As the private treatment business in recent years has seen much of its growth driven by the founding of new centers whose focus is on a high-end demographic – those treatment facilities who target clients who can pay upfront and out of
pocket – a growing group of individuals have begun to question whether growth can continue to be driven as it has to a large extent by these types of facilities, saying that there is a limit to the number people who can afford to pay cash for treatment. But there continue to be entrepreneurs who are proving the high-end naysayers wrong, especially if they are astute enough to found centers in regions where there is little high-end competition. And so it has been for Perry Litchfield, who has seen his high-end Bayside Marin center thrive since its opening about a year ago. “While our success has, I believe, mostly been due to the fact that we offer a whole new level of high quality care, there is no doubt that our location in the Marin County just outside San Francisco has been a factor.”
While Southern California is arguably the nation’s leading region for private treatment generally, with Malibu bursting at the seams with high-end offerings, entrepreneurs have noted that in Northern California there is dearth of private treatment facilities, a gap that Treatment Magazine has learned is being eyed by a number of entrepreneurially minded treatment executives from Southern California and Arizona. But to the first movers usually go the lion’s share of rewards, and so it is likely to be for players like Litchfield, who has already attracted interest from a number of buyers, both of a strategic and financial nature. After CRC Health Group’s announcement that it will be sold to private equity powerhouse Bain Capital, Treatment Magazine has noted a big uptick in interest from Wall Street investment banks in the addiction treatment business. But Litchfield says he is not at all in a selling mood, and is likely by the end of this year to expand his center to 18 beds from 12 currently. The existing facility is on 3 acres in tony Marin County with every conceivable type of amenity and a clinical excellence that is very likely matched by few facilities in the nation.
Not by any stretch of the imagination is it cheap to get clean at Bayside Marin, with the cost of treatment averaging around $45,000, reaching to around $60,000 depending on the room chosen by the client, as well as their clinical needs. While Litchfield will not discuss the financials of Bayside Marin, he does admit that the facility has been near full since its inception, implying that if beds are being filled at their average cost that Bayside Marin could be registering annual revenues in the $5 million range.
Treatment Magazine has found in its investigations that the operations of high-end treatment centers are among the most profitable businesses in the healthcare field, and so it is likely that Litchfield has pocketed substantial profits in his first year of operation, a highly unusual entrepreneurial feat. But like most treatment center operators who are themselves in recovery, Litchfield, already a successful attorney, says he is not in it for the money. “I wanted to give something back,” he said. “That’s mostly it.”
