Tulsa, Okla.-based Grand Mental Health, a certified community behavioral health clinic network, is rebuilding parts of its business model to reduce reliance on Medicaid as the program faces federal work requirements and state-level cost-cutting pressure.
About 80% of Grand’s revenue comes from Medicaid, President and CEO Josh Cantwell told Becker’s. That dependence has become riskier as HR 1 is implemented.
“It’s unstable right now with some of the federal legislation that’s going through. We have a lot of the work requirements going into place from HR 1,” Mr. Cantwell said. “Now, in Oklahoma, we’ve also got newly introduced managed care agencies that have been in operation for a couple years. They’re recognizing what they consider high, top-end spending on mental health in [the state].”
Diversifying beyond Medicaid
Mr. Cantwell became CEO in late 2024 after serving as the organization’s COO. He said reducing Medicaid dependence was one of the first priorities he identified, while keeping Grand’s core mission as a nonprofit safety-net provider intact. The strategy centers on standing up for-profit ventures that can generate revenue outside Grand’s Medicaid-funded, county-based service area and channel the proceeds back into the nonprofit’s mission.
The push was also driven by a separate problem: Grand’s vendor relationships had become concentrated in a single company handling telehealth, laboratory and pharmacy services, leaving the organization with little negotiating leverage.
“It was the opposite of economies of scale,” Mr. Cantwell said. “We were in a situation where if we didn’t appease what they needed, we couldn’t live without them.”
Splitting up telehealth, lab and pharmacy
Grand unwound that single relationship into three. Laboratory work moved to a standard outside lab. Telehealth moved to a new vendor, Apex Care, on a platform accessible from any mobile device rather than the agency-issued iPads the prior vendor previously required. Those devices, Mr. Cantwell said, were costly to replace and prone to getting lost once clients stopped using them.
The switch expanded round-the-clock telehealth access from about 30% of Grand’s roughly 18,500 monthly clients to all of them, according to Mr. Cantwell.
“That means they all have access to face-to-face, in-person, 24-hour a day crisis management and general service provision during work hours across all of rural Oklahoma,” he said.
Grand is now building a for-profit telehealth company modeled on that platform, which Mr. Cantwell said could eventually serve populations outside Oklahoma and outside Grand’s CCBHC catchment counties, which under state rules cannot be crossed for outreach.
Buying a pharmacy
Pharmacy services followed a similar path. Grand purchased a small compounding and retail pharmacy in Claremore, Okla., from a local owner the organization already knew. The for-profit pharmacy now feeds all of its proceeds back into Grand’s nonprofit operations. Mr. Cantwell said it allows prescribers and pharmacists to coordinate care directly — while preserving patients’ choice of pharmacy, as required under stark law.
“They had the ignition, which was the pharmacy, and I had the rocket ship, which was the people that needed the care,” Mr. Cantwell said of the arrangement. “The beauty of a pharmacy owned by a treatment provider is that everyone’s working in the same direction to provide the best care possible.”
“Addicted to innovation”
Mr. Cantwell said the restructuring wasn’t driven by a push to innovate for its own sake. When he took over as CEO, he told his team to drop the words “innovation” and “growth” from Grand’s strategic plan.
“There’s a reason why cars have two axles and four wheels usually because that’s what works,” he said. “If you start getting creative with that at the foundational level — there’s a reason why you don’t have triangular shape axle configurations.”
Instead, he said the team now asks a simpler question of new ideas: “Is this normal?” — favoring proven approaches and thinking “inside the box” before reaching for something novel. Asked what he’d tell other behavioral health leaders weighing a similar restructuring, Mr. Cantwell pointed to the discomfort of staying on an unsustainable path.
“You’re going to be looking at me in 18 months saying, ‘I wish we would have done these two things,’ or you’re going to be looking at me saying, ‘I’m glad that we did these two things,'” he said. “I wanted them to be glad that we did it.”
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