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Amesbury Psychological Center

Company Summary

The Amesbury Psychological Center is a for-profit behavioral health company located in Amesbury, Massachusetts. It was founded by the privatization of an existing mental health center that was a part of the Anna Jaques Hospital psychiatry program. The transfer of clients to the Center from the Outpatient Mental Health and Addiction Center was an effort to provide for uninterrupted, continued quality services to its present consumers, and expand its network of providers to ensure further growth. The transition to a privatized center enables the residents of the Merrimack Valley area to have continued access to a quality, accessible mental health center.


Although the Center is a new company, it is taking over the operation of an existing full-service mental health center. Prior to the privatization of the Outpatient Mental Health and Addictions Center, the Center was part of Anna Jaques Hospital’s Psychiatric Services Program. This program offered an array of behavioral health services which included both inpatient and outpatient services. Currently, there are approximately 565 active cases. There are another 233 inactive cases that use the Center’s services on an as-needed basis. The Center is located at the Amesbury Health Center, a facility owned by Anna Jaques Hospital. The Amesbury Health Center, formerly a city-owned community hospital, is a four-story brick building. It has been modified to accommodate a child inpatient unit and medical office spaces, including the mental health center.

The outpatient center began as a psychopharmacology center at Anna Jaques Hospital. During 1995, the psychopharmacology center moved to the Amesbury Health Center. At that time, the center expanded to include an Addictions Program.

In 1998, the Center further expanded to offer psychotherapy services. The psychotherapy component consisted of individual, couple, family therapies, and specialized groups. The composition of staff was multidisciplinary and included independently licensed/certified mental health centerians and certified addiction treatment specialists. During this time, the Center was licensed by the Department of Public Health to offer specialized addiction services that included a Second Offenders Program, an Addiction Counseling program, and an Intensive Outpatient Program. The licensing enables the Center to collaborate with other state and community agencies working with substance abuse/addiction populations, resulting in further growth for this program.

Since 1996 the number of visits/procedures has continued to grow to its present day tallies. The total number of visits for 1996 was 1,471, in 1997 it was 1,869, in 1998 it was 3,399, and in 1999 it was 6,158. The projected number of units of service for 2000 is 5,700. Although units of service have increased by 45% over the past two years, the net revenue has decreased per unit of service. As volume has increased, expenses per unit of service has fallen from $88 in 1996 to $52 in 1999. Since 1998, operating expenses have been under control and reasonably proportionate to units of service provided.

2.1 Company Ownership

The Center is a privately-owned sub-chapter S corporation formed to privatize, manage, and offer mental health and substance abuse services to the community of the Merrimack Valley. It is solely owned by its principal operator, John Nestor, Ph.D., M.P.A. It has been chartered and the name has been reserved with the Secretary of State’s office.

Start-up Expenses
Legal $2,000
Stationery etc. $400
Insurance $500
Rent $900
Redecorating and signage $2,500
Staff Training $2,000
Other $700
Total Start-up Expenses $9,000
Start-up Assets
Cash Required $101,000
Other Current Assets $5,000
Long-term Assets $0
Total Assets $106,000
Total Requirements $115,000
Start-up Funding
Start-up Expenses to Fund $9,000
Start-up Assets to Fund $106,000
Total Funding Required $115,000
Non-cash Assets from Start-up $5,000
Cash Requirements from Start-up $101,000
Additional Cash Raised $0
Cash Balance on Starting Date $101,000
Total Assets $106,000
Liabilities and Capital
Current Borrowing $0
Long-term Liabilities $50,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $50,000
Planned Investment
Direct Owner Investment $65,000
Investor 2 $0
Other $0
Additional Investment Requirement $0
Total Planned Investment $65,000
Loss at Start-up (Start-up Expenses) ($9,000)
Total Capital $56,000
Total Capital and Liabilities $106,000
Total Funding $115,000

2.2 Company Locations and Facilities

The Center is located in Amesbury, Massachusetts, and has been in the same location since 1996. The location is excellent because the Center is easily accessible by automobile or public transportation, and has ample parking. The psychological center has its own entrance on the south side of the building, ensuring moderate privacy and confidentiality. The Center has been recently refurbished by the hospital and there is space available for growth. Leasing arrangements are yet to be negotiated, though $10-$12 dollars a square foot is the customary rate as quoted by local realtors. The Center will ask the hospital to subsidize rent for the first two years of operation, representing their support to ensure the success of this project.

The Center occupies approximately 2,200 square feet. It has nine clinical offices and group rooms. There is a larger reception area that is separated by a divider, allowing for a child and adult reception area. Included in the square footage is a small staff kitchen, a staff bathroom, and a business/intake office. The offices are handicapped accessible. There is a public unisex, handicapped-accessible bathroom within close proximity to the Center, and one within the building.

Leasing arrangements are in process. Based upon a financial analysis and financial projections, the hospital will need to subsidize rent for the first two years if the project is to succeed. It is our goal to obtain a three-year lease from the Anna Jaques Hospital with an option to renew a second three-year lease. The present location is not critical to the success of the business. After three years we will review our rental options, the need for additional space, and other available facilities in the geographical area prior to renewing the contract.