Exploring Diversification as A Management Strategy in Substance Use Disorder Treatment Organizations

Implementation of the Affordable Care Act (ACA) creates both environmental uncertainties and opportunities for substance use disorder (SUD) treatment providers. One managerial response to uncertainties and emergent opportunities is strategic diversification of various dimensions of organizational activity. This paper explored organizational outcomes related to diversification of funding sources, services offered, and referral sources in a national sample of 590 SUD treatment organizations. Funding diversification was related to higher average levels of census, organization size, and recent expansion of operations. Service diversification was related to higher average levels of use of medication-assisted treatment (MAT), organization size, and expansion. Referral source diversification was related only to greater average use of MAT. Overall, strategic diversification in the three areas explored was related to positive organizational outcomes. Considering alternative strategies of diversification may help position SUD treatment centers to deliver more innovative treatments such as MAT as well as enhance capacity to satisfy current unmet treatment needs of individuals with behavioral health coverage provided under the ACA.