Refresh Mental Health, a subsidiary of Optum, will shutter its eating disorder treatment service line.
The health care and related services behemoth confirmed Refresh will close its four eating disorder treatment brands. Evolve Healing Eating Disorders was the first center to close, shutting its doors permanently on Dec. 1. Optum is part of Minnetonka, Minnesota-based UnitedHealth Group Inc. (NYSE: UNH).
It’s not immediately clear why Optum decided to close down eating disorder treatment services. A representative of Optum cited “local market conditions” without elaborating further in a statement.
“Behavioral care is a core part of our care model, and we see increasing access to behavioral health services as vital to deliver holistic, high-quality care,” the statement said. “We continue to advance the integration of physical and behavioral health across our service to deliver more comprehensive, whole-person care.”
Staffers who answered the phone at Fairhaven Treatment Center in Tennessee, Cielo House in California and Turning Tides Eating Disorder Treatment Center in Florida said these facilities will be closed by early March. Staff at the facilities are coordinating referrals to other providers.
The closures impact at least 16 locations, according to the company’s websites.
These closures come as other high-profile, diversified behavioral health providers have also shuttered some eating disorder treatment centers. For example, Brentwood, Tennessee-based Odyssey Behavioral Health and Irvine, California-based Discovery Behavioral Health have scaled back on eating disorder treatment locations. The latter organization is consolidating residential locations to focus more on outpatient services.
Odyssey Behavioral Health’s management cited increasing operating difficulties in the eating disorder treatment industry. Odyssey and Discovery Behavioral Health said smaller treatment locations, especially have been difficult.
The closures also come at a time when the need for eating disorder treatment services appear to be on the rise, especially among teens and young adults, after the onset of the pandemic. According to a report by Trilliant Health, behavioral health visits addressing eating disorders among youth have increased by more than 90% since pre-pandemic levels.
Refresh Mental Health, once a fast-growing private equity darling, was acquired by Optum in a deal that was revealed in March 2022. At that time, some experts saw the deal as a sign that rapid behavioral health consolidation would continue and that it signaled a clear path for investors to follow. In retrospect, it was one of the last major mental health platforms to trade going into a notably quiet latter part of 2022 and 2023 in terms of dealmaking. Increased interest rates and better-informed price tags have tremendously slowed dealmaking in the space.
Some experts expect dealmaking in behavioral health to pick up in the months to come as several degrading pressures on business force recapitalizations or sales.
