American Behavioral Health Systems Inc., a Spokane-based inpatient chemical dependency treatment provider that primarily serves state-paid low-income patients, says it plans to expand into Western Washington within the next year and perhaps into other states later.


The company, which operates a 204-bed center in Spokane Valley and a 130-bed facility on the North Side, is considering either buying or building a facility on the West Side that would be similar in size to its Spokane Valley center, says owner Craig Phillips. Also possible, says Phillips, is the opening of a smaller, perhaps 30- to 40-bed facility here that would target private-pay patients.


Later, he says, the company hopes to acquire large chemical dependency treatment operations in other states and convert them to the American Behavioral brand, though he declines to elaborate further.


Phillips says the 11-year-old company is now ready to expand, after several years of reorganization and system improvements following difficult times when it nearly collapsed.


We figured out exactly what we would need to operate efficiently and effectively, and we were right, he says.


American Behaviorals two facilities here employ about 150 people together, and serve about 3,000 patients a year. Treatment for most of the companys clients is paid for by one of several state programs for low-income people and for court-ordered treatment. Very few of the companys clients pay for their care privately, Phillips says.


The companys Valley facility, located at 12715 E. Mission, previously housed a Good Samaritan nursing home. American Behavioral opened a center in that 69,000-square-foot building in March of 2007. Phillips says the company bought the property for about $3 million and has spent $900,000 renovating it, including adding shower rooms, security features, and offices.


The company plans to make other upgrades later, including landscaping the 7-acre property, adding an exercise track and tennis courts, and remodeling the exterior of the facility and replacing the windows. Phillips says he doesnt know yet how much those improvements will cost.


The companys other facility, located at 44 E. Cozza Drive, has 30,000 square feet of floor space. American Behavioral opened it in 1998, and plans similar faade and window upgrades there.


Some of the patients at its North Side facility are sent there from courts around the state, including in Pierce, King, and Clallam counties. The company doesnt have a contract with Spokane County to provide such services, Phillips says. About 60 percent of the clients at the Cozza facility are from Spokane, and are referred by social workers and health-care workers.


Meanwhile, about 85 percent of the clients at the Valley facility are from Spokane, and treatment for most of those clients is paid for by Washington state Department of Social and Health Services programs for low-income people, he says.


The centers operate with full-time, 24-hour staffing. Each facility has two wings, one for women and one for men. Though the centers can take juveniles, Phillips says their clients primarily are adults.


Most of the companys clients remain in the inpatient centers fewer than 60 days, but there isnt a set time limit for treatment, Phillips says. Upon being discharged, a client is evaluated and referred to outpatient care if its warranted or required by outside agencies with which the client is involved. American Behavioral doesnt provide outpatient care.


Clients at the centers start with intensive inpatient treatment, focused on making choices that will get them what they want in life and on following rules and taking responsibility for their actions. Each client gets a minimum of one hour a week of individual counseling, 10 hours a week of group therapy, and 10 hours a week of education, including lectures. In addition, the company houses, transports, and feeds the patients, washes their laundry, and helps them arrange for medical care if its needed. Patients earn more freedom in the facility and move up to advanced-level treatment by following the centers rules, such as getting up at 6 a.m., arriving on time to meals, group meetings, and lectures, and treating their fellow residents respectfully, says assistant director Doug Walker.


The state pays American Behavioral $90 a day per patient for intensive treatment and $41 a day for less-intensive treatment, called the Recovery House, in which clients prepare for what they will do when they have completed their stay.


Phillips says that before clients leave the center, they have housing lined up and a plan in place for either going to school or to a job. He says the Department of Social and Health Services has determined that providing treatment to chemically dependent clients saves it money in future costs, such as emergency-room treatment.


Phillips says he operates American Behavioral as a for-profit company so he can retain control over it, but says his mission is to help as many people as possible. The company, he adds, made a 9 percent profit last year after taxes.


Though the company is healthy and ready to grow now, it struggled mightily in its early days, Phillips says.


He first launched the business in the former Salvation Army Booth Care Center, on West Garland, as a replacement to the discontinued Salvation Army chemical dependency treatment program there, which he had been directing when that organization decided to close it. Phillips, who also previously had operated a treatment program for Eastern Washington University students, took over the Salvation Army centers state and local contracts for inpatient and outpatient treatment services.


Bit off too muchSoon, however, Phillips found that he and his wife, Lisa, had bitten off more than they could chew, and didnt know how to deal with difficulties already entrenched in the staff and operation, which they retained from the previous operation. When the business added a second facility, on Cozza Drive, the venture proved to be too much for them to handle, he says.


About the time the Cozza facility opened, a number of complaints by clients and former employees emerged. The company then lost its outpatient treatment contract with the city of Spokane, and ran into problems with the state over its recordkeeping compliance, Phillips says, adding that those problems nearly buried the company.


The state did 10 audits in nine months one time, he says.


Phillips says that while some of the complaints against the company at that time were unfounded, some were made with reason, and made him realize how difficult it was to manage the facilities. In addition to losing its outpatient contract with the city, it had a restricted license with the state for two years, Phillips says.


We were dead, but I said I wasnt going to give up, Phillips says.


He says it took some time, and him taking a very hands-on approach to every aspect of the business, to find out what the problem areas were and to fix them. When the state took the step of no longer sending the company new clients until it could demonstrate improvements, he got rid of all of the companys other management, closed the Garland facility, and dug in to reorganize the remaining operations.


I was working 12 hours a day, seven days a week, he says.


Phillips says he personally audited all the patient records every weekend to ensure that all treatment was documented, and developed a record-keeping system that the company still uses today. Now that record-keeping system is cited as a model for other facilities that have poor audits, he asserts.


Once it got on its feet three years ago, the company sought to expand by opening a facility in the Spokane Valley, on the former Good Samaritan property, Phillips says. A protracted battle with the city of Spokane Valley to get special-use zoning for that facility delayed the expansion, but ultimately, American Behavioral received a designation as an essential public facility from the Spokane County commissioners, and opened the facility, Phillips says. The process took about two-and-a half years, he says.


Phillips says that though he hasnt decided when or where in Spokane to open a smaller, private-pay facility, such an operation could help the company provide more care to low-income clients by boosting its margins.


Contact Jeanne Gustafson at (509) 344-1264 or via e-mail at jeanneg@spokanejournal.com.