Treatment Abuse, Behavior Modification, Thought Reform > Aspen Education Group
CRC Health Annual Report: "Highly Leveraged"
Anonymous:
Translates as "going down":
http://google.brand.edgar-online.com/EF ... TOC39765_3
Best of:
--- Quote from: "CRC Health" ---
--- Quote ---An economic recession or other adverse economic conditions, such as inflation, may have a material adverse effect on our business. Substantially all of the revenue from our youth division and certain residential treatment facilities such as Sierra Tucson is derived from private-pay funding. In addition, a substantial portion of our revenue from our comprehensive treatment clinics is from self-payors. A sustained downturn in the U.S. economy could restrain the ability of our patients and the families of our students to pay for our services. In addition, some of the families of our students in our youth division rely on third-party loans, including additional home loans, to fund the cost of tuition at our programs. The unavailability of these loans could interfere with the ability of private-pay customers to afford our programs, and may harm our operating results.
Although inflation has not previously or currently had a material impact on our results of operations, our industry is very labor intensive and salaries and benefits are subject to inflationary pressures. Some of our facilities are experiencing the effects of the tight labor market, including a shortage of counselors and nurses, which has caused and may continue to cause an increase in our salaries, wages and benefits expense in excess of the inflation rate. Our ability to pass on increased costs associated with providing services to our patients, in some cases, may be limited.
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--- Quote ---Our level of indebtedness could adversely affect our ability to meet our obligations under our indebtedness, raise additional capital to fund our operations and limit our ability to react to changes in the economy or our industry.
--- End quote ---
--- Quote ---We are highly leveraged.
--- End quote ---
--- Quote ---Referrals of patients and relationships with physicians
The federal anti-kickback statute and related regulations prohibit certain offers, payments or receipt of remuneration in return for referring patients covered by Medicaid or other federal healthcare programs or purchasing, leasing, ordering or arranging for or recommending any services, good, item or facility for which payment may be made under a federal healthcare program. Federal physician self-referral legislation, known as the Stark Law, generally prohibits a physician from ordering certain services reimbursable by a federal healthcare program from an entity with which the physician has a financial relationship, unless an exception applies, and prohibits the entity from billing for certain services rendered pursuant to any prohibited referrals. Several of the states in which we operate have laws that are similar to the federal Stark Law and anti-kickback laws and that reach services paid for by private payors and individual patients.
If we fail to comply with the federal anti-kickback statute and its safe harbors, the Stark Law or other related state and federal laws and regulations, we could be subjected to criminal and civil penalties, we could lose our license to operate, and our residential and outpatient treatment programs could be excluded from participation in Medicaid and other federal and state healthcare programs and could be required to repay governmental payors amounts received by our residential and outpatient treatment programs for services resulting from prohibited referrals. In lieu of repayment, the OIG may impose civil monetary assessments of three times the amount of each item or service wrongfully claimed. In addition, if we do not operate our treatment facilities in accordance with applicable law, our residential and outpatient treatment programs may lose their licenses or the ability to participate in third-party reimbursement programs...
--- End quote ---
--- Quote --- Our treatment facilities are sometimes subject to attempts by local or regional governmental authorities and local area residents to force their closure or relocation.
Property owners and local authorities have attempted, and may in the future attempt, to use or enact zoning ordinances to eliminate our ability to operate a given treatment facility. Local governmental authorities in some cases also have attempted to use litigation and the threat of prosecution to force the closure of certain of our clinics. If any of these attempts were to succeed or if their frequency were to increase, our revenue would be adversely affected and our operating results might be harmed. In addition, such actions may require us to litigate which would increase our costs.
--- End quote ---
--- Quote ---We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs.
--- End quote ---
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Whooter:
This has always been a huge problem during economic downturns. It is extremely difficult to reopen mental health clinics in a new location because no one wants them in their neighborhood and they rally to get local government involved to put pressure on the health care provider to find another location. The same applies to drug rehabs. So trying to ride out the economic storm is most critical for these types of clinics.
Another vulnerable area that has been hard hit are the outpatient Clinics for chemotherapy which are expensive to keep open. There are many patients who cannot afford to travel into the cities for their treatment.
The good news is that the economic upturn has started and we have turned the corner so the majority of the damage is behind us. We need to start focusing on growth vs merely maintaining what we have.
Anonymous:
--- Quote from: "Guest" ---This has always been a huge problem during economic downturns. It is extremely difficult to reopen mental health clinics in a new location because no one wants them in their neighborhood and they rally to get local government involved to put pressure on the health care provider to find another location. The same applies to drug rehabs. So trying to ride out the economic storm is most critical for these types of clinics.
Another vulnerable area that has been hard hit are the outpatient Clinics for chemotherapy which are expensive to keep open. There are many patients who cannot afford to travel into the cities for their treatment.
The good news is that the economic upturn has started and we have turned the corner so the majority of the damage is behind us. We need to start focusing on growth vs merely maintaining what we have.
--- End quote ---
Oh yeah, definitely. Ignore the rest of the risk factors mentioned and the recent vintage of this report. Aspen offers more than drug rehab don't they? Considering Aspen's "reputation" and the countless hours you log as an apologist for them, why would any community not welcome the program's tough love and "great success"?
Again, from CRC's Annual Report:
--- Quote from: "CRC" ---If our programs are unable to maintain such licensure, certification and accreditation, our revenue may decline, our growth may be limited and our business may be harmed.
--- End quote ---
--- Quote from: "CRC" ---In addition, many states impose similar, and in some cases more restrictive, requirements. For example, some states impose laws governing the use and disclosure of health information pertaining to mental health and/or substance abuse issues that are more stringent than the rules that apply to healthcare information generally. As public attention is drawn to the issues of the privacy and security of medical information, states may revise or expand their laws concerning the use and disclosure of health information, or may adopt new laws addressing these subjects. Failure to comply with these laws could expose us to criminal and civil liability, as well as requiring us to restructure certain of our operations.
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Why does Aspen have such a problem complying with patient privacy?
--- Quote from: "CRC" ---Accidents or other incidents involving the students at our youth treatment facilities, or those of our competitors, may adversely affect our revenues and operating results directly or through negative public perception of the industry.
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This is unfolding as we speak with Sagewalk's reckless negligence in the death of a patient causing a public outcry. This is nothing but a self fulfilling prophecy for the shareholders.
--- Quote from: "CRC" ---Accidents resulting in physical injuries to our students or staff, or incidents that attract negative attention to the youth treatment industry generally, such as those involving death or criminal conduct against, or by a student could result in regulatory action against us, possible legal claims and lost referrals or student withdrawals. Similar accidents or incidents at programs operated by our competitors could negatively impact public perception of the therapeutic education industry and harm our operations as well. No assurance can be given that accidents or other incidents at our programs or those of our competitors will not adversely affect our operations.
--- End quote ---
'
--- Quote from: "CRC" ---Competition
Treatment providers for the large and growing substance abuse treatment market are highly fragmented, with services being provided by over 13,000 different facilities of which only 26% are operated by for-profit organizations. The primary competitive factors in the substance abuse treatment industry include the quality of programs and services, charges for programs and services, geographic proximity to the patients served, brand and marketing awareness and the overall responsiveness to the needs of patients, families and payors. Our recovery division competes against an array of local competitors, both private and governmental, hospital-based and free standing and for-profit and non-profit facilities. Most of our residential facilities compete within local or regional markets. Sierra Tucson, our residential treatment facility for addiction and other behavioral disorders, in contrast, competes in both national and international markets with other nationally known substance abuse treatment facilities such as the Betty Ford Clinic and Hazelden.
Providers of youth treatment services are also highly fragmented with services being provided by over 500 different facilities. Our youth division competes with a large number of single-site businesses that lack our name recognition and management resources, as well as a handful of larger companies who have divisions that provide youth treatment programs, such as the youth programs of Universal Health Services, Second Nature and Three Springs.
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13,000 substance abuse treatment programs and over 500 "different" programs. Wow, not even the GAO attempted to nail down an estimate of the number of programs in existence. That is disgusting.
The next misfortune to trouble the CRC stockholders will be the PA Juvie scandal, bets are being placed on whether Aspen is going to be at the top of the list of fools. John D. Reuben might have to drive into Allentown for police questioning about the nature of his activities regarding STICC and Aspen.
Whooter:
--- Quote ---Why does Aspen have such a problem complying with patient privacy?
--- End quote ---
The problem, as I see it, from a business perspective, is that there is one set of rules for general healthcare and another set for mental health and substance info. On top of that the rules vary from state to state and if they dont manage this properly they could leave themselves exposed to lawsuits. These lawsuits would require them to restructure which is expensive. The challenge is to create a cost effective way to meet all the requirements or create just one (a more restrictive program) which would satisfy all requirements from all states.
--- Quote --- This is unfolding as we speak with Sagewalk's reckless negligence in the death of a patient causing a public outcry. This is nothing but a self fulfilling prophecy for the shareholders.
--- End quote ---
Exactly. Their revenue can be affected by a non Aspen program accidents also. This can affect the perception of the entire industry not just SageWalk. This is why the industry themselves is concerned with the bad apples and take each incident very seriously.
--- Quote --- 13,000 substance abuse treatment programs and over 500 "different" programs. Wow, not even the GAO attempted to nail down an estimate of the number of programs in existence. That is disgusting.
--- End quote ---
I think this gives us all an idea of how many people are presently getting treatment.
--- Quote --- The next misfortune to trouble the CRC stockholders will be the PA Juvie scandal, bets are being placed on whether Aspen is going to be at the top of the list of fools. John D. Reuben might have to drive into Allentown for police questioning about the nature of his activities regarding STICC and Aspen.
--- End quote ---
Whether an Aspen program or not, any scandals will have a negative impact on the industry. As far as it affecting Rueben, I dont see how it would unless he is involved. I am not very familiar with the PA scandal or how Reuben is tied in. Is it an Aspen program?
Whooter:
--- Quote ---Oh yeah, definitely. Ignore the rest of the risk factors mentioned and the recent vintage of this report. Aspen offers more than drug rehab don't they? Considering Aspen's "reputation" and the countless hours you log as an apologist for them, why would any community not welcome the program's tough love and "great success"?
--- End quote ---
Therapeutic programs are never a problem getting them integrated into communities. The problem is typically with the clinics which attract unsavoury people from outside the community. I don’t think you would want a drug rehab clinic established in your neighborhood, but once it is there it is difficult to get them to move unless you find violations and shut them down (which the article speaks to). Once they are shut down then the community can easily deny them a new license and force them to move elsewhere. This becomes expensive for the owners of the clinics.
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