Home Upfront Deal Creates Largest Chicago Addictions Provider
Upfront
Deal Creates Largest Chicago Addictions Provider
June 2007

Acquisitive Resurrection Healthcare Buys Rush System Addiction Treatment Assets

Deal Creates Largest Chicago Addictions ProviderDr. Dan Angres has a long history operating in the Chicago market for addiction treatment services, after first coming to the city in the mid-1980s with the famous Doug Talbott to set up a professionals program.

Later he went to work at the massive 440-bed Parkside facility outside of Chicago. And when that facility closed, Angres and many other Parkside addiction treatment professionals moved on to start what would become a quite successful group of programs at Rush University Medical Center, then known as Rush Presbyterian-St. Lukes.

Over the last ten years or so, Dr. Angres and his team more than quadrupled Rush’s addiction treatment revenues, building a high quality collection of treatment assets that included a professionals program with community housing and a number of IOP and partial hospitalization programs. And now, with the deal closing in May, Rush’s addiction treatment programs have been bought by the behavioral health unit of acquisitive Resurrection Healthcare, which has doubled its size in recent years and now counts eight hospitals within its system.

Acting as an aggregator of Catholic health system assets within the Chicago area, Resurrection has grown to employ over 15,000 people. So, with just 210 employees, Resurrection Behavioral Healthcare is just a tiny part of the overall Resurrection system. But the deal to acquire the Rush addiction programs, in that in creates what is likely the largest addiction provider in the city, is an important one for the Chicago addictions market.

The Chicago treatment market is underserved from the standpoint that it does not have a well known free-standing residential center servicing the area, with Hazelden for a long time having gotten many clients from the region. And other well-known centers from around the country have also marketed heavily in the Chicago market, knowing that there was little competition from local providers for top-flight residential care. “We have spent the last several years integrating the psychiatric side of our behavioral healthcare assets,” says Frank Perham, VP behavioral health at Resurrection. And, in fact, up until now, Resurrection has offered precious little in the way of addiction treatment services, with only about one-tenth of its $12 million in behavioral health revenue coming from addictions programs.

Deal Creates Largest Chicago Addictions Provider“The acquisition of the Rush programs will increase our addiction treatment revenues by more than ten fold,” says Perham. And a couple of other recent hospital acquisitions, Holy Family and St. Joseph’s, have brought with them substantial residential addiction treatment operations to the Resurrection fold. Holy Family’s Keys to Recovery program has 43 beds and a substantial IOP program, while St. Joseph’s, located on Chicago’s north side, is expanding its operations with a new IOP program, adding a care continuum for its existing 20 bed residential program. “With these acquisitions, and now Rush, we have built what is the largest addiction treatment operation in the Chicago area,” says Perham. Since the advent of managed care, and the closure of the Parkside free standing center, what addiction services that have been offered in Chicago have tended to be run by hospitals as part of their behavioral health operations. “These programs over the years have tended to come go, not being a core part of the businesses,” says Perham. “At Resurrection we have now built a critical mass of addiction treatment assets, and we plan on growing the business into one that is highly integrated with our overall operations.”

As hospitals have exited the treatment business, opportunities have opened up for entrepreneurs. At the former Grant Hospital, now Lincoln Park Hospital, Jake Epperly leases
space for the residential, day treatment and IOP treatment operations of his thriving New Hope Recovery Center. JW

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written by Ron Frazier, December 21, 2009
This was the director and the program developer when I was at Rush.
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