Nearly a year ago, the benefits manager for BlueCross BlueShield of Tennessee canceled a contract with Cumberland Heights, one of the area’s oldest and largest inpatient drug and alcohol treatment facilities.
The upshot of that decision was that patients’ expensive stays at the 45-year-old facility, which sits on a 177-acre campus about 16 miles west of downtown Nashville, wouldn’t qualify for insurance payments.
Most people would be on their own to cover the costs of what generally amounts to a four-week inpatient treatment plan similar to how other nationally known programs such as the Betty Ford Center in California and Hazelden Addiction Treatment Center in Minnesota operate.
Cumberland Heights’ staff first went into shock, then denial, and finally its top brass – led by CEO Jim Moore – swung into action to try to save the place.
The insurance contract was lost, and there’d be no getting it back. In an era of health-care cost-control frenzy, the idea of treating addiction problems with a month or more of inpatient therapy looked frivolous to insurers.
The dollars-and-cents impact on Cumberland Heights was swift.
Moore and company expected to lose at least one-third of their revenues. Sixty-three jobs were cut. Marketing and sales efforts were increased to draw patients from a wider geographic area with deep enough wallets to pay full freight.
Glimmer of hope
The formula is beginning to work. Fast forward to today, and the good news is that the beginnings of a turnaround are visible at Cumberland Heights.
There has been a lot of adversity to tame. Consider these statistics:
After the insurance decision last July, the treatment center, which prides itself on putting patients first and painstakingly adhering to a classic 12-step approach to battling addiction, lost 40 percent of its patients. The hit to revenues wasn’t quite as severe, dropping 23 percent.
Moore, who started on the payroll at Cumberland Heights 33 years ago as a counselor, said there also was a nagging cultural hurdle to overcome.
With unemployment high, and others in the workforce fearful of job loss, not as many people with problems seem willing to seek treatment for fear of getting a black mark on their work record or raising too many questions in a supervisor’s mind.
Still, Moore and company fought for survival.
Billboards went up on the interstate highway system in Nashville pinpointing the cost to companies and the emotional toll that addiction problems can exact on families and the economy.
Marketing and outreach efforts were ramped up as Cumberland Heights contacted physicians and other psychological counselors in major cities outside Tennessee, seeking referrals of patients whom the center might help.
Moore said referrals have always been the lifeblood of Cumberland Heights, but important contacts were rekindled in Baltimore; Chicago; Raleigh, N.C.; Atlanta; South Florida; and New York, among other locations.
“There’s actually been somewhat of a silver lining to all this,” Moore says. “It made us realize we have the ability to stick to our principles and refuse to compromise our quality of care.”
Cumberland Heights’ basic mantra is that the longer a person stays in treatment, the better the outcome and the greater the chances the person will return to health.
Moore says Cumberland Heights is considering increasing its advertising and marketing budget even more. And the strategies already in place appear to be paying dividends.
Revenues rose to an adjusted $4.62 million in January-March, up 3.6 percent over the fourth quarter of 2010. And that was achieved despite a drop of nearly 30 percent in inpatient admissions compared with the first quarter of 2010.
Helping Cumberland Heights cope is the fact that 10 percent more patients are being drawn from outside Tennessee and 17 percent more treatment days are self-pay accounts (the patient pays the full cost).
“Our turnaround is in place, and it’s gaining traction,” Moore says.
Randy McClain is business editor of The Tennessean. Reach him at firstname.lastname@example.org or 615-259-8882.