Scaling Mental Health Organizations with Ryan Dewey Smith

welcome to Mental Health Evolution, a podcast about what's changing in mental health and why it matters. I'm your host, Rachel Harrison, inviting you into honest conversations with people from all perspectives in the field. Clinicians, tech founders, investors, insurance companies, and all the folks in between. Let's explore what's working, what's not, and what's next.

Welcome back everyone to the Mental Health Evolution Podcast. I am so excited to be here with you today and we are joining us will be Ryan Dewey Smith, who is founder and president of Imperium. Ryan has spent nearly a decade working with behavioral health and human service organizations across the country, helping them grow and adapt to an increasingly complex environment. As we often talk about on this podcast. Through Imperium, he supports nonprofit and for profit mental health, intellectual and developmental disability and family service organizations through strategic affiliation and shared services, with a strong focus on workforce sustainability, culture and long term outcomes. In today's conversation, we are going to explore what it looks like to scale mental health organizations responsibly in ways that protect clinicians, support staff retention, and ultimately improve care for the people and the communities that these systems serve. So thanks for being here, Ryan. It's good to have you.

Thank you Rachel, and it's nice to be with you. Thank you for the opportunity today.

Of course. So as always, we like to talk about some relevant articles related to today's topic before I get into questions with my guests. And hopefully this helps you kind of have a platform for what we're talking about, why we're talking about it, and kind of what's in the news. So the first article that I want to talk about is called Strategic A Critical Imperative for Community Behavioral Health Providers. This article looks at why community health organizations are increasingly turning to mergers, partnerships and affiliations to survive financial pressure, to expand access and to maintain quality of care. It also looks at the risks when growth outpaces culture and workforce support. So that article was a very interesting read for me about sort of really a strategy to survive right now in the changing landscape of mental health. And then the second article is called the Nonprofit Workforce is in Crisis. And this piece outlines the growing workforce challenges across nonprofit health and human services, including burnout, which is a biggie, vacancies and retention struggles. I would add, by the way, that I think for Prof. Mental health is seeing a lot of these same struggles, not just nonprofit. But this article highlights the urgent need for structural leadership and leadership level solutions. So that's a good read for you if you're interested in this topic. And last but certainly not least is an article called navigating workforce challenges 2025 trends and solutions for the Social Sector. And this is talking about the different trends happening in mental health and in social services, different staffing models, new leadership approach and system level strategies to reduce burnout and stabilize care delivery. There again, just recognizing that everything is changing rapidly in our industry and these are all addressing kind of ways we can look at that. But with that in mind, I'm excited to dive in with Ryan because he has been doing this work for 30 years. I watched a lovely video on his website of us kind of a 30 year celebration. That was really cool Ryan. So I want to just dive in and get more of a hands on understanding of what you've done and how you've supported the work, I think in a very creative way. So let's start with you and your story. It seems that you have a constellation of organizations under imperium that are all in the same industry of social supports and mental health. And I'm curious why you've chosen this model of kind of a group of organizations. But I'd love to also hear a little bit bit about your story and your inspiration for getting into all of this.

Sure. Rachel began my career in college in the late 1980s doing work with children and adults with attention deficit and hyperactivity disorder. I did a good bit of the neuromaturational battery testing and intelligence quotient testing for the actual creation of the diagnoses and then did some work with the pharmacology then of Ritalin and Wellbutrin as the actual medication to treat. Out of that I pivoted to working as a co therapist in a mental health outpatient partial hospitalization program where we also worked with a small group of those that were duly diagnosed then to mean with intellectual disability and a serious mental illness diagnosis. Today when we talk about co occurring, sometimes it's serious mental illness with addiction, serious mental illness with a physical affliction. This was specific to intellectual and developmental disabilities. And then I started my first company, Supportive Concepts for Families in 1993 where we served people with mental health and intellectual disabilities in community based programs. Rachel I grew that business over the next two decades to a middle sized nonprofit, roughly 40 million in annualized revenues, 450 well meaning highly qualified staff. I came to a point in the development of that business where the cost of my back office, the diversification of my payer bases my ability to recruit, retain and train qualified staff was a real problem. I had limited access to capital to address wait list needs, so I was unable to invest money in new systems or locations to address the waiting lists that were accumulating. So I went out and tried to find a merger partner that would be a larger entity, that would have more sophisticated systems, allow me to access thought leaders in certain areas, have access to capital to meet my wait lists. And after three failed attempts over a year and a half period of finding that partner, I decided that I was going to do a different approach to mergers or acquisitions and look at doing what we call affiliations or joint ventures or partnerships where we could kluge together like minded and unlike minded services organizations in the same and different geographies and then leverage that scale to create saving synergies to our costs that were drivers of our business, but not the drivers that impact therapeutic outcomes or what we pay staff that are working most closely with our patients. I'm talking the costs of payroll and auditing and accounting and insurance and IT infrastructure, data management, risk and the related insurances, employee health and welfare benefits. Those costs are very disproportional when you're a small to middle sized nonprofit or for profit. So I envision that if we diversified our geographies and our services providers across different services verticals, we could create enough scale economy to drive savings to our individual businesses that we could reinvest back in our missions and our staff. And that's what I've done now for the past 10 years. So at Imperium, we have 34 companies that operate in 20 states. Their collective revenues are $1 billion a year in funding.

Okay.

Over 10,000 employees. And then, Rachel, we provide through Imperium's back office company APIs, all of the general and administrative global services at costs that are half in some instances of what companies are paying as standalone entities.

Wow. And so Imperium actually employs that back office piece and that is shared across all the 34 companies. Is that the model?

Correct?

Okay, that's correct. Okay.

Yes, Rachel. Imperium is the sole member parent company.

Okay.

So it has participatory and protective governance rights that then permits us to consolidate all the companies as individual enterprises under one common parent who then manages and is the controlled employer group and the provider of all those general and administrative back office pieces and back out to those 34 companies. Those 34 companies retain their executives, their boards of directors, their missions. We don't at imperium or APIs influence treatment modalities who you accept into your programs what de novo work you want to do. We're very much behind the curtain as a supporting organization, providing all those backbone essential services that in some instances cost 20, 25% of your funding dollars to as minimal as 6 to 8% of those funding dollars.

That's impressive. That's really. I mean, you essentially created your own solution. You didn't find a merger that was going to work for you, and so you created this constellation of acquisitions, partnerships, affiliates. I love it.

Yeah. Rachel, in typical mergers or acquisitions, someone's identity is lost as it's merged or acquired into the larger or surviving entity, meaning your history, your legacy, your relationships in the community. Those all go away in a merger or an acquisition, and they live on in the surviving entity and an affiliation. All that remains intact. And all the companies can operate in the same cities, the same towns, the same services space with the same autonomy that they've always had. It's a very elegant model to business partnerships that ultimately creates opportunities to have greater impacts to our clients, patients and consumers, and greater impacts to the staff working most closely to them by way of better wages, better health and welfare benefits, opportunities for advancement into other jobs and positions, thought leadership. So it's just a very interesting intraconnected network or constellation that's dependent upon all the businesses working in unison to create the scale economies and efficiencies.

Yeah, yeah. Do you ever struggle with the idea that there are any competing organizations or anything of that.

That nature, Rachel? There are other aggregators or consolidators in the behavioral health and human services space. You know, the large ones that we know, like Molina, that are nationwide, they really typically focus on certain aspects of health and human services. They're primarily for profit. We're agnostic, Rachel. For profit, nonprofit elder care, children, youth, foster care, education, intellectual and developmental disabilities, substance use, mental health, outpatient, mental health, inpatient day programs. We are agnostic to that. We are all about mission based organizations who want that sustainability and savings through our model to do the great work that they're doing in whatever geography or vertical they do it in.

Mm, mm. I love that. So with that in mind, and you have a lens of so many different organizations, what are you seeing as some of the pressures right now and the trends in this workspace?

So the biggest one's the uncertainty, Rachel, that all of our affiliates feel every day with their funding levels, programs, how we are going to deal with any cuts that we believe will be occurring so that the end user, patient and clients aren't negatively impacted, that impacts Our ability to recruit staff who wants to come into a job in a field where the uncertainty of the funding in your paycheck could literally be day to day or week to week. So it's made recruitment difficult. Cybersecurity costs, with the cyber attacks that we experience in health care, those costs are outpacing funding. Obviously, the cost of insurance is a hot topic always around health and welfare insurances have to be reasonable for our staff. And not only reasonable from a coinsurance perspective, but a deductible perspective so that if you do in fact need to use the insurance, the deductibles aren't so cost prohibitive that it impacts your day to day income and living. And then all services, Rachel, utilities, food, we all live it in our personal lives. Those correlate into business as well. So we're seeing a lot of those costs to run residential programs and outpatient programs that provide food. So homeless services that provide three meals, all those costs have outpaced what the reimbursements are. So if you're not creative around maximizing your dollars by being a steward of those dollars and finding the most efficient way to spend the dollars that aren't impacting the people at the end of this, the clients and patients, so that they have the greatest reward, that's where the risk is. And what we see in the companies that come to join our network, that they're putting their hands up and saying, look, we need help. Our costs are out of control. We can't scale, purchase and leverage any scale to buy cheaper where we would want to. I'm talking basic things, copy paper, phones, all those business supplies that we all depend upon to run our businesses can be bought at much lower prices when you are spending at a billion dollar level than when you're spending at $100 million level.

Yeah, yeah, that makes sense. Do you think that this is a continuing trend that we're going to keep seeing? I think we're seeing bigger, bigger. Certainly, at least in the for profit side, we're seeing bigger and bigger tech companies kind of coming in and the little guys are sort of struggling to match that just because of what you're saying. They're the buying power, the marketing power, the negotiation power for insurance repayment rates. All those things are so different from the big guy to the little guy. You think that's going to be a continuing trend that we see?

Rachel, for me, and I'd be curious to hear your opinion. I think behavioral health and human services is among the most fragmented business area that we have in our country, meaning mom and pop provider organizations and small size organizations relative to the number of large that are all operating and vying for the same funding levels versus in for profit businesses. Phone providers, Internet providers, you have maybe four or five large conglomerates that you can choose from versus hundreds of smaller. So I think what happened in our fragmented industry around choice and individualization was amazing and a great way to address a need for getting services to people. But I do believe the fragmentation needs to be constricted and we do need to start to establish hubs or areas where we go from 100 providers to 25 so that we can create efficiencies, reduce waste, and ultimately serve more people. So yes, I do believe that our fragmentation over the next decade is going to constrict through joint ventures, mergers, acquisitions, partnerships, because I think it's the only way that our sector will survive.

That's interesting, I mean, because I'm reading in the news every week about mergers. Like they're happening all the time. Like I can't even keep up. Right. It's that many different mergers, acquisitions, all kinds of things happening all over the country. So it is happening at a rapid pace.

I agree. In all business sectors. Not just in all business sectors.

Right.

Hospital systems, we see it in physical health all the time.

True. That is true. I do feel like mental health specifically has sort of been this last sort of landscape to change. Right. It's been out sitting out there and nobody's wanted to touch it because it's been a different animal. And I think Covid kind of heightened the awareness of it and then sort of shone a light. And now everybody is kind of saying, oh, hey, maybe there's an opportunity there.

Yeah, the last adopters, right, Rachel?

Yeah, yeah. But I love that your affiliations are focused on kind of helping protect missions and cultures of the people that work there and certainly of the clients that are served. Can you tell me a little bit more about how you do that?

Sure, Rachel. People pick their provider for mental health services based on those attributes you just mentioned, the leadership, the culture, and the history. That's generally why patients choose to seek their mental health counseling or therapies from their provider. So if we're going to have the patient's satisfaction, remain at a high level because they can stay involved in treatment that's aligned to those choices, then we have to create a model that supports that while creating the synergies. And where you address that is through those shared back office areas that a patient has no idea a patient doesn't Know that you have a high deductible captive plan that serves your employees through a work comp program and that that saves money that they don't even are, they're not aware of that business piece that doesn't impact them or the therapist working with those folks. So if you can address those areas that are unknown to the patients and those serving them most closely, then the culture and the leadership and the mission sustainability just happens organically.

Yeah. Now, do you do a lot of automations, AI usage, those kind of things in the back office to also save money? We do.

We have a separate IT company that also does all of our AI work. So data warehousing, KPI reporting, tracking trends on occupancy and authorizations. We use a product through Palantir called Foundry, which Palantir is a for profit AI company that builds bots and those bots work in each of the affiliates and then we manage their data and their information through the use of that AI and through robust data warehousing technology.

Wow. Wow. Okay. That just answers so many of my questions because really nothing changes and everything changes. I often tell my staff we've got two pieces that we always have to consider, like what is our client care? And we want to make good decisions regarding that. But then the secondary piece is the business side. Right. And the pieces around that and how do we make decisions that work well for, for both of those pieces. And that's often where it gets challenging when you're working with insurance and pay limitations and those kind of things. But what you're basically saying is, nope, we're splitting those out. Imperium handles all of the business side and the organization continues to handle the client care.

They can focus on their mission and the outcomes and the therapeutic returns on serving the clients. While we focus on your annual audit, your quarterly reporting, your tax filings for payroll. We manage all that noise that all business owners and CEOs spend a good deal of their time handling. Insurance renewals, meeting with banks on line of credit, all those non essential client care aspects of the business is where executives and leadership end up spending their time. In our model, we take that away, do it for you, let you know as the leader and the CEO what we're doing. You're part of the conversation that's occurring. You're given the reports that you seek very transparently to those leaders, but they don't have to focus on that as much as they do when they're not part of our model.

And what is Imperium's mission? What are you trying to do with Imperium?

So we are trying to build a network or constellation of behavioral health and human service providers across the global, across the United States, possibly dipping international that uses our scale leverage to have the greatest impacts to the clients, patients, consumers of the communities where our companies operate. We are built to be a supporting organization. We don't provide the services, develop the treatment plans. We support the people and organizations that are doing that work.

Right. And so what about accountabilities? Do you dabble in any of that or is that all left up to the organization as well?

So accreditation, licensing, strategic planning, all of those elements live at the leadership level of the affiliated organizations.

Okay.

We have key performance indicators, Rachel, that Imperium and APIs report on to the affiliates, access to the capital stack, how quickly we're collecting your receivables, how well we're dealing with your ERISA retirement plans. So we're accountable to our customers related to those areas. And then we expect that our affiliates are going to maintain the highest service level and greatest integrity of the services, accreditation and licensing that they're providing.

Gotcha. Gotcha. Well, this has been an enlightening model to talk about. I'd love to ask you kind of one final question, and that is if you could say one thing to maybe both people seeking care on the mental health side and also providers and organizations, what do you think is an important thing thing for this industry to be thinking about moving forward,

Putting your hand up and asking for help, whether you're a CEO, a leader, a company, or an individual in person, no matter what it is, is a strategy, not a weakness.

I love that. I mean, that is what we are asking people to do when they seek services, right? Is to just say, hey, I may not have everything figured out and that's okay, but same on the business side. I like it. I like it a lot. All right, well, thank you so much for being on our show, Ryan. This has been an awesome conversation. I love the model and I'm excited to allow our listeners to listen in and hear about that. If you want to learn more about the articles that we mentioned today or about Ryan and his organization, all of that will be in the show. Notes for you with links and you can feel free to do your own research. But we are glad you are here. We're going to be back next week talking about more of the changes in the mental health industry. Thank you so much for listening and bye for now.