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Southlight reaching out

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By Todd Cohen

RALEIGH, N.C. — One year ago, Southlight found it was taking a week or more from the time an adolescent contacted the agency seeking services to treat drug or alcohol abuse to the teen’s initial intake interview at the agency.

Now, thanks to a new performance-based business model it has adopted, Southlight sees adolescents within three days of their initial call, and aims to reduce that to 24 hours.

With alcohol and substance abuse representing the second-leading cause of death last year in the United States, Southlight wants to improve its operations, services and accountability, and increase its visibility and fundraising, says Tad Clodfelter, CEO.

“Our goal is to be the substance-abuse provider of choice in the Triangle community,” says Clodfelter.

Prompting the agency’s overhaul, he says, has been a broad shift in the way the state and federal governments fund substance-abuse, mental-health and developmental-disabilities services, a shift known as “mental-health reform.”

Until about two years ago, Clodfelter says, agencies offering those services under contract with government generally treated clients, submitted bills to Medicaid or government funders, and were reimbursed in full.

But in the past two years, as it has contracted out a growing share of those services, government has made it tougher for agencies to recoup their costs, says Lawson Rankin, a consultant with the firm of Rankin McKenzie who serves as Southlight’s chief financial officer.

“We’ve seen an increasing amount of time and effort necessary to document the level of service required for our clients in order to obtain authorization for payment,” Rankin says.

Southlight, for example, hired RSM McGladrey to serve as its billing and collection agent, a contract that over the past two years has incurred costs equal to roughly 4 percent of the agency’s annual budget of just over $6 million, Rankin says.

And changes in the mental-health system have increased by at least 13 percent the cost to Southlight’s clinicians of documenting their work, he says.

Still, he says, the level of reimbursement has declined and no longer covers the full costs of services.

So Southlight adopted a business model, known as the “Balanced Scorecard,” that an organization can use to determine the outcomes it wants to achieve, align its operating strategy and budget to those goals, and develop metrics to gauge its performance.

To meet the goal of serving more adolescents, for example, Southlight reworked its strategy and budget so it can schedule initial intake interviews more quickly, Clodfelter says.

The agency wants to collaborate more with community partners, serve more people referred by the courts, and improve services to people needing treatment both for substance abuse and mental illness, problems that are linked for over a third of individuals facing either problem.

With reimbursement fees and government contracts accounting for nearly its entire budget, Southlight will seek more support from foundations, which account for roughly 7 percent of its budget, and launch an effort to raise money from individual by increasing awareness about its services.

“We want to be a better-run business, to be responsible and accountable,” Clodfelter says, and “to have increased name recognition and awareness in the community for Southlight and for the services we provide.”

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