Seven months after announcing plans to merge four mental-health services in Hillsborough, Pasco, Pinellas and Polk counties, three of the agencies announced Monday they have set up corporate shop under the single organization.
The idea is to share resources and cut administrative costs to meet a July 2015 state-imposed deadline dictating that before any state money is doled out, no more than 10 percent of an agency's operational budget be spent on administration.
Currently, the behavioral health services involved in the merger under Gracepoint Management, including Mental Health Care, Personal Enrichment through Mental Health Services and the Agency for Community Treatment Services, spend about 13 percent of their budgets on administrative costs.
"We have a plan in place to have us at that 10 percent goal prior to the deadline," said Joe Rutherford, Gracepoint's CEO.
The fourth service, Tri-County Human Services, which offers mental health and drug abuse services in Polk, Hardee and Highland counties, has opted out of the merger.
"The Tri-County Human Services board decided not to join Gracepoint at this time," Rutherford said. "They decided to focus on securing and continuing to expand on their local community dollars. We will continue with our relationship (with Tri-County), and keep the options open."
The merger created an agency that has 1,137 employees, including 38 psychiatrists and four medical doctors working out of 69 locations in 87 treatment programs.
Gracepoint will treat an estimated 30,000 adults and 14,000 children each year. All three participating agencies are accredited behavioral health and drug and alcohol treatment centers.
Last month, the boards of the three agencies formally voted to join up. The management company still has some hoops to leap through, mostly legal requirements and registering as a nonprofit entity.
But all future contracts being sought will now be processed through Gracepoint Management, Rutherford said.
"As we move down the road, we will consolidate some functions," Rutherford said. "There will be some duplicative positions that will no longer need to be funded. We hope that some natural succession will identify those positions for us."
Rutherford said the corporate model leaves the door open for other agencies to join up.
"Agencies that join us have the opportunity to be represented on the governance board," he said. "This lends itself to incorporate additional organizations, with them turning over the keys of administration and lowering their costs."
People using the services won't notice a difference, he said.
"All three agencies realize it is very important to keep our identities in the local community," he said. Those agencies "bring various skill sets to (the) table that the other agencies can benefit from."
The individual services will operate as if nothing has changed, he said.
The budgets of the three agencies totaled about $72 million, and that will be the annual operating budget of Gracepoint, Rutherford said.
The agencies will keep their names, adding "of Gracepoint" at the end, Rutherford said. Although there is no headquarters yet, he said, it will be somewhere in Hillsborough County.
"We are taking inventory of all our facilities and unused square footage," Rutherford said.
Tom Wedekind, chief executive officer of Personal Enrichment through Mental Health Services and now president of Gracepoint, said the management model could be a precursor of how behavioral health agencies will look as government funding becomes harder and harder to allocate.
Wedekind said such mergers of resources and agencies are being looked at all over the nation by behavioral health agencies struggling to obtain government funding.
"I think you are seeing this throughout the state and throughout the country," he said. "People all over are exploring mergers. Here in the state of Florida, we are one of the first to breach the dam, so to speak, in looking at this."