Jay Tobey: Can Behavioral Health Break Its Fragmentation?

The mental health and substance abuse crisis is an issue that continues to grow in urgency. Despite the critical need for support, only a fraction of those affected receive adequate care. But why? What holds the system back? This question drove Jay Tobey, founder of Northstar Recovery and Wellness, to tackle one of the sector's core problems: fragmentation.

A System with Cracks: The Need for Continuity

When Jay Tobey entered the behavioral health space in 2019, he quickly noticed a glaring issue. Patients often found themselves bouncing from one facility to another, each owned by different groups with little to no communication between them. This disrupted care pathways and left individuals vulnerable to relapse.

“The whole time those groups are trying to communicate with each other, but a lot of information gets lost in the weeds,” Tobey explains. He realized that the absence of a cohesive system created a cycle where patients started over every time they entered a new facility. The result? Unnecessary setbacks.

Building a Continuum of Care

Tobey's solution was ambitious: develop a comprehensive continuum of care that could support individuals across every stage of their recovery journey. From inpatient treatment to long-term outpatient services, he aimed to provide consistency.

“It’s not going to be resolved in 90 days just because your insurance says that’s when you should graduate,” Tobey emphasizes. By offering supportive housing, sober living options, and a therapeutic community model, Northstar Recovery ensures that individuals have the long-term support they need. This approach also focuses on creating vocational opportunities, helping individuals reintegrate into daily life with stability and purpose.

Fragmentation vs. Consolidation: Why It Matters

One reason behavioral health remains fragmented is the industry structure. Unlike the pharmaceutical sector, where a few major players dominate, the top four companies in behavioral health hold only 1% of the market share.

“You can see how fragmented the entire industry is,” Tobey says. For example, a rural Nebraska facility operates differently from an urban center in New Jersey, making standardization difficult. By acquiring facilities and fostering collaboration, Tobey's team helps bridge these gaps and streamline care.

The Role of Real Estate in Recovery

A key element of Tobey’s strategy involves integrating real estate-backed investments into behavioral health. This approach not only stabilizes investor capital but also accelerates growth for operational facilities.

“Instead of growing at one or two facilities a year, we can help them grow six or seven facilities a year, almost doubling their operational capacity,” Tobey explains. By owning the real estate that treatment centers operate within, Northstar Recovery ensures both financial security and the scalability of services.

Data-Driven Outcomes: What Makes a Facility Effective?

For Tobey, success in behavioral health goes beyond expanding facilities. He prioritizes measurable outcomes and evidence-based care.

“Are you tracking your data? Are you proving that people are having long-term success with you?” he asks. The focus on data ensures that treatment isn’t just about short-term progress but sustainable improvement over time.

The Power of Mentorship and Strategic Growth

Tobey credits much of his success to surrounding himself with a “personal board of directors”—a network of mentors who guide his decisions. This practice helps him navigate the complexities of scaling a business while aligning with long-term goals.

“I try not to take too much of their time because they’re all very successful and busy,” Tobey notes, “but I make sure to run major opportunities by them.” Whether it's structuring equity or planning an eventual exit, these mentors play a crucial role in shaping strategic decisions.

Key Takeaways:

1. Continuity is Essential: Behavioral health care needs systems that offer consistent support over the long term, not just quick fixes.

2. Fragmentation Hurts Outcomes: The industry’s fragmented nature creates barriers to effective care. Consolidation and communication can bridge these gaps.

3. Real Estate Strengthens Stability: By owning the physical spaces where facilities operate, Tobey’s model secures investments and enables faster growth.

4. Data-Driven Care: Facilities must prove their effectiveness through measurable outcomes.

5. Mentorship Fuels Growth: Surrounding yourself with experienced advisors can accelerate business success.

   
   

Call to Action

If you’re interested in learning more about the future of behavioral health care or exploring partnership opportunities, visit Northstar Recovery and Wellness for further insights. Jay Tobey’s mission highlights the power of combining innovation, investment, and empathy to create meaningful change.

For those navigating their own entrepreneurial journey, Tobey’s story is a testament to the importance of strategy, mentorship, and purpose-driven leadership.