BHOPB CEO Highly Critical of Soaring Internet Marketing Costs  E-mail
Addiction Treatment Industry Newswire

01/10/2016 -ATIN - The CEO of Behavioral Health of the Palm Beaches, which has been the subject of rumors that the South Florida-based for profit behemoth might soon be sold , says that with the increasing high cost of Internet - mostly Google - keyword auction bidding as a source of marketing spending and patient acquisition, it is becoming increasingly untenable. He says that it is critical that centers, especially the for profits, to maintain a diversified approach to marketing, using as many different channels away from the Internet as possible in order to survive in what may be a more and more difficult reimbursement environment in the future.

Diversified to Radio and TV

Behavioral Health of the Palm Beaches, BHOPB, CEO Alan Stevens told Treatment Magazine in an interview that as the returns in terms of patient acquisition from Internet keyword bidding have diminished because of increased bidding competition and higher costs, due in part to the proliferation throughout the country in recent years of higher end centers, BHOPB has relied less and less on that channel and, he says, has successfully diversified to other marketing channels like radio and TV. And Michael Cartwright, the phenomenally successful treatment entrepreneur who recently took his American Addiction Centers public (AAC: NYSE) has in numerous interviews with Treatment Magazine partly attributed his success in building three separate treatment enterprises to always maximizing the use of various different marketing channels, never overemphasizing too much one over another. Stevens pointed out that one medium sized Florida center was spending $1M a month on Internet bidding "pay-per-click." And when reimbursements slowed down from insurance companies in the wake of some well publicized Florida scandals, and the recent pulling out from the entire state by giant health insurer Cigna, that the over reliance on expensive Internet-based patient acquisition by the center may have been a big reason behind its recent closure.

No Comment

When asked about the persistent rumors of investor group negotiations to purchase BHOPB, and that a deal may just be weeks away, Stevens refused all comment. A couple of reliable sources, who wished anonymity, did confirm though that there is a trigger point, a $150M offer for BHOPB, where one of the two partners that own BHOBP could force an acceptance by the other. BHOPB is currently owned by one of the original partners, Jack Coscia, who started BHOPB some 20 years ago as a hole-in-the-wall outpatient center and during part of that time built it with the late Don Mullaney into the $60M-$65M a year multi-faceted center it is today, with the highest end care available at its Sea Side Palm Beach location all the way to highly affordable in-network care. Mr. Mullaney's 50 percent share is now controlled by his long time wife, Debra Mullaney. If by some chance $150M is paid for BHOPB, and Stevens would not even hint at BHOPB's current level of free cash flow (EBITDA), it would surpass the $130M paid way back in 2005 by CRC Health Group for the famed high end pioneer center Sierra Tucson, which Treatment Magazine believes still stands as the record price paid for a single addiction treatment facility.

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Ted Jackson


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