Big New High-End Residential Center Opening in Minnesota

Addiction Treatment Industry Newswire

02/18/2015 -ATIN – Meridian Behavioral Health is opening a new high-end venture in the Minnesota market, bringing an element of new residential competition according to published reports, into one of the nation’s major addiction treatment “hubs,” the hub in this case anchored by the presence of world famous Hazelden, whose sprawling main campus is in Center City, MN not far from Minneapolis. Meridian, which has been described in published reports as the largest for-profit behavioral health company in Minnesota owned privately by a group of investors and Meridian management, has previously not at all concentrated on the high-end “private pay” part of the addictions market, according to published reports having a payor mix that has relied principally on government pay and government-backed insurance.

Big 180 Acre Campus

According to published reports, Meridian has bought a mansion-like facility on a big 180-acre property which it will call the Beauterre Recovery Institute, charging slightly less than $1,000.00 per day. The property was bought from the University of St. Thomas and has been converted from a former use as a conference center into a slightly more than 60-bed high-end addiction treatment facility, with published reports describing the new Beauterre facility as having all the usual amenities of high-end care. Of course, Hazelden’s board and top management are likely highly preoccupied, as well they should be, in making a success of the historic merger between Hazelden and Betty Ford of Palm Springs, CA. Along with Caron of Pennsylvania, Hazelden and Betty Ford are probably the most respected and well-known non-profit names in the country when it comes to delivering higher-end type care and their merger is among the most important developments in decades on the non-profit side of the addiction treatment business. About 60 percent of addiction treatment centers are non-profit, perhaps somewhat less now with the fast growth in recent years of the for profit side of the addictions business. For example, Origins Recovery of Texas recently purchased the famous Hanley Center of Palm Beach from Caron, converting the large center to for-profit status along the way.

Relying Principally on Private Pay

Top Meridian executives have told local reporters in Minnesota that Meridian plans to rely primarily on “private pay” cash-out-of-pocket reimbursement to fill the 60+ beds initially at the new Beauterre facility, working along the way perhaps to rely to some extent on the “out-of-network” benefits of the well insured down the road. If Meridian management were to look at a playbook of how to do cash pay in the addiction treatment business, it would do well to examine that of Caron, which few would argue has established expertise and success in doing this type of business that few, if any, in the treatment business could hope to match. While managed care was decimating the treatment business in the early 1990s and pushing its dictates everywhere, Caron’s board and management, led by CEO Doug Tieman, made the bold and risky decision to go all cash pay, successfully doing so while maintaining very high growth rates at the same time.

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