Youth addiction recovery programs battle rising costs, stagnant funding amid opioid crisis

Phoenix House of Dallas shared an inspirational story of a young man who refuses to give up on himself. They hope to see more success stories like his if state funding can improve

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This has been a year of some big wins in Texas fighting the fentanyl crisis.

Several new Texas laws that went into effect this month are cracking down on dealers, requiring education in schools, and classifying what used to be fentanyl overdoses as poisonings instead. Narcan is also now available over the counter after federal approval.

But the organizations often on the front lines of addiction are still struggling.

Addiction recovery centers have been facing an uphill battle this year with rising costs, stagnant state funding, and a raging opioid crisis.

We're getting a tragic understanding of the impact this all is having on the youth.

"It really took a lot for me to get here,” said 18-year old Kevin Galindo, who shared his story with NBC 5.

At 16, he started to notice pain throughout his body.

"I thought, 'Hey, I need to neutralize this pain,'” he recalls. "I was self medicating because I didn't know what it was."

He turned to pain pills to cope with the pain, specifically fentanyl. It eventually turned into a full blown addiction.

"It was really bad. I was ready to throw it all away for a blue pill,” Galindo said. "The mixture of the drugs and the pain I was going through was not a good space in my head."

But the pain that started it all, turned out to be something else. It was cancer – specially lymphoma.

By 17, Galindo was fighting an addiction while fighting for his life.

Family photo
Kevin Galindo with his mother

“I found God in here at Phoenix House of all places. Not once did I ever pray in the hospital but my family did. And I truly believe now that everything happens for a reason," he said. "They just stuck with me, even throughout all the hard things I told them or made them experience, they just didn't lose hope in me."

Galindo overcame his cancer with the help of doctors at Children's Health in Dallas but the next step was recovery from his fentanyl addiction.

His family had little money to spare after expensive cancer treatments so they turned to Phoenix House Dallas, one of the last residential rehab programs for unfunded youth in state.

"The cost of treatment out of pocket can be anywhere from $40,000 to $200,000 per sort of care, depending on what the youth needs,” said Drew Dutton, president and CEO of Phoenix House Texas. "We want to make sure that finances are never a barrier to care. It's one of the largest barriers outside of stigma and other things that may be a reason people don't seek treatment."

Dutton himself is a product of what treatment centers can do for struggling youth.

"I struggled with mental health and developed a substance use disorder beginning in the 7th grade. I was fortunate to access treatment as an adolescent and now have 19 years of continuous sobriety," he said. "As a result of my experience I am passionate about ensuring all youth can be afforded the same opportunities for a different path, at one point I was a high school drop out and using every day."


Adding to the dire need for recovery support, highly addictive drugs like fentanyl have become more widely accessible by youth like Galindo.

According to local police, criminal drug networks are mass-producing fake pills using cheap to make fentanyl, falsely marketing them as legitimate prescription pills and either killing or starting addictions among unsuspecting Texans, many of them youth.

"They don't realize how much of this is just being illicitly manufactured and then pressed to look like a prescription pill because we have that sense of safety when we see something that looks like a doctor would prescribe or that comes in a pill bottle bottle," Dutton said.

It has lead to rashes of poisonings in cities like Plano and Carrollton in the past year, though no community is immune to the impacts of dangerous drugs on youth culture.

But as the overdose crisis among youth rages on, Phoenix House is in a battle of their own.

"Our adolescent population, we saw from 2019 to 2021 adolescent overdose deaths, more than doubled,” said Dutton. “And the cost of care over the last 10 years has grown tremendously."

Despite the increase in demand for services, many nonprofits are still operating with the same state funding reimbursements rates as they were over 10 years ago, despite inflation, the post-pandemic economy, and staffing shortages.

Phoenix House has been forced to fill literally thousands of dollars in gaps of care – per patient, per day – through donations, corporate sponsorships and grant rewards they must apply for.

"We have funding in place to make sure that no family has to pay any amount for the services that they receive while they are with us," Dutton said.

However, the costs were so much that it forced Phoenix House to close their Austin residential program at the end of August.

"We were the last remaining unfunded youth provider in that region seven area so there wasn't even another program to look at trying to transfer those funds to," Dutton said. "And then our Dallas program represents the last program available in all of North Texas that's available to boys and girls -- there's even more limited beds when we start talking about adolescent females."

Thankfully, the organization is able to continue out-patient services but the Dallas residency program – where many youth like Galindo now stay – has to take the brunt of unfunded youth seeking wrap-around services while fighting addiction.

"We're talking about a really serious threat to Texas youth that's not being addressed,” said Dutton. "It's been very disheartening and frustrating to see this exponential increase in need for youth support, especially those that don't have access. And then to see that providers are on the decline overall."

Nexus Recovery Center in Dallas, which serves women in recovery and their children, has also been fighting for more funding amid the opioid crisis.

In the United States, there are only 19 treatment centers that allow children to accompany their mother into treatment. Seven of these are in Texas and Nexus is the only center that does this and provides holistic treatment, services and education to address the impact and challenges brought on by parental substance use.

Like Phoenix House, Nexus Recovery Center is also trying to fill the gaps due to the lack of state funding.

In 2023, Nexus has been averaging about $300 per woman for a full day of treatment, with the state covering approximately $200 of that cost. To ensure clients continue to receive necessary treatment-services, Nexus has had to shift to an aggressive fundraising strategy to help fill the gap.

The numbers paint a picture of what more can be avoided if more is invested in recovery and prevention of addictions in the first place.

  • In Texas, an opioid overdose costs $35,908 per overnight.
  • Consequences of substance use annually cost the U.S. $740 billion due to increased healthcare and treatment costs, lost productivity, and cost to the criminal justice system.
  • In Texas, untreated substance use disorders result in about $350 million per year in emergency room charges.


Galindo's healing journey is far from over but he’s come a long way this year. He's been in cancer remission for 8 months and addiction recovery for 4 months.

“I feel amazing,” he said. "I like enjoying life for what it is and what it could bring me now."

Like a phoenix rising from the ashes, Galindo said he is aiming for a better life and hopes the resources he and so many other youth depend on don't disappear.

"I can say with a confident place in my mind, that treatment does work,” Galindo said. "You can live without drugs. It's not a necessity at all."

During this year’s legislative session, lawmakers did agree on something regarding this issue – the state’s health department needs to figure out an update to the reimbursement rates, which is the amount of money distributed to nonprofits like these recovery programs.

"Our challenge has really been with the Health and Human Services commission that kind of oversees how this funding and structure works," Dutton said. "When we work with state representatives from both sides, we get a tremendous amount of support and we have people willing to write letters. Everyone really seems to want to get involved to make sure these kids have treatment."

The Health and Human Services Commission is hosting a public forum this Friday in Austin to finally get the ball rolling on the matter. Phoenix House leaders plan to be there.

UPDATE 9/29:

After nearly 30 years, the Phoenix House Texas has closed all six of its outpatient services across the state and its last residential program for teens in Dallas. CEO Drew Dutton posted the following letter on their website this week:

To our Partners, Stakeholders, and Supporters,

We want to begin by expressing our deep gratitude to our staff and their unwavering dedication and commitment to our mission of serving underserved and unfunded youth. They have been the heart and soul of our organization, and their hard work has made a profound impact on countless lives.

Phoenix House Texas has been unsuccessful in negotiating sustainable rates with HHSC that would allow us to continue program operations on the treatment side. Over the last several years, the number of unfunded youth we serve has continued to grow, and we have adjusted to work to meet the need of unfunded and underfunded youth specifically over youth with alternate treatment options. Despite our best efforts to balance staff compensation and reduce overhead costs, the current financial landscape poses insurmountable challenges.

We want to thank all of the representatives, organizational leaders, and individuals that have been actively involved in the work with HHSC on rate increases and have shared the stories of their programs and challenges. We are hopeful that a finalized and sustainable rate is offered for providers continuing services.

It is with heavy hearts therefore that we share the board and organization’s decision to close all treatment programming (residential, outpatient, and assessments) by the end of September 2023. Our organization has always prioritized serving the underserved and unfunded youth, and we are committed to our mission. However, the financial constraints imposed by these reimbursement rates leave us with no viable path forward to continue offering services at such a substantial loss.

The board and organization are fully committed to prevention services and want to invest in models that are financially sustainable to ensure that Phoenix House Texas can continue to have a positive impact on Texas communities for years to come.

We understand that this decision will have a significant impact on the youth in need of treatment and the partners that we work with. We are working around the clock to ensure a smooth transition of all current patients, and we are working to coordinate plans for referrals moving forward with providers who are able to step up to take these youth. We are so grateful for the countless leaders, representatives, and providers that have stepped up to help ensure this process is as smooth as possible.

Thank you to all who have volunteered their time, helped a patient in need, or collaborated with us for a larger youth recovery and treatment effort across Texas. Although it is heartbreaking to see these 28 long years of programs come to an end, we are optimistic and fully engaged in expanding and supportive our prevention services.

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