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Here We Grow Again: Caron Getting Back into Expansion with New Initiatives

October 15, 2019

Market trends made it take a year longer to materialize than leaders at Caron Treatment Centers initially envisioned when sketching out their strategic plan in 2015, but entering the final quarter of 2019, the company has officially moved into growth mode.

After a decade of continuous expansion, CEO Doug Tieman says Caron executives in 2015 decided it was time to double down on existing services in the organization’s next three-year strategic cycle based on what they were seeing in the marketplace.

“If you remember in 2015, private equity was throwing dollars into this like crazy,” Tieman says. “We said we don’t even want to compete with that. Let’s just make sure we stick to our knitting, stay strong, stay focused, and when this bubble starts to burst, we’ll be ready to move forward from a growth perspective at that point. We had been on a real growth curve from 2005-15. In that time, we probably quadrupled our size.

“For us to say let’s stop growing for four years, it was a conscious shift. We sold some of our facilities and said this is what we want to focus on for the next couple years, and then we’ll start growing again in 2020.”

Caron’s leaders decided in 2018 to ride out their wait-and-see approach for one extra year, but as 2019 winds down, the company is shifting gears. Caron recently announced a series of initiatives to expand access to treatment and grow its service offerings.

Expanded services at regional centers

Caron announced that it is expanding its clinical and recovery support services at its regional recovery centers in New York, Philadelphia, Washington, D.C., and Atlanta. Tieman says the addition of reintegration support, increased family programming, additional support groups for family and parents of patients, executive and professional services, and other new programming are part of the company’s efforts to create a more seamless care continuum.

“I think that has become the expectation in other levels of healthcare, so we are trying to replicate that, particularly in our key communities to the extent we can,” he says. “Having more services in each of our regional centers is important. We see that as laying the groundwork for what we’ve begun in Atlanta and Washington, D.C., eventually having our own licensed outpatient services.”

Specialty program for first responders

Later this month, Caron will launch a treatment program for first responders, joining the organization’s list of other specialty treatment programs for groups such as lawyers, executives, healthcare professionals and older adults. The first responders program will be led by newly hired clinicians who have five years’ experience working with that population at other organizations, Tieman says.

“While it’s the same illness, there are some populations with unique needs, which means at times, they need therapists who provide specialized care because they understand the environment,” Tieman says. “It’s also good for this population to be with peers so that as part of a group process, they don’t compare themselves out, they compare themselves in.

Joint venture with MARC

Earlier this year, Caron entered a management agreement with Maryland Addiction Recovery Center to jointly run Encore Recovery Solutions in Arlington, Virginia. The facility provides intensive outpatient, partial hospitalization and supervised sober living services for the treatment of substance use disorder. Tieman says the deal is a model he hopes Caron can replicate in other markets.

“If we could either partner or purchase an ongoing outpatient provider, it could speed our entry over de novo,” he says. “This is the best of both worlds. We’re getting an opportunity to partner with Maryland Addiction Recovery Centers, which has expertise in this area, and we’re able to purchase together an outpatient provider in Northern Virginia, which gives us an opportunity to expand our footprint in the greater capital area because we anticipate several more outpatient facilities that will be part of our affiliation in that area.”

In-network with Highmark

Caron announced that it is now in-network with Highmark Blue Cross Blue Shield. Highmark becomes the sixth insurer with which Caron is in-network. The move is significant for Caron, which stopped taking any kind of insurance with any level of managed care involved in 2001.

“We wanted to have the freedom and opportunity to provide the kind of care we wanted to provide,” Tieman says.

Three years ago, Tieman says, Caron was approached by Independence Blue Cross to discuss a new arrangement: a contract that would be managed by Caron that would provide for higher reimbursement rates, but also hold Caron accountable for better patient outcomes. The model opened the door for the new arrangement with Highmark, Tieman says.

“A big challenge a lot of providers have had when they take on insurance is that insurance looks for a level of discounting, which oftentimes leads to some level of reduction of level of care,” Tieman says. “For us, a rate where we could continue to provide high-quality care was important to us because in essence, that’s what Highmark is buying from us—an outcome similar to what we’re doing with Independence Blue Cross.

“To do that, we said this is what we need to get paid to do this and this is how we’ll be managing the care. You have every right to do your follow-up to see if this is a financially prudent decision for you over time. That will be based on what these individuals do from a retreatment rate and what kind of ongoing healthcare costs this population continues to use in the future.”

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Having gone through similar waves of investment across the industry in the late 1980s and early 1990s, Tieman says Caron’s focus has been on initiatives that make sense beyond just the here-and-now. Organizations that are “truly committed to the space” are the ones with staying power, he says.

“Those who try to be profiteers will be gone,” Tieman says. “You need to be committed to this space for the long haul. Those are the organizations that continue to do well. If you look around, they’re doing well now and they’ll be doing well five or 10 years from now.”

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