SAN RAFAEL — The recent merger of two Marin nonprofits represents a two-fold trend affecting nonprofit mental health providers: increased consolidation of services amid the prolonged economic downturn and a shift toward larger, more integrated organizations as a result of health care reform, according to experts.
Last week, Buckelew Programs and Family Service Agency of Marin announced they would merge operations, with the latter becoming a “major operating division” of the larger Buckelew organization. It’s the second Family Service Agency nonprofit in the North Bay to combine with a larger nonprofit. It’s also an indication of how such organizations have looked toward one another to carry on services, as individual donations and government funding declined for the sector, said Steve Ramsland, executive director of Buckelew.
Yet, while the nonprofit world has taken a significant financial hit and increasingly relied on philanthropy, the Buckelew-FSA merger, and others like it, also represents greater opportunities for nonprofit mental health and substance abuse service providers in lieu of the Affordable Care Act, with a heightened focus on both primary and mental health care.
“Health reform is the biggest disruption in the health system, and will recast the system,” Mr. Ramsland said. “That’s just as true for mental health providers as it is medical providers. The role of mental health and substance abuse is changing and has been elevated in the whole process.”
Both Buckelew and FSA of Marin provide mental health and substance abuse programs, ranging from employment programs to counseling to family support for substance abusers. The two nonprofits began exploring a merger about 18 months ago, as each side considered the other complementary in services provided. No layoffs or service reductions are expected from the merger.
“Buckelew Programs and Family Service Agency have demonstrated forward-thinking planning, flexibility and responsiveness in putting the fuller range of their clients’ needs – and their ability to meet them – at the center of their planning,” said Marin County Supervisor Katie Rice in a statement. “This is a model of collaboration which will benefit the entire community.”
Indeed, a new model is emerging that includes nonprofit mental health providers at a far earlier stage in primary care treatment than before. Rather than address a severe mental health crisis in a hospital emergency room or with a physician ill-equipped to handle a mental health issue, the new Buckelew hopes to address such matters well before that, thereby reducing costs while better treating the patients.
The combined organization, which may re-brand and rename itself, will likely become an element of the emerging accountable care organizations encouraged under the new health overhaul, Mr. Ramsland said.
“The (Affordable Care Act) does a couple of things that are really important to us,” he said. “It covers a whole lot of new people — tens of thousands of people in the North Bay. A significant amount of those people will have mental health and substance abuse issues. The other part of health reform is a whole new way of redirecting the system — a move toward bundled payments, ACOs, health homes, all of which are trying to achieve a triple aim: improve quality, improve patient experience and reduce costs.”
Mr. Ramsland said patients suffering from mental illness like depression often suffer from other chronic diseases, such as heart disease or diabetes, and have a far shorter life expectancy. The merged organization will be better equipped to address such patients while assisting the traditional medical providers, in turn providing better outcomes.
“What’s really key to understand is that neither the health homes nor the ACOs will be able to reach those goals without effectively addressing mental health and substance abuse,” Mr. Ramsland said.
In May 2011, Family Service Agency of Santa Rosa merged with the larger West County Community Services, citing similar economic pressures and achieving economies of scale. Both North Bay mergers reflect a nationwide trend, Mr. Ramsland said, and the consolidation of smaller nonprofits into larger organizations mirrors another trend, where small, private medical practices are frequently merging with or being absorbed by large group practices or foundations.
“There are a lot of mergers happening around the country among nonprofits, and we have had discussions with several others,” Mr. Ramsland said. “It would be very difficult for a small service mental health agency in the years following 2014. As you’re looking at these new payment structures, they’re all geared toward larger entities contracting with multiple services.”
Serving Marin, Sonoma and Napa counties with an annual budget of $12 million, Buckelew is the 15th largest nonprofit in the North Bay, according to the 2011 Business Journal list of nonprofits. The addition of Family Service Agency’s annual budget of $2.3 million will make the combined organization the region’s 11th largest such group.
Family Service Agency has $1.4 million in assets and about 45 regular employees and 35 graduate and postgraduate interns. Buckelew employs about 180 people across the three counties and has $3 million in assets and an additional $13 million in assets through affiliated property corporations.
The new organization will serve at least 7,000 people in its first year. Family Service Agency will keep its name for the first three years.
“It is delightful to see these two longstanding, compassionate and strong service organizations join together to create an even stronger and broader capacity to serve the Marin community,” said Larry Meredith, director of Marin County Department of Health & Human Services.
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