The Business Case for Opening a Suboxone Clinic

Given these indications of widespread prescription opioid addiction in rural America, we investigated the possibility of opening a Suboxone clinic as one of the Rural System Groups. rs_suboxone_clinicSuboxone is an evidence-based medication treatment known for reducing crime and illegal opioid use.

Here are basics about Suboxone:

  • Buprenorphine, one of the active ingredients in Suboxone, is an opioid partial-agonist. This means it is not as strong as methadone, and so is less likely to be addictive.
  • Suboxone can be prescribed in one-month supplies by authorized physicians in an office setting. This liberates addicts from daily visits to a methadone clinic and increases availability for rural areas.
  • Buprenorphine’s effects increase until they reach a ceiling, at about 16-32 mg, after which larger doses have no added effect.
  • Buprenorphine remains in the blood for about three days. At higher doses, if a full opioid agonist enters the bloodstream, buprenorphine can block the effects of the full agonist and precipitate withdrawal symptoms.
  • Suboxone contains naloxone, an opioid antagonist, as well as buprenorphine. As a prescription, Suboxone is administered sublingually (under the tongue). Buprenorphine has good bioavailability when taken sublingually, but poor availability when injected. Naloxone is just the opposite, so its effects are not experienced when Suboxone is taken through the prescribed method, but when it is injected it blocks the opioid receptors and withdrawal symptoms are then triggered. This discourages the abuse of Suboxone by opioid addicted people. The drug can still be abused by non-addicted individuals with limited effect.
  • Suboxone can be administered in a controlled clinic setting, and has been used to aid in opioid detox. I found many cases of clinics with Suboxone programs across the country. Many of these programs offered methadone treatment as well as Suboxone.

But what are the main costs of starting a Suboxone clinic?

  • Malpractice insurance, though dropping steadily of recent years due to fewer claims, is still about $7,700 per year for a physician in psychiatry.
  • Property rent in a prominent location is always a bit expensive. An example is this office for rent in Blacksburg, VA for about $14,000 per year.
  • Salaries. Here is the meat of the investment. The average annual salary for a physician in psychiatry is $165,000, $65,470 for a registered nurse, $54,000 for a physician’s assistant, and $23,000 for a secretary.

A clinic would need multiple doctors in order to keep prices competitive for clients, particularly due to patient limits imposed by the DEA license required to prescribe Schedule III substances. Each physician can only treat 30 patients in the first year, and 100 patients in following years after sending a second Notice of Intent to SAMHSA. Realistically, the physicians would require the assistance of at least one secretary and nurse for a very lean start-up.

The product itself is not very expensive, allegedly costing between $4 and $19 per dose. One must be a physician or pharmacist in order to inquire about the wholesale prices of Suboxone, which is owned by Reckitt Benckiser Pharmaceuticals (1-877-782-6966). Suboxone is also covered by Medicaid in the state of Virginia, as well as many other states in the U.S.

Our Rural System Clinic would also need medical equipment for monitoring patients during administration of the first dose. Security cameras, glass, and even personnel might also be advisable if the product is kept within the clinic. We would need to pay the usual fees for business start-up and the monthly costs of utilities. The latter would vary widely depending on location. Our clinic would also need to develop a partnership with a laboratory in order to run blood tests to monitor potential continued illegal opioid use by patients.

Year  #Doctors   #Nurses #Secretaries   Year Cost   Total Cost   Cost/Patient    Net Profit
1 1 1 0 252,170 252,170 4,000 -132,170
2 2 1 1 440,170 572,340 4,000 -52,340
3 2 1 1 440,170 492,510 4,000 307490

 

The Year Cost is calculated from the average salaries of the persons listed, cost of malpractice, and cost of rent. Total Cost is calculated by subtracting the net profit of the previous year from the year cost. Cost/Patient is calculated by adding a $400 induction fee to ($150 a visit x 2 visits per month x 12 months per year= $3600). Net Profit is calculated by multiplying the cost/patient by the maximum number of patients and subtracting the total cost.

It is thus a low estimate of the initial costs of business, not including costs of equipment, lab work, product, security features, and utilities. The chart also assumes a full patient load for the full year for each practicing physician. (30 in year 1, 130 in year 2, and 200 in year 3.)

Given $252,170 as a low estimate of initial start-up costs including the salaries of two physicians and one nurse, if the Suboxone clinic had a total of 60 clients per year paying an average of 2,000 each (through Medicaid, other insurance or self-pay) per year, the initial start-up costs of $252,170 would be paid back in year 3 when the clinic becomes profitable.

If a full patient load is not achieved each year, it could be year 4 or 5 before the clinic would become profitable. Alternatively, cost per visit could be raised, patients could be charged a fee for stopping and starting treatment, or the cost of induction could be raised to compensate for the low patient-load.

Based on my research, treatment for opioid addiction is an increasing need in rural America, including Southwest Virginia. There is likely a market to support the foundation of a Rural System Suboxone Clinic, given funds for an initial investment.

Perhaps this Group could be the beginning of many Rural System Groups Reaching for Economies of Scale and improving the health of land and people in rural America.

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About Laurel Sindewald

Laurel is an alumna of Warren Wilson College with a BS in Conservation Biology and a BA in Philosophy. She is a writer for Rural System, Inc.

Comments

  1. David McCraney, MD, MBA says:

    You’re barking up the right tree.

    To be clear, a buprenorphine clinic cannot work under the traditional insurance-based, fee-for-service model.

    Over time, patients tend to stabilize; the patient who needed weekly visits at first, eventually can survive with monthly visits.

    Addiction is a chronic illness, and a high proportion of patients will remain on your panel for months, years, some maybe forever.

    Since we are capped at 100 patients, any given physician will find that her panel will start off as a full time job (100 hours per week) but will eventually turn itself into a one-day-a-week job (25 visits per week).

    Buprenorphine treatment is, then, a “per diem” model. So the business model has more in common with say rehab, hospice care, or residential treatment than it does with traditional office-based practice.

    Monthly revenue is critical. However, you will not get monthly revenue from any insurance company. All insurance is either explicitly or implicitly capped.

    It may be possible to negotiate a “waiver” from the state to treat the indigent. This would be similar to the Medicaid Waiver, which provides a per-diem for the treatment of people with brain injuries and developmental disability. In fact, this might be a good use of the Medicaid Waiver.

    No insurance company will ever, in a million years, negotiate such a contract.

    It follows, then, that for anyone who isn’t a ward of the state, this has to be a cash business.

    Your thoughts about physician salaries and costs are on the mark. The only way the program works is to hire physicians part-time, by the hour. In a state that mandates malpractice coverage, a part-time physician may bear that cost for you; and in any event, you need to insure the CLINIC not the doctors. That should make the numbers work.

    Discussing the market economics of a cash-based buprenorphine clinic is another topic for another day; although it’s a good topic. In the meanwhile, ask yourself this question. What industry are you in? I would submit that it’s not the “health care” industry.

    • Lydia G MD says:

      Her numbers for physician salary for qualified psychiatrist are way way off. Your are a physician and MBA but it may not be your fault if you haven’t heard that a rural practice self insured psychiatrist simply cannot be had for $165 k unless you are talking about a 16 -20 hour per week gig perhaps then maybe but still, good luck with that. Do your numbers again. Psychiatry is the new Derm.

  2. MARTIN SHIPMAN says:

    This article interest me on many fronts but my main interest is strictly whether it is a viable business model.
    In review of the article as well as Dr. McCraney’s comments would lead one to believe that its truly a volume dependant business. Not sure what the 100 pt Cap is referred to by Dr. McCraney so is that a licensing issue or what. Also how much latitude does one have on the charges for the rx.
    Laurel or Dr. McCraney is there a business model out there on these clinics? If so please advise.

    • Laurel Sindewald says:

      Well, Martin, this article was written as one possible business model. The entrepreneurs must be doctors, certified to prescribe Suboxone, and each doctor has a 100 patient limit at any given time. Envisioning business models is a numbers game. If you wanted to open a Suboxone clinic, you would need to do research on your own area and crunch the numbers, similar to what I did in this article.

    • Lydia G MD says:

      It’s not state it’s a federal licensing issue. It’s very sticky and you need docs who have a specialized license.

  3. Lydia G MD says:

    Any clinic hospital or organization that thinks they can get a full time boarded psychiatrist to work for under $275/yr full time is delusional. Psychiatry now the single most in demand field in medicine. Your $165 K per annum estimate for a doc is a joke. You won’t get a qualified doc for that. An assh$ole deadbeat can be had for that, for a two days a week good and qualified doc maybe but not a full time qualified doc you can stand working with who isn’t an addict or borderline personality disorder themselves. Revise. Signed

    A Psychiatrist not even out of residency who gets hit with dozens of offers every week by recruiters and headhunters.

    • Hi,

      Just curious about your source for the salary for a psychiatrist. I checked your number versus the Bureau of Labor statistics (http://www.bls.gov/oes/current/oes291066.htm) and found average salary of 193k and high salary of 230 for home health psychiatry. There is no direct salary provided for rural psychiatrists, so I inquire about your source!

      Mikael

    • Laurel Sindewald says:

      The annual salary estimate in the post is probably dated, given that the post was written two years ago. However, I think you may be overestimating. Furthermore, it is important to note that you do not have to be a psychiatrist to prescribe buprenorphine. I chose to use the estimate of a physician in psychiatry because I was trying for conservative estimates – higher costs, lower returns – worst case scenario.

      This matter is complicated, too, because in the case of Suboxone clinics, the doctors are the entrepreneurs. To be an entrepreneur, your salary really depends on your own business savvy. The patient limits make it difficult for a doctor to justify opening a clinic. Fortunately, the Department of Health and Human Services is proposing to raise the limit to 200: http://www.hhs.gov/about/news/2016/03/29/fact-sheet-mat-opioid-use-disorders-increasing-buprenorphine-patient-limit.html

      Stay tuned, everyone, for a post on why there are such long wait lists for Suboxone clinics! It will appear, today or tomorrow, on handshakemediainc.com

      Thanks for all your input!

  4. Milton Lang says:

    If you would like to know the truth contact me as I was a program supervisor. Your head is in the right place but you’re missing key information!

    • Laurel Sindewald says:

      Hi Milton, please feel welcome to write that information here. We would be fascinated to hear it.

    • Milton
      I’d love to talk to you and hear things from your perspective. Please email me at marship44@gmail.com
      As a program director I’m sure your experience would be very informative

    • Hi Martin,

      I would also be interested in your perspective, since I have been approached to invest in a clinic.

      • Hello I was wondering if you had any information about opening up a suboxone clinic you could share with me . Ive been working on trying to get my clinic open for a while now and having a little difficulty. Thank you , Kris

    • Martin,

      My e-mail is dfluck99@gmail.com

      Thanks

    • I would love to hear more details on opening up a suboxone clinic . I have just begun trying to open one . Having issues getting physicians to work for me and issues with getting the secretary who knows what type of paper work every patient needs etc . Any input would be great . Thank you , Kris Moniz

    • Please share. I am the clinical counselor supervisor for s suboxone clinic that has offices in 3 states. As it’s my first positiom in this arena, I am interested in the longevity of sich a podition. 15 yrs or so before retirement, is it worth my time?

    • I am responding to a reply you made to an article a little more than a year ago. I am interested in the key elements that are missed. I am interested in your insight.

  5. Michael says:

    Thanks Laurel for the time and effort you put into this article. I found it helpful.

    **Lydia G. MD, hopefully your bedside manner is better than your online etiquette. Have some respect.

    • Laurel Sindewald says:

      Thanks very much, Michael! I’m so glad you found the article helpful. 🙂

      • Your article is very on point , I was wondering if you could email me with a little more information . Trying to get my own clinic started but having a few issues . Thank you , Kris

        • Laurel Sindewald says:

          Thank you, Kris, I’m glad you found it helpful! The information that I have is included in the post, and I wish you the best of luck.

    • Derrick K. MD says:

      I agree, for a psychiatrist in training , Lydia G, MD’s choice of words appear a bit harsh.

  6. Lawremce Einhorn says:

    Why cant NP’s or PA’s administer this program under an MS’s supervision or that of a medical director. If that were possible, that would considerably cut down on the staff compensation costs. I have also been told that ideally it makes sense to own or have an interest is a lab for additional revenue. Some one please comment. Larrydavid1989@gmail.com

  7. Lawremce Einhorn says:

    I meant supervision of an MD. Larry Einhorn. larrydavid1989@gmail.com

  8. Marleen McClure says:

    Hello, would anyone seriously considering opening a clinic please also factor in the cost of two addiction counselors, social workers, or at least recovery coaches if you want to be providing ethical care and guiding patients towards wellness rather than supplying addicts with a substance that can be easily altered to be able to be abused and can be sold or traded for illegal opiates? Addiction is a complex bio-psycho-social disorder, and I would implore anyone planning to open a clinic to incorporate wrap-around care.

    • Laurel Sindewald says:

      Hi, Marleen, thanks for reaching out! MAT is a controversial and complex topic. I have done extensive reading into the primary scientific literature, as has Maia Szalavitz, and so far studies show that there is no significant difference between maintenance therapy with counseling and maintenance therapy on its own. I highly recommend Szalavitz’s new book, Unbroken Brain, for a comprehensive look at addiction from the standpoint of exhaustive research.

      I agree that addiction often has psychological roots manifesting in behavioral coping mechanisms, and that DBT in particular shows promise for being effective in treating it. For opioid addiction, however, the indication is that life-long maintenance may even be necessary, and preferable when the alternatives are death or a seriously hindered life. I would also be wary of any more one-size-fits-all approaches to addictions treatment. Most people with opioid substance use disorders could probably benefit from behavioral therapy, but some may do well only on medication maintenance. I’m ready to welcome the notion that people are extremely complex, that addiction is extremely complex, and that treatment may look slightly different for different people.

      Regarding the business model, I do not think it is feasible for a new clinic to support psychologists in addition to physicians given the patient limits for the medication. I would suggest that Suboxone or buprenorphine clinics form business associations, rather than direct partnerships, with behavioral counselors to help patients find top-quality care despite this financial reality.

      Again, thanks so much for taking the time to start a rich discussion!

      • Marleen McClure says:

        You’re welcome, and thank you for your thoughtful reply. I am curious if you could supply me with the specific studies indicating that maintenance medications without any therapy?

        I one-hundred-percent agree with you that one size does not fit all, and I do understand that a licensed psychologist could be super-expensive, but a couple of “peer recovery specialists” would not be so much, and there may be even some grant funding somewhere to support that part of the practice. I do think your suggestion that the clinic could have close associations with other behavioral health providers is also an excellent idea.

        Thank you for the book recommendation, I am ordering it on Kindle now! I just want to be clear that I am not suggesting harm reduction is bad, one of my favorite books is Gabor Mate’s In the Realm of the Hungry Ghosts. I just wanted to chime in to advocate for potential business owners to please be careful not to replicate some of the practices at *some* buprenorphine clinics that I have witnessed which are less than helpful.

        • Marleen McClure says:

          Updated: I found a link to a study in one of your articles posted above.

          “Co-occurring other substance use and mental illness exert strong influences on cost and risk of relapse, suggesting that individuals with these conditions need more comprehensive treatment.” (Clark, Baxter et al, October 2015).

          To be honest, I encounter pretty all individuals with these situations – they abuse more substances than one opiate & often have some mild co-occurring mental health issues (at least depression or anxiety), and likely some history of trauma, so that is the population to which I refer.

    • Depending on the state, counseling services are required. Also, SAMHSA”s model for MAT services include counseling.

  9. Martin Biscuit says:

    As has been stated a shrink makes more and they should. You also don’t need at psychiatrist to do the job. Any licensed physician with an XDEA can Rx for Sub.
    Under paying the doc is an open invitation to have the doc walk away with all of you (really the doctor’s) patients and set up shop next door. Anti compete contracts generally don’t hold water. No one owns a patient. They are generally free to go where they choose. Especially in a clash model.

    Doc’s are getting paid $4,000 per DAY to Rx Suboxone!

    Gotta share the wealth if this is going to work. Can’t do it without that MD with his of her XDEA prescription pad in their hand.

    Patients being prescribed Suboxone need to be in counseling. The clinic has an obligation to make sure that requirement is being met whether in house or not.

    Best,

    MH

    Potentially a very lucrative business.

  10. Cedric J says:

    Hi All,
    I hope all is well. Thank you Laurel on this very helpful article. I have been tasked to help a doctor establish his practice into a suboxone clinic. What is the best way for him to start? I know there is an 8 hours course and exam he needs.. how do I get that information?
    Also, having a lab to work with a great resource given there are many benefits of having an analyzer in place for drug screening which pays very handsomely. That is what we do hence this situation of trying to help a group to establish this and hopefully benefit addiction treatment.
    my email address is sjafri@carolinaclinicals.com

  11. Hi,
    This article is super informative for me. Thank you for posting it.
    My husband and I want to open a SB clinic. We’ve been thinking about it and saving our money for a while. We feel that we are ready and are trying to figure out where to start? Can you give me some advice please?
    Shall I start contacting doctors and offering them opening a clinic? How can I find a doctor that needs an investor?
    Thank you!

  12. Nate Boyett says:

    I am preparing to open a clinic in my area. I pay the physician $100 per patient seen a month. Whether they see the patient once, twice, or 4 times in a given month, they only get $100 per patient. I have one FT employee; that is also a CRS (Certified Recovery Specialist), wich will allow him to conduct group sessions when needed. I also have contracted an LCSW to do group sessions once a week at $100 a session.
    At the 30 patient cap, here are my costs per month for labor:

    Physician 30 x 1000 = $3000
    FTE $11/hr x 160 hrs = $1760
    LCSW 4 X $100 = $400
    TOTAL LABOR COSTS = $5160

    The costs for the program is $300 a month, or $175 every two weeks. The cost covers doctor visits and 2 group sessions.

    30 patients x 300 = $9000

    $9000 – $5160 = $3840 left after labor

    $3840 – $2140 = $1700 for misc expenses

    For the first month, I will break even. But by the second month, I anticipate to have two NPs that can see 30 patients a month, and by the 6th month, I will have another physician that will have 85 of his 100 spots available.
    I anticipate being profitable in six months. Start-up capital is $12,000.

    There is only one other doctor in my area that prescribes suboxone, and he is capped out at his 100.

    Currently, my call-back list has 20 patients names who are wanting to schedule appointments.

    • I am a physician licensed to prescribe suboxone and have also been thinking about opening a clinic. My cap is 275

  13. This is a great forum. Laurel, your research is spectacular. All comments have been helpful.

    MAT as a treatment option provides patients the opportnity to restore quality of life, if it is done right. No doubt of it being a profitable business, but for how long? The addiction may still exist, but csn the business of treating such addiction sutvive the politcal and economic changes in the industry?

    • Laurel Sindewald says:

      Thank you very much, Denise! I’m pleased that the research has been helpful to so many people so far. Everything is a bit different with a 200 patient limit, and you’re probably right that things will continue to change rapidly. Still, I’m glad it remains helpful as a forum and a sort of model for further research.

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