February 2024: ROC Monthly Masterminds Call

CAPER: Maintaining & Monitoring Costs to Scale

Feb 14, 2024

Maintaining & Monitoring Costs to Scale

Thank you to Josh Foster, Founder and CEO of Central Partners Group, for sharing his wealth of experience consulting for behavioral health companies.

Josh covers critical topics in fostering cost-conscious growth, including identifying significant expenses on the profit and loss statement, using benchmarks from other facilities, and optimizing marketing expenditure as it ranks among the top three expenses.

Take a listen to hear what you missed, and see a summary below.

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CAPER = Cost as a Percent of Expected Revenue

The CAPER Approach

Outside Sales (salaries x 15%, ancillary spend)
Alumni Services Team (salaries x 15%, events)
Digital Marketing (salaries x 15%, paid spend, etc.)
Average Revenue Per Patient (ARPP) by Level of Care (LOC)

Cost as a Percent of Expected Revenue in Summary:

… creates an ecosystem of accountability.

… allows an executive with mediocre marketing chops to ask meaningful questions about their admit-producing teams.

… can help outside sales teams with the right size expectations related to compensation, helping them run their day-to-day like a franchise within a larger Op-Co.

… can help a company quickly recognize and course correct marketing expenses that are producing E.R. for a cost above a certain threshold.