private pay treatment: good, bad, and ugly | part 1: the good stuff
I wrote this series of posts on the private pay treatment world to explore ideas I’ve wrestled with over the past few years. My goal is to start an honest dialogue around the good, the bad, and the ugly of the private pay treatment industry. Additionally, I’m trying to elucidate hidden incentive structures and the tradeoffs we make when choosing to work in private pay healthcare.
I have an affinity for the people and programs, but I think it’s essential to be your own harshest critic. Thus I’m scrutinizing my experience with the private pay world – enter the good, the bad, and the ugly of NATSAP, OBH, and IECA (collectively, the “private pay world”). If these acronyms aren’t familiar, check out the links at the end of the post.
part 1: the good stuff
I got my entrepreneurial start in private pay treatment when I co-founded Green Hill in 2017. Initially, Green Hill only served families with the financial means to pay north of $5,000/month for “transitional living” – the combination of masters-level clinicians providing substance use and mental health counseling, structured sober living, and academic and vocational support. When your program costs thousands of dollars a month, you quickly realize it’s not a “community resource.” Initially, I planned to be a behind-the-scenes guy focused on the operational side. However, when I took over as the CEO, one of the biggest problems I had to address was our census: we needed more clients. So I jumped into the NATSAP-IECA-OBH circles with both feet.
The first private pay treatment conference I attended was NATSAP in January 2018, just a few months after Green Hill opened. I felt like a fish out of water. I didn’t have any experience in the field, and my program was brand new; thus, I was met with an appropriate amount of apprehension, and folks generally kept me at arm's length. However, I was warmly welcomed by one person in particular (shoutout to Jacob), and he let me follow along to some of his meetings and made introductions to referral sources. I spent the next nine months touring programs and networking with colleagues, “competitors,” and referral sources. By the end of the year, I was all in. I felt fortunate to be part of such a welcoming, collaborative profession.
Here are a few things that make the private pay treatment world extraordinary:
The people are fantastic.
I thoroughly enjoy and admire most of the folks I’ve met in the field – consultants, program staff, therapists, and owners. They care deeply about their clients and are committed to providing the best support and treatment they know how. So many talented folks could make a lot more money in other professions, but they’ve chosen to dedicate their professional lives to the service of others. Not only are the people passionate about helping their clients, but it’s also a group of professionals who genuinely care about one another. Sure, on paper, there are some competitive companies, but it doesn’t take long to build meaningful relationships with like-minded colleagues throughout the country. Collaboration and camaraderie are vital as Wall Street creeps into the treatment industry, demanding profits over outcomes. Fortunately, clients and families are in good hands with this group of people.
*Next post: I’m exploring how the relationship-based nature of the industry leads to perverse incentives and a focus on customer services and referral management over clinical sophistication and training.
Insurance companies can’t dictate treatment.
Much of the incredible work in private pay treatment is seemingly “nonclinical.” Thus, insurance wouldn’t even consider paying for it. If you’re an insurance-based program, the health insurance companies play an outsized role in what type of treatment you can receive. The same constraints don’t limit private pay treatment programs. If you believe a client needs a longer length of stay or a particular clinical intervention, you don’t have to ask ABC Insurance Co. for permission. Appropriate clinical treatment trumps medical authorization in the private pay world. This freedom is the main structural advantage of private pay treatment, IMHO. Insurance companies have a stranglehold on the traditional healthcare system, and it’s great that some programs operate outside the system.
There is an opportunity for innovation and change.
Since private pay programs operate outside the traditional, insurance-bound healthcare system, there is an opportunity to be exploratory. Programs can use out-of-the-box thinking to deliver unique interventions over a period of time that may be prohibitive in insurance-based settings. Insurance companies fail to allocate enough resources to mental health and substance use treatment, so private pay programs have the unique opportunity to deliver the level of care that is clinically indicated. For example, if enough data is generated to show the effectiveness of XYZ treatment for a particular condition, or that a (much longer) course of treatment dramatically improves patient outcomes, then a case can be made for insurance companies authorizing what was found to be effective. Thus, I hope private pay programs generate more effective interventions that can be translated (dare I say, commoditized) for the “general” population and covered by insurance.
*Next post: The issues with mythology and lack of clinical sophistication in private pay treatment.
We need a larger, more robust behavioral healthcare system.
Ultimately, the private pay treatment industry addresses some of the most challenging problems developed countries face. Private pay treatment is an essential piece of the healthcare puzzle that serves a population that often requires a level of customer service and attention to detail to engage in treatment successfully. Not everyone can afford a Ferrari, but that doesn’t mean Ferrari shouldn’t make cars. If it weren’t for NATSAP-OBH-type programs and the therapeutic consulting field, many families would not get the help they need and deserve.
*Next post: Does private pay treatment perpetuate systemic inequality and promote unequal access to care?
in summary
The private pay industry has a lot going for it: great people, fewer insurance-driven restrictions, opportunities to drive innovation and change, and the industry addresses some of the most pervasive, destructive societal ills. I’ve been in the private pay treatment industry for five years, a relatively short time compared to industry veterans. There’s a lot I have come to love about the field, but I believe there are some issues we need to discuss openly, not just behind closed doors. That’s what I’ll explore in my next post, part 2, the bad: the road to hell is paved with good intentions (NATSAP, OBH, IECA).
Links for NATSAP, IECA, and OBH below.
“The Independent Educational Consultants Association (IECA) is a not-for-profit, international professional association representing experienced independent educational consultants. Chartered in 1976, the Association’s headquarters is located in the Washington, DC area. IECA sponsors professional training institutes, workshops, conferences, and webinars, publishes a directory of qualified independent educational consultants, offers information to students and their families regarding school selection issues, and works to ensure that those in the profession adhere to the highest ethical and business standards.”
“The National Association of Therapeutic Schools and Programs serves as an advocate and resource for innovative organizations which devote themselves to society’s need for the effective care and education of struggling young people and their families…Our members include therapeutic schools, residential treatment programs, wilderness programs, outdoor therapeutic programs, young adult programs and home-based residential programs working with struggling teens and troubled adolescents. All are working through NATSAP to make sure our industry provides the highest quality services to the young people and families they serve.”
“The Outdoor Behavioral Health Council was founded in 1996 by representatives from a handful of wilderness treatment programs who believed through collaboration that best practices and standards of care could be developed to elevate the industry and field. Today, the organization, its member programs and friends have been instrumental in raising the bar for outdoor behavioral healthcare, facilitating research on the efficacy of wilderness and other outdoor behavioral treatments for adolescents and adults, and in promoting the field as a whole.”
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