THE BUSINESS OF TREATMENT

Despite Assured Privacy, Addicts Wary Of Internet

Five years ago, Barry Karlin sensed a huge business opportunity where
most people saw only devastating social blight.

There were more than 16 million people in the United States who
needed treatment for drug or alcohol addiction, but only one in five
addicts who sought help could get it because the number of programs
was limited and the cost was so high.

Enter the Internet -- or so Karlin imagined.

Rather than undergo the shame and awkwardness of face-to-face group
counseling programs, addicts could find the support they needed in
cyberspace. Karlin calculated the size of the potential market for
drug treatment -- online and offline -- at $12 billion.

Today, the company Karlin founded, CRC Health Group of Cupertino, is
the country's largest provider of substance-abuse treatment, with 87
facilities in 21 states.

And CRC's eGetgoing program is the only accredited Internet-based
addiction-treatment program in the United States.

The only thing missing is the addicts.

Even in the heart of Silicon Valley, where the pull of the Internet
has proven strong enough to transform activities as diverse as
driver's education and dating, the tug of methamphetamine, cocaine,
heroin and alcohol is proving stronger than offers of cheap and
confidential treatment. Since the program started in 2001, only about
1,000 addicts have logged on. Meanwhile, the company has continued to
fill available slots at more traditional inpatient and outpatient programs.

"It's an entirely different mode of providing treatment," said
Karlin, who says the main obstacle to the Web-based program's growth
is that insurance companies are reluctant to pay for it.

Addicts receive group counseling from home, logging on twice a week
for an hour-long session led by a counselor. The group communicates
through headsets and microphones, using screen names of their
choosing. There is streaming video of the counselor, but no photos or
video of group members. Protecting privacy is paramount, Karlin said.

Still, the sense of community and trust can be very strong.

"I learned more from eGetgoing than I did in my entire life," said
C.R. Watt, a Scotts Valley woman who completed the program more than
a year ago, but has continued to attend an aftercare group hosted by
the system.

Watt said the straight talk and support she found in her Internet
group enabled her to change the way she thought about her life. "I
had gone to AA places for so many years," she said. "There's no
movement there."

The program costs $1,200 for 24 interactive sessions and a year of
free aftercare sessions -- compared with $3,000 or more for a typical
12-week outpatient drug-treatment program.

Like many mental health professionals, Robert Brooner, a medical
psychologist at the Johns Hopkins Bayview Medical Center in southeast
Baltimore, was initially skeptical about the benefit the Internet
could bring to traditional psychotherapy. But Brooner said he
recently tried eGetgoing and was surprised by its sophistication and
ease of use.

Still, Brooner said he is not surprised that droves of addicts aren't
turning to the Internet for confidential counseling. Many have to be
forced into face-to-face counseling.

"It's not that they don't want to go public," he said. "They are
trying to persuade themselves that they are just using a little more
than they did before and they will slow down. The disorder is
designed to preserve and protect itself."

EGetgoing tries to address the stigma around addiction -- and the
hopelessness it can inspire -- by defining drug dependence as a
treatable medical condition.

"This is a chronic illness that requires management," said former
drug czar Gen. Barry McCaffrey at a company event last fall. "If we
approach it from that perspective we can absolutely get people into recovery."

McCaffrey, who is a member of CRC's board of directors, said
eGetgoing can prevent relapse and facilitate long-term sobriety by
enabling long-term, low-cost access to counseling.

However, Jeffrey Schaler, a psychologist who teaches at American
University's School of Public Affairs in Washington, D.C., said the
problem with eGetgoing is not its use of the Internet as much as the
premise that drug users are sick and need treatment.

"It's only a metaphorical disease," said Schaler, the author of
"Addiction Is a Choice." He noted that eGetgoing is based on the
principles of the 12-step program first developed by Alcoholics
Anonymous and that there are free 12-step programs all over the
country sponsored by churches and other groups.

"The idea that you are not going to have access so you have to go
online is ridiculous," Schaler said. "They are selling water by the river."

Douglas Lehrman of North Castle Partners, a private equity firm with
offices in San Francisco and Greenwich, Conn., said demand stayed
strong as CRC grew from one treatment center in Scotts Valley to 87
facilities around the country. During the 3 1/2 years North Castle
owned CRC, revenues quadrupled to $230 million. North Castle recently
sold its stake in CRC.

Meanwhile, CRC now treats approximately 22,000 people a day.

Steve Barnes, managing director at Bain Capital investment firm, said
he believes CRC will continue to expand, with growth fueled in part
by the company's ability to provide information and counseling over
the Internet. Bain Capital closed its acquisition of CRC last week in
a deal valued at $720 million.

"Health care is something you see many individuals using the Internet
for," Barnes said. "There is a need in the marketplace for more
treatment for substance abuse, and CRC is the leading company in this market."