There’s been plenty of deal making in the healthcare sector in recent years, mostly focused on hospitals and physician groups, but other care providers are getting in on the action as well.
Two Greater Hartford mental, behavioral and addiction health services providers have agreed to a corporate affiliation, creating a nearly $19 million nonprofit with 10 brick-and mortar locations.
The marriage of East Hartford’s InterCommunity Inc. and Hartford-based Alcohol and Drug Recovery Centers Inc. came about a year after both organizations started looking for ways to collaborate and integrate their services, said Kimberly Beauregard, InterCommunity’s president and CEO.
The deal was driven in part by the changing healthcare landscape, in which medical providers are being asked to better coordinate and integrate their services, and also financial pressures felt by the nonprofit sector.
“I am really excited about this opportunity to integrate mental health, addiction recovery, and primary care services,” said Beauregard, who is now the CEO of the combined entity called InterCommunity Recovery Centers.
In fiscal 2013, Alcohol and Drug Recovery Centers Inc. reported a $220,945 operating loss on $10.6 million in revenue. The organization offers substance abuse treatment and recovery-support services.
InterCommunity, which recorded a $309,548 surplus in fiscal 2014 on $8 million in revenue, operates a community health center and an array of behavioral health services.
Beauregard said the combination made sense because both organizations offer complementary programs and can save money by sharing expenses, including having one management team. Combined the organization will employ about 300 people.
By integrating their array of services, the affiliation also satisfies a key tenet of federal healthcare reform, which is to provide more seamless care from one provider to the next.
Besides inpatient, outpatient and residential detoxification services, InterCommunity will also offer primary care, which is not a typical service provided by mental health nonprofits, Beauregard said.
InterCommunity decided to get into that business two years ago — hiring two APRNs, care coordinators, and a medical assistant and opening four exam rooms — because they saw a major gap in care for people with mental illnesses.
They found, Beauregard said, many of their Medicaid patients didn’t have adequate access to a primary care doctor, either because physician waiting lists were too long, they didn’t have reliable transportation to get to a doctor, or they chose not to go.
Combine the lack of access with the fact that people with severe or chronic mental health diseases, ranging from depression to schizophrenia, die around 15 to 20 years younger than the average person from preventable diseases like heart disease, diabetes and hypertension, and there was a clear need in the community that had to be filled, Beauregard said
“People were dying,” she said, adding the goal is to work with patients to not only change their behavior but also their health care.
Financial pressures in the nonprofit sector also spurred the affiliation, Beauregard said.
State funding makes up about 75 percent of InterCommunity’s funding, but that number has shrunk over the years. The state’s budget woes are a major concern, Beauregard added, forcing the nonprofit for the first time to hire a lobbyist to protect its interests at the State Capitol.
“Nonprofits are in a very bad situation,” Beauregard said. “Smaller agencies are at risk of closing.”
