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Community Psychiatric Centers Business Information, Profile, and History

6600 West Charleston Boulevard
Suite 118
Las Vegas, Nevada 89102
U.S.A.

History of Community Psychiatric Centers

Community Psychiatric Centers was one of the largest chains of investor-owned psychiatric hospitals in the United States and Britain, as well as a provider of long-term critical care in the early 1990s. At the end of 1995, however, it announced plans to sell its U.S. psychiatric operations.

CPC was founded in California in 1968 by Robert L. Green and James W. Conte. The two had already been working together when they founded CPC as part of an effort to link two private neighborhood hospitals; Alhambra Psychiatric Hospital in Rosemead, California, and Belmont Hills Psychiatric Hospital near San Francisco. In so doing they founded the concept of creating a multi-hospital system by joining community-based psychiatric centers.

The development of psychotropic drugs in the 1960s to fight mental illness made it possible for psychiatric patients to stay in the hospital for much a shorter time. With psychiatric expenses no longer potentially unlimited, many insurers began to cover mental illness. Hospitals like Alhambra and Belmont were founded partly to treat patients who had to be treated in state mental institutions until the development of psychotropic drugs. When CPC linked these hospitals it reduced operating and administrative costs by centralizing functions like finance, purchasing, construction, and design. Because community hospitals (compared to state facilities) usually offered convenient locations, a good environment, and specialized treatment, CPC's founders believed that demand for their concept would increase.

In June 1969 CPC went public, with Robert Green as its first president. Its headquarters was located in San Francisco. In 1970 newly constructed facilities opened in Santa Ana and Pomona, California. The firm also bought a hospital in West Los Angeles, bringing it into a huge new market. In 1971 it expanded further, buying Fairfax Hospital in Seattle. The firm diversified beyond psychiatric care in 1973 when it bought a Los Angeles-area dialysis company that operated three units. CPC also expanded to the East, opening St. John's River Hospital in Jacksonville, Florida.

In 1975, a new federal law (the Certificate of Need law) caused a nationwide slowdown in hospital expansion, making it harder for CPC to grow. Still, by 1975 the firm operated ten hospitals with 747 beds in five states. CPC had five dialysis centers in California, and by 1977 it had become the second-largest dialysis provider in the United States. Many competitors sprang up during the firm's first 15 years, but many of them spent heavily on advertising and other overhead, leaving them indebted and inefficient.

CPC joined the New York Stock Exchange in 1978. It then bought Priory Hospital, London's largest, oldest private psychiatry hospital. CPC used it to start the Priory Hospitals Group, which became the second-largest British provider of private acute psychiatric care (only the state-run National Health Service was larger).

Investor-owned psychiatric hospital chains boomed in the 1980s. A large part of this growth was fueled by generous employee benefit packages that paid for employees to pursue in-patient care for mental health problems, as well as drug and alcohol abuse. These plans were lucrative for psychiatric hospitals, which billed an average of $500 per patient day. Hospitals had operating profits of 35 to 45 percent from such patients. In 1983 CPC diversified into home healthcare through the purchase of Personal Care Health Services Corporation.

In 1985 the Certificate of Need law was nullified in several states, and CPC began a major construction program to beef up its hospital division. It added seven new hospitals in 1986, seven more in 1987, and another four in 1988, including one in Puerto Rico. In 1989 CPC's dialysis and home health business was spun off as a separate public company called Vivra Incorporated. Chairman Robert Green left the firm to head Vivra, and James Conte took his place. Richard L. Conte, formerly general counsel, became president and chief financial officer and oversaw the United Kingdom hospital division. CPC moved its headquarters downstate, from San Francisco to Laguna Hills.

In 1990, CPC bought two more psychiatric hospitals, while in 1991 the firm built its last new psychiatric hospital to date. The firm had grown at an impressive rate, always meeting its goal of annual earnings-per-share growth of 15 to 20 percent. Its operating margins were around 35 percent and its return on equity averaged more than 20 percent. On the basis of that strength, Forbes magazine labelled the firm "the class act of the country's psychiatric hospital chains." But in the early 1990s the psychiatric market changed dramatically and CPC's growth stalled.

Corporations were rebelling against the rising cost of these mental health benefits, which were rising between 30 percent and 50 percent a year (more than twice the rise in other segments of the healthcare market). Critics charged that most plans gave hospitals no reason to release patients before their insurance benefits were exhausted. The industry was hurt by allegations that some psychiatric hospitals held patients against their will, then kicked them out when their benefits expired.

Because of the rising costs, many employers began using insurers and managed care companies to help reduce their costs. As a result, hospital admission standards were toughened and more employees were treated as outpatients. Insurers demanded shorter hospital stays and large discounts. Managed care became an important component of the psychiatry business, and it hurt revenues of psychiatric hospitals across the United States. Managed care and negotiated group discounts resulted in profit margin reduction to around 22 percent by 1991, and sometimes as low as ten percent. Since the late 1980s, moreover, the average length of patient hospitalization had shrunk from four weeks to three, then to less than two. Psychiatric hospitals across the United States were hit by these changes, and many closed.

Between 1988 and 1990, the percentage of managed rates in CPC's patient population climbed to 33 percent from only 12 percent. In the early 1990s CPC decided to adapt to this changed environment. It negotiated with managed care providers trying to increase its patient volume enough to offset the lower profits from each patient. Even so, the firm experienced its first loss in 1991. Upset about a plunge in the CPC's stock price, angry investors filed a class action suit against CPC. That same year Texas, Florida, and New Jersey launched investigations into for-profit psychiatric hospitals, causing a public relations disaster for the industry.

In the midst of these troubles, CPC head James Conte retired in 1992 and was replaced by Richard Conte, his son. CDC decided to switch gears, reformulating itself from a psychiatric hospital company into what it termed "an integrated behavioral health delivery system." The firm diversified into the growing market for long-term critical care, hoping to escape the tightening psychiatric market. CPC launched a new subsidiary, Transitional Hospitals Corp., to develop and operate long-term critical care units with CPC hospitals, as well as to acquire or lease critical care units outside of CPC. The subsidiary offered long-term hospitalization for patients who required intensive nursing care as they recovered from a catastrophic illness or accident. Such patients needed services including life-support systems, post-surgical stabilization, intravenous therapy, and wound care. When opening hospitals, Transitional looked for large markets with a large proportion of elderly residents. Many of its patients were dependent on ventilators.

In 1993 CDC decided to reduce costs of its U.S. psychiatric division, and announced it would close as many as ten of its 44 hospitals. In 1994, CDC moved its headquarters again, this time to Las Vegas. By this point, the average hospital stay of a CPC patient had dropped to less than 11 days for an adult, down from four weeks about ten years earlier. In contrast to the troubles besetting the firm in the United States, its British division experienced its best year ever in 1994, with net operating revenues of $46.2 million. The Priory Hospital Group expanded its bed capacity by a third, and bought hospitals in Bristol, Reifate, and North West Surrey, giving the group a total of 13, including one joint-venture hospital.

CPC made $10.2 million in 1994 on revenues of $427.7 million. Its Psychiatric Care Operations offered five major services and programs. Inpatient treatment was geared toward patients who needed constant supervision. Residential treatment was offered to adolescents requiring more structured care than they could get in outpatient care. The firm had 21 residential treatment centers, each with a psychiatrist and 24-hour nursing. Partial hospitalization was designed for patients not requiring constant supervision. Patients were treated for six to 12 hours a day, up to seven days a week, around other requirements like work or school. Intensive outpatient programs were offered to patients requiring routine observation. Treatment was given three to four hours a day, usually three or four days a week. Outpatient treatment was the least intensive. It generally involved 45 to 90 minutes of individual, family, or group therapy on a scheduled basis.

By early 1995 the Transitional Hospitals subsidiary operated 14 facilities from Massachusetts to California. It relocated its headquarters from Atlanta to the CPC corporate offices in Las Vegas. The firm needed to expand its headquarters anyway, and decided it would be less expensive to construct a new building that consolidated the main corporate office with the office of Transitional Hospitals Corporation, formerly located in Atlanta. The Priory Hospitals Group continued to expand, reaching 13 facilities. Two-thirds of CPC's record 1994 revenues of $428 million still came from its U.S. psychiatric division's 36 facilities, but it seemed likely that the percentage would shrink.

CPC experienced a flurry of change in 1995, a year when the revenue of the Transitional Hospital subsidiary and United Kingdom division grew larger than that of the U.S. psychiatric division. In November 1995 it announced that it would close six of its psychiatric hospitals that were losing money. The hospitals were located in Milwaukee, Laguna Hills, Fontana and Santa Ana, California, New Orleans and Skokie, Illinois. The operations of the last two were transferred to other CPC hospitals nearby. The New Orleans and Milwaukee hospitals shared space with the Transitional Hospitals subsidiary, which then expanded to take over the entire hospital.

CPC then reorganized the management of the U.S. psychiatric division, promoting William E. Hale to president. It consolidated regional operations, closing offices in Jacksonville, Sacramento and Seattle, and terminating more than 40 regional and corporate positions. In December 1995, CPC announced plans to spin-off its domestic psychiatric business to its shareholders, splitting the company into two publicly held corporations. CPC would hold onto the Priory Hospitals group and Transitional Hospitals Corp. Management felt that they were much better bets for future growth, and that dealing with the problems of the shrinking U.S. market for psychiatric care was sapping the CPC's resources. A management team lead by William Hale would remain to lead the new company.

Transitional Hospitals had grown to 14 hospitals in ten states, while Priory Hospitals Group had 15 hospitals in Britain. The two combined had a 1995 gross income of about $258 million. The mid-1990s found CPC in the midst of an important transition. Only time would show if the firm had made the correct decision in abandoning the U.S. psychiatric market in favor of the British psychiatric market and long-term critical care.

Principal Subsidiaries: Priory Hospital Group, Ltd (United Kingdom); Transitional Hospitals Corp.; Community Psychiatric Centers

Related information about Community

A community usually refers to a group of people who interact and share certain things as a group, but it can refer to various collections of living things sharing an environment, plant or animal. This article focuses on human communities, in which intent, belief, resources, preferences, needs, risks and a number of other conditions may be present and common, affecting the identity of the participants and their degree of adhesion.

The word community comes from the Latin communis, meaning "common, public, shared by all or many."Harper, D. Online Etymology Dictionary. The Latin term "communitatus" from which the English word "community" comes, is comprised of three elements, "Com-" - a Latin prefix meaning with or togther, "-Munis-" - ultimately Proto-Indo-European in orgin, it has been suggested that it means "the changes or exchanges that link" (Both municipal and monetary take their meaning here), and "-tatus" a Latin suffix suggesting diminutive, small, intimate or local. German sociologist Ferdinand T旦nnies presented a concise differentiation between the terms "community" (gemeinschaft) and "society" (gesellschaft). They thus develop individual and group identity through associations that connect them to life-long community experiences.Newman, D. Chapter 5. 134-140.

As people grow, they learn about and form perceptions of social structures. During this progression, they form personal and cultural values, a world view and attitudes toward the larger society. Gaining an understanding of group dynamics and how to "fit in" is part of socialization. Individuals develop interpersonal relationships and begin to make choices about whom to associate with and under what circumstances.

During adolescence and adulthood, the individual tends to develop a more sophisticated identity, often taking on a role as a leader or follower in groups. If associated individuals develop the intent to give of themselves, and commit to the collective well-being of the group, they begin to acquire a sense of community.

Socialization

The process of learning to adopt the behavior patterns of the community is called socialization. The most fertile time of socialization is usually the early stages of life, during which individuals develop the skills and knowledge and learn the roles necessary to function within their culture and social environment. For some psychologists, especially those in the psychodynamic tradition, the most important period of socialization is between the ages of 1 and 10. 141.

Socialization is influenced primarily by the family, through which children first learn community norms. Other important influences include school, peer groups, mass media, the workplace and government. The norms of tolerance, reciprocity and trust are important "habits of the heart," as de Tocqueville put it, in an individual's involvement in community.Smith, M. Community.

Sense of community

Continuity of the connections between leaders, between leaders and followers, and among followers is vital to the strength of a community. With sustained connections and continued conversations, participants in communities develop emotional bonds, intellectual pathways, enhanced linguistic abilities, and even a higher capacity for critical thinking and problem-solving. It could be argued that successive and sustained contact with other people might help to remove some of the tension of isolation, due to alienation, thus opening creative avenues that would have otherwise remained impassable.

Conversely, sustained involvement in tight communities may tend to increase tension in some people. The sum of the creative energy (often referred to as "synergy") and the strength of the mechanisms that maintain this balance is manifest as an observable and resilient sense of community.

McMillan and Chavis (1986) identify four elements of "sense of community": 1) membership, 2) influence, 3) integration and fulfillment of needs, and 4) shared emotional connection. "Sense of community through Brunswick's lens: A first look."

Communitarianism

Communitarianism as a group of related but distinct philosophies (or ideologies) began in the late 20th century, opposing classical liberalism, capitalism and socialism while advocating phenomena such as civil society. Not necessarily hostile to social liberalism, communitarianism rather has a different emphasis, shifting the focus of interest toward communities and societies and away from the individual. The question of priority, whether for the individual or community, must be determined in dealing with pressing ethical questions about a variety of social issues, such as health care, abortion, multiculturalism, and hate speech.

Organizational communication

Effective communication practices in group and organizational settings are important to the formation and maintenance of communities. Organizational communication is the study of how people communicate within an organizational context and the influences and interactions within organizational structures. The sense of connectedness and formation of social networks comprise what has become known as social capital.Putnam, D. 19.

Social capital is defined by Robert D. Putnam found that over the past 25 years, attendance at club meetings has fallen 58 percent, family dinners are down 33 percent, and having friends visit has fallen 45 percent.Bowling Alone web site

Western cultures are thus said to be losing the spirit of community that once were found in institutions including churches and community centers. Sociologist Ray Oldenburg states in The Great Good Place that people need three places: 1) The home, 2) the workplace, and, 3) the community hangout or gathering place.Project for Public Spaces. Ray Oldenburg.

With this philosophy in mind, many grassroots efforts such as The Project for Public Spaces are being started to create this "Third Place" in communities. Social Capital in Tampa Bay: An Update Report.

Community development

Community development is often formally conducted by universities or government agencies to improve the social well-being of local, regional and, sometimes, national communities. Less formal efforts, called community building or community organizing, seek to empower individuals and groups of people by providing them with the skills they need to effect change in their own communities.

Formal programs conducted by universities are often used to build a knowledge base to drive curricula in sociology and community studies. The General Social Survey from the National Opinion Research Center at the University of Chicago and the Saguaro Seminar at the John F. Kennedy School of Government at Harvard University are examples of national community development in the United States. In The United Kingdom, Oxford University has led in providing extensive research in the field through its Community Development Journal, Community Development Journal, Oxford University Press used worldwide by sociologists and community development practitioners.

At the intersection between community development and community building are a number of programs and organizations with community development tools. One example of this is the program of the Asset Based Community Development Institute of Northwestern University. Community Power: A Guide to Mobilizing Local Assets and Your Organization's Capacity. to assess community assets and make connections between non-profit groups and other organizations that can help in community building. Welcome to ABCD.

Community building and organizing

M. Scott Peck is of the view that the almost accidental sense of community which exists at times of crisis, for example in New York City after the attacks of September 11, 2001, can be consciously built. It is maintaining this sense of community that is difficult in the modern world.

Community building can use a wide variety of practices, ranging from simple events such as potlucks and small book clubs to larger?scale efforts such as mass festivals and construction projects that involve local participants rather than outside contractors. Some communities have developed their own "Local Exchange Trading Systems" (LETS)Local Exchange Trading Systems were first developed by Michael Linton, in Courtenay, BC, see "LETSystems - new money". Retrieved: 2006-08-01. and local currencies, such as the Ithaca Hours system,The Ithaca Hours system, developed by Paul Glover is outlined in "Creating Community Economics with Local Currency".

Community building that is geared toward activism is usually termed "community organizing." Where good-faith negotiations fail, these constituency-led organizations seek to pressure the decision-makers through a variety of means, including picketing, boycotting, sit-ins, petitioning, and electoral politics. The ARISE Detroit! coalition and the Toronto Public Space Committee are examples of activist networks committed to shielding local communities from government and corporate domination and inordinate influence.

Community organizing is sometimes focused on more than just resolving specific issues. Such groups facilitate and encourage consensus decision-making with a focus on the general health of the community rather than a specific interest group.

The three basic types of community organizing are grassroots organizing, coalition building, and faith-based community organizing (also called "institution-based community organizing," "broad-based community organizing" or "congregation-based community organizing").

Community service

Community service is usually performed in connection with a nonprofit organization, but it may also be undertaken under the auspices of government, one or more businesses, or by individuals. However, it can be part of alternative sentencing approaches in a justice system and it can be required by educational institutions. Examples of local community include:

A municipality is an administrative local area generally composed of a clearly defined territory and commonly referring to a town or village.
A neighborhood is a geographically localized community, often within a larger city or suburb.
A planned community is one that was designed from scratch and grew up more or less following the plan. Several of the world's capital cities are planned cities, notably Washington, D.C., in the United States, Canberra in Australia, and Bras鱈lia in Brazil. It was also common during the European colonization of the Americas to build according to a plan either on fresh ground or on the ruins of earlier Amerindian cities.

Identity

In some contexts, "community" indicates a group of people with a common identity other than location. Some of those members may join a professional society, making a more defined and formalized group. These are also sometimes known as communities of practice.

A virtual community is a group of people primarily or initially communicating or interacting with each other by means of information technologies, typically over the Internet, rather than in person. (See below.) Research interest is evolving in the motivations for contributing to online communities.

Overlaps

Some communities share both location and other attributes. Members choose to live near each other because of one or more common interests.

A retirement community is designated and at least usually designed for retirees and seniors ?- often restricted to those over a certain age, such as 55. It differs from a retirement home, which is a single building or small complex, by having a number of autonomous households.

An intentional community is a deliberate residential community with a much higher degree of social interaction than other communities. Intentional communities include Amish villages, ashrams, cohousing, communes, ecovillages, housing cooperatives, kibbutzim, and land trusts.

Special nature of human community

Definitions of community as "organisms inhabiting a common environment and interacting with one another," Austalian Academy of Science. Nova: Science in the News.

Notes

References

Beck, U. The Symbolic Construction of Community. Routledge: New York.
Durkheim, Emile. The Cultural Evolution of Civilizations Mesa Community College.
Giddens, A.
Nancy, Jean-Luc. Sociology: Exploring the Architecture of Everyday Life, Chapter 5. Bowling Alone: The collapse and revival of American community. New York: Simon and Schuster
Sarason, S.B. 1974. Community.

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