Costa Mesa-based Solid Landings Behavioral Health Inc. is riding a wave of increased coverage prompted by healthcare reform to big revenue growth.
Solid tops the list of fastest-growing private large companies in Orange County, according to this week’s Business Journal list.
The provider of rehabilitation for drug and alcohol addictions posted revenue of $125 million for the 12 months ended June 30. That’s a hike of 1,036% compared with $11 million for the same period two years earlier.
Solid operates more than 60 properties with a total of 550 beds. Its facilities are spread over Southern California; Las Vegas; and Austin, Texas, and it serves more than 3,000 clients yearly.
“The company has grown a tremendous amount over the last few years, and honestly, I don’t see us slowing down,” said Mark Shandrow, a co-founder who also serves as senior vice president of the company.
The other co-founders are Chief Executive Steve Fennelly and Elizabeth Perry, executive vice president.
“We’re a demand-based business,” Shandrow said, pointing out that there are an estimated 20 million people yearly dealing with alcohol and drug addiction, but only 2 million a year who seek treatment.
Solid feels like “we’re barely even scratching the surface” in terms of reaching potential clients, Shandrow said.
The company also credits insurance changes, including the Affordable Care Act, for its growth.
Federal healthcare reform included “this thing called mental health parity,” he said.
“Basically, what it says is, if insurance companies are going to provide recovery and medical support for physical ailments, they need to do the same thing for mental ailments, behavioral health.”
Gender-Specific
Solid sets itself apart from its competitors by maintaining “gender-specific residential treatment,” according to Shandrow, who said the practice helps patients by pre-empting the possibility of relationships that could become distractions from their recovery programs.
It’s “pretty common” for patients of coed rehabilitation programs to become romantically involved, Shandrow said.
“We’re known for being one of the only gender-specific programs,” he said. “All the women are treated with the women, the men are treated with the men, and there’s really no opportunity for crossovers.”
Solid’s patients range from ages 18 to 70, with an average age of 26 for women and 28 for men.
They come from all parts of the U.S.
“Our demographics are pretty broad, and we tend to house people of similar ages with each other,” Shandrow said. “The big thing is getting out of their environment, getting rid of all their bad habits.”
Solid has 1,200 workers but no doctors on staff—California rehabilitation law requires physicians to work as third-party providers.
Staffers include case managers, drug and alcohol counselors, and marriage and family therapists.
The company gets patients from various sources, including people who reach out to Solid’s call center, as well as referrals from doctors, therapists, hospital emergency rooms, and marketing channels such as its website.
Solid estimates that 90% to 95% of its patients’ treatments are paid to it via preferred provider organizations or other insurances and as an out-of-network provider—coverage that likely includes a substantial co-payment. It also does private-pay arrangements for treatments, which can run tens of thousands of dollars.
The company first assesses potential clients to see whether they would be a good fit for the program.
A majority of Solid’s clients enroll in its 90-day program, although the company offers shorter programs, Shandrow said.
“A lot of that is really based on our understanding and belief [that] the longer someone is in a support structure, especially after being in an addictive environment, lifestyle, for several years, [that] it takes a while” to arrive at recovery, he said.
Patients who completed initial treatment move to a “sober house” where they work on life skills, such as rebuilding resumes, clearing up criminal records or charges, or re-enrolling in school if they hope to resume studies, Shandrow said.
Solid’s Avenues program assists with those issues and getting clients to a point where they can “live in recovery. That means getting back into society, getting their own apartment, getting a job,” Shandrow said.
Solid, which was established six years ago with a women-only sober living home, “absolutely” wants to open more centers in other locations around the U.S., he said.
Possible locations include Pennsylvania, Tennessee and the Pacific Northwest.
“We believe we provide the best services and have the best business model” in rehabilitative healthcare, Shandrow said.
Interest
Solid works in a field that has attracted some interest from the investment community.
Brentwood, Tenn.-based AAC Holdings Inc. went public in 2014, and CRC, another large addiction treatment company, was acquired by Franklin, Tenn.-based Acadia Healthcare Co. earlier this year.
Shandrow did not dismiss the possibility of an initial public offering for Solid.
“It’s not on the table right now, but it’s definitely something that we could look at in the future,” he said. “Right now, Wall Street is looking very favorably upon this sector, primarily because of its growth potential and the margins.”
