, you must also factor in the cost of their services, which may or may not be worth it depending on the quality of their service and your needs.

Cost 4: Designing Programs Based on Individual Needs

Another cost associated with running a rehab facility that is often overlooked is the cost of designing programs based on individual needs. While it is important to have a few standard programs in place, it is also essential to tailor programs to the specific needs of each patient as each patient recovers from addiction in their own way.

This process starts with an assessment of the patient’s needs. This can be done through a variety of methods, such as interviews, surveys, and psychological testing. Once the needs of the patient have been assessed, the next step is to design a program that will address those needs. The cost of this process can vary depending on the size of the facility and the number of patients being treated.

Additionally, the cost of designing programs based on individual needs can also vary depending on the type of programs being offered. For example, a program that includes individual therapy sessions will typically be more expensive than a group therapy session.

However, the cost of designing programs based on individual needs is often worth it as it leads to better outcomes for patients. When patients feel like they are being treated as an individual and not just another number, they are more likely to engage with the program and stick with it until they achieve their goal of sobriety.

Cost 5: Creating a Strong Culture That Prioritizes Behavioral Health

Another cost associated with running a rehab facility is the cost of creating a strong culture that prioritizes behavioral health. This includes everything from hiring the right staff to creating an environment that is conducive to healing. [4]Fottler, M. D., Ford, R. C., Roberts, V., & Ford, E. W. (2000). Creating a healing environment: The importance of the service setting in the new consumer-oriented healthcare system. Journal of … Continue reading

Creating a strong culture that prioritizes behavioral health can be a challenge, but it is an important part of running a successful rehab facility. The first step is to hire staff that are passionate and knowledgeable about helping others recover from addiction.

The next step is to create an environment that is conducive to healing. This means creating a space that is safe, comfortable, and welcoming. It also means having a variety of programs and services that are designed to meet the needs of each individual patient.

Finally, it is important to create a culture of care and compassion. This means being understanding and empathetic toward each patient and their unique situation. It also means providing the mental health resources and support patients need to recover from addiction.

Compassion

Are Rehab Centers Profitable?

With so many costs associated with running a rehab facility, can rehab centers be profitable? The answer is it depends. There are a number of factors that can impact the profitability of a rehab center, including:

  • The type of services offered
  • The cost of operating the facility
  • The number of patients treated
  • The success rate of the programs offered
  • The location of the facility
  • The reputation of the facility

As you manage a rehab facility, it is important to keep an eye on the bottom line and adjust strategies when something is not aligning with the goals of the organization. A plan that might work for you in the early days of business might need to be revised as the business grows. This is all a part of the process and should be expected to maximize the profitability of your rehab facility.

Key Qualities in Profitable Staff

When running a profitable rehab facility, it is important to have staff that embody the following qualities:

Passion

Staff must be passionate about helping others recover from addiction. It’s easy to tell when someone is passionate about their work. They have a deep understanding of the challenges that come with addiction and a demonstrated ability to help others overcome those challenges. They talk about their work with excitement and energy, and they are always looking for ways to improve the services that they offer.

Flexibility

The best rehab facilities are those that can adapt to the changing needs of their patients. This means having staff that are willing to adjust their approach based on the needs of each individual patient. It also means being open to new ideas and approaches and being willing to change when it is clear that something isn’t working.

Lifelong Learners

The best staff are those who are constantly learning. They are always looking for new ways to improve their skills and knowledge, and they are always open to new ideas. When interviewing staff, ask them about their plans for continued education and professional development.

Relationship Builders

Great rehab staff members can build strong relationships with their patients. [5]Jones, M., O’Neill, P., Waterman, H., & Webb, C. (1997). Building a relationship: communications and relationships between staff and stroke patients on a rehabilitation ward. Journal of … Continue reading They understand the importance of trust and respect, and they work hard to create an environment that is safe and welcoming. When recruiting staff, look for people who are warm, compassionate, and empathetic.

Loyalty

You want staff who are loyal to the organization and its mission. When interviewing potential employees, ask them about their commitment to previous organizations and why they left. This can provide insight into their thought process and what type of loyalty you could expect from them.

Build a Profitable Rehab Facility

One of the most important factors in rehab center success is funding. A rehab facility with adequate funding can provide patients with the best care, including access to the latest treatment options and therapies and a comfortable and safe environment. To ensure your facility is well-equipped to provide the best care possible, you need to have a clear understanding of what it costs to run such a center and how much to open rehab.

Reach out if you’d like to discuss the costs of starting a new addiction treatment facility, we can help you develop the right plan to ensure your program is effective and profitable.

Sources:

Sources:
1 French, M. T., Popovici, I., & Tapsell, L. (2008). The economic costs of substance abuse treatment: updated estimates and cost bands for program assessment and reimbursement. Journal of substance abuse treatment, 35(4), 462–469. https://doi.org/10.1016/j.jsat.2007.12.008
2 Kaplan, R. S., & Porter, M. E. (2011). How to solve the cost crisis in health care. Harv Bus Rev, 89(9), 46-52. Retrieved April 24, 2022, from https://iew.technion.ac.il/serveng/Lectures/Kaplan_Porter_2011-9_How-to-Solve-the-Cost-Crisis-in-Health-Care_HBR.pdf
3 Agwunobi, J., & London, P. A. (2009). Removing costs from the health care supply chain: lessons from mass retail. Health affairs, 28(5), 1336-1342. https://doi.org/10.1377/hlthaff.28.5.1336
4 Fottler, M. D., Ford, R. C., Roberts, V., & Ford, E. W. (2000). Creating a healing environment: The importance of the service setting in the new consumer-oriented healthcare system. Journal of Healthcare Management, 45(2), 91-106. Retrieved April 24, 2022, from https://pubmed.ncbi.nlm.nih.gov/11066961/
5 Jones, M., O’Neill, P., Waterman, H., & Webb, C. (1997). Building a relationship: communications and relationships between staff and stroke patients on a rehabilitation ward. Journal of Advanced Nursing, 26(1), 101-110. https://doi.org/10.1046/j.1365-2648.1997.1997026101.x


Author: James Haggerty
Experienced Chief Executive Addiction Recovery and Mental Health Professional Business professional in the Addiction Recovery and Mental Health industry for the past 26 years. Caring, compassionate and strongly motivated to make a difference in the organizations I am affiliated with and welfare of the population we serve. Currently focused on advocating, educating and developing projects leveraging evidence based, real time technology to support individuals in recovery. JamesHaggertyRecovery.com

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