A conversation with Andy Eckert
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The CEO of CRC Health: R. Andrew “Andy” Eckert. Photo by Jim Nagareda, Nagareda Studio (San Jose, Calif.) |
But it's already clear that although his experience does not include past work in behavioral health, he brings a sophisticated knowledge of the business and healthcare worlds in which CRC Health Group operates. After earning a BS degree in industrial engineering and later, an MBA from Stanford University, Eckert joined ADAC Laboratories, a small maker of imaging and nuclear medicine equipment, as controller in 1989. Just eight years-and a few leaps of growth later-Eckert was named CEO. The company's success attracted an acquisition offer from Philips, which was accepted in December 2000.
Shortly thereafter, in early 2002, Andy joined Docent, a $25 million enterprise software company that, as CEO, he later merged with another company to form SumTotal Systems. Under Eckert's leadership as CEO, this maker of e-learning systems quickly grew into a $100 million concern.
Despite his success in the software business, Eckert said that he “had an itch to get back into healthcare.” In 2005, that itch led him to Eclipsys, a developer and marketer of EMR, billing, and ancillary departmental software systems for some of the world's largest healthcare organizations. As CEO at Eclipsys, Andy cemented relationships with senior health system executives while executing a major repositioning and restructuring of the company. During his time at Eclipsys, the company grew by about 40 percent, adding some $150 million in annual revenue.
After Eclipsys moved its headquarters to Atlanta in 2008, Eckert felt the pull of family and business ties to Silicon Valley, and so departed the company to join a private equity firm in 2009. It was there that, in the fall of 2010, he heard about CRC Health Group and began the process that led to his selection as CEO in December 2010. His work began on Jan. 3, 2011.
Q. What drew you to CRC Health?
A. I will tell you-it's funny-addiction treatment just doesn't jump out at you naturally as a field that you should get into, and I don't have any personal experience with treatment and recovery, though there has been experience in my extended family.
A few years ago, before I knew anything about CRC, my wife and I decided to look into programs that could help our son, who was having a weight problem. “Looking back, he's changed his life. He's a totally different kid-very confident, very athletic, well situated socially. When I was alerted to the opportunity at CRC Health, I looked up the company, and, lo and behold, they, or rather we, owned Wellspring.”
I like being in the healthcare business. I always have. I stumbled into it originally, but I've found working in healthcare to be more gratifying personally.
Q. You stumbled into healthcare? Tell us about that.
A. I got into healthcare initially because I needed a job. It was with this little company-ADAC Laboratories-in San Jose. I found that I really enjoyed it. ADAC was developing and building imaging equipment which was used in cancer diagnosis and treatment. At the time, our PET (positron emitting tomography) scanners were the best in the world for identifying metastatic disease. It was very interesting work and ultimately, I worked my way to the CEO spot. The business grew as well and ultimately, was acquired by Philips and became part of what is today Philips Medical Systems.
Q. What have you been up to so far at CRC?
A. I spent my first month here traveling around and meeting our people-three or four solid weeks-in Pennsylvania, California, Utah, Arizona, Texas, Washington, and more. I've had meetings and lunches with a lot of patients and with a lot of our people on the ground-doctors, nurses, therapists and others. And, I've learned a lot.
Recently, I've been meeting a lot with the management team-trying to work through our 2011 objectives, thinking about how we want to manage the company and where are the places that we can improve in the near term.
Q. What's your biggest challenge at CRC Health's largest business segment-the Recovery Division?
A. We all know that there's a big unfilled need for chemical dependency treatment. General Barry McCaffrey (former head of the White House Office of National Drug Control Policy and longtime CRC board member) reminded me of that the first time I met him. He asked, ‘How many people do you treat a day at CRC?’ I told him, ‘About 30,000.’ Then he asked, ‘How many people in this country do you think need our help?’ When I told him that I didn't know, he replied, ‘15 million.’ That really sunk in.
So, for me, the big question is: How do we reach those families in need? We provide an important and a great service-one that I'd like to think is the best available. But how do we prove that? And, how do we reach all of the people out there that need our help?
It's a big problem and a big challenge for CRC. We are, perhaps, the only organization in the industry that offers such a broad continuum of care. We have facilities that treat people from all different walks of life and socioeconomic backgrounds. We've got over 50 residential programs in the country, including state-based networks that serve public-pay patients, a set of managed care facilities that cater to those with private insurance, and then a number of private-pay facilities that cater to that segment.
So it really is a unique and valuable continuum. And it's our job to get out there, find out who needs our help, and tailor a program that will work for them.
Q. How are things going at CRC's other business segment-the Healthy Living Division?
A. I've spent a lot of time with the employees and patients in the Healthy Living Division, which includes our Aspen Education Group, Wellspring programs, and eating disorder/weight management programs. These programs offer therapeutic education, residential treatment, and outdoor programs for young people who need to work through learning disabilities, out-of-control behaviors, substance abuse problems, eating disorders, or weight-control problems.
The Healthy Living group fills a vital need in our society, but has faced some great challenges recently due to the economy. Far fewer parents now have access to home equity lines of credit, which were until recently a very common source for funding treatment. There have also been significant changes to laws governing the uses of educational loans, which have limited their availability for use with programs like ours. The impact is that people just don't have as many means to finance residential treatment for a teenager or young person, though the need for that treatment is very much there.
R. Andrew EckertEDUCATION:
CEO-CRC Health, January 2011
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Q. As an organization, CRC has grown primarily by acquisition. Do you expect that kind of acquisition-driven growth to continue at CRC?
A. The company absolutely wants to grow, and I want it to grow. A growing business is always a better, healthier entity for all involved. The impetus here is that we know the problem is large, and largely under addressed, despite the great efforts of many in this field. So, if we're able to grow the company, we're making a bigger dent in the problem. I think that's what gets us all up in the morning.
That said, will we grow the company by acquisition, grow it organically, or both? I think it's primarily going to be organic for a while. We've got a spectacular lineup of services and, at present, we're building more capacity at existing facilities where it's needed.
For example, we've just built an 80-bed addition to the New Life Lodge in Tennessee. But because the need is so large in that state, it's already filled, so we may need to build another addition. By expanding existing treatment brands and facilities, we're trying to establish a reputation, much like what we've done with the White Deer Run facilities in Pennsylvania. We're looking for places like Tennessee where we can build capacity and sell it quickly because we've got people in need.
Q. Right now, CRC has addiction treatment facilities are in 26 states, with larger clusters in Pennsylvania, California, Texas, Florida, Arizona, and in the Pacific Northwest. Are you looking to expand into other states as well?
A. We will always entertain startups or acquisitions in states where we believe we can make a difference. But I think that most of our efforts over the next year or two will go into growing the existing franchises, the locations we already own. That could mean extending an existing brand name to a facility in a new state, or adding beds and capacity to a franchise we currently have.
Q. What kind of role or influence do you see yourself playing in the arenas of clinical care and service delivery?
A. That's a good question. I've learned over the years, Dennis, that when the CEO thinks that he or she is an industry expert-on very specific or clinical things-often that turns into a problem. So, although I am educating myself in this field quite rapidly, we have people here who are just incredibly knowledgeable and proficient. So, I purposely look into, but do not at all think it's my job to influence how we treat patients in terms of therapies and treatments. I'm not the guy for that.
What I'm focused on is the overall experience that a patient might have. How can we communicate that better, more efficiently, more promptly? How can we do a better job coordinating the financial side with insurance companies and payers? How can we improve the experience of being away from home for a time and make that time more conducive to healing? That's really where I believe I can help.
Q. So what does that mean in terms of changes?
A. I do think that we-and I mean the entire treatment industry-need to learn how to be a little bit nimbler. The world is continuing to change, and the industry is changing-for example, the healthcare reforms and the parity act. Neither has had a big effect on us yet, but things are changing.
And, we need to change with it-we need to learn ways to deliver great value and high-impact treatment in ways that fit into today's economic framework. If we keep trying to do the same things the same way that we did 10 or 20 years ago, that may not work as well. So, how do we respond to what's going on in the marketplace-how do we become a better company to do business with? How do we provide those interested in our services with proof that we provide a superior service and clinical outcome?
Today, we have a lot of the right answers. But we haven't put those answers together, nor have we presented and communicated that data to the people who need to see it. I believe that the clinical fields that do not support their work with substantiated, fact-based outcomes are at risk.
Q. At risk? What do you mean?
A. Let me rephrase that. Under healthcare reform-and, by the way, reform has been going for years-if you're not collecting, analyzing and communicating clinical performance and outcomes data as part of your everyday business life, I think you're at risk.
One of the virtues at CRC is that we are large enough, we have enough outstanding clinical leaders, and we have the ability to design the right kinds of studies and gather the right kind of data to go to Aetna, Cigna, Magellan, the federal government, state Medicaid agencies, or any other payers with information that supports our value.
Put another way, just relying on the idea that ‘Hey we're good people and we're doing good things’ is just not good enough. I'm not saying that we have all of the answers-but collecting, analyzing, and communicating clinical performance and outcomes data is going to be a priority for CRC Health.
CRC Health: At a Glance  Photo by Luke Cunningham Founded: 1995 Headquarters: 20400 Stevens Creek Boulevard, Cupertino, CA. Nationwide Facilities: 145 Divisions: 2 o Recovery Division: inpatient and outpatient addiction treatment facilities, comprehensive treatment clinics o Healthy Living Division: adolescent residential and outdoor behavioral treatment programs, residential and outpatient eating disorder programs, residential weight management programs, adolescent weight loss programs Annual net revenue: $450 million Patients: 30,000 per day Employees: 4,000 Executive Management: Andrew Eckert, Chief Executive Officer Jerome Rhodes, President, Recovery Division Philip Herschman, President, Healthy Living Division Jay Raimondi, Chief Technology Officer Pamela Burke, Vice President, General Counsel & Secretary Jonathan Ciampi, Vice President, Marketing Mission: To inspire employees to deliver clinical excellence and lead CRC to be the preferred treatment provider to individuals and families in need. Website: www.crchealth.com |
Q. It sounds like CRC Health is facing the same issue as a lot of organizations in the industry. You're producing outcomes, but struggling with how to show payers the value. Why don't you just show payers the data you've got?
A. It's not that easy. When I ask about it, our people say, ‘We've got that data.’ I say, ‘Where is it?’ They say, ‘We've got to put it together.’ I understand that, but the times in which we, or anyone, can provide a medical service of any kind without presenting a measure of our performance, outcomes, and effectiveness, are rapidly drawing to a close. Consumers are educated, payers are educated-they want to ask questions and have those questions answered with fact.
As an industry, we need to push that data forward to payers so [addiction treatment] isn't viewed as something that can be shortchanged in the budget cycle. If we don't stand up for our industry, who is going to? And, it's easy, as we've seen, for people to pick on those who don't talk back enough-that's something we all need to be cognizant of.
Q. So, you'll be pulling together a knowledge base-or database-at CRC? Is there a vision or project for that in the works?
A. Not yet. I see it as more of a journey-a cultural shift that we need to have. The idea is not only do we have to perform each day, which we do, but we also need to document the results. As the industry leader, CRC Health has an obligation to push on that. That's top of mind for me.
We've got a good IT backbone at the company. We can do more, get better, get stronger at supporting our ability to collect and provide data, but we're making good progress overall with the resource that we have.
Q. What's your vision for the next few years? What do you hope to see down the road?
A. It's a little early to say much, though I will say that we do hope we're even more customer-focused, patient-focused than we are today, that we're significantly more efficient, and that we're more focused on continuous improvement. I believe that the better we can be at everything we do, the more we can free people and resources for patient care. That's the reason we're in business.
Q. Because CRC grew through acquisitions, I would assume that the company has acquired a lot of technology resources that were designed for a time and place, that maybe don't work as well together when they become part of a larger organization like CRC. Do you have plans to centralize any IT functions?
A. I think it's important that any healthcare company has some sort of strategy to get to a centralized data repository. That's the goal. In that data are answers to the question, ‘How do we improve the delivery of healthcare?’
A data repository also will help us internally, since it's tough to drive incremental, continuous improvement at 140 facilities. The key question is, ‘How do we collect data from across our network that will show us how to move the needle for the entire organization?’
That's not going to happen tomorrow, and it's not going to happen next year, but it's clearly something that I would like to move toward.
Q. Historically, CRC Health has grown by acquiring smaller organizations. How does the culture of care, or the care process, differ at each site? Do you plan to sustain those differences?
A. Everything is a bit different, site by site, but one of the great things at CRC Health is that we do have strong best-practices groups-for clinical practices, therapy, operations, and more. These groups bring together people from the various locations to discuss professional issues, challenges, and opportunities. And, they serve an important role in ensuring that consistent, high-quality care processes are being used at every site. And, as we collect data from all of the locations, we'll strengthen this product and quality assurance effort even more.
Q. How much time have you spent working with Barry Karlin?
I was just with him yesterday-I've gotten to know him very well. He's a neighbor, a friend, and a member of our board of directors. I've spent a lot of time with him. It's been very productive.
Q. Can you share any of what you've been talking about with him?
A. He's educated me on the business a great deal and has made clear to me where the true growth opportunities are, as well as where the improvement opportunities are. He's been a very positive counselor to me in this role and remains eager and open to help in the industry.
Q. So, after 60 days, what is your strongest impression about this industry?
A. I've been blown away, absolutely blown away, by the people in this organization and this industry. Talk about mission driven! The commitment I see in this field is just off the charts. So, my hat is off to everyone who's been involved in the field for so many years. I'm just glad to be part of it now myself.
