The addiction to subsidies and the addiction-center mess

Orange County and three other Southern California counties are known as the Rehab Riviera because of their large number of addiction treatment facilities. That has made this region ground zero in the fight over a rehab system that’s widely viewed as broken. At a public hearing in Costa Mesa last month, for instance, lawmakers called for more regulation and law-enforcement tools to help officials crack down on bad actors within the industry.

An Orange County Register series has meticulously detailed the myriad problems at these centers, ranging from facilities that disrupt neighborhoods to incidents of sexual assault, drug abuse, questionable payment schemes and even death. Democrats and Republicans mostly agree on the need for more regulation, tougher licensing standards and limits on questionable advertising (“You’ll be cured in 30 days!”).

Most proposals skirt around the core issue, which is rooted in passage of the federal Affordable Care Act. “After decades of denying coverage, insurance companies were required to pay for treatment, and at rates comparable to coverage for major illnesses,” the Daily Beast reported. That meant “virtually anyone could get a policy” and high reimbursement costs turned addicts into “gold mines.” Our region became the center of this industry because, as the article added, patients would rather spend their recovery time in warm, beach-adjacent areas than in Rust Belt cities.

Addiction certainly is a serious healthcare issue. Private centers — rather than government-run clinics — remain the best approach to treat people. Whenever third parties such as Medicare or insurance companies foot the bill, however, it makes it tougher for customers to control their costs. Plus, it’s much harder for regulators to measure the legitimacy of a facility that deals with opioid addiction than one that provides surgery or cancer treatment.

Because federal policy created perverse incentives, California policymakers are limited in what they can do about it. Gov. Gavin Newsom signed some reform bills and rejected others in the last session.

But no reform can work until lawmakers recognize that addictions to subsidies and federal mandates are the root causes of the treatment-center mess.