In the past month, Community Psychiatry, a California-based provider of outpatient behavioral health services, has completely revamped its executive team. New private equity ownership has brought aboard a new chief growth officer, a new COO, a new CFO and, most importantly, a new chief executive to transform the company from a regional provider into one with a national presence.
In mid-January, Christopher Brengard stepped into the role of CEO for the provider. He previously made his mark as the chairman and CEO of U.S. Renal Care, a Plano, Texas-based kidney dialysis company that he co-founded in 2000 and grew to more than 300 locations across 32 states and Guam.
Headquartered in Sacramento, Community Psychiatry provides virtual and in-person behavioral health care to patients all across California. The provider, which employs more than 120 clinicians and has 44 locations across the Golden State, was an early adopter of virtual health, first offering telemedicine services back in 2009.
Brengard’s hiring comes after the private equity firm New Harbor Capital, in December, sold Community Psychiatry to two other PE powerhouses — Centerbridge Partners and Leonard Green & Partners, which was previously the majority owner of U.S. Renal Care.
Now, Brengard, who is based in Arkansas, says he has big plans for Community Psychiatry, from building out its virtual care platforms to expanding into new states. Behavioral Health Business recently connected with Brengard to discuss all that and more.
You can read the conversation with Brengard below, which has been edited for length and clarity.
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BHB: You have a fascinating background as an executive and co-founder of U.S. Renal Care. Can you give us some more insight about your background?
Brengard: I started U.S. Renal Care back in 2000. When we started, we really focused on one thing, and that was lack of access around the country, particularly in rural and secondary markets. I actually had a family member in a rural market that was needing dialysis services, and that’s how I became acquainted with the industry itself.
We [expanded] from a single dialysis center out here in Arkansas to more than 350 dialysis centers. It ended up being about a $1.5 billion company with close to 10,000 patients. After 20 years, I just decided that it was time to move on, and I really had not intended to go back into a full-time position.
What made you want to come to the behavioral health care industry full-time?
A friend of mine had been talking to me about mental health and some of the opportunities there. It seemed to be very similar to what the dialysis industry was [experiencing] years ago with the need for access, not just in rural and secondary markets but in major markets across the country.
What exactly drew you to Community Psychiatry, which is located halfway across the country from you?
I had spent six or seven months working with a private equity firm looking at behavioral health opportunities. They were beginning to do some research in the industry, and we looked at several companies over a four- to six-month period of time. Community Psychiatry was one that we didn’t take a specific look at, but we looked at it on the periphery. What became pretty obvious to everybody was that Community Psychiatry was a very high-quality, mature regional business with a strong group of managers.
Community Psychiatry had been purchased by Centerbridge Partners, who invited Leonard Green & Partners into the investment with them, and they invited me on the board. Later, they offered me the opportunity to run the strategy around growing the company across the country.
What made Community Psychiatry stand out to you and your investment partners?
First of all, this is a physician-led business. Physicians have a complete say-so on how they operate their practices. Second, this is a mature business, and it has always been known as a high quality provider in California.
What are your main goals for Community Psychiatry as CEO?
We intend to continue to build and refine the connected care model that was already established here. We’re focused on immediately developing partnerships with national payers and are looking closely at integrated care opportunities.
What are the biggest challenges that you see in behavioral health as you settle into your new position?
The biggest challenges are just simply the size of the industry, and recognizing that more than 50% of the adults in the US have behavioral issues who are not receiving proper behavioral health care. There are many contributing factors to that failure, such as lack of coordination with primary care or other mental health services, insufficient insurance coverage and stigma.
Certainly, there’s a shortage of mental health providers, and poor organization and infrastructure to facilitate fast access to care continues to be a major issue in California and other markets. And there also seems to be very underdeveloped, or underused, measures around tracking treatment and quality of care. For the industry, those seem to be the biggest challenges moving forward.
On the growth front, there has been a lot of consolidation in the last decade in behavioral health, and Community Psychiatry has been busy in the purchase of facilities in the last couple of years. Do you expect that there might be more M&A activity in the future?
We’re evaluating which markets around the country that we think we can best serve and best have an impact. As we identify those markets, we’ll look to see if we can find high quality providers to partner with. Once we partner with those providers and move into those markets, we intend to work with those local doctors to decide what access care is needed, and we’ll hopefully fill in the cracks with de novo and with recruitment of the new clinicians into that market.
So would it be fair to say that with Community Psychiatry setting its sights on expanding outside of California, it’s not a matter of if but when?
We’re going to look at other markets, and I would expect to enter those markets the next four to six to eight months. We certainly don’t have anything pinned down at this at this current time, but we intend to expand.
Community Psychiatry was an early adopter of telehealth services for patients. How big is that business for the company, and what opportunities do you see in that area going forward?
Community Psychiatry was an early adopter of telehealth as a way to provide access to remote patients and partnerships with rural clinics, far before COVID hit. But now, psychiatric clinicians have pivoted to virtually 100% of our patients now receiving telehealth.
When talking to our physicians, what they’ll tell you is that they expect for many of the patients and — certainly clinicians themselves — to continue their virtual appointments, based on preferences and clinical appropriateness. I think telehealth is here to stay, and we’re certainly positioned well for that.
I notice you’re not the only new face in the C-Suite, as Community Psychiatry has announced several additions to its leadership team lately. What prompted the new executive level hires?
Community Psychiatry had a very strong management team that had evolved over the last 20 years, but it had stayed a regional business. With a strategy to take its high quality of care across the country to open up new centers, we needed help with a management team that had experience in running large businesses and growing health care companies quickly.
As CEO, where will you be based out of?
I’ll be staying here in Arkansas. We have a strong office in Sacramento, and we are getting some concentration in Denver with new executives. I expect to have a similar experience today as I did with U.S. Renal Care, when I was on the road four to five days a week. We’ll be spending time both in Sacramento and in Denver, and then on the road as we’re building out new centers.