Less than six months after The Emily Program and Veritas Collaborative merged, the eating disorder treatment provider has announced a new name for its parent company: Accanto Health.
And that’s not the only change coming down the pike for the newly combined organization, according to CEO Dave Willcutts, who has his eyes set on acquisitions, de novo growth and value-based care opportunities.
Together, The Emily Program and Veritas Collaborative have more than 20 locations across 7 states, which include Georgia, Minnesota, North Carolina, Ohio, Pennsylvania, Virginia and Washington. Their programs are largely locally focused and span the continuum of care for eating disorder treatment.
Veritas Collaborative is a portfolio of Vestar Capital Partners, while The Emily Program is a portfolio company of TT Capital Partners, the private equity arm of Triple Tree Holdings.
Behavioral Health Business recently sat down with Willcutts to discuss the companies’ recent merger, new name and future goals, which include expanding eating disorder treatment access, improving payer relationships and more.
You can find that conversation below, edited for length and clarity.
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BHB: Can you tell me a little bit about how you chose the name Accanto?
Willcutts: What we really wanted to highlight is a message that pointed toward one of our fundamental beliefs: that we need to be with our clients through their journey.
That journey often lasts a lifetime. We may be highly engaged in that journey at the beginning or during an intense period, but even long after clients are on a good path to recovery, we want to be there for them.
In Italian, “accanto” means “beside,” so that fits well with this concept of being beside them through their journey.
The new name comes just a few months after The Emily Program and Veritas Collaborative merged. Even with the birth of Accanto, those brands will remain in place. That said, why was renaming the parent company important?
The parent company has the corporate functions that will be supporting both brands, and we fully expect we will have more brands that will join.
Both Veritas and The Emily Program have very, very strong brands, particularly in their regions, and we wanted to maintain that. Each has a very deep history, and a lot of people know and support the work they’ve done, so we wanted to keep those brands, as opposed to coming up with some new name that would absorb them
In terms of brand additions, do you have anything in the works?
We’re always looking at different opportunities, so there are always conversations happening. But I can’t really go into any kind of detail about those conversations.
Our perspective on our space that is pretty comprehensive. We have inpatient to residential to a full-day program with PHP, a half-day program with IOP, individual therapy, outpatient and outpatient groups. We cover the full spectrum and are very committed to that.
And when you look at that full spectrum and continue to do more in those areas, there’s likely an opportunity to have different approaches to the market at different acuity levels. It’s both from a geographic partnership standpoint, as well as scope of services.
When you talk about the geographic perspective, would that be further partnering with folks in markets where you already work? Or would it be using potential deals to enter new geographies?
More likely to enter new geographies. In the geographies that we’re in, we tend to look not at confusing the market with another brand, but really rallying around one brand.
In 2020, right as COVID hit, we closed the acquisition of the Center for Balanced Living in Columbus, Ohio, and we very quickly changed that name to The Emily Program because we have a very strong presence in Ohio. That made just more sense.
Building on our existing presence in a geography makes sense under the brands that we have. In new geographies, that also could make sense, but there are opportunities for partnerships that we see that could be compelling.
What about de novo growth?
I would say we’re probably mostly de novo.
Our Columbus presence is expanding significantly with the additional 24 beds, and we have several other de novo efforts in process, a couple of which will get us into new markets. That’s really where we’re going to be focusing the majority, if not the vast majority, of our efforts: on de novo expansions.
We see just a ton of opportunities to do that. The reality is the market does not have enough access to care, and it’s gotten much worse in the last year with the pandemic causing an incredible surge in the need for eating disorder treatment services.
A lot of folks still have to get on a plane to get good care, and we believe strongly in offering the full continuum of care on a local basis. We serve people who fly in, but that represents only 10% to 15% of our clients, as opposed to others that could be the opposite.
There are lots of local geographies and communities that don’t have any services available to them. And we need to work to convince the health plans in those areas that it should be a priority to have good local services that they pay adequately.
In states that don’t have good access to eating disorder treatment services, the payers aren’t willing to pay. They seem to be okay with their members either going to a general behavioral health service, which just is not adequate for eating disorders, or getting on a plane and go to another state. And then they’re still paying the other states higher rates.
A lot of states’ payers have to realize that eating disorder treatment is a service that is valuable to pay for because the cost of not treating these conditions are among the highest in behavioral health.
Given the great need for and dearth of these services across the nation, how do you even decide where to expand as an eating disorder treatment provider?
That’s a question we’ve spent a lot of time talking about. A year and a half ago, I would answer that question very differently than I would answer it today.
Back then, we probably would be focusing particularly on low access to care areas. But given the surge in demand and the fact that costs are continuing to go up, we need to work with payers to prioritize where we’re going to go.
We have to have a relationship with payers in a given market that is reasonable, otherwise, there’s too many other areas to go to. That becomes a real driving factor, because the need is everywhere.
Does availability of clinicians come into play? They’re in short supply, too.
Absolutely. There’s no question that mental health care in general, and the eating disorder treatment [industry] specifically, is facing a real shortage of talent. The country is just not producing enough therapists and psychiatrists. It’s not limited to eating disorders.
Anywhere you look, you’re going to have a challenge with the staffing side of it, so staffing becomes a top priority for anything that we are doing in our existing or new markets. But I think all markets right now are really struggling with the limited number of clinicians to support this type of care.
How can we fix that problem?
It is tied to the payers. It’s going to get down to a point where the providers out there in the community are going to say, “Hey, you either need to pay what these people are able to earn, or we’ll just take cash pay or do it another way.”
This dance of limited resources but fixed prices doesn’t work in a capitalist society. And that’s the dynamic we’re in.
Psychiatry is an area to look at as an example of what probably is going to happen more broadly in behavioral health: Payers have been increasing their rates, sometimes rather dramatically, for psychiatry services because there’s a shortage.
It’s just a supply and demand issue.
Switching gears here a little bit and going back to the merger between The Emily Program and Veritas: Could you tell me a little bit more about the origin of the deal and how it came to be?
The folks who started the Veritas Collaborative and the folks who started The Emily Program have known each other for a really long time. They’ve really respected each other in what they do and how they approach the care.
So the conversations between our top-level folks have always existed from a professional standpoint. We’ve referred patients back and forth: Veritas has done inpatient, where The Emily Program does a lot of outpatient. Veritas is 75% adolescent, while The Emily Program is 25% adolescent.
There are a lot of areas to support each other on, and with the pandemic hitting, the ability to combine forces just made more sense than ever.
As the CEO of the newly combined company, what are your main goals, either in the short-term or the long-term?
The short-term goal is to integrate the two organizations in a smooth way that doesn’t disrupt staff or clients. And then there’s a lot of growth opportunities that we are looking at and deciding how quickly to run after.
Those growth initiatives rolling out in the coming months are a really important priority. It all goes toward having a full continuum of care and working with payers to show the value creation of treating the full continuum.
We are looking at value-based approaches. We don’t have anything signed yet, but given our full scope of service offerings, we think we have an ability to offer a continuum that really lowers total health care costs.
The ability to make all of that happen, as well as expand our geography, is the biggest objective we have in the near-to-mid-term, meaning the next three years.
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