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Hazelden CEO: Health reform a major driver of merger with Betty Ford

October 1, 2013
by Gary A. Enos, Editor
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The CEO who soon is expected to lead the new Hazelden Betty Ford Foundation acknowledges that absent the Affordable Care Act (ACA) and its placing a premium on comprehensive and integrated healthcare approaches, the two addiction treatment giants that are closing in on a merger probably would have chosen to continue to stand alone.

“Both would be able to continue indefinitely, but we’d both ask ourselves, ‘Are we really able to reach more people, or will we just experience a steady state?’” current Hazelden president and CEO Mark Mishek said in an interview with Addiction Professional in the days following the announcement of governing boards’ approval of the planned merger.

The earliest manifestations of a merger that is expected to be completed by the end of the calendar year will involve development of outpatient service capacity in Southern California, which will reflect a realization that even a revered treatment name such as Betty Ford needs in today’s industry to expand beyond a traditional residential treatment base.

“The ACA has really opened up everybody’s eyes to size and scale and multiple levels of care,” says Mishek. “Some people will disagree with me on this, but I think the days of freestanding purely residential facilities are numbered.”

He continues, “The government wants to see multiple levels of care. You can’t be a strong partner to accountable care organizations unless you have all the tools needed to manage a chronic disease population.”

And with Betty Ford having advanced less in the outpatient arena than Hazelden, and also being located in a Southern California region with 20 million residents, developing outpatient services in the Los Angeles and San Diego areas will become a top priority for the Hazelden Betty Ford Foundation.

Marriage of equals

While Hazelden’s current CEO will be at the helm of the new organization, and Hazelden already is operating with a more diversified service and product base than Betty Ford, Mishek emphasizes that the two organizations arrived at the merger discussions as equals.

“We have the same DNA in a lot of respects,” Mishek says. This dates back as far as the earliest days of the Betty Ford Center, when Mrs. Ford received consultation from then-Hazelden chief executive Dan Anderson, he says. In addition, departed Betty Ford Center CEO John Schwarzlose worked many years ago at Hazelden.

Mishek also insists that the discussions were not driven by any imminent fear of major financial peril or the threat of possible closure in the organizations. Yet it is equally clear that arguably the two most storied addiction treatment facilities in the country found it important to identify a mechanism for positioning themselves to, in the words of the centers’ respective board chairs last week, “respond to the challenges and opportunities presented by health care reform and the rapidly changing marketplace.”

Mishek adds that he does not expect the merger will generate much in the way of staff reductions, and that in fact overall staffing should increase as outpatient service capacity expands across the country.

Brand identity

According to Mishek, leaders of the two organizations spent a great deal of time discussing how to maintain the individual identities that have taken decades to build. At the outset, the facilities of each organization will retain their individual name and will receive a tagline specifying that they are part of the Hazelden Betty Ford Foundation.

“The Betty Ford Center is going to stay the Betty Ford Center,” says Mishek. “It’s a remarkably powerful name in the field.”

Completely melding the two organizational cultures will take time. “This’ll take three to five years, to infuse a new attitude among all employees,” Mishek says.

The past couple of years have constituted a busy time for merger and other partnership activity in the addiction and mental health fields. Mishek believes the decision by two top leaders in the industry to join forces clearly could spur similar moves elsewhere. “Once things like this start happening, more people will open up to the possibility,” he says.

But even if an organization decides to continue to go it alone, Mishek hopes the direction his center is pursuing will convince other facilities to establish closer ties with colleagues in a time of rapid change. “Nonprofit addiction treatment providers really have to hang together,” he says. “Both of our boards understand the need for change.”

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