Hazelden, Betty Ford Center say they'll merge

Two of the best known names in addiction treatment say they are combining. The boards of Minnesota-based Hazelden and California-based Betty Ford Center announced Tuesday the two plan to merge.

The announcement said the Hazelden Betty Ford Foundation will be the largest non profit addiction treatment provider in the U.S. It will keep its headquarters in Center City, Minn.

Current Hazelden President and CEO Mark Mishek will become CEO of the merged organization.

Mishek said the foundation will remain focused on abstinence-based addiction treatment in resident and outpatient facilities at 14 sites.

"The day of the free-standing residential treatment centers, like Hazelden has had in Center City and the Betty Ford had in the desert, are coming to an end," Mishek said. "What we need to offer patients is multiple options, multiple locations depending on the level of severity and the care they need."

Months before major provisions kick in, the Affordable Care Act already is being cited as a reason for some health care organizations to rethink how big they need to be, as well as how they'll deliver care.

"By coming together with multiple geographic sites and having the capability to open outpatient centers and make these services available, we'll be able to really work with the new world of health reform," Mishek said.

Even before the merger is approved, Mishek said the Betty Ford Center plans more outpatient treatment sites in southern California and Hazelden will do the same in its current markets. Hazelden aimed to double the number of people treated at outpatient sites over the next three years.

Andrew Croshaw, partner at health care consulting firm Leavitt Partners, agreed that the ACA was likely a factor in the proposed merger. But he said rising health costs are also forcing companies to try to find more ways to save money.

One way to do that is to focus on providing comprehensive care, which offers organizations like Hazelden and the Betty Ford Center the opportunity for partnerships with large health care providers.

"Both providers and payers are migrating to new ways to take care of people that can be more cost effective," Croshaw said. "These models typically involve more coordination in care management."

Croshaw said the proposed merger is part of the trend toward consolidation. But that may make them more efficient.

"It's very challenging and uncertain for the providers and many of the payers involved," Croshaw said, "but I believe patients are going to come out better in the end."

The boards hope to clear all regulatory hurdles by the end of the year and implement the merger by Jan. 1.

Hazelden was founded in 1949. The Betty Ford Center was founded in 1982 and is currently based in Rancho Mirage, Calif.