Reply All - #121 Pain Funnel

Episode Date: May 18, 2018

An ambitious plan to help people goes off the rails, and a man from Florida tries to fix things the only way he knows how: with prank phone calls. Further reading: Cat Ferguson's reporting on Google and Rehab (The Verge) - Part I Cat Ferguson's reporting on Google and Rehab (The Verge) - Part II David Segal's series on the business around addiction (New York Times) Ryan Hampton's American Fix: Inside the Opioid Addiction Crisis Palm Beach Post's Reporting on the Sober Home Crisis  Learn more about your ad choices. Visit podcastchoices.com/adchoices

Hey, before we start the show, if you listen to Reply All, it is very unlikely that we need to tell you about startup, Gimuth's first podcast. But we're doing it anyway because they're back with the new season and if you haven't been listening, you owe it to yourself to check it out. It's great. They are profiling the most unlikely powerbroker in Silicon Valley, Arlen Hamilton. It's a story of Arlen breaking into the biggest, whitest boys club in the valley, Venture Capital. It's awesome not just because you learn about her, but because you actually learn about this world that, I feel like people think they know, but have no idea about the details of. You should check it out.

It's out now. Go listen. Here's our show. From Gimlet, this is Reply All. I'm Strithy Penameney. So here's an idea that is so good and so agreeable that it's almost boring for me to say it out loud. People who are addicted to drugs should be able to go to rehab. And when they do, health insurance should cover it.

Today, after almost a century of trying, today after over a year of debate, today, after all the votes have been tallied, health insurance reform becomes law in the United States of America. It is obviously President Obama. It was back in 2010, he was signing the Affordable Care Act, Obamacare. And included in this act was a seemingly non-eastern. controversial idea. For the first time, everybody's insurance had to cover drug rehab. And it also had to cover the people most likely to have drug problems, young adults. And this year, young adults will be able to stay on their parents' policies until they are 26 years old. That happens this year. All of these people who wouldn't have had access to help before, now they could get it. But what happened next was not

what anyone expected or what anyone would have wanted. And today I'm going to tell you the story of what happened next. How quickly the seemingly good idea turned into basically the evil twin of a good idea. And I'm going to start with this gentleman. He's a 77-year-old psychologist named Alan Goodwin. And he has spent his entire life trying to make rehab better. You can't even ask his name without him bringing this up. I just want you to introduce yourself. I'm Dr. Alan Goodwin. In 1961, I walked into a large state hospital. I was a freshman at the University of Alabama.

And I saw there was a lot to be done. And what is scary, there's so much that needs still to be done. We just have to really try and figure this out. That's how I'd introduce myself. So that is Alan. Allen told me that he, like most people in the field, was thrilled with the passage of Obamacare. But then a couple of years after the law passed, he started to notice these changes that gave him pause. And they were right in his backyard in Palm Beach, Florida.

If you drive between here, West Palm, going south, you'll see a bunch of treatment centers. Now, those suddenly, over the last four or five years just appeared. They just popped up. They were like weeds. Almost overnight, it seemed as if there were treatment centers everywhere, like these tiny outpatient rehab places and sober homes, these halfway houses that people would stay at when they were going to rehab. And none of this made sense to Allen because Palm Beach County was not,

the center of the opioid epidemic. It was mostly filled with resorts and retirement communities. And so Alan's wondering, who's going to all these places? He decides to investigate. I drove over to Atlantic Avenue in Del Rey, and I saw a, you know, a group of three or four young folks. Sort of stereotypical-looking drug kids. I hate to use that. Okay.

I would make some pretense. ask directions or something, then start talking to them and just getting some information. Alan would ask them where they were getting treatment, where they were from, and he said that again and again, he would hear the same story. Pattern was most of these people were treatment failures. They've been multiple treatments. Most of them were from out of state. Huh. So these were young people who were going from rehab to rehab without getting better.

And they'd come from far away to get this treatment in Palm Beach. Alan wanted to know exactly what was going on inside of those treatment centers. And so he devised a plan. He figured out that the centers were spending a ton of money on internet advertising. Because by this point, you couldn't Google anything addiction related without all these sponsored ads promising solutions to addiction. Like addiction treatment helpline. Stop dying. start living. Or this other one, no-cost rehab assistance. Make the call. We are available 24-7.

And so Alan decides he would call the numbers that he saw online. He would pretend to be a potential patient, some person doing drugs. Like this one time, he said he was a teenager with autism who just tried pot. I was the 18-year-old who had smoked a little weed during my freshman year year at Duke. Wait, did you really? Are you telling me that you, on one call, convinced somebody that you were 18 and high? Well, I did change my voice. I am now going to play you Dr. Allen Goodwin's impression of this 18-year-old kid. I have autism, and I went to the mall, and I ran into the bad boys, and I think I may have done some drugs. And my father's terribly upset with me. And then the father came on, probably in my natural voice.

And I again repeated, my son has autism. Can he bring his toys to treatment? Alan acknowledges that this is the worst possible impression of an 18-year-old kid or a person with autism. But the point for him is what happened next. What happened next is that the person on the other end of the line, the rehab call center salesman, he asked him, do you have insurance? And when Alan said yes, the call center person told him, okay, I'm connecting you with the rehab in Palm Beach County.

Your kid needs to fly down here right away. They were going to put me in this home full of heroin addicts. I have nothing against heroin addicts, but you don't put an impressionable 18-year-old kid who smoked a little weed and tell him to drop out of college. Crazy, crazy, crazy shit. Excuse me. Alan made dozens of these calls, and he said that no matter how outlandish his story or how ridiculous his character, the advice he got from the other end was always the same.

If he had insurance, they would pack him off to rehab in some faraway state, often Florida. Even if rehab was a terrible option for the person that he was pretending to be. So all of this just made him worry more. Like what exactly was happening to these poor people when they actually showed up. at these treatment centers. And then in 2015, Alan got his chance to find out. An investor called him and said, hey, can you take a look at this treatment center I just bought? He wanted to woo Allen into referring patients there. And Alan took the invitation. He got inside. And there, he ended up meeting this one patient whom he clicked with right away. We're going to call him Michael.

Here he is. Do you remember, like, first seeing Alan what it was like? I thought he was just a weirdo goofball. Can you tell me why you thought he was a weirdo goofball? Like what did he say or do that made you think that? Because he's pretty old, but he's very zany. He's like an Albert Einstein kind of character. You know, he's just got a lot of energy like coming from his face. He's just stoked to be alive and you can sense that.

that and just how he carries himself and how he talks to people. I don't know. He was not the same kind of person as any of the people that I had met on my entire journey. Michael's journey had started a couple years earlier. He had been addicted to heroin. He'd been suicidal. And his mom had called a bunch of these rehab hotline numbers off Google. Next thing he knew, he was making the four-hour drive to this new rehab place in Palm Beach. Yeah, it was pretty big. And you know, big driveways and stuff like that. Basically, like four little, I guess you could call them like villas. And a lot of us, you know, were drug users for a while there.

So we weren't used to being in very nice conditions at all. So then to put us in a place with nice marble countertops and whatever, you know, was cool. Michael only stayed at that place for 30 days. By the time he'd met Allen, he'd been through a whole succession of sober homes in treatment centers. How many treatment centers would you go to in the next few years? Jesus Christ, I would say probably about 18. 18?

Yeah. Michael and Alan struck up a relationship. And over many conversations, Michael described his experiences, cycling through these different rehab centers, sober homes, relapsing occasionally. And the more Alan learned, the more alarmed he became. For example, Michael told Alan that he would sign lots of paperwork for labs or therapy that he'd need to get. And on all of this paperwork, he would see a doctor's name. But he never actually saw a doctor.

All his therapy sessions were run by counselors, and these counselors basically acted like board substitute teachers. Like there were days when they would just plunk the kids in front of a movie. So some of the films examples that they would show us would be a diary of a magic. black woman leaving Las Vegas. That's the one with Nicholas Cage. At the time, I really didn't understand how that fit in. We were all making jokes about it. But it was basically just, it was like study hall time in school where we're not really

there to study. It all sounded worse and worse to Allen. And then there was this time that he went to see where Michael was living. I remember going to visit Michael at this sober home. There were these sad-looking, I couldn't even call them women. They were girls, just unhappy, who obviously were being prostituted. I could not believe what treatment had become. He noticed that it was in this kind of not great area.

That's putting in light lately. But he said that right next to your home was another home where it was just like work. It was a crack house. They were actually actively day and night selling crack out of that house right next to us. And Alan would be like, that's not normal. That shouldn't be happening ever. For a while, I argued with him about it and was like, yeah, okay, Alan, you know, you do your thing and I'll do mine, buddy. In Michael's mind, this sober home, as crappy as it was, was the one thing saving him.

Like, he didn't know how to be a person in the non-rehab world anymore. Leaving men overdose. Leaving meant death. And there were people in the sober home who were reinforcing this message. Like, the guy who ran the place, this gruff-talking former addict named Anthony. This is almost a little embarrassing, but, you know, fuck it. It's for the greater good. when Alan first picked me up and when I said picked me up you know met me in that treatment center

I mean I was what's that shit when you're in love with your captor you know yeah some Stockholm syndrome yeah I was totally Stockholm syndrome on Anthony I remember telling Alan like oh no like he's he's hard but you don't understand like he really goes out of his way to help us and and everyone else has really fucked us in this industry and all this kind of stuff. And, you know, we can't trust anybody, but Anthony is the one that's always there for us. And I know I can go to him. This is me saying this shit. I don't know why I felt that way. For months, Alan and Michael would just go back and forth like this. Alan would tell Michael, you need to leave this place. This whole system is actually doing you harm. And Michael just wouldn't budge. And so one day, after they

millionth argument. Alan just got this look on his face. He was just like, hey, I got this idea. And I was like, uh, okay. And he just pulls the phone out and puts it on speakerphone. He's just like, uh, hi, you know, and he starts up his little spiel. Alan had just dialed up one of those rehab hotlines. And the guy on the other end, the call center agent, was asking how he could help. I told him I was a 67-year-old gentleman. with Alzheimer's, and I was just crazy as a loon. I would giggle. I would say, oh, what did I tell you? Can you? I don't remember what I told you. And I told him that my 22-year-old son had said, if I shot heroin, it would help my Alzheimer's. At first, because he didn't tell me what he was going to do. I was like, Alan, stop that. I was like, what are you doing? I didn't know if he was just trying to play a prank on these people.

And I told him I was very rich. I was not interested in using my insurance. I had a company, and I would write a check. And they were immediately sending a car up to pick me up with my cashier's check. This whole time, Michael had thought that Alan was just exaggerating, like about the state of treatment. But hearing this whole phone call play out this way, it was clear. to him that the person on the other side of this line did not care about this old man. For what he said, that he was suicidal and doing heroin and he was an old man with Alzheimer's,

I mean, totally unstable. And to hear that they were ready to send him on a plane, just cablam. By the time he hung up, you know, he said immediately to me, you know, do you realize, can you see what the problem is with this. And I had already been hashing the whole thing out of my head the whole time. Were you seeing like a montage of everything that you'd been through, like from that first place at the marble countertops all the way through bare mattresses? Yes. All the way into the ghetto with the gunshots outside, you know, from the top to the bottom. I had put everything together and I could understand what the problem was here. Michael says that the thing he realized at that moment was that it was not just about this one sober home owner, Anthony, who may not have had his back.

It was something way bigger than that. It was that he had been fed into this system, this much larger system, which was scooping up addicts from all over the country and then extracting every possible insurance dollar out of them. After the break, just how ruthless and efficient that system became, according to one of the guys who helped operate it. So here was what had started everything in motion. By 2013, when insurance companies had started paying people's rehab bills, they created a rehab market overnight. Alan said this was like billions of dollars all of a sudden. With the Affordable Care Act, suddenly people saw gold. And that gold was really easy to get. Remember, up until this point, insurance companies

have never had to reimburse for rehab before, not on this scale. Like, they didn't know how many drug tests you're supposed to get, or how long should people be in treatment. Mostly, they just paid the bills that came to them. So the only thing standing between a scammer and those billions of dollars in insurance money was a license. A license to open a new treatment center. What does one need to do to get a license? It's basically you fill out a stupid form. You hire a consultant who cuts in pace and you set up shop. You know, it's like opening a... It sounds almost like opening a hair salon. I think you need a license to do a hair salon. Yeah, in fact, I think the requirements in the hair salon are more stringent.

There are some ways in which it is harder to open a rehab clinic than a hair salon. For instance, you cannot get a license to open a rehab if you are a convicted felon. But it turned out that this was very easy to get around. The guy who ran Michael's Treatment Center, for instance, Anthony's boss, he was an ex-felon convicted of credit card fraud. Obviously not every treatment center was run by some former credit card scammer. But if you were a criminal and your only intention was to take patients and turn them into insurance money, you could thrive in this system. In fact, you actually had a competitive advantage over the do-goaters who weren't in this for the money. Just as an example, the ex-felon who ran Michael's Treatment Center, he would have worked out exactly what kinds of things insurance would pay for.

Like tests. Michael would get tested all the time for everything, allergy testing. DNA testing, and then their favorite test of all, the urine test. Every single day. It was something that if you didn't do it, of your own volition, you were punished very heavily for. They were just so strict about it. It was so important. I mean, they would run around and yell for people to do their tests.

They tell you like, well, you're an addict, and we can't trust you, and this is for your own good and blah, blah, blah. And if you got nothing to hide, then you shouldn't have a problem with it. So it doesn't take long until you're pretty much like, yeah, well, everybody is. has to pee every day, and that's just the way the treatment centers work. Michael's Treatment Center could bill insurance for up to $5,000 per pee test. They were making millions off of pee. The people I talked to for the story who worked in rehab, they actually referred to urine as liquid gold. Some people in the rehab business got so good at wrenching every single insurance dollar out of patients

that they realized they could actually pay for kids to fly down to Florida. and still make a profit. And so the question became, how do we find those kids? And this part, they didn't have to invent. They could just hire people on the internet to do it for them. Your program has been created. You have a beautiful location to help people, and you're ready, but the phone is not ringing. This is the problem that all addiction centers have at some point.

So what now? Diversify your lead generation for one cost. With our lead generation service, you pay one price and allow our lead generation experts to do the job of generating leads directly to your center. This is an ad for a rehab SEO company. There are many of them. They all sprung up around the same time. And they had all sorts of tricks for snagging out-of-state patients who Googled looking for rehabs. Like, for instance, they could make it look as if a rehab was right around the corner from you, even if it was,

way out there in Florida. And there was this other thing. Are you in startup or growth mode and don't have an intake staff dedicated to the phones? We can help with that too. We employ over 45 people in recovery to answer the calls for you and qualify the calls prior to... They are talking about the next step in the chain, the rehab call center. It's the place you go when you call the number on one of these Google ads. I talked to a guy who worked at one.

We had a script that said, of course, it said, we work with numerous locations and facilities. We want to find the one that's best for you. However, we work at one specific place and only put them in one place. So that was a lie, but that was in the script. I'm going to call this person, Sam. And to protect Sam's identity, we have changed his voice. Sam's title at the call center was client advocate, but really what he was was a salesman. His job was to pluck these kids out of wherever they were from and get them into the system.

Could you tell if they were high when they were calling? Yeah. Most of them late nights usually the really drunk people that will never remember that they call people. And how do you treat people like that? Like what are the... Treat them all the same. I mean, you go, oh, were you calling for yourself or a loved one? Okay.

Oh, you're drinking too much. You mind sharing more about that? Have you tried to do anything about it before? How'd that work out for you? Not too good, huh? Okay. Let me ask you a question. If you could see yourself in six months not doing anything about your problem,

where do you see yourself in six months? And usually they say something like, oh, probably dead or divorced or anything. Well, that wouldn't be good, would it? No. All right, let's say you do go get help. Six months down the road, where do you see that job, that relationship, everything else? Probably a lot better. So how can I help you tonight?

I need to go to treatment. Okay, great. That line of questioning is called the pain funnel. The what phone? The pain funnel. The pain funnel. Okay. And it works.

Yeah. And it does work. Sam said that for every person that he was able to get to rehab, he got a commission up to $1,500. And the thing that made him good at this job was that, like everybody else he worked with, he was a former drug user. He'd been in rehab first in Pennsylvania and then in Florida, and this was an experience that he was able to use while making his pitch. How do you convince them? Like, what's the script there? I tried to, like, block all this out of my head. I'm sorry.

Okay. So one of the ways, you know, one of the scripts I remember it so clearly that I was handed, it said, you know, psychology today said you were 90% more successful as you leave your immediate area to seek treatment. And what I would tell people was the truth. When I was in Pennsylvania, every day I thought I could even. usually make it home. I'm two hours away. I'll walk that. I want to. And it was on my mind 24-7. When I was in Florida, that wasn't even a fuck. You're a good salesman. Oh, God, that sucks. When Sam first got his job at that call center, he said that he actually thought that he was helping kids. Like, these kids whom he'd convinced to fly down to Florida, he would sometimes

pick them up from the airport, and he'd check up on them, like, during their treatment. But he noticed that over time they weren't actually getting any better. In fact, most of them, he said, were getting worse. And he saw that they would just circulate from facility to facility. And this is a thing I heard a lot, like in Michael's story, in other people's stories. And I didn't understand why this would happen. Like, why wouldn't these kids just go home? And then I found out that this is actually the most devious part of this entire rehab machine.

I talked to this one journalist, Kat Ferguson, who has done some of the best reporting on this entire rehab economy down in Florida. And she explained it to me. The first time I went to Florida, I was sitting in a Starbucks with a guy. And he pointed outside and he said, those people sitting at those tables are holding court. Those are body brokers. Body brokers. Kat explained that body brokers are basically just guys who deliver kids to treatment centers or sober homes for cash. And there were suitcases all around the Starbucks. And he said, those are kids who have been kicked out of sober homes and they need a place to go. And so they go and they have a meeting with the marketer and they find out how much their insurance benefits are worth.

And they find out if they can make money because a lot of times they'll get paid 500 bucks to go into detox. These kids were looking for treatment centers because for whatever reason they'd left their old one. And I talked to this one mid-level patient broker who told me the mechanics of this moment. Like he would meet a kid, send a photo of the kid's insurance card to his boss, the marketer. And if it was good insurance, they would give the kid money to go to a new rehab and also money to buy drugs. In order to go into detox and have insurance pay for it, you have to be honest. on drugs. So that is why body brokers will either give kids drugs or give kids money and say, come back when you piss dirty. That's so dark. It is really dark. You're getting clean and

you're learning a whole new way to be alive. And the people who are telling you the rules of this new life are telling you it's totally fine to shoot up one time and take 500 bucks to go back to detox. Something that I heard a lot was treating your insurance card. like an AMX black card. It was the dark funhouse mirror version of rehab. That pivotal phone call where Michael said that he finally got over his Stockholm syndrome, that happened in 2016. And after that, he says he turned over all his treatment records to Dr. Allen Goodwin.

He shared with me this one-inch thick packet of insurance bills for $400,000 or whatever it is. and it was just half of it was on urine screens, seemed to be multiple overlapping dates. It was so obviously criminal. Alan was now part of a new task force that was investigating the entire rehab industry in Palm Beach. Things by that point had gotten so bad that all the problems that he was seeing,

they were becoming clear to everybody. In Palm Beach County, Florida, 4,600 drug overdoses last year alone. The number quadrupled in four years. The crisis is so out of control, Governor Rick Scott wants to declare a public health emergency. The FBI came in and arrested a handful of treatment center owners, including the guy who ran Michael's Treatment Center, the former credit card scammer. His name was Kenny Chapman. And the details that came out in his trial made it clear that all of the things that Michael had experienced,

were just a fraction of all the bad stuff that was going on. Kenneth Chapman faces a longer list of charges. Accused of health care fraud, money laundering, and prostituting female clients. And he allowed patients to keep using drugs as long as he could still bill their insurances. By most accounts in this past year, things have actually gotten better in Palm Beach. Florida passed this big law against patient brokering and Google suspended selling any search terms related to rehab. That's the good news. The bad news is people I talked to in Florida say some of the worst offenders basically just picked up and moved their operation to another state, California.

Ellen's actually been talking to authorities there trying to help. Before I started reporting this story, I'd been reading about the opioid crisis just like everybody else. And so it was shocking to me to learn how ignorant I was about this huge piece of it. I'd always thought that the problem was just getting people into treatment. it never occurred to me to ask what happened once they got there. Turns out it didn't occur to a lot of people. Shruthi Pinnaminani. She's a producer for a show. Our show is produced by Fia Vennon, Damiano Marquetti,

Caitlin Roberts, and Elizabeth Kules. Our editor's Tim Howard. We had extra editing help this week from Alex Bloomberg and Sarah Saracen. Our intern is Devin Gwyn. Shruthi has a very long list of thank you, which she's going to say. Yeah. So this entire story was built on incredible reporting by other people.

First of all, Kat Ferguson, whose series on Google and Rehab, you have to check out on The Verge. David Siegel, who did his own series about rehab entrepreneurs for the New York Times. He's the one who introduced us to Alan Goodwin. Thank you, David. And Ryan Hampton, who wrote American Fix, which comes out in August. I got to read it early, and it's very, very good and important. Also, special thanks to Alan Johnson, Justin Kinselman, Katrin O'Leary, Christine Stapleton, Andy Mandjuk, and Greg Horvath. You can check out his documentary.

It's called The Business of Recovery. Matt Lieber is just getting to do credits in a normal way without some weird interloper coming in the room. We were mixed by Rick Kwan, Haley Shaw, and Dara Hirsch. Back-checking by Michelle Harris. Our theme music is by the mysterious breakmaster cylinder. You can find more episodes of the show on iTunes and Spotify. Thanks for listening. you soon. Check this out underneath the bass strings there's like a small blue switch I can't

quite reach. It's right there. There must be a false panel on the side or something. We should push this right. Hell yes.