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Some Types of Storms From Brainstorming

(TNU 2008)


Hate/Satan/Spiritual Warfare

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HS Drop-outs


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Elements of the Storm That Threaten Child Residential Treatment

By Mary C. Bromell, UoPhx, MBA 590,2007
Edited by Craig Stevens

The storm in business can be described as anything that threatens the success of an organization (, n.d.). This storm is fueled by the external and negative influences of competition, politics, society, and government regulations, among others. The negative affects of any of these influences can alter the success of an organization's plan. These forces when joined together weaken the organization. The purpose of this paper is to describe elements of a storm that negatively affect the ship of residential treatment centers (RTC) for children. Residential treatment is being rocked by the storms of competition, government regulations, and managed care organizations. To navigate thru the storm, you must have an acute sense of your surroundings and all of the factors that will impact your navigation through the storm.

Before the early 1980’s residential treatment for children was most commonly known as orphanages, reform schools, or institutions for behavior and the mentally challenged (, n.d.). These institutions were funded mostly by government dollars. The occupant’s parents either abandoned the children, gave them away, their parents died at birth when they were juveniles, or they suffered from mental retardation..

Today’s residential treatment centers “RTC’s”can be a short-term living situation for children akin to both an orphanage and reform school. Children are placed in residential living situations of a structured environment and provided with counselors who act as direct care parents. The children and parents are given a required plan of care for treatment with measurable objectives for success that may include individual therapy, family sessions, group therapy, and academic success. Most children with psychiatric diagnosis are offered psychotropic medication therapy.


Competition is relevant to the storm. The business of residential treatment was once a thriving and smooth sailing business with few storms. They were few and number the most successful company marketed only through word of mouth. The funding per diem rate was above average and remained that way for several years. Doctor’s groups and small advocacy groups established most residential treatment centers. The success of these small mom and pop dorm style RTC’s, market research revealed, had positive forecasts. The RTC’s had various modalities and treatment styles and they could be found in almost in city. Surveys revealed that the 37 percent of children ages 9-12 had at least one psychiatric disorder and 25% of males and females between the ages 11-15 suffered from depression (Jellinek, Abraham, Muriel, & Swick, 2005). With this market research RTC’s became one of the most competitive businesses in mental health.

Competition in residential treatment rose and the average census rate began to fall. Larger companies began buying smaller struggling companies and the smaller companies are now fighting to stay afloat. The larger companies with larger departments developed and initiated strategic plans that allowed admission of clients from other states. This change in acquiring clients also caused smaller companies’ daily census to fall and their business began to sink. The vision and mission to aid and assist children by addressing mental health issues that cause acting out behaviors has changed to just meeting the bottom line. Residential centers began competing for clients. Often RTC’s would change client admission criteria to accept more challenging clients without the skilled practitioner to serve them. At the same time quality of care lowered due to completion, regulations and standard were also set to control residential treatment centers’ admission practices.


Politics relates to the storms. Even though you can see the trends and changes before they come many RTC’s are not financially padded enough to ride the storm. The state and federal regulations seem to change daily. It is the responsibility of the company to stay abreast of all these changes. Some changes demand higher quality of care at often-decreased rates. Private RTC’s have spent millions of dollars into their business based solely on changes in federal or state regulations.

The cost of residential treatment is expensive. The average per diem rate is $225 per bed day; approximately $7,905 per client a month. Most families can not afford this out of pocket expense and companies seldom support mental health in their insurance plans. The co-payments high and coverage was limited. At the same time the need and demand for residential treatment increased.

The governments began financing treatment centers through such agencies as TENN CARE and Interstate Compact. As the demand increased the per diem rate for care offered by government agencies decreased. As the payment levels decreased access to care eroded. More and more private owned RTC’s began to sink while others struggled to stay afloat.

Managed Care

Managed care is relevant to the storms in that there are steady streams of information not communicated to caregivers regarding coverage. Diagnoses are clumped into specialties of care and the information regarding funding for this treatment is communicated only to providers within a particular network. The impact of managed care has been dramatic in the provision of psychiatric care and is most acutely felt in child behavioral psychiatric services (Jellinek, Abraham, Muriel, & Swick, 2005).

The forces of managed care on child residential care have raised cost and decreased availability of services. The original promise of managed care was to retrain market-driven means of consumer choice and profit incentives toward the public good (Jellinek et al.). This would increase access to healthcare, efficiency of services, and accountability of providers. The reality is that carve-outs of managed care have encouraged psychotropic management of child mental health illnesses with inadequate comprehensive care. Judicious use of medication is a valuable aspect in successfully treating some children (Jellinek et al.). Psychotropic medication use, driven by carve-out bottom lines, lowers the level of care and access to general child residential care is limited.

The behavioral health carve-outs are becoming old news in managing the storms of behavioral health care costs and services. Today’s marketplace requires payers of certain carve-outs to give up control over segments of their business, and realize the risks with doing business with some managed care agencies (, n.d.).


Competition and politics are elements of a storm and are enemies to the success of residential care for children. Navigating the storm requires an acute sense of your surroundings and all of the factors that will impact your navigation through the storm (Ed Crowley, n.d.). Legislation and changes in the delivery of mental health services have altered how mental health insurance is bought and sold. Mental health coverage is not offered in levels equivalent to coverage for other medical conditions. Not only has legislation altered how mental health insurance is sold it has also alter the environment of coverage (Barry et al., 2003). Parity regulations aim to eliminate the difference in insurance coverage and managed care agencies has transformed the delivery of services. Mental health plans are frequently contracted out to specialty managed behavioral health care organizations (MBO’s). Units of care are clumped together to form a specialty for services to regulate coverage. Many diagnoses for treatments normally covered by other programs are not served by MBO’s as a specialty and therefore not covered. This limits access to treatment. This paper described elements of a storm, competition, politics, and managed care that when combined threaten the success and future of child residential treatment centers’ ship.


  1. Barry, C., Gabel, J., Frank, R., Hawkins, S., Whitmore, H., & Pickreign, J. (2003, n.d.). Design of Mental Health Benefits: Still Unequal After All These Years. Health Affairs, 22, 127-137. Retrieved 10/11/2007, from http:///   (n.d.).
  2. Regain Control, Recapture Margins, Realize New Profitability and Enhanced Mental Health Status: InnoPsych: The Journey to Integrated Health Care. Retrieved 10/11/07, from
  3. Crowley, Ed (n.d.). Surviving the Perfect Storm. Retrieved 10/17/2007, from
  4.  Jellinek, M., Abraham, M., Muriel, A., & Swick, S. (2005, n.d.). Managed Health Care and Child Mental Health Services: Where is Horton to Hear the Who's? Retrieved 10/11/2007, from
  5., n.d., The Storms over Orphanages, Retrieved 10/11/0, from,9171,981992,00.html
  6., ( n.d.) Management Models: Step 2, Navigating Through The Storms of Chaos. Retrieved 10/13/2007, from 


The Storms of Chaos: The Storm and Society 

 By Lindsay McFarland (UoPhx 2007)

 The storm relates to the outside forces that complicate, attack and/or threaten our organizations.  These external factors cover a broad range of possibilities, however the focus here is on societal issues that disrupt our operations.  Society shapes the corporate world.  Any change in societal norms and expectations can make or break a company.  People build an organization.  Since people form organizations, they are a prime factor in creating the storms that may sink the ship.

 One social issue is age discrimination. The role age plays in the business is an element of the storm.  Cornelia Geissler addresses age in the workforce, when she writes that older individuals find it more difficult to look at long-term goals and failures in corporations.  As some older employees reach retirement they focus more on accomplishing the current task and do not always know or care where it fits into the larger picture.  This paper, from a German perspective, focuses on the elements of German retirement.  In Germany, the government weans older employees starting at fifty-five years of age out of the working world.  This is a means to prepare them for retirement by allowing half days at eighty percent pay.  Companies struggle because there is animosity between workers causing an uncomfortable work environment.  Geissler explains, older employees feel micromanaged by younger newer managers that may not have as much knowledge.  Younger managers are displeased with staff member missing half of a working day as mandated by the law.  Generational gaps create large gaps in cultural understanding and inhibit communication between groups.  By slowing progressing people into retirement, the sense of community dissipates because there are different standards for differing age groups.  This government mandate causes discourse in corporate communications and negate team building.  Without a functional team, many businesses fail.

An aging concept that many corporations are not aware of is “middlescence.”  Morison, Erickson, Dychtwald explore a relatively new concept in Managing Middlescence.  This concept focuses on adults ranging from their mid thirties to their mid forties.  This group is in search of new careers.  They have become sedentary in their current positions.  They feel incomplete in their professional lives.  They are frustrated with their jobs and they are not enjoying the work they produce.  This group of adults is highly skilled in their field and brings success to the business.  Managing this group is difficult because they show few signs of a desire to leave the company and it often comes as a shock to management.  Being integral to the team, corporations suffer from sudden changes in staff.  There is little time for companies to align backup systems for task coverage.  Hiring for these now open positions is not a quick process so there is a gap in filled positions.  Productivity decreases because ultimately others pick up the slack.  This creates a snowball effect when overloaded employees become discontent as well.  As turnover rate soar, the company begins to suffer.

Balancing business economic needs with societal needs is one one-way to fight the social element of the storm.  Rodman C. Rockefeller outlines the importance of this balance in the article Turn Public Problems to Private Accounts.  Managers must ensure that donating to charities is beneficial for corporate economies and will improve the company’s image in society.  Improving the society image help the organizational ship battle the storm.

 Communities view businesspersons as leaders and decision makers.  Therefore, business leaders take on the persona of being menders of current societal issues.  However, sometimes there is a major conflict when business and community goals conflict.  Rockefeller discusses that in a perfect world all societal and economic goals come to completion equally.  However, this is not the reality.  Conflict occurs when society holds businesses responsible.  Pressure increases when business have to adhere to the needs of consumers, employees, and stockholders. 

Corporations today enter the storm often as they must operate with socioeconomic goals in mind rather than only fulfilling monetary prospects set by shareholders alone.  Rockefeller discusses that not all companies are able to achieve the appropriate balance.  Those companies suffer economically, because they attempt to solve the problems of the world, or they lack a customer base due to ignoring the needs of their stakeholders. 

It is important to appeal to the needs of society, however business may not fulfill every need.  This often leaves people wanting more.  The company must form standards for society and manage the evolution of a product.  The needs of society are ever changing.  Rockefeller discusses a benefit of being in harmony with the societal norms and being economically aware.  Without placing emphasis on societal needs, companies cannot stay afloat.

Work Cited

  1. Managing Middlescence. By: Morison, Robert, Erickson, Tamara, Dychtwald, Ken, Harvard Business Review, 00178012, Mar2006, Vol. 84, Issue 3

  2. Geissler, Cornelia. Harvard Business Review, Oct2005, Vol. 83 Issue 10, p31-42, 9p, 2c, 4bw

  3. Turn Public Problems to Private Account. By: Rockefeller, Rodman C., Harvard Business Review, 00178012, Aug2003, Vol. 81, Issue 8

  4. CHANGING THE WAY WE CHANGE. By: Pascale, Richard, Millemann, Mark, Gioja, Linda, Harvard Business Review, 00178012, Nov/Dec97, Vol. 75, Issue 6


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