|Addiction Treatment Industry Newswire|
|10/02/2013 -ATIN – Minnesota Teen Challenge, the state organization of the massive franchise style faith-based addiction treatment drug rehab alcohol rehab whose name belies its more than half century general mission of treating youths, adults and even whole families, is opening a new center in Rochester that will have up to 100 beds, treating a male-only census in a $5.2M purchase and renovation of a 50,000-sf former nursing home. As Betty Ford and Hazelden team up into the $150M largest non-profit, often overlooked is Teen Challenge International, which is an Ozark, MO head office operation that oversees nearly 200 residential programs scattered in every state. Combined revenues are easily in the many hundreds of millions and many times what will be the Hazelden Betty Ford Foundation when that merger is expected to be completed early next year.
Minnesota Teen Challenge isn’t the only addiction treatment enterprise to convert a former assisted-living property into an addiction treatment center, the real estate synergies being obvious. In fact a slowdown in the once red hot assisted-living mergers and acquisitions space has prompted small specialty bankers previously doing nursing home deals to follow their clients into the addiction treatment space. Platinum Healthcare is one of the assisted living operators who have moved into addictions, sending one of their top executives, A.J. Schreiber, to South Florida and opening Recovery Road, a Florida Model center in Palm Beach. And Abraham Shaulson, the enormously wealthy CEO of Miami-based Millennium Management, has been involved in the nursing home business on the hundreds of millions of dollars scale. He is considering opening a large detox operation in the Miami area, sources say. Shaulson, who recently subscribed to Treatment Magazine, has not responded to requests for an interview.
Revenues Pushed to Operating Units
With a history going back to the late 1950s, and immortalized in the millions selling book The Cross and Switchblade, Teen Challenge is rarely mentioned in the mainstream addiction treatment industry. Nevertheless it is a huge sprawling highly decentralized organization, with 150 programs outside the U.S. as well, whose revenues are raised overwhelmingly at the local operating units. Minnesota Teen Challenge is a good example. The new 100-bed Rochester center will be in addition to three other similar sized residential operations in the state that in 2012 brought in a total of nearly $23M in revenues. That compares to 2012 revenues, calendar year, for the national and international headquarters organization of only slightly less than $2M. The headquarters functions as a kind of mission quality control and franchise-type steering operation for the hundreds of local “ministries” nationwide and internationally.
Most non-profits in the addictions space get the vast majority of their revenues from treatment services, with donations very rarely accounting for much more than 10 percent of the annual top line. But the local Teen Challenges operations, guided by the latest technology and a laser-like focus and training at the national level, are charitable fund-raising juggernauts. Typical again is Minnesota, which got just $12M of 2012 revenues, or about half, from program services. Nearly $9M was raised in straight-up donations and $1.8M from special charitable events. While there are no generally accepted benchmark data on outcomes for addiction treatment in the United States, and thus Treatment Magazine goes not generally publish outcomes data in its articles, NIDA conducted a well-known study of Teen Challenges that showed highly positive long-term outcomes. Behind the positive outcomes may lie a highly comprehensive and integrative and very long-term involvement of Teen Challenges in the lives of their clientele.
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