Ray Tamasi, the president and CEO of Gosnold on Cape Cod, has been working in addiction treatment for more than four decades. But he's never seen anything like what he's seeing now: private equity investors lining up to get into the treatment business.

"I've been doing this for 40 years, and I've been doing presentations at private equity firms [that] want to understand behavioral health because they want to understand and invest in it," Tamasi said. "I've done more of those in the past year than I've done in my entire career."

Tamasi says several things are fueling this interest — the biggest of which is the opioid epidemic.

Only 10 percent of the estimated 700,000 Massachusetts residents who could use substance treatment actually are able to get it. There are also state and national legislative and insurance changes that have made substance use treatment a projected $35 billion-a-year business in the United States.

Hundreds of new treatment beds are being created in New England this year alone. One of the largest projects — which also represents one of the biggest private equity investments in addiction treatment — is now under construction in Danvers. Recovery Centers of America (RCA) is spending some $20 million to renovate the former Hunt Hospital into what will eventually be a 210-bed substance use treatment center. It's set to open Aug. 1. Brad Greenstein, CEO of Recovery Centers of America, Danvers, says the center will help with the state's opioid crisis.

"Massachusetts has great need, and for whatever reason doesn't have a lot of capacity with respect to inpatient treatment beds," Greenstein said. "So we saw great opportunity to bring a medically focused treatment center here to Massachusetts."

A rendering, dated November 2015, of the main lobby in the under-construction Danvers treatment facility (Courtesy of Recovery Centers of America)

The facility will provide both inpatient and outpatient care, and Greenstein says it will feel almost like a boutique hotel — with well-appointed bedrooms, private therapy rooms, coffee shops and cyber cafes. Although he says eventually RCA plans to build other facilities that will accept those with public insurance, this center in Danvers will only accept commercially insured patients or those who pay out of pocket. These are people, Greenstein says, who are now underserved.

"For people who lack resources, there are a lot of programs that are funded to work with that population, and on the opposite extreme are people who have tremendous resources [who] can go really anywhere they want," Greenstein said. "What we found, not just in Massachusetts but nationwide, is this lack of availability for your average everyday individual who has been dutifully paying insurance premiums -- those are the ones having a hard time accessing care."

The Danvers clinicians will use several methods of treatment, designed around a patient's needs, according to Deni Carise, the company's chief clinical officer.

"We owe it to every patient to throw everything we have at this disease and figure out what helps and how that will fit for them," Carise said. "That's everything from medications to 12-step programs to yoga. You need to look at the person as a whole."

The Danvers facility is one of eight centers RCA is building in the northeastern U.S. Carise says that will help keep patients in treatment longer, which usually means they have a better chance of staying sober. She says because of the lack of treatment beds in the Northeast, many residents have had to go to places like Florida or California for inpatient care. But when they return home after 30 days, many have a hard time connecting with supports to help them in early recovery. So she says staying closer to home will make it easier for residents to transition to outpatient care.

"We want to eliminate break points and have people stay here and continue treatment with the same people in one campus." Carise said.

Carise believes the building boom in treatment will also result in something that hasn't happened in the industry before: proof that treatment works by having providers document outcomes to both attract patients and to satisfy investors.

"We don't do anything small at RCA," Carise said. "Our initial funding is for almost a quarter of a billion dollars for eight centers for addiction medicine, and this center [in Danvers] is the largest at this time."

The $231.5 million to RCA is from the New York private equity firm Deerfield Management, which specializes in health care investing. Deerfield's Leslie Henshaw says there are several reasons why money is flowing into treatment right now — mainly the laws requiring insurers to pay for care and the Affordable Care Act provision allowing dependents to stay on their parents' insurance until age 26. A law that went into effect in Massachusetts last year requires insurers to pay for up to 14 days of inpatient treatment. Henshaw says increased investment will result in better care.

"We feel it's an industry that unfortunately is seeing exploding demand. It's an industry that to date has had very little accountability with regard to delivering on effective outcomes, so we see both an enormous need and an imperative to change the model in which care is delivered," she said.

Even longtime Massachusetts treatment providers are looking to get in on the more lucrative end of addiction treatment. Spectrum Health Systems, which operates 13 facilities in Massachusetts, just opened a new 36-bed facility in Westborough: the New England Recovery Center.

Chuck Faris, president and CEO of Spectrum Health, says the center is in response to demand.

"I think that we're probably the most state-of-the-art facility in the state right now," Faris said.

Faris says the facility will also accept only private insurance or patients paying cash. A monthlong stay will cost about $15,000.

It's a sign the market is responding to the new face of opioid use: young adults with more well-off parents who either have good insurance or are willing to pay high prices to get their child healthy.

"We saw that there was a demand for that part of the market. We saw that there was a niche that wasn't being filled," he said. "We saw a lot of private pay customers going out of state for services. At the same time, they shouldn't be put in a publicly funded bed if they have the resources to pay for it."

About half of the patients at the New England Recovery Center pay cash; the other half use insurance. Faris doesn't call it luxury — especially when compared with some of the spa-like centers in other areas of the country. He describes this new center as mid-range treatment. He says the higher end treatment offers more personalized care, provides family support, and has a lower staff to client ratio than Spectrum's facilities that accept patients on public insurance such as MassHealth. In contrast to the new center's tall windows and wood beams, the other facility on the same Westborough campus has a dated brick facade and dark hallways. Faris says having a higher level of treatment also helps offset the cost of caring for lower income patients, for which the state pays $100 a day.

"You can't stay at a Motel 6 for $100 a day -- you might get continental breakfast with that," he said.

Regardless of the rates, business is booming. Faris says Spectrum's revenues this year will be around $70 million, up from $60 million last year.

Paula Torch -- senior analyst with Avondale Partners, which helps manage public offerings for treatment providers -- says substance use treatment is one of the hottest health care investments right now, and it's only going to continue.

"We believe that the market is growing at about a 5 percent-plus rate per year," Torch said. "Part of that is because of a lot of strong fundamentals: mental health parity, the Affordable Care Act and just the opioid epidemic in general. And there are thousands of sophisticated players getting into the market."

One of the largest players in the treatment field is American Addiction Centers, which last year became the first business focused solely on addiction to go public and raised $75 million in an IPO. The well-known local player in luxury treatment is McLean Hospital in Belmont. McLean is now expanding out of state and is running Internet ads about its new facility in Camden, Maine, called Borden Cottage. The ads for the facility say: "McLean Hospital, located just outside Boston, has long been known as one of the top psychiatric hospitals in the world. Now, for the first time in our 200-year history, we've taken our expertise outside of Massachusetts."

McLean opened the eight-bed Borden Cottage last year. It does not accept insurance and charges more than $2,200 a day. Borden Cottage officials say they provide highly intensive treatment from doctoral level clinicians. They also say paying cash allows patients, not insurers, to determine the course of treatment — and keeps care strictly confidential.

While there are concerns that focusing on higher end treatment could leave behind those without resources, many welcome the increased number of treatment beds.

Boston University public health professor David Rosenbloom says the growth will lead to better quality for everyone.

"I would like to see providers take all patients, so I'm not in favor of discrimination based on insurance, but we need to expand the total size of the treatment community and if this is a step toward increasing the size and accountability and quality of the system, then this is a step we have to take," Rosenbloom said.

Gov. Charlie Baker has said over a two-year period ending this December, there will be 1,000 new mental health and substance use beds will have been created in Massachusetts.

Amid the trend toward higher end forms of treatment, state Health and Human Services Secretary Mary Lou Sudders says the state will closely monitor the new beds and who is using them.

"As we increase with 1,000 new beds, I need to ensure there is access to care for the MassHealth population, as well as those with commercial insurance, and I'm going to watch that carefully," Sudders said.

Sudders says she remains hopeful that more treatment — of any kind — and the 21 percent increase in opioid-related expenses in the governor's budget for the next fiscal year will put a dent in the current rate of four deaths per day in this state because of opioid overdoses.

Clarification: This post has been updated to clarify that an estimated 700,000 Massachusetts residents meet the medical criteria for having a substance use disorder.