Are Wall Street's For-Profit Eating Disorder Clinics Fleecing Patients & Providing Shoddy Treatment?

Illustration for article titled Are Wall Street's For-Profit Eating Disorder Clinics Fleecing Patients & Providing Shoddy Treatment?

It’s an upsetting question posed by a New York Times piece, which delves into the proliferation of for-profit, specialty eating disorder clinics—posh rehab centers and chains that offer yoga and spa retreat amenities while tackling a health issue that is notoriously difficult to cure. At the crux of the investigation is the question of whether the focus of treatment goes by the wayside when money is a more prominent focus.


More alarming is whether these clinics’ practice of wooing mental health professionals with retreats and kickbacks for patient referrals might result in the wrong sort of treatment for the patient:

The perks offered to outside clinicians who might refer patients, the experts say, include free trips, restaurant meals, educational seminars and small gifts like pens and key chains dispensed at professional meetings. Critics liken them to pharmaceutical industry tactics that led to laws and policies requiring financial disclosure, though on a smaller scale. Studies had shown that even small gifts from drug companies, like free medication samples, affected doctors’ prescription practices.

On Monday, five Columbia University Medical Center professionals published an article calling for transparency in the field of residential treatment centers, reports the Times. In it, they lay plain the problems with some centers, which spread in the ‘90s “when managed care dramatically shortened hospital stays for eating disorders.” Their main issue is the reward system for health care professionals, but they also find problems with most of these centers’ lack of connection to “academic medical institutions,” which in turn results in a lack of oversight.

They also point out such centers’s connection to Wall Street, resulting in an alarming kind of eating disorder treatment industrial complex:

In the United States, residential treatment programs have recently captured investor attention and have become a popular vehicle for private equity firms. Investors believe that high clinical demand and the availability of third-party payments make behavioral health treatment an area ripe for growth (10). They are alert to the fact that many previously uninsured individuals now have mental health benefits from commercial insurance under both the Mental Health Parity and Addiction Equity Act and the Affordable Care Act. This group includes young adults, a population at high risk of developing eating disorders.

There’s also the added complication—one that dovetails with the pharmaceutical industry—that some doctors are, questionably, prescribing medications such as Adderall and Vyvanse to treat binge-eating disorder.

Eating disorders, as the Times notes, are difficult to treat, and some of the patients interviewed in the piece couldn’t sustain long-term recovery in for-profit treatment centers, finding better care in hospital programs:

Melissa R., 28, who asked that her last name not be used for reasons of privacy, said after several hospitalizations for anorexia, beginning when she was 21, she found a residential center in the Southwest on the Internet and spent six weeks there. The center, which she described as “more like a resort,” was “somewhat helpful,” she said, but not worth the time and money.

“People were nice, and the food was really good,” she said. “I had fun, I enjoyed rock climbing and stuff, but that’s not why I was there. I’m paying a lot of money to get well, not to rock climb.”

Last year, she spent two months at Eating Recovery Center in Denver, moving from residential care to day treatment, and began to gain control of her illness. “E.R.C. was the best place I’ve been,” she said about the center. “They were very individualized.”


Ultimately, the Times notes, the blame for inadequate treatment circles back again to Wall Street, to money, to eating disorder treatment chains seen as a good investment—patients are seen a commodity, rather than individuals dealing with a mental health issue. One example is Monte Nido, a center started in Malibu by “a former teacher who recovered from an eating disorder,” but which expanded to a chain in four more states after it was purchased by the equity firm Centre Partners.

Last year, noting that the investment had “tripled the company’s facility footprint during our ownership period,” Centre Partners sold Monte Nido to another investment firm, Levine Leichtman Capital Partners, for an undisclosed sum.

“I believe that the Monte Nido’s [sic] approach to eating disorder treatment is what you and others like you have been waiting for,” Ms. Costin wrote in a letter to potential patients on the company’s website, which includes images of beaches, mountains and the Boston skyline on its home page.


Eating disorder recovery is not an inexpensive prospect from any treatment center, and often it takes years, sometimes even decades, to reach a tenable level of recovery. It’s a big population to prey upon: One in five American women suffers from some type of ED.

Image via Ttatty/Shutterstock



My sister has had an eating disorder for the past 20 years. If there is something I’ve learned is that so-called professionals still don’t understand EDs and they don’t know how to treat it. You’re going to spend a fortune seeing no improvements because so many girls don’t want to get better and these clinics profit from that. In the past 10 years my sister went to two different treatment centers. One of them gave her candy as snacks, during a time my sister was terrified of drinking water because she thought she’d gain weight. Both places cost a fortune and did absolutely nothing for her except make her more anxious, paranoid and depressed.

Honestly, there have been moments when I’ve thought EDs are incurable. My sister not cooperating in any way at 35 years of age and still acting like she’s 15 makes me lose all hope. It’s like she was emotionally and psychologically frozen at 15 years of age. Doctors really don’t have any idea what to do.