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Catasys Provides Unique Approach To Treating Substance Addiction

|Includes: Catasys Inc. (CATS)

The Supreme Court's 5-4 decision to uphold the Affordable Care Act reignited the public debate over rising healthcare costs. With around 30 million people poised to enter the U.S. healthcare system, providers and insurers are seeking ways to control costs while delivering high-quality care.

According to a new five-year study from Columbia University, "There are few targets for cost savings that are as straightforward as preventing and treating risky substance use and addiction." Addiction can lead to costly health complications such as liver damage, respiratory disease, and HIV/AIDS. Patients who overdose may incur additional costs related to ambulance rides, ER treatment, hospital stays and physician visits. According to one estimate, high-cost substance-dependent (NYSE:SD) members cost health plans eight times more than other members.

The study also suggests that the U.S. health system largely fails at identifying and treating SD patients. Only 1 out of 10 SD patients receives treatment, compared to 7 out of 10 for patients with hypertension, severe depression or diabetes. Additionally, current treatment methods don't rely on scientifically proven methods, and most addiction care providers aren't adequately trained. The study calls for "a significant overhaul in current approaches" to treating substance addiction.

Catasys, Inc. (OTCBB: CATS), a California-based healthcare company, has developed the only solution of its kind to treat substance abuse. The Company's 52-week program, OnTrak, combines medication with therapy and long-term care coaching to reduce cravings and prevent relapse. OnTrak has proven effective at treating substance addiction while significantly reducing medical costs.

OnTrak is designed to save health plans $19 million to $40 million per one million members. Patients enrolled in OnTrak experienced a 68% decrease in medical costs, as compared to a 57% increase for the control group.

Catasys is contracted with a number of health plans, including Coventry and Reliant Medical Group, and the Company's proprietary outreach program has proven successful in identifying high SD users and convincing them to seek treatment. OnTrak has a potential market of 191 million covered members, with projected revenue of $8.5 million per every one million covered members.

The Company has no direct competition and a low threshold of only 1.5 million members needed to reach breakeven. With 600,000 members under contract, a probability-adjusted 4.9 million lives in the last stage of negotiation, and 13 million lives in the pipeline, Catasys represents a compelling opportunity for investors. Don't miss your chance to invest at today's low prices.

Disclosure: The subject security is a client of RedChip Companies, Inc. RedChip Companies, Inc., employees and affiliates may have positions and affect transactions in the securities or options of the issuers mentioned herein. For full financial disclosures for all RedChip clients, please visit http://www.redchip.com/disclosures.asp?src=rcv.