Aware Recovery Care CEO Brian Holzer is focused on quality over quantity. Under his direction, the in-home addiction recovery provider has prioritized increasing its density of services instead of expanding its footprint.
Aware’s in-home addiction care model, now offered in 11 states, is unusual in a landscape of in-center or virtual offerings. The Wallingford, Connecticut-based company is capitalizing on a recent infusion of $35 million to expand its services.
Holzer, who started his career training as a physician and working as an executive at Kindred Healthcare subsidiary Lacuna Health before assuming the Aware CEO position in 2022, credits the company’s growth to its shift from a fee-for-service model to a bundled payment system. He predicts that the behavioral health space will experience consolidation and vertical integration similar to the evolution of hospital post-acute care.
Holzer sat down with Behavioral Health Business for a conversation about the future of the behavioral health field, Aware’s growth plan and the “North Star” that is value-based care.
Highlights from the conversation are below, edited for length and clarity. Subscribe to BHB Perspectives to be notified when new episodes are released.
BHB: The post-acute care space is undergoing a huge evolution, including setting of care, rising acuity levels, more managed care and value-based care models. Do you see parallels between that evolution and where behavioral health, particularly SUD, is headed?
Holzer: It’s eerily similar. If I were a betting man, I would say that mental health and substance use disorder will undergo the same type of transformation that we’ve seen with some of the traditional post-acute care assets like home health care.
When I transitioned to behavioral health, I saw the same thing [as with post-acute care], where you had all these levels of care, from residential treatment facilities to partial hospitalization to intensive outpatient to outpatient.
Ultimately those services aren’t necessarily connected. So, someone going through a journey towards recovery is left to navigate the various levels of service that they may need, without any integrated care management or transitions of care support to ensure that they’re at the right level of care at the right time. That’s the innovation with Aware.
Our founders essentially constructed it to stitch together those levels of care.
Not too long ago, Aware had a relatively smaller footprint. Now you’re in 11 states with upwards of 800 to 900 employees. What has driven that growth, in your view?
We were a one-state company in 2016 with 50 employees and 100 clients, all served through a fee-for-service model that the founders had set up. Within a calendar year, clients [went from] being asked to pay repeated copays shifting to a monthly bundle, where we receive one monthly payment to deliver the totality of our services, and for the client, that results in them having to pay one copay once a month.
That changed the course of the company.
If you look over a seven-year period, we’ve gone from one state, 50 employees and 100 clients to 11 states, 800 or 900 employees, and I think we’ve served around 7,500 admissions just in the last three years alone. We continue to think the growth will accelerate further.
What were some of the things you had to do to make sure Aware was capable of moving from a fee-for-service to a bundled payment structure?
To be honest, the conversion from a fee-for-service model to a bundled payment model is easier. We negotiate bundled payment arrangements for every insurer prior to entering the state. Once those bundled payments are negotiated, there’s a code that we were able to use to reflect the service we provide in that given month. It creates simplicity with us being able to deliver our services in the right way, tailored to whatever the client’s needs are at that given point in time, versus having to stay relatively programmatic to delivering a fee-for-service arrangement.
Can you talk a little bit more about your growth goals for the next 12 months or so?
With regards the number of states, I think we’re at a point in time where we want to invest in the states we’re in. We think there’s an opportunity to invest in the density of services. We’re working on launching a medication-assisted treatment (MAT) product and a medically managed detox product.
Our goal moving forward is to expand the populations and products we provide in our existing states.
Do you think the buzz around value-based care is warranted?
It’s the North Star with where we’re all headed. I admire all the focus and acceleration of that focus over the years with regard to shifting from a fee-for-service to a value-based arrangement. Value and risk-based models require deep collaboration between providers and payers. Those entities tend to speak different languages and have access to different types of data. It’s complex. I love the fact that we’re all focused on it as an industry. I tend to hear more promise versus actual indicators of it.
What Aware has been able to do over almost seven years, in collaboration with a large commercial insurer, is look at total cost of care and per-member-per-month (PMPM) impacts. We’re able to show dramatic reductions in the two-year total cost of care impacts, not just medical, but behavioral.
This is the type of data that we think is going to accelerate our ability to stay out in front in the conversion of a fee-for-service model to ultimately risk-based bundled payment arrangements from insurance companies, upside and downside.