Wednesday, August 8, 2018

TT Capital Partners and the Emily Program ... Speculation has become Reality.



“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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