“Nothing strengthens authority as much as
silence.”
Leonardo da Vinci
“Our aim is not to do away with corporations; on the contrary, these big
aggregations are an inevitable development of modern industrialism. ... We are
not hostile to them; we are merely determined that they shall be so handled as
to subserve the public good. We draw the line against misconduct, not
against wealth.”
President Theodore Roosevelt
Private equity firms have proliferated and spread
through the eating disorder industry like the Black Plague through Europe in
the mid 14th Century. The
issues brought about by this modern day plague include: no government
oversight with no concrete legislation to curb gross excesses of financial
corruption and abuse of power; no corporate accountability since PE firms can carte
blanche exit a transaction after it has reached its financial goal. In the event the transaction collapses
because the very few assets of the treatment center diminish and the debt
obligation cannot be met, the PE firm has no liability and all of the financial
burden falls upon the treatment provider. When the treatment provider fails,
our loved ones pay the ultimate price. Another issue is that the treatment
provider, guided by the mandates of the PE firm, focus not upon the health, well-being
and recovery of its patients, but instead must necessarily focus on generating
the greatest amount of revenue and financial profit for its overlord and master.
Private equity is not
invested in the eating disorder industry for philanthropic reasons. Private
equity firms invest in the eating disorder industry to make the largest profit
in the most expeditious manner and then divest itself of the asset.
Another issue with PE firms is that when profits are emphasized over
people, those people, our loved ones, suffer. Progress in recovery is stalled
or even reversed. Our loved ones, who are treated as corporate commodities,
suffer grave injury. For some, the temptation exists to classify these concerns
and fears as mere speculation. But what happens when this speculation turns to
reality.
This paradigm shift happened in late 2017 and reality has arrived in an open and notorious manner.
The Emily Program
In 1993, psychologist Dirk Miller, Ph.D., L.P., opened a private eating
disorders treatment practice. Dr. Miller
named his new practice The Emily Program, after his sister, Emily, who
recovered from an eating disorder. According to The Emily Program, “The Emily
name has come to signify the core values behind our successes: personalized
care for all individuals struggling with eating disorders.” [emphasis
added]
Growth started slowly. In 1999, The Emily Program hired its first
staff person, therapist Lori Peiffer, Ph.D. In 2000, The Emily Program added
two additional therapists and its first administrative staff person, Shirley
Gottwalt, and a consulting dietitian begins offering services.
In 2002, with outpatient
groups expanding, Jennifer (Gottwalt) Smith, R.D., L.D., became its first staff
dietitian.
In 2006, it opened its first satellite
office in downtown Stillwater, Minnesota. The following year, it began
operating the Anna Westin House in Chaska, Minnesota’s first
residential eating disorders treatment facility. Its second satellite office
opened in downtown Duluth, the largest city in northern Minnesota.
In 2008, it opened its third
satellite office in Burnsville, a Twin Cities suburb. Steady growth continues
as in 2009, The Emily Program purchased the former St. Andrew Kim Catholic
Church, across from the University of Minnesota’s St. Paul campus. They
renovate the building to host the new Anna Westin House, and doubled its
treatment capacity to 16.
2011 marked its growth into its
first facility outside of Minnesota, an outpatient program in Seattle,
Washington.
Finally, 2014 marked a watershed
moment. In June, it partnered with the Cleveland Center for Eating Disorders.
This happens at about the same
time as The Emily Program sells part of its interest to a private equity firm,
TT Capital Partners, LLC. And with that stroke, The Emily Program joined the
expanding arms race into the world of private equity.
Pre-2014
Treatment Philosophy
Prior to the entrance of TT
Capital Partners, the Emily Program’s treatment philosophy was best explained
by its founder, Dr. Miller.
Dr. Miller envisioned eating disorders treatment as a pyramid,
with outpatient therapy
relationship as the strong foundational base and in-patient treatment as the tip. Dr. Miller
stated, “The higher intensity levels of care are where the greatest profit
margins are.” He further stated, “It makes sense that programs have wanted to
focus on that, but outpatient is so essential to the recovery process from a
theoretical, client-care, and insurance standpoint.” [emphasis added]
The Emily Program’s foundation was built upon outpatient care and
involvement of the patient and patient’s family in an on-going manner. This was
in keeping with its core value of “personalized care for all individuals struggling with eating disorders.”
Only in the more severe cases, The Emily Program offered partial and
full residential treatment for both adults and adolescents. Dr. Miller
noted that, “in-patient treatment is a small percentage of what goes on in the
change process. It’s short-term
symptom interruption.” [emphasis added]
Clearly, despite the fact that residential care is more
financially lucrative, the Emily Program’s core values revolved around outpatient
therapy and family counseling.
Enter the Dragon … TT Capital Partners
In or about June of 2014, in a very understated announcement, TT Capital
Partners, LLC, the private equity arm of Triple Tree Holdings, acquired an
interest in the Emily Program. This acquisition started even greater expansion
for the Emily Program … with an emphasis on expanding residential treatment
programming.
In June 2015, it opened a 24-7 residential program in Cleveland, Ohio.
In April 2017, it expanded its residential treatment program to Seattle,
Washington. On the surface, this emphasis on the “tip of the pyramid” is quite
perplexing since it runs counter to the espoused philosophy of Dr. Miller and
the core values of the Emily Program.
Finally, in November of 2017, the Emily Program went full circle and announced that it was dropping as many as 250 patients as
it allegedly shifted toward a more intensive treatment model for people with
severe or life-threatening conditions. The Emily Program announced that it was
stopping outpatient therapy for many patients who had eating disorders but with
a co-current mental illness diagnosis. This too is perplexing since most
experts in the field believe that up to 80% of those persons suffering from
eating disorders also suffer from anxiety, depression, PTSD and/or alcohol or
drug addiction.
In
stopping outpatient therapy, the Emily Program obviously decided to focus on the
more financially lucrative in-patient residential treatment. Chief Strategy
Officer Jillian Lampert said the shift enabled the firm to focus on patients
with acute eating disorders who are engaging in extreme, self-harming
behaviors. In an interview with the local CBS affiliate, Ms. Lampert denied
that this shift was a “money thing.”
In an interview with local
reporter, Andy Steiner, Ms. Lampert stated: “These changes are not being driven
at all by financial measures. That’s all rumor and speculation.” She later stated, “There is a lot of
speculation on social media sites. We understand that the changes people are
experiencing feel frustrating and difficult — we absolutely do. But these
changes are not being driven from financial need. They really are driven by the
need to support the latest evidence-based research on eating disorder treatment
while still providing the same quality of treatment that we’ve been providing
since we opened in 1993.”
Extensive research was conducted
attempting to find this “latest evidence-based” research to which Ms. Lampert
was referring. These attempts were fruitless and no third party, objective
research study could be located supporting the hypothesis that residential
treatment programs are the preferred method for battling this insidious
disease. No objective, universal criteria exists for judging the effectiveness
of residential treatment programs. In fact, the most reliable “evidence-based”
research indicates that with adolescents who are afflicted with eating
disorders, Family Based Therapy is the most effective counseling method.
Ms. Lampert's statements are further
contradicted by other public statements and representations made by the Emily Program. On a recent posting on the website for the Association of
Psychological Postdoctoral and Internship Center, in which The Emily Program
was advertising for interns, it stated: “The Emily Program is proud of its
emphasis on empirically-based treatment for individuals with eating disorders. We
are the largest provider of outpatient "ED" therapy in the country in
part because we believe in the need to work with clients on recovery in the
context of their everyday lives. Respect for and trust in our clients is
woven through every interaction that takes place at The Emily Program." [emphasis
added]
And yet, the Emily Program is curtailing the out
patient program that it touts as crucially important. The out patient program
touted by the founder of the Emily Program as the very base of its pyramid, the
foundation upon which the Emily Program was started. But, the decision to increase the more financially lucrative residential treatment program at the expense of 250 IOP and outside patients was allegedly not
a financial decision?
One wonders what other decisions were not “financial decisions.”
For example, since TT Capital Partners invested in the Emily Program in 2014, a
search revealed that the Emily Program has filed lawsuits against approximately
150 former patients for non-payment of fees, costs and expenses. Imagine that a
loved one is fighting this insidious disease, they have left a treatment
program, the vast majority are still fighting for their lives only to discover
that they are being sued by the program which supposedly only wants to help
them.
Of course, the high dollar value of some of the financial obligations of
these “scofflaw” former patients merited this aggressive approach. And yet, according to
court records, some of the original principal amounts due are: $530.28;
$545.68; $577.50; $593.25; $998.00; $1,176.00. Those numbers are correct. Lawsuits
were filed by The Emily Program against its former patients to recover those middling amounts.
One cannot help but speculate whether the decision to prosecute those
lawsuits was made by Dr. Miller and the treatment team at The Emily Program.
Or, was it made by the financial partner, TT Capital Partners. Clearly, the answer to
that speculation is self-evident.
The Money Grab by Private Equity is no longer speculative.
The
paradigm shift from speculation to reality has happened. Acute-level care,
including residential treatment, requires more billable hours, and the
reimbursement rates for intensive treatment are more lucrative. In order to
obtain these financial riches, patients whose recovery cycle does not currently
involve the highest level of care need to be sacrificed. And in this case, 250
patients, 250 people suffering from this insidious disease, 250 people fighting
for their lives, were treated as disposable corporate commodities.
No
matter how many denials are made regarding decisions being made based on
financial concerns, overwhelming contrary facts predominate. No medical entity files
lawsuits against its patients who are still suffering from this disease for
$530.28. Ms. Lampert is on record
as stating: “We’re finding that people coming into our programs have higher
acuity levels and more intensive symptoms than in the past,” she said. “They
are extraordinarily ill and we want to better meet their needs.” Obviously, meeting their needs includes filing lawsuits for
amounts which would not even cover ½ of one day of residential treatment.
That is what private
equity has brought to the eating disorder industry. That is the reality when
corporate entities become involved in the practice of medicine. That is the
harsh reality that our loved one must now face as they battle this insidious
disease.
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