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A new player on the scene

August 1, 2006
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Haven Behavioral Healthcare aims to grow a specialty inpatient business; Remuda Ranch is its first acquisition

Last month, well-known eating disorder treatment provider Remuda Ranch Co. was acquired by Haven Behavioral Healthcare, Inc. The transaction represents the beginning of Haven's plan to build a specialty inpatient behavioral health business.

Aggressive—but disciplined—growth is Haven's goal, according to CEO Vernon Westrich, who has more than 30 years of experience in behavioral healthcare, including serving as president of Ardent Health Services's behavioral health division. Thoma Cressey Equity Partners, along with Clayton Associates, created Haven (a holding and operating company) in May.

“Thoma Cressey recognizes a market opportunity in the behavioral healthcare industry and created Haven with an experienced management team to build a leading specialty inpatient behavioral business,” said Peter Ehrich, a partner at Thoma Cressey, when the Remuda Ranch deal was announced. “We’re active healthcare investors and have spent a lot of time over the last several years looking at the behavioral space,” he told Behavioral Healthcare.

Ehrich says Haven's focus will be on underserved specialty niches, such as eating disorder treatment or care tailored to specific demographic groups. “There are a tremendous number of niches, segments, and opportunities in the greater behavioral health universe,” he notes. “Haven's strategy is going to be finding great niche specialty opportunities in the inpatient world.” Ehrich expects Haven's growth to be focused on North America.

Westrich adds, “We are specializing in inpatient and potentially partial hospitalization. We don’t see ourselves going into the outpatient line of services, as most communities have very talented people providing that service. We hope to work with them, being part of their ‘safety net’ on the inpatient side rather than competing with them on the outpatient side.”

Soon after Remuda Ranch's sale was announced, Westrich told Behavioral Healthcare that another deal was close and a couple others were in the talking stages. But Haven plans to not just focus on acquiring existing providers.

“Acquiring will only be part of our strategy,” Ehrich says. “We actually are going to have a significant focus on organic growth.” For example, Westrich notes that Remuda Ranch might be expanded in other locations.

Ehrich and Westrich emphasize that this growth will not come at the expense of Remuda Ranch's quality of care. “We’re not looking to change the clinical protocols or any of the things that Remuda Ranch has done so well at their business,” Ehrich says. Westrich adds, “We do not intend to make any changes in clinical programming whatsoever. They are very good at what they do.”

“We are excited to have Thoma Cressey and Haven as new partners, and look forward to continuing our focus on offering proven, high-quality services to our patients,” said Ward Keller, president and CEO of Wickenburg, Arizona-based Remuda Ranch, in a release. Keller will maintain his role at Remuda Ranch. Keller and Remuda Ranch's senior management also invested in the transaction.

Haven is likely to face some reimbursement challenges, as insurers traditionally put their focus on less expensive outpatient services. For example, Lynn S. Grefe, MA, CEO of the National Eating Disorders Association, says the market for eating disorder treatment is huge, but insurers have been reluctant to pay for inpatient care—the type of services Haven aims to provide. Westrich says Haven will work with managed care firms and governmental payers to secure reimbursement as well as market to private paying clients.