In the past two months alone, Odyssey Behavioral Healthcare has opened two new outpatient centers, acquired an eating disorder treatment provider and created and filled a new executive-level position.
That’s only a fraction of the activity the mental health care provider has logged in past year: In 2020, the company also purchased a myriad of specialized treatment centers in California, hired a new COO and added a new chief development officer.
All this action comes just about five years after the Brentwood, Tennessee-based company was formed back in 2015. With backing from Nautic Partners, CEO Scott Kardenetz set out to close some of the treatment gaps in mental health care by focusing on offering intensive residential services. Today, the company has grown to more than 20 locations across eight states — which is a testament to the need for the services that Odyssey provides, according to Kardenetz.
Behavioral Health Business recently connected with him to discuss the company’s recent growth and executive hires, in addition to its 2021 goals and priorities.
You can find the conversation below, edited for length and clarity.
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BHB: First of all, can you tell me a little bit about Odyssey’s origin story and how it came to be the provider it is today?
Kardenetz: The origin of Odyssey started as I worked my way through large, strategic behavioral health care providers in the US over the past 30 years. Those include Charter Behavioral Health, Ardent Health Services, Psychiatric Solutions and Universal Health Services. The facilities I supervised and worked with were primarily acute psychiatric hospitals.
The vision for Odyssey came once I left the acute world and thought about what I wanted to do going forward. I thought long and hard about the spectrum of behavioral health care, with acute being on one end of the spectrum and outpatient being on the other. I thought about the frequent phone calls I would get from VIPs looking for long-term residential care, primarily for young adults. And oftentimes, I struggled to find and refer people to that particular service.
I call it the treatment gap. And I founded Odyssey in 2015 to focus on that treatment gap in behavioral health care. That includes those clients who are leaving acute hospitalization and are told they’re ready to step down to outpatient care, but they and their families feel like they need an interim step.
I don’t think that existed — or existed prevalently — in our country, so I focused on starting a company to focus on this underserved sector of intensive residential services within the spectrum of behavioral health.
Would you say that’s the main factor that sets Odyssey apart from its competitors?
Perhaps so. What sets Odyssey apart from its competitors is not only its strategy of addressing this treatment gap, but also our people, our treatment philosophy and our diversification, geographically, clinically and with our revenue streams as well.
Speaking of money, can you tell me a little bit about Odyssey’s financial backing?
I started the company in 2015 with the backing of Nautic Partners. We had tremendous success and were able to generate some great returns in a very short period of time for our investment partners.
We ended up recapitalizing after about two and a half years ago with the Carlyle Group, who shared a similar vision for addressing this gap in treatment.
One of the things I find most interesting about Odyssey is how quickly the company has found its footing and grown over the past five years. Even with the pandemic, you announced multiple new locations last year, in addition to a couple acquisitions. Going into 2021, what sort of growth goals do you have for the company?
We always look for accretive acquisitions to our portfolio, although we are extremely selective. We’re developing outpatient PHP and IOP clinics — in fact, we’ve got several developing across the country for 2021. We have expanded to the West Coast, and we’ll be looking for further expansion opportunities there. And, of course, we’ve got several of our own internal organic growth initiatives that we’re developing as well.
Generally, how would you categorize your growth strategy? It sounds like you guys are pursuing a little bit of everything on the growth front.
Well, that is our growth strategy, within the treatment gap. If you look at the company, we are not just one thing. We address that treatment gap niche, and we focus primarily on three verticals: intensive residential psychiatric services, intensive residential dual diagnosis services and intensive residential eating disorder services while remaining diverse in our service offerings and locations.
We’ve been very selective in the facilities that we’d consider adding to the Odyssey portfolio. We made two acquisitions last year, and we look to make a couple of acquisitions per year and continue to add to our outpatient clinic portfolio. We’re adding a virtual platform to that as we speak, and we’ve also ventured into technology addiction. We’ll be relaunching our Greenfield Gaming and Technology Addiction Program at our Lifeskills South Florida facility this quarter.
On the growth front, Odyssey also seems to be expanding its team. The company made a lot of executive-level hires last year and created some new positions. You added a new COO and a new CEO of Pasadena Villa, plus you hired a chief development officer and promoted internally to fill the position of vice president of outpatient services.
It goes hand-in-hand with the growth, the maturation and the needs of the company.
COVID did not stop us from executing on growing our infrastructure proportional to our revenue growth. We kept focusing on what those infrastructure needs were, what the facilities’ needs are, and what resources the company needs to continue on this trajectory.
We continue to execute on our plans and on adding top veterans in the field to our team, like our new COO, Richard Clark, who was the president of the western division of Acadia, and our new Chief Development Officer, Dan Davidson, who was the founder of Coker Capital’s behavioral health initiative, and we’ll continue to scale up proportional to the growth and maturation of the company.
What are the biggest challenges and opportunities you predict for Odyssey in the year ahead?
We are looking forward to putting this COVID-19 pandemic behind us and to returning to some sort of normalcy.
As a behavioral health care operation, our staff has been deemed priority for vaccinations, and they are getting vaccinated as we speak. Hopefully we can all put the COVID issues behind us in the back half of 2021.
Beyond that, we’re always looking to broaden our payer relationships, our referral networks and our facility portfolio. We’ll continue to do that, and we’ll continue to further strengthen our infrastructure to support the growing needs of the company.
We just had a new administration step into office. What behavioral changes do you want to see from them over the next four years?
We’re hopeful that the issues of fairness and parity continue to play out and that payers are all aligned with their policies and procedures.
We have seen, as most other behavioral health providers have experienced this year, incredible demand for services. If people were not familiar with mental health conditions in the past, everybody, including our politicians, for a number of reasons now, are quite familiar with anxiety and depression. Everybody’s eyes have been opened to the drastic need for these services. I’m hopeful that telehealth initiatives, and the ACA will be broadened and obtain increased funding.
I’m cautiously optimistic that government policy and payer policies will be more aligned and that folks’ needs for behavioral health services will be met. This is one of the silver linings of this whole unfortunate situation: an awakening to the increased need for behavioral health care services and the role we play in public health.
In addition to policy and growth, which we touched on, what other hopes and priorities do you have for your company in the year ahead?
Our priorities are simply to stay focused on our treatment philosophy. We have it posted in every facility that we own: Our philosophy is to serve clients and their families with compassionate, individualized, high quality care.
That means using evidence-based treatment approaches and treatment modalities on an individualized basis and rendering those services through fully credentialed professional staff. We combine that with exceptional client-focused customer services, and we render those treatment services in our superior treatment facilities. That’s what we strive to do every day.
I started the company not to be the biggest or have $100 million in revenue or 50 facilities. I started the company to help patients and their families and to focus on the provision of good care and treatment.
At Odyssey, we put as much focus on supporting and resourcing the clinical treatment people, programs and processes as we do on the business and managerial metrics. We will continue to maintain our focus on doing things well, doing things right and finding that balance in order to fuel the growth of the company going forward.