The impact of COVID-19 and the emergence of telehealth are having ramifications that touch all aspects of addiction treatment programs, from digital marketing to patient retention to potential deals with investors, said panelists in a session presented on Friday at the Treatment Center Investment & Valuation Retreat.
Josh Weum, director of paid search for Dreamscape Marketing, Parker Polidor, co-founder of CaredFor, a Nashville-based treatment center engagement solutions firm, and Christal Contini, JD, member and co-chair of the Mergers and Acquisitions practice at McDonald Hopkins in Cleveland, weighed in on these topics and more.
Building relationships, building organizational value
Polidor said he views telehealth as a useful tool for strengthening connections to patients who already have ties to a treatment program. Whereas telehealth is viewed from a transactional perspective for primary care, treating a common cold or brief bout with the flu, for example, addiction treatment requires a long-term connection and telehealth can be used to build that relationship and help patients stay connected.
“We believe technology can help a lot with overall patient retention and engagement,” Polidor said. “We think patient engagement and experience are going to be key differentiators for innovative programs in the months and years to come. We see a couple ways technology can do things.”
Specifically, Polidor cited telehealth as a means to drive patient referrals and enhance patient experiences with offerings such as access to a private peer support community and private, HIPAA-compliant messaging.
From an M&A perspective, Contini said embracing telehealth isn’t currently being viewed as a sole reason for buyers to make an acquisition, but its use can be indicative of how a program interacts with its base generally and how well it keeps in touch with current and past patients. Demonstrating successful implementation of telehealth offerings also paints a clearer of how programs are capable of making use of tools that are becoming available in the industry.
“The things making treatment programs successful in the past are true today,” Contini said. “Add this innovation piece to it, and it makes a program better not just generally, but as an acquisition target if the current owners have a succession plan or a liquidity event in their future.”
For marketers, the shift to telehealth has driven an evolution around keywords, and “strategy around ad copy, verbiage and even landing page capital needs to all sync up and reflect the importance and value of a treatment that is seen as novel, but also very necessary right now,” Weum said.
Adding the requirement of obtaining LegitScript certification to advertise with Google, Microsoft and Facebook has proven to be a very successful means of policing digital advertising across the industry, Weum said, adding that providers who enter the space now can “expect a level playing field that certainly isn’t wrought with fraud like it used to be.”
Costs to apply for and retain certification have evolved, and Weum also credited LegitScript for accommodating changes within the industry, such as developing a special certification for practitioners in light of current events.
“When COVID hit, a lot of people were unable to get the kind of treatment they were able to previously look for,” he said. Telehealth became a prevalent piece in our space. To speed up the process of getting certified, [LegitScript] created a new certification for practitioners that was a bit cheaper and quicker to get through the gauntlet of criteria they look for there.”
For treatment programs looking to sell or get investors involved, the issue of PPE loans has come up in every transaction with which Contini has been involved this year, she said.
“It doesn’t matter the structure—if you are taking on investors, if you’re doing an asset sale, even if you’re doing something that is just internal family planning and internal gifting—if you took out a PPE loan and you are transferring equity that is more than a 50% change in your equity or transferring more than 50% of the assets, you trigger potentially an acceleration of your PPE loan unless you do a couple things,” she said. “The goal of PPE loans is to get forgiveness for them. If you filled out the application properly and you followed all the rules, the last thing you want to do is accelerate it because of liquidity events or family planning or succession planning.”
The way to avoid that acceleration, Contini said, is through an apply and escrow process. Programs first should apply for loan forgiveness and also set up an escrow account with their SBA lender who provided the PPE loan funds. If the SBA lender forgives the loan, the money is released from escrow and the loan is not accelerated. If the loan is only partially forgiven, funds from the escrow account are used to pay what is owed.