Delphi Behavioral Health Group, a provider of addiction treatment services, appears poised to undergo a major behavioral health facility shutdown, with some of its facilities reportedly being transferred to other operators. The company’s CEO, Michael Borkowski, declined to comment when approached by Behavioral Health Business, leaving the future of Delphi’s patients and staff uncertain. Public records suggest that at least 130 employees will be affected by layoffs, signaling a major disruption within the organization.
According to company employees, significant portions of Delphi’s operations are closing. “Certain centers will be taken over by alternative companies. However, Delphi is closing,” one employee told BHB via a company text line. This statement reflects growing concern among staff, patients, and the broader behavioral health community about the abrupt changes to the company’s operations.
Uncertainty for Patients and Facilities
The uncertainty surrounding Delphi’s closures raises questions about the fate of patients currently receiving treatment at its facilities. Behavioral health services often involve ongoing care plans, medication management, and therapy sessions that require continuity to ensure patient safety and recovery. At this time, it is unclear which operators, if any, will take over facilities that remain open or assume care for displaced patients. Multiple attempts to reach Delphi executives for clarification have gone unanswered.
Founded in 2015, Delphi Behavioral Health Group operates 13 facilities across California, Florida, Maryland, Massachusetts, and New Jersey. Florida appears to be the first state impacted, with letters signed by Borkowski confirming the closure of all four of its facilities and the layoff of 133 employees. Most affected positions include behavioral health technicians, nurses, and administrative staff, highlighting the breadth of the workforce impacted. These closures represent one of the largest behavioral health facility shutdowns in recent years in the regions affected.
“The closure is expected to be permanent and will affect all employees,” Borkowski stated in the letters. “All affected employees have been notified of their separation and that their separation from employment will be permanent.” Calls made to all facility numbers listed on the company’s website and Google business profiles resulted in busy signals or intercept messages, further illustrating the company’s winding-down operations. The sudden behavioral health facility shutdown has left many employees and patients scrambling for answers.
Leadership and Private Equity History
Michael Borkowski, who joined Delphi Behavioral Health as CFO in 2016, was promoted to CEO in August 2022. Under his leadership, the company faced both growth and financial restructuring challenges. Delphi has received backing from multiple private equity investors over the years, most notably Dallas-based Capital Southwest Corp. (Nasdaq: CSWC). According to its latest financial filings, Capital Southwest invested over $8 million in debt and equity in Delphi, with a fair market value of $5.3 million.
Capital Southwest first acquired equity and loaned money to Delphi in April 2020 and later extended a protective advance in April 2021. During an August 2020 earnings call, CEO Bowen Diehl expressed optimism about Delphi’s financial recovery, stating that the company had restructured its financial obligations out of court and praising the quality of care provided to patients. “We continue to be pleased with the high-quality care that Delphi provides its patients and the company’s improving financial performance,” Diehl said at the time. “We are optimistic about the company’s future and the ultimate recovery of our capital.”
Other early investors in Delphi include BlueOx Healthcare Partners, which exited the company in October 2017, and the Halifax Group, which exited in April 2020. In its latest disclosure, Capital Southwest reported providing a loan of $76,000 to Delphi during the second quarter of 2022. The investment firm has yet to comment on the company’s current closure plans.
Impact on Staff
The layoffs at Delphi Behavioral Health are extensive and affect employees at all levels of operation. Behavioral health technicians, nurses, and administrative staff are among those impacted, reflecting the company’s reliance on a diverse workforce to deliver addiction treatment services. The closure of facilities in Florida alone represents a significant behavioral health facility shutdown, with other states potentially facing similar challenges if closures continue.
Employees have expressed concern over the sudden nature of these developments. Many were only recently notified of their separation, leaving staff with limited time to secure new employment or transition to other facilities. The lack of clear information about which operators might take over certain facilities adds another layer of uncertainty for employees and patients alike. This unexpected behavioral health facility shutdown has also raised concerns among patients relying on continuous care, with disruptions potentially affecting treatment outcomes.
Broader Implications for Behavioral Health
The closure of Delphi Behavioral Health Group underscores ongoing challenges within the addiction treatment and behavioral health industry. Financial pressures, investor expectations, and operational complexities have made it difficult for some providers to sustain long-term operations. The sudden nature of Delphi’s behavioral health facility shutdown highlights the importance of stability and continuity in behavioral health services, particularly for patients requiring residential care, outpatient therapy, and ongoing support.
Patients, families, and staff will be closely watching to see which organizations, if any, step in to take over Delphi’s remaining facilities. The transition process will be critical to ensuring that patients do not experience interruptions in care, particularly in high-need areas. The widespread behavioral health facility shutdown also draws attention to the broader systemic vulnerabilities in the sector, emphasizing the need for contingency planning and transparent communication.
What Comes Next
As Delphi Behavioral Health Group begins to wind down its operations, questions remain about the fate of patients, staff, and remaining facilities. Updates from company executives or acquiring operators will be crucial in clarifying the next steps. For now, the closures serve as a stark reminder of the volatility within the behavioral health sector and the importance of proactive planning for patients, employees, and investors alike.
The story of Delphi Behavioral Health Group is still unfolding, and further developments may provide insight into how private equity-backed behavioral health providers manage financial pressures while balancing patient care and operational stability. Stakeholders will be monitoring this situation closely to understand the broader implications of this behavioral health facility shutdown across the United States.
