Substance Abuse Recovery Facilities

The Situation

  • Owner and operator of residential substance abuse facilities located across the West Coast – company specialized in drug and alcohol dependency treatments and served patients both in and out of network insurance policies
  • Company suffered from being undercapitalized upon purchase by the owner, a changing landscape in marketing and patient acquisition strategies, and changes in payor mix.
  • Weak management led to declining EBITDA and insufficient cash flow to properly build a marketing team and strategy


  • Chief Restructuring Advisor

The Work

  • Managed daily cash flow; implemented turnaround plan to stabilize operations; improved lender communications; managed sale process; hired investment bank
  • Assisted with the development of a comprehensive marketing plan including: new marketing initiatives designed to improve revenue per bed; implement branded marketing strategy while building additional patient acquisition platforms
  • Reduced cost structure; implemented new information technology tools to help improve utilization reviews and cash collections

The Results

  • Improved cash flow as census increased from newly implemented successful marketing programs
  • Through new IT tools, improved process of managing receivables and cash collections; new metrics and KPIs led to improved operations reporting
  • CR3 fully supported the process of marketing and selling the company

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