by Art Levine
So it didn’t really seem to matter to investors that CRC or its Aspen Education division was marked by several wrongful death lawsuits; a $9 million settlement in 2014 with the Justice Department for allegedly defrauding Medicaid by providing substandard care; and at least ten potentially preventable patient deaths so far since being acquired by Bain in 2006. These deaths included four patients in less than two years at its premier drug-treatment facility, Sierra Tucson in Arizona, known for treating celebrities such as Ringo Starr and Rush Limbaugh.
All told, since CRC acquired the high-end, $50,000-a-month treatment center in 2005, six people have died in the facility as of this writing, most recently in August 2015.
Sierra Tucson has been considered a world-class treatment facility, especially proud of its expertise in dealing with “dually-diagnosed” patients with mental illness and substance abuse. Its website proclaims, “If you or a loved one is battling a chemical dependency concern and the debilitating symptoms of a mental health condition, look no further than Sierra Tucson’s Addiction and Co-Occurring Disorder Program.”
Despite that promise, January 2015 began with the death of one such patient when a fifty-five-year-old Pennsylvania man, Richard Lecce, who was supposed to be on suicide watch, hanged himself with a belt in his room. He was found “unconscious but still breathing” in his room by staffers who had spent the previous two hours looking for him, witnesses told investigators for the Pinal County Medical Examiner’s Office. A few weeks later, Sierra Tucson’s CEO, William Anderson, said the staff was “extremely saddened,” but asserted, “Suicide prevention is a key focus.” In December 2015, Lecce’s family filed a wrongful death lawsuit, citing the program’s monitoring failures in the death of the deeply depressed engineer whose family cashed in $64,800 in savings to pay for his uninsured care. Sierra Tucson’s CEO William Anderson told the Arizona Daily Star that he couldn’t comment because the issue was being litigated.
Unfortunately, Sierra Tucson’s staff and leadership—consistent with the general practice of CRC over the years—don’t seem to learn from their mistakes, and virtually never apologize or admit wrongdoing. With toothless state oversight so commonplace, why should they? For instance, when the facility reached a June 2015 settlement with the state to improve monitoring and pay a $7,500 fine following Lecce’s January 2015 suicide, its lawyers said the agreement wasn’t “an admission of violation, wrongdoing or liability.” Yet it was just a few months later, on August 27, 2015, that a fifty-nine-year-old California man hanged himself in his bathroom closet with shoelaces—despite the facility’s previous promises to track patient movements. Even so, in October 2015, state health officials still didn’t crack down: they ended the facility’s probationary period, loosened oversight and accepted yet another fine for $27,000.
As usual, Sierra Tucson’s leadership followed the same script they have used ever since a suicidal patient’s corpse was found on the grounds in 2011. In their October 2015 agreement with the state, Sierra Tucson officials vowed yet again to make improvements in screening and monitoring patients. But the problems continued: The facility was also required to pay another $4,000 in July 2016 for its repeated deficiencies, some involving failed health monitoring, in its fifteen-bed psychiatric care unit. Anderson issued a statement after this penalty: “The safety and well-being of our residents is our utmost priority,” while noting the facility’s full cooperation with state regulators to “understand guidelines” affecting the program.
Yet by the end of 2015, the year of the last reported fatality, there had been so many allegedly needless deaths due to the same sorts of staff mishaps that it was hard to keep them all straight. It would take an entire book to chronicle all the mistakes in full, but it’s worth offering a summary review of the deaths so far. (Some of the wrongful death lawsuits and state health reports can be viewed online at this book’s companion website, mentalhealthinc.net, and at Tucson.com.) With perhaps one exception, virtually all of them follow a similar pattern: It begins with a suicidal or disoriented patient signaling to the staff his interest in killing himself or exhibiting other signs of severe distress. Then after the patient commits suicide, the similarities continue through the state’s death investigation, which usually ends with a modest fine and Sierra Tucson agreeing to make improvements. Then sometime later, another patient dies and the cycle starts all over again.
At some point in these deadly repeat performances, families usually get around to filing their wrongful death lawsuits—and executives dutifully decline to comment while litigation is pending or after they reach confidential settlements. Of course, the size of the regulatory fines, the precise method of death and the promised reforms vary in specifics, but the general framework remains the same. Reviewing the highlights puts this string of deaths in a broader context:
In March 2007, a few years after CRC bought Sierra Tucson, a thirty-four-year-old patient, Toby Blanck, drowned in the facility’s swimming pool but nearby staff didn’t respond. As recounted in the Tucson Sentinel and in online memorials to him, he favored long stretches of underwater swimming but blacked out. Citing a confidential source, the Sentinel reported that staffers may have believed he was pretending to drown as he had reportedly done in the past. The family’s wrongful death lawsuit against the facility was settled out of court in 2013.
In August 2011, shortly after admitting a deeply depressed patient, California physician Dr. Edward Litwak, the staff assessed him as being at “high risk” of suicide, but he was nonetheless transferred to the center’s poorly monitored residential section. He was soon reported missing, but it took the staff two weeks to find his body on the grounds near the horse stables. A wrongful death lawsuit against the facility was settled for undisclosed terms in September 2014.
In January 2014, a fifty-nine-year-old patient from Phoenix with a history of depression and anxiety hanged himself with a shoelace attached to a showerhead, as The Arizona Daily Star first reported. The day before the incident, a staff counselor overheard the distressed man telling his wife on the phone of his plans to kill himself. His alarmed wife immediately called the staff to inquire about removing him, yet they convinced her to let him stay, while failing to note the incident in his chart or to increase monitoring of him. Though the state fined the facility $2,000 for its apparent neglect, the facility didn’t admit liability and Sierra Tucson avoided further damages by apparently settling with the family even before a lawsuit was filed.
In April 2014, a disoriented, depressed twenty-year-old patient confided to a nurse, “I want to die,” even as his doctor later assessed him at “low risk” of suicide. A few days later, he was found face down on the floor of his room. He died two days later from what an autopsy determined was lethal drug toxicity. It’s still not clear whether his death was accidental or a suicide, but his mother filed a wrongful death lawsuit in April 2016, blaming Sierra Tucson’s lax procedures. The state penalty imposed on Sierra Tucson for the tragedy: a $250 fine and an order to train staff again on suicide monitoring protocols.
On January 2, 2015, staff members seemingly chose to ignore the lessons from those required suicide prevention trainings imposed after the earlier suicides. As a result, they allowed the new middle-aged patient from Pennsylvania, Richard Lecce, to wander around unobserved for hours before he hanged himself. Sierra Tucson entered into a new state enforcement agreement in May 2014 to improve suicide risk assessment, hold more prevention trainings and upgrade monitoring of drug interactions.
In August 2015, a fifty-nine-year-old California man hanged himself in his bathroom closet with his shoelaces tied together. Sierra Tucson officials promised again later in the year to make reforms.
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SO IN 2016, WHEN SIERRA TUCSON OFFICIALS PAID THEIR MOST RECENT fine—for deficiencies in their psychiatric inpatient unit—they followed the same time-tested response virtually all CRC facilities have employed for over a decade: they didn’t acknowledge any culpability. Once again, no on
e in authority at CRC appeared to be held accountable for anything that went wrong.
Welcome to the world of loosely monitored for-profit behavioral health care in which profits and cost-cutting priorities can easily trump patient safety. By January 2015, after the Acadia deal was signed, the leadership of CRC Health appeared ready to turn the page and put all those messy lawsuits and deaths behind them—until two more Sierra Tucson patients killed themselves before the summer of 2015 was over. Akin to VA officials rarely facing punishment for wrongdoing, when there was no culture of accountability and enforcement in Sierra Tucson and other CRC programs, patients’ lives were seemingly also endangered.
CRC originally purchased Sierra Tucson in 2005 for $130 million as its “crown jewel” shortly before plans to sell CRC to Bain were announced. “Then the business side started controlling admissions,” says a former employee, who worked at Sierra Tucson before and after the CRC acquisition. “It doesn’t take a brain scientist to realize that if you reduce staff [in key programs] and add sicker patients, there’s going to be trouble.” By 2009, even before Litwak’s 2011 death, the state health department fined the facility for having insufficient staff to prevent high-risk patients from wandering off.
Nevertheless, any fines, deaths or wrongful death lawsuits across the CRC chain didn’t prove to be much of a problem for potential buyers of CRC by 2014, when Bain looked to sell the company. Bain was following its customary practice of increasing an acquisition’s revenues and then reselling after five to seven years. The CRC firm was considered an appealing asset in the burgeoning $220 billion behavioral health field, which includes government clinics, nonprofit hospitals and for-profit treatment centers. Dana Blum and other grieving family members, however, were likely not cheered by this upbeat financial news.
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IN LOOKING INTO CRC IN 2012 FOR SALON, I FOUND PREVIOUSLY UNREPORTED allegations of abuse and neglect in at least ten CRC residential drug and teen care facilities across the country, including three I visited undercover in Utah and California in 2012. When I looked again at CRC in 2015 and 2016, the same types of dangers seemingly continued unabated, emblematic of broader failings in the residential treatment field. These include facilities owned by corporate leaders such as the UHS hospital chain; small locally owned sites such as the Tierra Blanca ranch for troubled teens in New Mexico, whose owners faced lawsuits for alleged fraud, “torture” and wrongful death until the claims were quietly settled in 2016, but they continue to strongly dispute the allegation; and, of course, the unfettered, brutal religious programs such as Restoration Youth Academy. I was surprised to learn that some facilities I had covered earlier, such as Sierra Tucson, had apparently become even less safe after the scandals erupted. With the rare exceptions of the publicity aimed at a few CRC facilities in Arizona, Utah and Tennessee, the incidents I found have largely escaped national notice or even sustained local attention because the programs are, thanks to lax state regulations, largely unaccountable.
Court documents and ex-staffers also charged that such incidents reflect, in part, a broader corporate culture at CRC Health Group, still a leading national chain of treatment centers even though it’s operating as a division of Acadia. A series of lawsuits alleging wrongful death and abuse, augmented by the criticism of former staff and clients, have portrayed CRC as prizing profits—and the avoidance of outside scrutiny—over the health and safety of its clients. (Back in 2012, I sent specific questions on these basic charges to CRC and its original owner, Bain Capital. CRC would answer only general questions; Bain did not reply. Acadia executives didn’t reply to my recent requests for comment.) But the Acadia company, despite its over $1 billion in revenue, conceded in its 2015 financial statement that its rosy predictions for CRC and other divisions faced some risk: “The occurrence of patient incidents could adversely affect the price of our common stock and result in incremental regulatory burdens and governmental investigations.”
And CRC’s corporate culture, in turn, still reflected in large measure the no-holds-barred attitudes and financial imperatives of its owner for eight years, Bain Capital, the private equity firm co-founded by Mitt Romney. (The Romney campaign in 2012 did not reply to written questions about Romney’s continuing investment revenues from CRC after he left Bain Capital.) As early as 2007, Romney also personally faced public scrutiny over his ties to reportedly abusive teen programs: Two of his leading GOP fundraisers, Mel Sembler and Robert Lichfield, founded and ran controversial chains of troubled-teen facilities, Straight, Inc., and the World Wide Association of Specialty Programs and Schools (WWASPS). Those scandal-marked programs and their spin-off facilities have variously faced allegations and lawsuits over horrific abuse, false imprisonment or neglect they have strongly denied. Time magazine’s Maia Szalavitz, the author of the first major book on these programs, Help at Any Cost, wrote a scathing article about Romney and these influential donors for Reason magazine headlined: “Romney, Torture and Teens.”
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WHEN BAIN PURCHASED CRC IN 2006, IT LOOKED LIKE AN INVESTMENT masterstroke. The CRC company, founded in the mid-’90s with a single California treatment facility, the Camp Recovery Center, had quickly grown into the largest chain of for-profit drug and alcohol treatment services in the country, with $230 million in annual revenue. Under Bain’s guidance, its revenue nearly doubled, to more than $450 million by the time it was sold in 2014. CRC now serves over 30,000 clients daily—mostly opiate addicts—at more than 140 facilities across twenty-five states. Of course, when CRC was sold to Acadia, certain Bain investors made out well, including presumably Mitt Romney, when the company received 6.3 million shares of Acadia stock valued at almost $2 billion. Bain’s original purchase of CRC, a leveraged buyout, had also saddled CRC with massive debt of well over $600 million.
The 2006 CRC acquisition immediately made Bain owner of the largest collection of addiction treatment facilities—both inpatient and outpatient—in the nation. And by receiving millions of shares of Acadia stock in 2015, Bain Capital is still heavily invested in the behavioral health care field. In a report in April 2015 on the health-care market for private equity investors, Bain Capital remained optimistic about the profit potential of the US behavioral health segment, citing continuing loose regulation and the expansion of the health-care market under the Affordable Care Act.
Even after the sale to Acadia, the story of Bain Capital’s handling of CRC Health remains an object lesson in how the drive to maximize revenues can place vulnerable people at risk. According to company executives and independent analysts, hands-on oversight of subsidiary companies was a hallmark of both Bain and CRC, so any major problems in their facilities should have been known to officials in charge of CRC.
These factors are still at work in the maltreatment, needless deaths and fraud alleged in lawsuits, media accounts and government investigations aimed at today’s giant in this field, the UHS chain. With nearly two hundred behavioral health care facilities—including troubled-teen and addiction programs—in the United States, joined by a few dozen general acute care hospitals, it rakes in over $9 billion in revenue annually, over half of it from Medicaid and Medicare. It is by far the nation’s leading provider of inpatient mental health and addiction services, with 20 percent of the market. The company’s Chief Financial Officer, Steve Filton, even admitted to investors in 2013 that weak oversight of UHS and other behavioral care providers is a key to the field’s financial success: “It tends to get, I don’t want to say no attention, but a fairly minimal amount of attention from [government and private] payers, which I think is generally a good thing.” (For nearly thirty years, spokespeople for the company have denied corporate wrongdoing in the deaths or suicides of patients at their facilities, going as far back as two teenagers who died while being restrained at UHS facilities in Pennsylvania and North Carolina in the late 1990s. Occasionally, states have stopped sending kids to UHS centers.)
Bain was flexible in using its private e
quity strategies to squeeze more money out of CRC Health. Unlike some Bain Capital acquisitions, which have led to massive layoffs, Bain’s approach with CRC was to boost revenues by gobbling up other treatment centers, raising fees and expanding its client base through slick, aggressive marketing, while keeping staffing and other costs relatively low. But that rapid pace of acquisition couldn’t be sustained in the mostly small-scale drug treatment industry alone. So Bain Capital and CRC set their sights on an entirely new treatment arena: the multibillion-dollar “troubled teen” industry, a burgeoning field of mostly locally owned residential schools; Residential Treatment Centers (RTCs) offering mental health and drug treatment services; and wilderness programs. As mentioned earlier they all served, nationwide, at least 200,000 kids facing addiction and emotional or behavioral problems, according to GAO estimates and other reports.
One of CRC’s first acquisitions under Bain ownership was the Aspen Education Group. Founded in 1998 with about six schools, Aspen Education had expanded to thirty troubled-teen and weight-loss programs by 2006, including Youth Care of Utah. With Bain’s backing, CRC purchased Aspen for nearly $300 million in the fall of 2006.
Less than a year later, Brendan Blum was dead.
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AT THE TIME OF THE CRC ACQUISITION, ASPEN ALREADY HAD A HISTORY of abuse allegations, including at least three lawsuits, and two known patient deaths, one by suicide. Featured on Dr. Phil, Aspen grew out of schools inspired by the “tough-love” behavior-modification approach of the discredited Synanon program, which was eventually exposed as a dangerous cult.
Aspen, in some ways, sought to present itself as the more professional and somewhat kinder version of Mel Sembler’s Straight, Inc., but one that would still use tough-love techniques to dramatically improve kids’ lives. The spartan, harsh conditions, ostensibly designed to toughen the spirit of wayward youth, also saved money and boosted profits.