Community, infrastructure the secret sauce behind BH On the Inc. 5000 companies

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Community and partnerships are essential for many of the fastest growing behavioral health companies in the United States

Four of the booming mental health companies, as identified by Inc. 5000, have experienced growth that is usually the responsibility of young startups and technology companies. These companies have taken advantage of the massive imbalance between supply and demand present nationally and in individual markets.

In addition to partnerships, each has proactively built an infrastructure that can handle and enable rapid growth.

“There are probably more downsides to growing too quickly than there are upsides,” Brian Wheelan, CEO of Transformations Care Network grantee Inc. 5000, told BHB.

A platform company backed by Chicago-based private equity firm Shore Capital Partners, Transformations Care Network formed in August 2021 through the consolidation of four outpatient mental health practices. Shore Capital Partners first invested in Transformations in October 2020. The company’s annual revenue grew 125% from 2018 to 2021, according to the Inc. 5000 list.

Transformations Care Network seeks outpatient mental health practices with leaders who are dedicated to making their practices the leading practice in the state, Wheelan said.

“That’s my #1 goal, which is to help someone make their brand the leader in this state on a networked, fully paid business,” Wheelan said.

Transformations Care Network then acquires majority stakes in these companies, helps them grow with new capital, and provides centralized administrative and back-office systems. It also provides continuing education and training.

“You’ll meet very few founders, no matter how incredibly clinically motivated they are, who are thrilled to do the payroll,” Wheelan said. “We allow them to go back to what they originally got into the business for – which is to be a clinical leader, to be a supervisor, to be a trainer, to be a member of their community of human services, not to be pay hockey. .”

Centralizing vital business functions has another added benefit as the business grows.

“The downside is if you’re moving so quickly that you don’t actually have the infrastructure and the systems and the processes to ensure consistency,” Wheelan said, adding that admitting patients “constantly confuses health mental”. … These are actually complicated processes.

Insurance partnerships are key to growing behavioral health businesses

Operating on a network basis with health plans to grow was another trend among the Inc. 5000 health companies that responded to BHB’s request for comment. It also requires significant investment in community and infrastructure.

Ellie Mental Health, based in Mendota Heights, Minn., owns and operates practices in Minnesota and sells franchises to teams of local investors and clinicians. Its turnover from 2018 to 2021 increased by 544%.

Ellie Mental Health is looking to achieve a “trifecta” through its franchise model, co-founder and CEO Erin Pash told BHB in a previous interview.

The trio calls for generating bargaining power and respect with payers through strong national systems, clinical best practices and clinical outcomes; give therapists the feel of a small local practice while having the support of a large system; and appeal to local investors and entrepreneurs to help the therapists with the commercial aspects.

“The macro mental health care system involves working with…insurance companies,” Pash said. “Insurance companies don’t want to contract with independent practices without standard operating procedures that best support what’s best for insurance companies.”

In 2020, about 64.3% of all health care spending in the United States was paid for by private health insurance, Medicare and Medicaid, according to a report by the American Medical Association.

In a previous interview, Carrie Singer, owner and founder of Quince Orchard Psychotherapy, told BHB that being in a network with payers drives patients to her practice with little need for marketing. This combines with a community focus to generate a strong word-of-mouth referral pipeline.

Quince Orchard Psychotherapy increased revenue by 87% between 2018 and 2021.

The downside is if you’re moving so quickly that you don’t have the infrastructure, systems, and processes in place to ensure consistency.

Brian Wheelan, CEO of Transformations Care Network

Meet multiple needs

Focusing on community and infrastructure allows behavioral operators to accomplish multiple things at once.

Scott Snider, CEO of Proven Behavior Solutions LLC, opened his autism treatment center in November 2015 after his wife, a board-certified behavior analyst (BCBA), worked under contract with a company whom she discovered was likely committing insurance fraud.

“We were seeing the landscape and how there weren’t enough vendors that were providing this type of service, to begin with, but then the ones that were here weren’t providing it at the level of quality that we knew possible based on our own experience,” Snider said in an interview.

Proven Behavior Solutions, based in Norwell, Mass., whose revenues grew 170% from 2018 to 2021, has focused on opening locations in southeast Boston, where the density of care providers for autism was much lower.

“A lack of vendor density at the start helped us because once you got started, it wasn’t too difficult to raise our flag and say, ‘Hey, we’re open,'” Snider said.

Although the lack of geographic competition made it easier to launch the business, establishing trust through “a very high bar for clinical quality has become a huge differentiator for us”.

“That’s what really fueled the growth,” Snider said.

The company offers Applied Behavior Analysis (ABA) therapy, speech therapy, occupational therapy, special education promotion support for parents of students with special needs, and assistive technology services in each of its centers.

Throughout this time, the company has sought to implement a corporate structure similar to that of multi-state providers, although it currently only operates in one region of a state.

“You need to assemble the scaffolding first to allow for faster growth,” Snider said. “While you’re moving, you don’t necessarily have time to hit the brakes and stop and think. [about] what we miss. … Being proactive is number 1 for us.

The combination of savvy community navigation and infrastructure development has been validated, according to Snider, by New York-based Health Enterprise Partners’ investment in Proven Behavior Solutions. The goal is for Proven Behavior Solutions to grow as a southern New England behavioral health platform company, Snider said.

Challenges abound

Despite rapid growth and investment, one of the biggest challenges of a fast-growing company is managing expense rates responsibly, Snider said.

“We have to make sure we’re watching that burn rate and not rushing to a point where we can’t keep the doors open,” Snider said. “We sometimes straddle that line.”

Earlier in the year, BHB reported that outpatient mental health operator Foresight Mental Health nearly closed due to overspending.

You must first assemble the scaffolding to allow for faster growth.

Scott Snider, CEO of Proven Behavior Solutions LLC

Staffing issues are amplified when a company’s staffing needs increase while labor supply issues persist. This allows employees, especially clinicians such as therapists, to be picky with jobs and with the types of patients they’re willing to see, Singer said.

“Clients aren’t hard to come by, honestly,” Fisher said, adding that when it comes to finding staff. “It’s an employee market.”

At Quince Orchard Psychotherapy, Fisher needs to find therapists who want to treat children 10 and under. But many therapists don’t want to do this because of the additional and unique duties of caring for young children, even though they are trained to do so.

“Finding the staff who want to serve the patients who need the most help and who are really difficult patients…is a tough sell,” Fisher said.

Wheeler echoed a similar sentiment. But the challenge for an outpatient psychiatric care provider in expansion mode is finding therapists who are willing to commit to insurers.

“Our biggest competitor isn’t another well-capitalized company, it’s the viability of not participating in a network,” Wheeler said. “What’s so important to us is delivering on the promise of being a good place to work because it keeps [clinicians] on their journey and with us.

“Then we can kind of deliver on that promise of access to payers. When we do this, payers are willing to pay us more because we are an alternative to emergency rooms.

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