Consulting: Financial Planning
A drug rehab proforma projects your treatment center's income, costs, and profits before you sign a lease. We build them for a living, and we built one for our own 68-bed facility.
A drug rehab proforma is a financial model that projects the future income, costs, and profits of an addiction treatment center, usually across five years with monthly detail for the first 24 months. It covers startup costs, revenue projections by level of care, operating expenses, payer mix, and a break-even analysis. Lenders, investors, and state licensing reviewers read it before they say yes. Get it right and doors open. Get it wrong and they stay closed.
Who has to say yes
01
Lenders
underwrite the model
02
Investors
price the risk
03
State reviewers
check it before licensure
Adam breaks down what your proforma has to prove to lenders, investors, and you.
A proforma turns your vision into numbers a bank can underwrite. Every serious lender in the addiction treatment industry expects a comprehensive 5-year model with monthly projections for the first 24 months. Improper financial planning is one of the main reasons treatment centers fail within two years. The proforma is how your facility avoids becoming one of them.
A complete drug rehab proforma includes:
01
real estate, renovation, licensing and compliance costs, staffing before your first admission, and a contingency fund. Initial costs for drug rehab centers commonly run between $500,000 and $1 million, and every additional cost you did not budget comes out of your runway.
02
projected revenue streams by level of care, built on your payer mix, occupancy rate, and average daily census, not on hope.
03
staffing, typically your largest expense, plus facility rent, marketing, insurance, and administrative costs.
04
the patient census where revenue covers operating expenses, and the month you realistically reach it.
05
multiple scenarios, so you know what happens if your census ramps slower or reimbursement rates land lower.
One honest note
One honest note: insurance payer credentialing can take months and directly impacts first-year cash flow. A proforma that ignores it is fiction. We do not write fiction.
$42 billion
the estimated size of the substance abuse recovery industry in the United States
15 to 25 percent
average profit margins for residential treatment centers
$500,000 to $1 million
typical startup costs for a drug rehab center
24 months
the monthly projection detail most lenders expect in a financial model
Get a directional read on your profit potential. Select the levels of care your facility will offer, enter your bed or client count, choose in-network or out-of-network, and the calculator estimates potential gross revenue from national average rehab cost data.
How this calculator works: every figure comes from national average billing ranges by level of care, at 80 percent occupancy. In-network selections use the conservative end of each range, because contracted insurance reimbursement rates run lower than out-of-network billing. This is gross revenue based on national averages, not profit, and not your market's actual rates. For a full 5-year proforma built on your real numbers, schedule a call with our team.
Treatment centers have a stack of revenue streams, and revenue generation looks different at every level of care. The proforma models each one honestly, using the treatment options your facility will actually offer. The national averages:
Medical detox
$600
$1,000
per day
detox programs bill roughly $600 to $1,000 per day, the highest daily rate in the continuum and usually the shortest stay.
Residential rehab
$15,000
$75,000
per month
inpatient rehab programs bill between $15,000 and $75,000 per month. A full residential treatment episode can generate $45,000 to $180,000 per patient, which is why inpatient services anchor most models.
Intensive outpatient
$250
$650
per day
IOP runs $250 to $650 per day, and outpatient programs deliver clinical services without facility admission, which changes the cost structure entirely.
Outpatient
$5,000
per 3-month program
a standard 3-month outpatient treatment program averages around $5,000 per client.
For reference
For reference, the average cost of drug rehabilitation across all settings is $13,475 per person. Where your treatment center sits against that number is a positioning decision your proforma should defend.
Source: National Center for Drug Abuse Statistics, national averages.
Inside each level of care, the services offered drive the billing. Individual behavioral therapy, group therapy, family programming, and medication assisted treatment each carry their own billable codes and margins. Specialized services and a holistic approach often bill as additional services or command private-pay premiums, and aftercare planning keeps people connected to your treatment program through their recovery journey. Model each stream separately. Averages hide problems; line items expose them.
Model each stream separately
individual behavioral therapy
group therapy
family programming
medication assisted treatment
specialized services and aftercare
Payer mix is the most important assumption in your proforma. Most patients use some form of insurance coverage, and your status with each insurance provider changes every revenue line in the model.
In-network contracts bring lower reimbursement rates but steadier volume and faster payment. Out-of-network billing can capture higher rates per episode, but collections run slower and less predictably. At premium facilities, private pay clients contribute 40 to 50 percent of total revenue, and the most durable rehab centers balance private insurance, private pay, and government funding so no single payer can sink the model. Your proforma has to survive the gap between opening day and your first clean insurance reimbursement check.
The three payer paths
in-network: lower rates, steadier volume
out-of-network: higher rates, slower collections
private pay: 40 to 50 percent at premium facilities
Residential treatment centers achieve profit margins of 15 to 25 percent on average. Treatment facilities with 30 to 50 beds tend to achieve the strongest profit margins: large enough for operational efficiency, small enough to protect quality care. The same pattern holds across the behavioral health industry, where addiction and mental health services share most of the same cost structure.
What erodes margins is rarely a mystery. Staffing is typically the largest expense in substance abuse treatment, and operational costs like facility rent, marketing, and administration compound quietly. Market conditions shift reimbursement rates too, which is why sensitivity analysis is not optional. Your model should show the version of the business where everything goes right, and the version where your census ramps six months slow.
What moves the margin
15 to 25% average residential margin
30 to 50 beds the strongest margin band
staffing, the largest single expense
The rehab owners who maximize revenue do not chase census at any cost. They manage a few operational metrics relentlessly:
the two numbers that tell you whether growth is profit or noise. Average revenue per occupied bed is the heartbeat of a residential model.
an empty bed costs your facility almost as much as a full one.
inpatient programs usually last 28 to 30 days, while residential treatment plans can extend from 3 to 12 months. Longer clinically appropriate stays improve patient outcomes and unit economics.
many patients step down through multiple levels of care, and rehab facilities that move people from inpatient care to PHP, IOP, and outpatient keep serving the same person through their recovery journey.
Our refusal line
Quality care is the one growth strategy nobody can copy. Better patient outcomes produce referrals and long term recovery stories, and a family choosing addiction treatment services for a loved one reads outcomes before anything else. Growth strategies that skip quality do not survive the addiction treatment field. We refuse to grow chaos.
This is not a template with your logo on it. Careful planning, real data, honest outputs:
1
Your market, your levels of care, your capital picture. If a feasibility study has not been done, we start there, because a proforma without market data is a guess.
2
Month-by-month admissions and census projections per level of care across the first 24 months, then quarterly through year five.
3
Payer mix, reimbursement rates by payer and level of care, and collections timing, per revenue stream.
4
Staffing plans mapped to census and state ratios, facility costs, marketing strategies, administrative overhead.
5
Everything it takes to reach opening day, including the zoning laws that stall timelines.
6
The census where you cover operating expenses, and what happens in slower scenarios.
7
A package you can put in front of banks, investors, and partners with a straight face.
What each side brings
You bring the vision and the market knowledge. We bring the model, the national data, and the scar tissue from doing this ourselves.
68 beds
at Radix Recovery, Cedar Rapids
$2,000,000
state grant backing Radix
TJC
accredited, at Radix
LegitScript
certified, at Radix
We are not consultants who read about drug rehab programs in a report. We are seasoned professionals who built one: Radix Recovery in Cedar Rapids, Iowa, a 68-bed facility with detox, residential, PHP, and IOP, licensed while still under construction, backed by a $2,000,000 state grant, Joint Commission accredited, and LegitScript Certified.
Radix Recovery, Cedar Rapids
detox, residential, PHP and IOP
licensed while under construction
a $2,000,000 state grant
Radix Recovery
In Adam's words: "We can have your website up three months before license, and by the time you are open, you already have calls."
01
proves the market exists
02
proves the business works
03
makes it legal
04
makes it fundable at scale
The proforma is step two of a sequence. A feasibility study proves the market exists. The proforma proves the business works. Then state licensing makes it legal, and Joint Commission or CARF accreditation makes it fundable at scale. If you are earlier in the journey, start with our guide on how to open a rehab center, or see what it costs to open a rehab center. When your numbers are ready to become a plan, our consulting team walks the whole road with you.
Where you are now
market proven
numbers modelled
licence filed
A drug rehab proforma is a financial model that projects the future income, costs, and profits of a treatment center. Lenders, investors, and partners use it to evaluate the business before it opens.
Startup costs, revenue projections by level of care, operating expenses, payer mix assumptions, a break-even analysis based on patient census, sensitivity scenarios, and a contingency fund. A 5-year model with monthly projections for the first 24 months is the standard lenders expect.
It depends on levels of care and payer mix. Detox bills roughly $600 to $1,000 per day, IOP runs $250 to $650 per day, and a residential treatment episode can generate $45,000 to $180,000 per patient.
Residential centers achieve profit margins of 15 to 25 percent on average, and treatment facilities with 30 to 50 beds tend to perform strongest. Staffing is typically the largest expense.
Yes. Banks, SBA lenders, and private investors all expect a professional financial model before committing capital to rehab centers. A credible proforma also sharpens your own decisions.
In-network contracts bring lower reimbursement rates with steadier volume and faster payment. Out-of-network billing captures higher rates with slower collections. Successful centers balance private pay, insurance, and government funding, modeled separately.
Payer credentialing can take months per insurance provider, and you often cannot start it until late in licensing. It is one of the most common cash flow surprises in the startup phase.
It is a directional estimate built on national averages, not your market's reimbursement rates or payer contracts. Use it to frame the opportunity, then schedule a discovery call and we will build the real model on your numbers.
Initial costs commonly range between $500,000 and $1 million depending on state, property, and levels of care. Our full guide on the cost to open a rehab center breaks the startup costs down line by line.
Free Discovery Call
Thirty minutes with Adam, camera on, no pitch on the first call. If your numbers do not work, we will tell you before you spend a dollar chasing them.
Written by Adam Vibe Gunton, Founder and Managing Partner of Behavioral Health Partners.
Reviewed by Dr. Angela McMahon, EdD in Psychology, BHP Licensing and Compliance Partner.
Adam is a person in long-term recovery, bestselling author of From Chains To Saved, TEDx speaker, and a founding member of Radix Recovery in Cedar Rapids, Iowa, which had one of the most successful treatment center launches in history.
Dr. McMahon holds a master's degree in Counseling Psychology and specializes in state licensing, Joint Commission, CARF, levels of care, and ASAM criteria. She leads the licensing practice behind the team's 100+ state licenses.
Published July 28, 2026
