12 Steps To Broke

The Billion-Dollar Rehab Racket That Drains Family Savings

A new documentary by a former rehab insider shines a skeptical light on the tony business of high-priced addiction centers.

05.02.15 4:10 AM ET

Until a few years ago, Greg Horvath was making around $30,000 a month as an interventionist, confronting people with drug and alcohol problems and persuading them to go to high-priced rehabs. But as he was becoming wealthier, he says, the people he was purportedly helping rarely kicked their habits, despite repeated stays at some of the best-known facilities in the U.S.

Horvath, who quit drinking in 1990 with the help of the 12 steps of Alcoholics Anonymous, began to question the value of his work—and of the rehabs themselves. Four of his former clients overdosed and died after multiple trips to treatment centers, he says. The centers “paint this picture that they’re going to fix everything. These families in crisis are so vulnerable, and they want to believe what they hear.”

But in truth, Horvath says, the biggest motive of rehab facilities, some of which charged upwards of $50,000 a month, was simpler still: profit. One rehab he worked with, he said, had an employee whose job was to guide families through the process of refinancing their home to pay the tens of thousands of dollars charged for treatment. Meanwhile, he told The Daily Beast, the families he was working with— hardworking parents fearful for their children’s lives—were “getting swept away.”

In 2011, Horvath teamed with a documentary filmmaker, Adam Finberg, to investigate the $35 billion treatment industry. The result of their partnership, “The Business of Recovery,” which premiered on Sunday at the Newport Beach Film Festival, is an extraordinary look into the secretive and unregulated world of alcohol and drug rehab. Because of Horvath’s credibility with industry leaders, the team gained unprecedented access to centers and their leadership, including Betty Ford, Hazelden, and tony facilities overlooking the Pacific in Malibu.

It’s a devastating portrait, all the more powerful because some of the most damning statements come from the rehab executives who seemed to believe they were talking to a gullible colleague.

The documentary argues that the efficacy of residential rehab is abysmal—and it’s also a black box. The filmmakers interview Lance Dodes, a professor of psychiatry emeritus at Harvard and author of the 2014 book The Sober Truth, who notes that the vast majority of drug and alcohol treatments rely on the 12-step approach created by Alcoholics Anonymous in the 1930’s. Repeated studies of the 80-year-old faith-and-abstinence program by Dodes and others have found its efficacy to be in the single digits. Ruben Baler, a health scientist at the National Institute of Drug Abuse in Bethesda, told the filmmakers: “If you’re looking for … randomized trials and scientifically rigorous studies of how they work and for how many people they work —you will not find those studies. You will find anecdotal evidence—for people that it did work [for]—but unfortunately we don’t have the scientific basis to say how many of all those people that tried a 12-Step program—how many of those did not succeed.”

Yet the rehab executives interviewed in the movie claim success rates of 80 percent or more. Those numbers are typically compiled in a less-than-scientific way: Former clients are called by telephone and asked if they have remained sober.

One interviewee scoffed when recollecting the phone call he got from his rehab. “I told them I was sober, sure,” he said. “But I was drinking.”

The movie says that a low level of training is required to become a rehab “counselor.’’ Many states require no more education than a high-school diploma or a GED to oversee seriously ill patients at risk for suicide, seizures and mental illness. The sole qualification for a job in a rehab center is often that the employee has remained sober for months or years through a 12-step program, according to the documentary.

Dee-Dee Stout, a Bay Area counselor and college instructor who, like Horvath, quit drugs and alcohol through AA, has become an outspoken critic of the single-minded adherence to the 12-step approach, arguing that it ignores the many other options that have proven more effective. These include cognitive behavioral therapy and motivational interviewing, an individualized form of therapy that helps guide clients through behavior changes by helping them resolve their ambivalence about their drug and alcohol use, as well as a handful of FDA-approved drugs that help reduce cravings.

“If we’re going to treat (addiction) like a disease, let’s treat it like a disease,” Stout says in the movie, “with medical personnel and other health professionals in charge of treatment.’’

And unlike fertility centers, which are required by the federal government to publish their success rates, the documentary says rehab facilities have no regulatory oversight, and are therefore able to offer expansive claims about their outcomes.

Get The Beast In Your Inbox!
By clicking "Subscribe," you agree to have read the Terms of Use and Privacy Policy
Thank You!
You are now subscribed to the Daily Digest and Cheat Sheet. We will not share your email with anyone for any reason

One center the film depicts, Passages in Malibu, promises lasting success. In a clip from a television commercial shown in the film, co-founder Pax Prentiss intones: “Someone comes in here addicted to a substance, and they leave here addiction-free. They’re cured.” Cliffside Malibu declares: “Our treatment program is so successful, we guarantee it.”

What does one get for a month’s stay at rehab? The answers border on the absurd. One director after the next lists the services offered at these centers, which range from $1,000 to $1,800 a day. (Many of the directors of the facilities, which are typically nonprofits, earn salaries in the high six figures, according to the film.) Darryl Seskind, director of admissions at Seasons Recovery Center in Malibu, walks along the lawn at the beachfront center, explaining that clients sunbathe, surf and kayak. Others discuss their meditation classes, AA meetings (which are free, of course, outside rehab), and “educational lectures.” According to William Miller, a professor emeritus of psychology and psychiatry at the University of New Mexico who has studied addiction for decades, such lectures have among the lowest impact on the complex condition of alcohol and substance use disorders.

At New Directions for Women in Costa Mesa, Calif., viewers learn that residents take field trips to the Getty Museum, watch movies, and go to AA meetings. (The center’s website also lists an impressive number of staff. They include “energy meditation facilitators,” a “Native American facilitator,” a “psychodrama facilitator” and a “drum circle facilitator.”) Some centers promote equine therapy, in which clients interact with horses. At the now-shuttered One80 Center in Los Angeles, former clinical director and CEO Bernadine Fried told the filmmakers: “I really believe horses make the best therapists.”

Horses, dogs, and other animals can certainly be calming influences. Yet evidence proving the value of equine therapy is dubious at best.

Mike Mitschke, who tried three stints at rehab for his heroin addiction, explained the treatment to the filmmakers this way: “You go and f*cking pet horses. What is petting a horse going to do for me? I don’t even f*cking like horses. How is that going to keep me from keeping a needle out of my arm?”

Still, Fried told the filmmakers: “Here at One80 we have about an 80 percent success rate, so we’ve been very fortunate.”

Fried’s suite of techniques, which cost $55,000 a month, proved unhelpful to Andrew Witkoff. In 2013, Fried and her husband and business partner, Alex Shohet, were named in a wrongful death suit (PDF) over Witkoff’s 2011 overdose death while at a sober living facility the couple owned. (Sober living homes are interim facilities where some live after rehab and before they return to their former lives.) The suit (which is still in litigation) alleged that a “sober companion”, a chauffeur whom the Hollywood Reporter said earned $1,000 a day for his chaperone duties, did not properly supervise or monitor Witkoff, who allegedly left the facilities unattended, shirked his urine tests and bought illicit drugs online. According to the complaint, Witkoff asked for, and was given, the knife he used to crush and inhale the pills that later killed him.

The filmmakers compare the services offered at Betty Ford (it has since merged with Hazelden), which costs $53,000 a month, to those of a nearby retirement home, which cost $4,005 a month. (One notable difference: at Betty Ford, you eat what’s being served that day. At the retirement home, you have your choice of a restaurant-style menu.)

A spokeswoman for Hazelden said that they had not had the opportunity to see the film. Other facility directors, including New Directions’ Rebecca Flood, did not return calls for comment.

Business of Recovery

Greg Horvath Productions

But Fried, reached by telephone, said this: “I'm over 27 years sober. I've been through hell working in the treatment industry. I've worked with some of the biggest, scariest, narcissistic people. It's a tough field to treat addicts and alcoholics. It's really, really tough. And I am under attack.”

Her husband, Alex Shohet, blamed the media for portraying his work in a negative light. “People characterize us greedy, money-hungry people,” he said. “That's not who Berni and I are.”