Latest / The Mental Health Evolution / Ep 22: Scaling Mental Health Organizations with Ryan Dewey Smith

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Ep 22: Scaling Mental Health Organizations with Ryan Dewey Smith · The Mental Health Evolution

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(Transcribed by TurboScribe. Go Unlimited to remove this message.) This podcast is part of the Frederick podcast network.
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Learn more at listenfrederick.com.
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Welcome to Mental Health Evolution, a podcast about what's changing in mental
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health and why it matters.
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I'm your host, Rachel Harrison, inviting you into honest conversations with
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people from all perspectives in the field, clinicians, tech founders,
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investors, insurance companies, and all the folks in between.
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Let's explore what's working, what's not, and what's next.
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Welcome back everyone to the Mental Health Evolution podcast.
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I am so excited to be here with you today and we
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are joining us will be Ryan Dewey Smith, who is founder and
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president of Imperium.
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Ryan has spent nearly a decade working with behavioral health and human
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service organizations across the country, helping them grow and adapt to an
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increasingly complex environment, as we often talk about on this podcast.
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Through Imperium, he supports non-profit and for-profit mental health,
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intellectual and developmental disability, and family service organizations
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through strategic affiliation and shared services with a strong focus on
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workforce sustainability, culture, and long-term outcomes.
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In today's conversation, we are going to explore what it looks like
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to scale mental health organizations responsibly in ways that protect
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clinicians, support staff retention, and ultimately improve care for the people
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and the communities that these systems serve.
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So thanks for being here, Ryan.
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It's good to have you.
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Thank you, Rachel, and it's nice to be with you.
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Thank you for the opportunity today.
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Of course.
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So as always, we like to talk about some relevant articles related
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to today's topic before I get into questions with my guests and
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hopefully this helps you kind of have a platform for what we're
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talking about, why we're talking about it, and kind of what's in
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the news.
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So the first article that I want to talk about is called
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Strategic Growth, A Critical Imperative for Community Behavioral Health
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Providers.
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This article looks at why community health organizations are increasingly
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turning to mergers, partnerships, and affiliations to survive financial
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pressure, to expand access, and to maintain quality of care.
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It also looks at the risks when growth outpaces culture and workforce
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support.
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So that article was a very interesting read for me about sort
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of really a strategy to survive right now in the changing landscape
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of mental health.
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And then the second article is called The Nonprofit Workforce is in
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Crisis.
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And this piece outlines the growing workforce challenges across nonprofit
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health and human services, including burnout, which is a biggie, vacancies, and
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retention struggles.
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I would add, by the way, that I think for-profit mental
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health is seeing a lot of these same struggles, not just nonprofit.
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But this article highlights the urgent need for structural leadership and
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leadership level solutions.
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So that's a good read for you if you're interested in this
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topic.
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And last, but certainly not least, is an article called Navigating Workforce
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Challenges, 2025 Trends and Solutions for the Social Sector.
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And this is talking about the different trends happening in mental health
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and in social services, different staffing models, new leadership approaches,
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and system level strategies to reduce burnout and stabilize care delivery.
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There again, just recognizing that everything is changing rapidly in our
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industry, and these are all addressing kind of ways we can look
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at that.
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But with that in mind, I'm excited to dive in with Ryan
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because he has been doing this work for 30 years.
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I watched a lovely video on his website of kind of a
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30-year celebration.
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That was really cool, Ryan.
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So I want to just dive in and get more of a
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hands-on understanding of what you've done and how you've supported the
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work, I think in a very creative way.
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So let's start with you and your story.
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It seems that you have a constellation of organizations under Imperium that
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are all in the same industry of social supports and mental health.
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And I'm curious why you've chosen this model of kind of a
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group of organizations, but I'd love to also hear a little bit
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about your story and your inspiration for getting into all of this.
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Sure, Rachel.
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I began my career in college in the late 1980s doing work
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with children and adults with attention deficit and hyperactivity disorder.
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I did a good bit of the neuromaturational battery testing and intelligence
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quotient testing for the actual creation of the diagnoses, and then did
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some work with the pharmacology then of Ritalin and Welbutrin as the
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actual medication to treat.
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Out of that, I pivoted to working as a co-therapist in
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a mental health outpatient partial hospitalization program, where we also
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worked with a small group of those that were duly diagnosed then
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to mean with intellectual disability and a serious mental illness diagnosis.
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Today, when we talk about co-occurring, sometimes it's serious mental illness
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with addiction, serious mental illness with a physical affliction.
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This was specific to intellectual and developmental disabilities.
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Then I started my first company, Supportive Concepts for Families, in 1993,
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where we serve people with mental health and intellectual disabilities in
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community-based programs.
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Rachel, I grew that business over the next two decades to a
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middle-sized non-profit, roughly $40 million in annualized revenues, 450 well
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-meaning, highly qualified staff.
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I came to a point in the development of that business where
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the cost of my back office, the diversification of my payer bases,
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my ability to recruit, retain, and train qualified staff was a real
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problem.
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I had limited access to capital to address waitlist needs, so I
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was unable to invest money in new systems or locations to address
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the waiting lists that were accumulating.
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So I went out and tried to find a merger partner that
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would be a larger entity, that would have more sophisticated systems, allow
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me to access thought leaders in certain areas, have access to capital
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to meet my waitlist.
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After three failed attempts, over a year-and-a-half period of
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finding that partner, I decided that I was going to do a
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different approach to mergers or acquisitions and look at doing what we
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call affiliations or joint ventures or partnerships, where we could kluge
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together like-minded and unlike-minded services organizations in the same and
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different geographies, and then leverage that scale to create savings synergies
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to our costs that were drivers of our business, but not the
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drivers that impact therapeutic outcomes or what we pay staff that are
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working most closely with our patients.
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I'm talking the costs of payroll and auditing and accounting and insurance
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and IT infrastructure, data management, risk and the related insurances,
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employee health and welfare benefits.
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Those costs are very disproportional when you're a small to middle-sized
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non-profit or for-profit, so I envision that if we diversified
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our geographies and our services providers across different services verticals,
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we could create enough scale economy to drive savings to our individual
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businesses that we could reinvest back in our missions and our staff,
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and that's what I've done now for the past 10 years.
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At Imperium, we have 34 companies that operate in 20 states.
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Their collective revenues are a billion dollars a year in funding.
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We have over 10,000 employees, and then Rachel, we provide through
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Imperium's back office company, APIS, all of the general and administrative
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global services at costs that are half, in some instances, of what
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companies are paying as standalone entities.
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Wow, and so Imperium actually employs that back office piece and that
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is shared across all the 34 companies.
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Is that the model?
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That's correct, yes.
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Rachel, Imperium is the sole member parent company, so it has participatory
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and protective governance rights that then permits us to consolidate all the
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companies as individual enterprises under one common parent who then manages
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and is the controlled employer group and the provider of all those
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general and administrative back office pieces back out to those 34 companies.
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Those 34 companies retain their executives, their boards of directors, their
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missions.
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We don't at Imperium or APIS influence treatment modalities, who you accept
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into your programs, what de novo work you want to do.
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We're very much behind the curtain as a supporting organization providing all
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those backbone essential services that in some instances cost 20-25%
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of your funding dollars to as minimal as 6-8% of
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those funding dollars.
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That's impressive.
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That's really, I mean, you essentially created your own solution.
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You didn't find a merger that was going to work for you
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and so you created this constellation of acquisitions slash partnerships,
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affiliates.
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I love it.
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Yeah, Rachel, so we know in typical mergers or acquisitions someone's identity
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is lost as it's merged or acquired into the larger surviving entity,
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meaning your history, your legacy, your relationships in the community.
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Those all go away in a merger or an acquisition and they
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live on in the surviving entity.
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In an affiliation, all that remains intact and all the companies can
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operate in the same cities, the same towns, the same services space
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with the same autonomy that they've always had.
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So it's a very elegant model to business partnerships that ultimately creates
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opportunities to have greater impacts to our clients, patients, and consumers
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and greater impacts to the staff working most closely to them by
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way of better wages, better health and welfare benefits, opportunities for
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advancement into other jobs and positions, thought leadership.
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So it's just a very interesting interconnected network or constellation that's
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dependent upon all the businesses working in unison to create the scale
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economies and efficiencies.
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Yeah, yeah.
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Do you ever struggle with the idea that there are any competing
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organizations or anything of that nature?
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Rachel, there are other aggregators or consolidators in the behavioral health
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and human services space, you know, the large ones that we know
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like Melina that are nationwide.
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They really typically focus on certain aspects of health and human services.
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They're primarily for profit.
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We're agnostic, Rachel.
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For profit, non-profit, elder care, children, youth, foster care, education,
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intellectual and developmental disabilities, substance use, mental health
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outpatient, mental health inpatient, day programs.
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We are agnostic to that.
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We are all about mission-based organizations who want that sustainability and
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savings through our model to do the great work that they're doing
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in whatever geography or vertical they do it in.
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I love that.
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So with that in mind, and you have a lens of so
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many different organizations, what are you seeing as some of the pressures
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right now and the trends in this workspace?
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So the biggest one is the uncertainty, Rachel, that all of our
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affiliates feel every day with their funding levels, programs, how we are
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going to deal with any cuts that we believe will be occurring
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so that the end user, patient and clients aren't negatively impacted.
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That impacts our ability to recruit staff.
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Who wants to come into a job in a field where the
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uncertainty of the funding in your paycheck could literally be day-to
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-day or week-to-week, so it's made recruitment difficult.
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Cybersecurity costs with the cyberattacks that we experience in healthcare,
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those costs are outpacing funding.
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Obviously, the cost of insurance is a hot topic always around health
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and welfare.
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Insurances have to be reasonable for our staff and not only from
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a co-insurance perspective, but a deductible perspective so that if you
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do in fact need to use the insurance, the deductibles aren't so
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cost prohibitive that it impacts your day-to-day income and living.
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And then all services, Rachel, utilities, food, we all live it in
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our personal lives.
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Those correlate into business as well.
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So we're seeing a lot of those costs to run residential programs
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and outpatient programs that provide food.
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So homeless services that provide three meals, all those costs have outpaced
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what the reimbursements are.
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So if you're not creative around maximizing your dollars by being a
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steward of those dollars and finding the most efficient way to spend
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the dollars that aren't impacting the people at the end of this,
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the clients and patients, so that they have the greatest reward, that's
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where the risk is.
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And what we see in the companies that come to join our
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network, that they're putting their hands up and saying, look, we need
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help.
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Our costs are out of control.
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We can't scale, purchase, and leverage any scale to buy cheaper where
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we would want to.
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I'm talking basic things, copy paper, phones, you know, all those business
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supplies that we all depend upon to run our businesses can be
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bought at much lower prices when you are spending at a billion
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dollar level than when you're spending at a hundred million dollar level.
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Yeah, yeah, that makes sense.
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Do you think that this is a continuing trend that we're going
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to keep seeing?
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I think we're seeing bigger, bigger, certainly at least in the for
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-profit side, we're seeing bigger and bigger tech companies kind of coming
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in and the little guys are sort of struggling to match that.
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Just because of what you're saying there, the buying power, the marketing
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power, the negotiation power for insurance, repayment rates, all those things
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are so different from the big guy to the little guy.
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Do you think that's going to be a continuing trend that we
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see?
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Rachel, for me, you know, I'd be curious to hear your opinion.
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I think behavioral health and human services is among the most fragmented
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business area that we have in our country, meaning mom and pop
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provider organizations and small size organizations relative to the number of
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large that are all operating and buying for the same funding levels
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versus in for-profit businesses, phone providers, internet providers, you have
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maybe four or five large conglomerates that you can choose from versus
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hundreds of smaller.
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So I think what happened in our fragmented industry around choice and
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individualization was amazing and a great way to address a need for
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getting services to people.
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But I do believe the fragmentation needs to be constricted and we
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do need to start to establish hubs or areas where we go
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from 100 providers to 25 so that we can create efficiencies, reduce
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waste, and ultimately serve more people.
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So yes, I do believe that our fragmentation over the next decade
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is going to constrict through joint ventures, mergers, acquisitions,
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partnerships, because I think it's the only way that our sector will
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survive.
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That's interesting.
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I mean, because I'm reading in the news every week about mergers,
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like they're happening all the time.
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Like I can't even keep up, right?
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It's that many different mergers, acquisitions, all kinds of things happening
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all over the country.
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So it is happening at a rapid pace.
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I agree.
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In all business sectors, not just in all business sectors.
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Hospital systems, we see it in physical health all the time.
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True, that is true.
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I do feel like mental health specifically has sort of been this
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last sort of landscape to change, right?
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It's been out sitting out there and and nobody's wanted to touch
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it because it's been a different animal.
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And I think COVID kind of heightened the awareness of it and
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then sort of shown a light and now everybody is kind of
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saying, oh, hey, maybe there's an opportunity there.
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Yeah, the last adopters, right, Rachel?
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Yeah, yeah.
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But I love that your affiliations are focused on kind of helping
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protect missions and cultures of the people that work there and certainly
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of the clients that are served.
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Can you tell me a little bit more about how you do
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that?
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Sure, Rachel, people pick their provider for mental health services based on
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those attributes you just mentioned, the leadership, the culture and the
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history.
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That's generally why patients choose to seek their mental health counseling or
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therapies from their provider.
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So if we're going to have the patient's satisfaction remain at a
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high level because they can stay involved in treatment that's aligned to
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those choices, then we have to create a model that supports that
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while creating the synergies.
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And where you address that is through those shared back office areas
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that a patient has no idea.
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A patient doesn't know that you have a high deductible captive plan
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that serves your employees through a work comp program and that that
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saves money.
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They're not aware of that business piece that doesn't impact them or
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the therapist working with those folks.
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So you can address those areas that are unknown to the patients
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and those serving them most closely, then the culture and the leadership
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and the mission sustainability just happens organically.
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Yeah.
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Now, do you do a lot of automations, AI usage, those kind
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of things in the back office to also save money?
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We do.
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We have a separate IT company that also does all of our
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AI work.
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So data warehousing, KPI reporting, tracking trends on occupancy and
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authorizations.
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We use a product through Palantir called Foundry, which Palantir is a
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for-profit AI company that builds bots and those bots work in
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each of the affiliates.
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And then we manage their data and their information through the use
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of that AI and through robust data warehousing technology.
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Wow.
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Wow.
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Okay.
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That just answers so many of my questions because really nothing changes
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and everything changes.
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I often tell my staff, we've got two pieces that we always
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have to consider.
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Like what is our client care?
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And we want to make good decisions regarding that.
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But then the secondary piece is the business side, right?
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And the pieces around that.
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And how do we make decisions that work well for both of
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those pieces?
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And that's often where it gets challenging when you're working with insurance
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and pay limitations and those kind of things.
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But what you're basically saying is, nope, we're splitting those out.
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Imperium handles all of the business side and the organization continues to
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handle the client care.
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They can focus on their mission and the outcomes and the therapeutic
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returns on serving the clients while we focus on your annual audit,
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your quarterly reporting, your tax filings for payroll.
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We manage all that noise that all business owners and CEOs spend
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a good deal of their time handling.
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Insurance renewals, meeting with banks on line of credit, all those non
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-essential client care aspects of the business is where executives and
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leadership end up spending their time in our model.
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We take that away, do it for you, let you know as
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the leader and the CEO what we're doing.
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You're part of the conversation that's occurring.
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You're given the reports that you seek very transparently to those leaders,
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but they don't have to focus on that as much as they
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do when they're not part of our model.
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And what is Imperium's mission?
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What are you trying to do with Imperium?
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So, we are trying to build a network or constellation of behavioral
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health and human service providers across the global, across the United States,
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possibly dipping international that uses our scale leverage to have the
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greatest impacts to the clients, patients, consumers of the communities where
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our companies operate.
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So, we are built to be a supporting organization.
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We don't provide the services, develop the treatment plans.
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We support the people and organizations that are doing that work.
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Right.
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And so, what about accountabilities?
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Do you dabble in any of that or is that all left
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up to the organization as well?
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So, accreditation, licensing, strategic planning, all of those elements live at
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the leadership level of the affiliated organizations.
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Okay.
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We have key performance indicators, Rachel, that Imperium and APIS report on
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to the affiliates, access to the capital stack, how quickly we're collecting
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your receivables, how well we're dealing with your ERISA retirement plans.
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So, we're accountable to our customers related to those areas.
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And then we expect that our affiliates are going to maintain the
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highest service level and greatest integrity of the services, accreditation,
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and licensing that they're providing.
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Gotcha.
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Gotcha.
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Well, this has been an enlightening model to talk about.
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I'd love to ask you kind of one final question and that
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is if you could say one thing to maybe both people seeking
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care on the mental health side and also providers and organizations, what
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do you think is an important thing for this industry to be
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thinking about moving forward?
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Putting your hand up and asking for help, whether you're a CEO,
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a leader, a company, or an individual in person, no matter what
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it is, is a strategy, not a weakness.
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I love that.
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I mean, that is what we are asking people to do when
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they seek services, right?
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Is to just say, hey, I may not have everything figured out
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and that's okay.
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But same on the business side.
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I like it.
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I like it a lot.
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All right.
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Well, thank you so much for being on our show, Ryan.
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This has been an awesome conversation.
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I love the model and I'm excited to allow our listeners to
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listen in and hear about that.
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If you want to learn more about the articles that we mentioned
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today or about Ryan and his organization, all of that will be
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in the show notes for you with links and you can feel
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free to do your own research.
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But we are glad you are here.
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We're going to be back next week talking about more of the
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changes in the mental health industry.
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Thank you so much for listening and bye for now.
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Thanks for listening to the Mental Health Evolution podcast.
25:43
Join the conversation, find us on socials, send us your thoughts and
25:47
tell us what you're seeing in your corner of the mental health
25:50
world.
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Until next time, stay curious and keep evolving.
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