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A New IT Player Hits the Addiction Treatment Scene
January 2007

After Two Angel Funding Rounds, Celerity Begins to Market its Affordable System

In early 2004, Peter Labaki was approached by a senior clinician at a local Buffalo, NY, outpatient clinic who knew that Labaki had an extensive background in information technology. “I told her that that there were likely plenty of IT vendors who could meet her needs,” says Labaki. “And that’s when I found out that wasn’t the case.” The clinician began to inform Labaki that she had looked at some systems, including Sequest and Anasazi, and had found them wanting. “They appeared to be, in her eyes, far more geared to the mental health side, and didn’t help much at all with the huge paperwork requirements of the New York state addiction regulators.”

And then, of course, there was the cost, which the clinician, according to Labaki, found to be prohibitive. “For what she needed, the systems required a fair degree a customization, something that was way beyond her clinic’s means.” All this got Labaki to thinking, and he began to do some research, finding out that there were a huge number of addiction treatment programs in the U.S., well over 13,000, according to SAMHSA.

“The vast majority of the programs are small and publicly funded,” points out Labaki. “Most of these programs are crying out, wanting to be brought into the 21st Century, but not having the the funding to do so.” That’s when Labaki resolved to found a new kind of IT company, one that would be exclusively oriented toward the addiction treatment industry and one that would deliver highly affordable solutions.

To get the company, which he eventually named Celerity, off the ground Labaki did two “angel” funding rounds. The first, which he closed in early 2004, helped pay for the software’s development, while the second round, which closed in late 2006, is going toward funding the sales and marketing push.

To get Celerity into the hands of providers, Labaki is employing innovative approaches to helpprospective clients out. In one case, Celerity hired a grant writer for one of its clients, helping them get public and private charitable funds to pay for the Celerity installation. Labaki expects to duplicate this turnkey, all-in-one funding and IT package for other small public and private non-profit treatment operators, believing it will be a powerful marketing tool, and highly attractive for cash strapped providers.

Celerity came out of beta testing late last year, and so far the system has been installed at three sites, South Florida-based Recovery First, Phoenix Recovery Center in Maryland, and the Albany Citizens Council in New York.

A former commissioner of OASAS, the New York state addiction treatment provider and regulator, the largest in the nation, Shari Noonan is now the CEO of the Albany Citizens Council, a private, non-profit treatment, housing and prevention center. “The thing about this industry is that we are very backward when it comes to IT,” she says. “Everything is on paper and, when I came here recently, they were not using email. We were practically using smoke signals to communicate.”

Noonan, whose staff at OASAS worked closely with with Labaki in the software’s development stage, says she has been highly impressed with Celerity’s offering. “Most other systems were built with hospitals or mental health centers in mind, Celerity was built with CD in mind from the ground up. It was also built with the regulators that we deal with in mind and I like the fact that it’s web-based, which is convenient and keeps up front costs down.” But there is no doubt that the marketplace into which Celerity is launching is highly competitive, with perhaps 20 players competing in the addiction treatment and behavioral IT space, including some very well established and very aggressive companies. And Celerity will no doubt be bumping up against another new, and formidable, competitor that plans to go after the exact same market that Celerity wants, smaller CD facilities looking for affordable solutions. Valley Hope Association, which spent millions developing an internal system to service its seven state treatment operation, early last year decided to take the system commercial and is planning an aggressive marketing push this year. Valley Hope’s IT unit, called VHS-IMCSS, late in 2006 signed Bayside Marin, Northern California’s premier high-end center. PD

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