The eating disorder treatment industry has experienced a complex evolution in recent years. As the rates of eating disorders continue to rise across the United States, the demand for specialized care has led to an influx of treatment providers eager to meet this need. However, the industry has also witnessed some significant closures and scaling back of programs as providers struggle to navigate the changing dynamics of healthcare. Many believe that the closure of certain eating disorder treatment centers is indicative of deeper systemic challenges—challenges that go beyond just financial strain.
In a recent episode of the Behavioral Health Business Perspectives podcast, Allan Benham, the CEO of Alsana, a comprehensive eating disorder treatment provider, shared his insights into the current state of the industry. Alsana, with locations in California, Alabama, and Missouri, offers residential, partial hospitalization (PHP), and intensive outpatient (IOP) programs, with virtual care available nationwide. Benham, who assumed the role of CEO in April 2023, discussed how the company is adapting to industry changes and overcoming challenges that many providers are facing, including staffing shortages, insurance issues, and the evolving nature of patient care.
The Rise and Fall of Eating Disorder Treatment Providers: A Cautionary Tale
During the COVID-19 pandemic, there was a notable surge in new eating disorder treatment providers entering the market, driven by a collective recognition that the mental health crisis was intensifying. With more individuals struggling with anxiety, depression, and eating disorders, providers were eager to expand their offerings to meet the increased demand. However, as Benham explains, this sudden influx of providers created a market where the truly mission-driven organizations remained, while others, motivated more by short-term profit, began to struggle.
“We saw a lot of people come into the industry during COVID, and as with any time when you get an influx of people, the quality companies stay around, and the ones who were just here for a quick profit disappear,” Benham notes. This dynamic is not unique to the eating disorder treatment sector but has been observed across various segments of the behavioral health industry. In fact, some of the most significant closures in 2023 and 2024 have come from providers who were not fully committed to the mission of eating disorder care, but rather to capitalizing on the momentary boom in demand.
Notable closures, such as those of Refresh Mental Health, Odyssey Behavioral Health, and Discovery Behavioral Health, serve as reminders that sustainability in the healthcare space requires more than just meeting immediate demand. It requires deep commitment to providing quality care, building strong patient relationships, and maintaining a clear mission.
Alsana’s experience has mirrored this broader trend. “We really tried to capitalize on that growth, but we’ve had backpedal on some of that aggressive expansion,” Benham admits. He points out that the lesson learned here is a shift in focus: instead of rapid growth based on meeting occupancy targets, Alsana is now prioritizing a more intentional, sustainable approach that emphasizes quality, patient outcomes, and proven demand in specific areas.
Returning to the Mission: Why Mission-Driven Providers Are Here to Stay
The eating disorder treatment sector is seeing a broader industry-wide shift away from profit-driven models and back toward mission-driven care. “The industry is shifting back toward the mission rather than the margin,” Benham says, referring to the transition from a focus on profit margins to a genuine commitment to patient well-being. This change is particularly important in the eating disorder treatment space, where the challenges of care are complex and multifaceted.
As Benham explains, a major shift is occurring within the approach to eating disorder treatment, one that focuses not only on recovery but also on early intervention. “There’s a shift of catching eating disorders early, treating adolescents, and trying to change the behavior before it’s fully ingrained in a lifestyle choice,” he states. This early intervention strategy is crucial, as untreated eating disorders often lead to long-term, chronic struggles with mental health, nutrition, and physical health.
Additionally, Alsana has become a leader in addressing the underreporting of eating disorders in men. Historically, men have been significantly underrepresented in eating disorder treatment programs, with societal expectations and stigma contributing to their reluctance to seek help. “There’s an underreporting of men; men who suffer from eating disorders have a deeper shame about it and they struggle more to ask for help,” Benham acknowledges. At Alsana, the goal is to engage with men earlier in the process, providing them with the resources they need before their struggles escalate to crisis levels.
Alsana has also taken a leading role in treating diabulimia, a particularly challenging condition that combines both an eating disorder and diabetes. Benham proudly shares that Alsana has a specialized approach to treating diabulimia, recognizing the need for both skilled clinicians and physicians to provide holistic care for patients with this complex disorder.
The Challenges Facing Eating Disorder Treatment Providers: Staffing and Insurance
Despite the shifts in the market and the growing awareness of eating disorders as a chronic, treatable condition, providers continue to face significant challenges. Two of the most pressing issues are staffing shortages and insurance reimbursement.
Benham notes that the behavioral health sector as a whole has been struggling to retain qualified staff, a trend that has only been exacerbated by the pandemic. With many healthcare professionals leaving treatment centers for virtual opportunities or private practice, eating disorder treatment providers are finding it increasingly difficult to attract and retain staff who are both skilled and passionate about the field.
“There’s a big lure to go to the virtual world with some of the other providers. And there’s a big lure to go to private practice,” says Benham. To address this, Alsana has focused on attracting top-tier talent by offering competitive compensation packages and providing ongoing training to ensure that staff are well-equipped to provide the highest level of care. Benham emphasizes that this training benefits not just Alsana but also the wider mental health and eating disorder treatment field, as staff members take their knowledge and expertise with them into future roles.
The other significant challenge eating disorder treatment providers face is insurance reimbursement. Historically, insurance companies have been reluctant to cover the length of time that eating disorder patients often need for treatment. Benham explains that while Alsana’s approach is not adversarial, the company’s commitment to providing quality, long-term care sometimes clashes with insurance company policies. “We just need to come alongside [insurance companies] and make sure that we both have the patient’s best interests in mind,” he says. It’s not about fighting with insurance providers but about demonstrating that long-term care is necessary for patient recovery, rather than unnecessarily prolonging treatment for financial gain.
The Positive Tailwinds: Greater Acceptance and Understanding
Despite these challenges, the eating disorder treatment industry is experiencing positive tailwinds that are pushing the sector forward. One of the most encouraging developments is the decreasing stigma surrounding eating disorders. As society becomes more educated about mental health and the chronic nature of these diseases, there is a growing acceptance that eating disorders are not a matter of choice or willpower but are deeply rooted in psychological and physical health issues.
“There’s a level of acceptance coming into the world that eating disorders or even mental health in general is truly a disease and it’s truly a disorder of the mind that people can’t control,” Benham notes. This shift in understanding is helping to reduce the shame that often accompanies seeking help, making it easier for individuals to reach out for the care they need.
The acceptance of eating disorders as a lifelong condition that requires ongoing management is another key tailwind. As Benham points out, “Nobody’s been able to find a cure for it yet. It’s about learning how to have a healthy relationship with food. It’s about learning how to have a healthy relationship with movement.” This recognition of eating disorders as chronic conditions that require long-term care and attention is helping to foster a more compassionate and realistic approach to treatment.
There is also growing acceptance of eating disorders in men, who have historically been underdiagnosed and underserved in treatment programs. As societal attitudes continue to shift, more men are coming forward to seek treatment, reducing the stigma surrounding eating disorders and expanding access to care for this underserved group.
The Road Ahead: Embracing Lessons from the Past
Looking ahead, the eating disorder treatment industry is navigating a challenging yet promising landscape. The closures of some providers highlight the difficulties of balancing growth and patient care, while Alsana’s commitment to quality treatment, intentional growth, and mission-driven care serves as a model for sustainability. The industry’s shift toward recognizing eating disorders as chronic conditions, addressing male representation, and reducing stigma offers hope for better care and better outcomes for individuals struggling with these debilitating disorders.
As the industry continues to evolve, providers that focus on the patient experience and the long-term well-being of those they serve will be the ones that succeed. The road ahead is one of careful growth, innovation, and unwavering dedication to mission over margin—a future that offers hope to those battling eating disorders, one patient at a time.
