Timothy Zercher 0:00

All right. Well, good morning, Nick. Thank you so much for joining us. We really appreciate it.

Nick Stavros 0:03

Yeah, Tim, thanks for having me. Happy to be here.

Timothy Zercher 0:05

Absolutely. So, first question, I always like to ask all of our guests what brought you into the behavioral health and specifically into the substance use space?

Nick Stavros 0:12

Well, prior to coming to this company, actually, I was in the military for eight years. I was infantry officer and tr transitioning out of the military. I think a lot of people have this problem where trying to find your next career, for me, I think for most people coming out of the military, I knew it had to be something that was like making a huge impact, like as big as of an impact as I could be making. And army infantry, you know, I always thought like we were that like tip of the spear, you know, we were dealing with on the ground, whatever the biggest issue was at the time. And when I came out of the military into this space and learned about the opioid crisis and the scale of it and the shortage of treatment and the opportunity to make an impact, like it just totally drew me to it. I only came to CMS temporarily to help prep it for a sale back then. Just six clinics in two states, treating about 1,200 patients back then. And I just absolutely fell in love with the patient population that we treat. I mean, I struggled with addiction as a teenager, and so it like really resonated with me, the struggles our patients were going through. Um, so it was real easy to get passionate about. And then realizing the absence of access to treatment in the space really became like our impetus to grow and expand to try to meet the need. That's awesome.

Timothy Zercher 1:23

That's awesome. So like you mentioned, CMS has expanded a lot in the last couple of years, right? You I think now we're in dozens of locations across.

Nick Stavros 1:30

14 states. Yeah, we got 80-some clinics in 14 states treating about 28,000 patients.

Timothy Zercher 1:35

Yeah, which is incredible. Yeah. So what were some of the key decisions or kind of principles that allowed for that kind of growth while still maintaining the quality that you guys deliver?

Nick Stavros 1:44

Yeah, that's a great point because that's something that kept me up at night and keeps me up at night still, which is like you could think of business after business that grew in response to having a good value proposition, but then they kind of lost sight of what made them special and what they were able to do when they were small. And so that is something I'm still super hyper-vigilant about. Like, how do we grow and scale? But whatever made us special and we were able to maintain while we were small, like how do we not lose sight of that? And so that's a whole other conversation, I think. In general, just the idea of growing and scaling, you know, I'd say not growing just for the sake of growth, in all candor. When I came to the company, I was like, we're gonna grow like crazy, blah, blah, blah. And then I settled down really quickly and I was like, wait a minute, like this is not a business that can scale at this point in time. Like, we need to turn inward, we need to focus on quality, we need to build out a solid infrastructure, a solid platform that we could grow from. And, you know, I made the decision back in like 2014, 15 to partner with private equity, which we did in 2018. And so the partner with private equity, like you have to have your house in order. I mean, you got to have solid infrastructure. They do all sorts of due diligence checks. They're very focused on quality and compliance. And I knew we needed the capital to be able to grow, and we didn't have access to it without some sort of equity sponsor. And so that led us to really focus inward from like 2014 to 2018 on not growing, but actually just like building a quality platform. And I didn't know this at the time, but that ended up bringing growth to us. Like we started having like there was instances where like the DEA was like shutting down a clinic and they were reaching out to us to like help help run it and take over it, or states or cities inviting us in to open clinics because of the quality of care that we had, or payers wanting to partner with it. It's like growth started coming our way without us seeking it, and because it was focused inwardly on really having a quality platform.

Timothy Zercher 3:41

That's incredible. And I think that that should be where almost all organizations start, and I don't think it is.

Nick Stavros 3:47

Yeah, it's hard not to, and then you get in this growth phase where it's like grow, and then you become like me. I became like a growth-minded CEO, and then it's kind of like, but there's times when like during COVID, there's times when the external environment or other factors say, no, now's not a good time for growth. Now's a good time to recalibrate and make sure that you're shoring up any loose ends and stuff like that. And so it's it is this like constant iteration of when to grow and when to prepare for growth.

Timothy Zercher 4:15

Absolutely. That makes complete sense. So switching topics a little bit, you speak a lot about reducing stigma around addiction treatment. From your perspective, what still needs to change from both behavioral health leaders as well as like communities and how they approach substance use disorder?

Nick Stavros 4:31

One of our core values is we're evangelists for practices grounded in science and evidence. And I think that's key. I mean, we live that, we breathe out, like we have a research committee internally that we're constantly looking at research that's coming out, and we make decisions based on what the science says works. Like we use medications for opioid use disorder like methadone and buprenorphine, not because we were invested in like the pharmaceutical uh companies behind them, but because the science just says it's the most efficacious modality of treatment today for treating opioid use disorder. So we do that. It's very unbiased, unlike it's very objective. We just say this is what works and this is what leads to the best patient outcomes, and that's what we're gonna do. And I say this to the company all the time. I'm like, look, if a new modality of treatment comes out that's better than medications, like we'll adopt that. Our core, our core mission and vision is to be treating people with opioid use disorder, agnostic of the modality, just based on the modality that works. And I think the problem is there's a lot of passionate people in this space, which is good, but a lot of times passionate people are ideological, and sometimes that ideology is based on anecdote rather than science. And so I'd say just we stay focused on what the science says works. And I think that a lot of people, their ideology is actually coming from a place of stigma, unfortunately. A lot of people that went through, you know, I don't know, 12-step or abstinence-based treatment or detox or whatever, and they might say that worked for me, therefore that needs to work for everybody. Or, you know, I did this without a medication, therefore everybody should do it without a medication. When the research says the majority of people, the vast majority of people respond better with a medication, for instance. So I think that the stigma, I mean, look, human beings have all sorts of biases, right? Our society has a lot of stigma against addiction. Stems back to the war on drugs in this country and how we've treated addiction as a society. That stigma undoubtedly has made its way into people's, into how people think about addiction, and they might, and it makes its way into their ideologies even. And so that stigma kind of permeates into people's ideologies without them even knowing about it. And so we try desperately, constantly to try to break down that stigma in people's minds, whether that's our patient population, because a lot of times that's what stops. You know, the research says about 95% of people with an addiction who are not in treatment aren't actively seeking it out or acknowledging a need for it. In my mind, that a lot of that is stigma. They might say, Don't tell me I have an addiction, I can handle this relationship, my relationship with this medication or something. They don't even want to come to terms with the fact that they might have an addiction because of the stigma our society has towards addiction. So a lot we need to do to eradicate that.

Timothy Zercher 7:12

Yeah. Well, and sometimes that that stigma is so strong, they don't want to admit it even to themselves, even if they are assured that no one else will know that they have acknowledged it.

Nick Stavros 7:21

Yeah, internal stigma.

Timothy Zercher 7:22

Absolutely, absolutely. And so operationally, what have you found is one of the hardest parts of growing your organization so far?

Nick Stavros 7:30

Yeah. Well, I mean, the typical pain points, which are I think a lot of them are like contradictions sometimes. Like, how do you ensure autonomy but consistency, right? Clinics, you know, we're in 14 states, multiple cities. Like, I think healthcare is somewhat geographically nuanced. There's different needs in different communities. Yeah. So we give a lot of autonomy to our clinics. Some clinics do different types of groups or maybe yoga and acupuncture. We have a gym at one of our clinics. There's different clinics do different things, but then how do you kind of make sure that there's consistency and people are doing things that are aligned with our policies and procedures, or tops down versus bottoms-up planning and thinking, or centralized versus decentralized operations? We deal with that all the time. Like, should we centralize our compliance function so it's just done at like the in the corporate level, or should we have it more embedded in the field? Or with HR, do you have HR business partners in the field, or is it everything at the corporate level? Like the there's a lot of these conflicts that it's not there's not like a right answer. Should you be have centralized versus decentralized HR? Like it's based on the time and it can ebb and flow over time. And so I say that's one big challenge, which are just the pain points of scaling. And then also finding, I mean, we're a very like mission, vision, values driven company. And, you know, it's it's hard. I mean, we're running a business also, and so you got to think about sustainability of things and ROI and stuff like that, but never at the expense of like doing what's best on behalf of the patient. And so, you know, you got to balance that. I see it all the time. There's companies that are like too focused on profitability and on the business, and like obviously that's gonna sacrifice patient care. But if you also are super focused on quality care and patient care and you don't know how to run a business, like then you're not gonna you're not gonna be around to provide that great patient care. And so finding the right people that can handle that balance is always a challenge. That's really hard finding the right people.

Timothy Zercher 9:27

Yeah, absolutely. Well, I think that almost everything in business, right, comes down to balance. We need to invest in this, but we don't need to invest too much because if we invest too much, then we're too top-heavy, over risk-centric, whatever. So it makes a lot of sense. So, because we're a marketing agency that specializes in this space, we always have to ask some more marketing questions. First one is what is working best for your team right now in acquiring new clients across your 14 states?

Nick Stavros 9:48

Well, marketing people don't always like my answer to this, because we've tried all sorts of different advertising techniques and marketing and stuff. And and what we have found over time is that we don't spend a lot of money on advertising per se. Or let me let me just say like outbound marketing. We're not big fans of outbound marketing. It just for our patient population. I mean, like I said, we have 28,000 patients in treatment. The average like revenue per patient in our space is like, you know, maybe seven, eight hundred dollars. Like it's not a lot. I mean, that's how much like an inpatient might make in a day. That's for a month of our treatment. And so is that high volume practice? Like the only way to make it work is to have sufficient patients. And so when you start thinking about like marketing ratios like acquisition costs, an inpatient residential could spend a lot on acquisition costs because their lifetime value patient is they make in one month what we might make in three years with a patient. And so for us, it's more about it's gotta be some sort of marketing that like really permeates like people's thoughts in a way that's not probably dependent on like being at the right place at the right time. So, what we found is that every MSA that we're in has a community impact manager in it, like a person that's like usually somebody in recovering themselves that's really tied into the community, that's really passionate about treating addiction. It's not a even a billable service. There's a lost leader, like they're out there, and we can't tie a linear line between like they spend this amount of time with this system partner and it leads to this many intakes. Like it doesn't work like that. It's kind of like they are out there breaking down the stigma, which is then if you break down the stigma, people are more inclined to seek out treatment, like we talked about. Communities are more accepting of having a clinic in their neighborhood, all that stuff. So we have these community impact people out there, and what we found is that the marketing still gets done, but it's not by us, and it's not conventional marketing. We might have a Chamber of Commerce post on their social media site, like welcome CMS in our community. It's like we, I mean, it's earned marketing. It's like, or PR is a lot of times for us, PR is earned marketing. We have, I mean, we just had a mayor in Wisconsin make a video about like welcoming us into the community. And we had another story in Washington where a local senator representative was visiting our clinic and talking about the opioid crisis and those kind of things. I mean, they and it also creates a lot more trust with potential patients than them seeing us try to sell something. Like I tell my team all the time, I'm like, you see me right now when I'm presenting, I don't have a banner behind me like CMS. And I tell my team, I'm like, guys, we're not out there to sell a product, we're out there to be a solution, right? We're here to solve the opioid crisis, not try to sell like our company. And that that goes a long way because that gets your foot in the door, that gains trust with the audience more so than trying to market. But with all that being said, inbound marketing is still obviously very important. Like SEO in particular, like making sure if people want to find us, they can find us. They could land on a high quality website or we're answering the phone, or they have an app that they could interact with, like those kind of things, making sure we're accessible to people are very important.

Timothy Zercher 12:56

Absolutely. I think that makes complete sense and is a smart play given your market mix and the type of clients you have. So, last question on the marketing side: what is one marketing tactic or strategy that you're either considering right now for you and your team or that you're just watching really carefully in the marketplace?

Nick Stavros 13:14

Yeah, yeah, I don't know because it's because I don't even know how to if it's bucketed as marketing. I think we do a lot of intakes compared to most of our competition. We're we grow like when we open clinics, I mean they grow pretty fast and we don't really do substantial marketing at all, like I talked about. For us, it's more keeping people engaged. I don't know if you call that marketing, but like so reaching out to lapsed patients, like about 50% of all of our intakes are actually readmits, people that have started treatment and stopped and then are coming back in. And so we're trying to spend a lot of time on how do we decrease discharges in the first place, or especially AWOL discharges. Like if people are gonna leave treatment for a reason, even if it's like I'm not ready, now's not the time, like at least telling us kind of like keep that conversation open. So we put a lot of focus on I'd say like plugging up the leak, and that that's like reaching out to lapsed patients. We do that, we have AI that does that, like automated, sends out automated text messages if they miss one appointment, or and then like if they if they've been out for like three days, then it elevates to like somebody, like a case manager calling them or something. And then like our own app, just getting people engaged with the app is really important so that they know that there's a continuity in communication even after they leave treatment. But on the like admissions side, we're doing a pretty good job, but we're constantly trying to understand why we're doing a good job. We don't even know why we're doing a good job sometimes. So understanding what data is telling us about why people are coming to us and then trying to capitalize on that, I'd say that's something we could do a better job of.

Timothy Zercher 14:43

So I think I feel like that's uh that's one of those things that you could never you can never do a complete job of because there's always going to be something better, something cleaner, faster, more engaging, whatever that you could do.

Nick Stavros 14:53

Yeah, for sure.

Timothy Zercher 14:54

Well, thank you, Nick. We really appreciate you coming on, taking time out of your schedule and sharing some of your insights. You're making a huge impact in a lot of different places. So we appreciate the work you do, and we appreciate you taking time for us. Awesome. Thanks so much for having me. Absolutely.