By comparison, in domestic transactions, private equity firms spent over $16.3 BILLION on behavioral health
entities and acquisitions in 2017 alone. In 2015, eating disorder treatment was classified as
a $3 billion industry per annum with a growth rate expected to be 5% per
year. The deal value of
acquisitions of eating disorder treatment centers exceeded $2 BILLION dollars.
And yet, the gross
disproportionality of money being invested in corporate entities which attempt to treat
eating disorders merely perpetuates a broken system which is not reducing the
horrendous death rate of one life every sixty-two (62) minutes and also is not
resulting in a more clear, transparent, unified, community-accepted standard
for the treatment of eating disorders. Contrarily, the best hope for those
afflicted with this disease resides with the research scientists, those persons
on the front line who study the biological causes and ramifications of the
disease from which a greater understanding of the disease, and a more effective
manner to treat eating disorders is possible.
In 1993, when former North
Carolina State coach Jim Valvano was wracked with cancer, he gave one of the
greatest, inspirational speeches in the sports world when he announced a
partnership with ESPN to start the V Foundation for Cancer Research.
Note that the foundation was started to raise funds for research … not
treatment directly, and since 1993, the V Foundation has awarded over $200 million in cancer research grants
nationwide. Numerous examples exist showing that investment in medical research
is the best avenue for understanding and developing revolutionary treatment
regiments to combat diseases.
CCMP d/b/a ERC's Opportunity to Send a Powerful Message
CCMP d/b/a ERC has a unique,
bold opportunity to embrace and financially support the academic institutions and research scientists
whom are the backbone of the industry.
When CCMP was the
successful bidder at auction for ERC, ERC was represented by Jamieson Corporate
Finance. Jamieson announced that as part of the transaction, ERC and its
management team entered into a new “incentive plan” with CCMP Capital
Advisors. Prior thereto, when Lee
Equity acquired ERC from Trinity Hunt, there was also an “incentive plan”
negotiated for ERC. Not being privy to the specifics of those “incentive plans,”
one can nonetheless logically speculate that the incentive plans are tied to
the financial growth and expansion of ERC facilities. This is especially true
since the rating given by Moody’s Investor Services is dependent upon, “… [Moody’s]
believes ERC will continue to expand aggressively through growth of existing
facilities, new facility openings and acquisitions.”
CCMP d/b/a ERC has
no formal affiliation or partnership with an academic, medical
institution, let alone any medical institution conducting research into
the biological aspects of the disease. Nor is one likely. Nonetheless, CCMP d/b/a ERC has the opportunity to reach across the aisle of the industry and support our scientists and academicians.
ERC has the opportunity, on March 17,
2018 to publicly announce that as part of the ever expanding ERC empire, it is embracing and supporting the
critical contributions and work done by research scientists in the eating disorder field by donating fifty
percent (50%) of the incentive payments it received or will receive from CCMP, or $100,000, whichever
amount is greater, to the University of Texas Southwestern Medical Center,
specifically its eating disorder program and the research being conducted by the professionals at UT Southwestern.
UT Southwestern's scientists' and professionals' ground breaking research and study of the brain and its complexities as they relate to eating disorders will undoubtedly result in a much greater understanding of this disease ... and as a result, the saving of millions of more lives. Contrarily, the
incentive payments being made to ERC by CCMP are not related to breakthrough
medical research discoveries. CCMP’s mission, as with any private equity firm
is to participate in the acquisition of a corporation or asset, drive up its
growth cycle and then divest for a profit. However, ERC still has the opportunity to redistribute payments from the private equity firm to scientists and research professionals who are battling this disease on the front lines and who so desperately need funding. Further, this type of altruistic conduct is keeping in line with
the vision of ERC’s initial founder, Dr. Ken Weiner.
When
Dr. Weiner was interviewed in November of 2017, Dr. Weiner extolled his own magnanimous virtues, as well as the virtues of ERC when he responded to questions as follows:
“I feel strongly that if you are
lucky enough to do exceptionally well, you have an obligation to give back and
take care of others.”
Over time, I have come to
appreciate that integrity is as important as competence when it comes to
partnerships. I only surround myself and partner with people who have the
highest level of integrity. If somebody wants to tell me it’s just business,
that person is not my partner. To me, that is often an excuse for making poor
short-term financial decisions that are not going to evolve into long-term
success.”
“We are a mission-driven company.
Everything starts with our mission to take the greatest care of patients, their
families and referring professionals so that they view us as best in class.”
“Just like
we have been with our mission of taking the greatest care of patients, their
families and referring professionals so we are considered best in class, we
have always been incredibly intentional about our culture. There are five
pieces to it – three Cs and two Is.
The first
piece is compassion – you must care deeply about our patients and their
families if you are going to work here.
The
second component is collaboration. Internally, we have to be a functional
family. Otherwise, patients get distracted by our staff; they lose focus and
lose the opportunity for a life-changing experience. Externally, I always tell
my staff members that they are my ambassadors to the world. When they tell
others that they work at Eating Recovery Center, what they say next sets the
template for how that person understands who we are and what we do.
The third
piece is competence. This is a high-competency organization, and we demand a
lot of ourselves.
The next
piece is something that I mentioned earlier: integrity. Everything from start
to finish has to be done with the highest level of integrity.
Last is
innovation. We have an obligation to elevate the field of eating disorder
treatment – determining what works, what doesn’t, how we make change happen and
so forth.”
Integrity. Collaboration. Compassion.
Competence. Innovation.
All very admirable and necessary
words. Qualities and standards to which we should all aspire. And now, what an incredible
opportunity ERC has to put into action those very noble words and grand aspirations. ERC can
show, through its actions, that it fully embraces its mission, it stands behind its words and believes in
one of the preeminent eating disorder research centers in the United States by
financially supporting them. And the ERC medical doctors, who comprise the minority owners of ERC, have the ability to take the money being paid to them by CCMP and instead of simply keeping that incentive pay, they can transfer it
to those with greater financial needs and whose contributions to the eating
disorder community are so incredibly crucial.
This type of contribution results in so many people benefitting. The ground breaking, world class work for which UT Southwestern Medical Center is known is recognized, encouraged and financially supported. Its scientists and professionals are energized by a significant influx of capital and support. ERC publicly and openly shows that its words are not merely words ... but are a catalyst for action. In one fell swoop, ERC can start to lay to rest the ever-increasing belief in the industry that CCMP d/b/a/ ERC is about money, first, last and foremost. But most importantly, our children, our loved ones, those who suffer as a result of this insidious disease, are given greater hope. THIS is the opportunity for ERC to be that one, gleaming candle of hope in an otherwise dark, deathly quite hospital hallway.
Great moments are born from
great opportunities. ERC has a great opportunity to embrace its mission
and its noble words. ERC needs to seize this occasion and create a great moment. The world awaits.
