PORTLAND, Conn.-Elmcrest Psychiatric Institute in Portland wasn't trolling for a buyer when it approached Saint Francis Hospital and Medical Center in Hartford, Conn., about managing Elmcrest's behavioral health programs. But that's what it got earlier this month, when Saint Francis agreed to acquire the private, for-profit institute for just under $11 million.
"Actually, we were minding our own business," said Elmcrest President Anthony Ferrante, M.D., who will become president of a new not-for-profit corporation controlling Elmcrest's assets. The corporation will be managed as a freestanding unit of Saint Francis and will include the 93 inpatient psychiatric beds that Elmcrest staffs in Portland, six satellites offering partial hospitalization services throughout the state, and other behavioral health programs.
Ferrante is excited by the possibilities for growth under Saint Francis' umbrella.
"We'll actually be able to make a substantial mark on Connecticut's behavioral health," he said.
Together, Saint Francis and Elmcrest will control 20% of the statewide market for behavioral health services, he said. Currently, Elmcrest has 13% to 14% of the market.
With the Elmcrest acquisition, Saint Francis responds to a challenge from its biggest local competitor, Hartford Hospital, which acquired Institute of Living in 1994.
Institute of Living, with 150 inpatient psychiatric beds, is the largest provider of behavioral health services in the state, said Gail Ryder, director of network development.
"I think there will be competitive tensions at times, which is not necessarily unhealthy in these times," she said.
Edward Johnson, a Saint Francis spokesman, said the Elmcrest deal will enable Saint Francis to create a broad-based behavioral health network.
"In addition, Elmcrest has been very successful in the area of managed-care contracting, which will be used to good advantage by Saint Francis Care as it develops its integrated health delivery system," Johnson said.
Saint Francis Care is the brand name of the system Saint Francis is assembling.
Elmcrest generates about $29 million in annual revenues, employs 475 people and is "solidly profitable," Ferrante said. He said it would be difficult to break out a specific profit figure from all its holdings.
Other Elmcrest holdings include Pathwise Behavioral Health, a utilization management company with 60,000 capitated lives in Connecticut; Elmcrest School, which runs special education programs throughout the state; a crisis diversion program with six offices in the state; and 50% ownership in another behavioral health management company>