Hazelden Foundation History

P.O. Box 11, C03
Center City, Minnesota 55012-0011

Telephone: (651) 257-4010
Toll Free: 800-257-7810
Fax: (651) 257-1055

Nonprofit Company
Incorporated: 1949
Employees: 850
Sales: $53.4 million (1998)
NAIC: 621420 Drug Addiction Treatment Centers & Clinics; 623220 Alcoholism Treatment Centers and Clinics; 62322 Residential Mental Health & Substance Abuse Facilities; 51130 Book Publishers

Company Perspectives:

Hazelden is a nonprofit organization dedicated to helping people recover from alcoholism and other drug addiction. We provide residential and outpatient treatment for adults and young people, programs for families affected by chemical dependency, and training for a variety of professionals. Hazelden is also known as the world's premier publisher of information on this subject and related areas.

Company History:

A pioneer in its field, Hazelden Foundation is widely considered the most influential chemical dependency treatment center in the nation, claiming about 40,000 alumni. Hazelden's $20 million publishing business and $25 million endowment fund make it one of the wealthiest as well. In addition to the Center City, Minnesota complex, treatment locations include Florida, New York, Chicago, and Texas.

A.A., the Bedrock of Hazelden Foundation: 1940s--50s

A writer, a lawyer, and a priest, all alcoholics who had been helped by Alcoholics Anonymous (A.A.), were among those who laid the groundwork for Hazelden. The original concept, a treatment facility for priests, was formalized in 1947 with backing from a prominent Minneapolis businessman and the archbishop in St. Paul, Minnesota. But personality conflicts and philosophical disagreements nearly scuttled the venture entirely. In 1948, the planning group reorganized. The concept was reworked as a treatment center for professional men: the clergy-only aspect of the original program had been a sticking point for important funders.

In December 1948 Richard Coyle Lilly, a well-known Midwest banker and financier purchased the Power Farm (known as Hazelden) in Center City, Minnesota, for $50,000, via the Coyle Foundation. The property, located about 45 miles north of the Twin Cities, consisted of 217 acres of farm and woodland. The 17-room house, later known as the Old Lodge, would serve as the main treatment center. Hazelden Foundation was incorporated as a not-for-profit agency on January 10, 1949.

Lynn Bernard Carroll, a well-respected speaker on the A.A. circuit and a member of the original planning group, was named the first director. The first patient arrived in the spring of 1949; Hazelden was set up as a hospital corporation which would operate a sanatorium for curable alcoholics. During the first three years of operation, Carroll was the only full-time counselor. The rest of the staff included "Ma" Schnable, who served as cook and nurse, the groundskeeper for the estate, and a series of utility men whose tasks included tending to men going through alcohol withdrawal.

"Looking back years later after he had departed from Hazelden, Carroll reflected that when the program opened there was no model to follow. He wanted the men to stay three weeks, and to provide them with an environment where, once they were dry, they could be educated to the A.A. program," wrote Damian McElrath in Hazelden: A Spiritual Odyssey.

In addition to Carroll and Lilly, a third man, A.A. Heckman, one of the original incorporators, was central to the formative days of Hazelden, according to McElrath. As a board member, Heckman laid out a vision for the future which touched on concerns ranging from a strong fiscal policy to careful patient evaluations.

The early days were not without peril, with the patient census low and fundraising efforts lagging, Hazelden failed to make payments on its contract for deed and Lilly foreclosed in 1951. The Butler family, owners of Butler Brothers Mining located on the Iron Range of northeastern Minnesota, purchased the option from Lilly. Lawrence Butler had been Hazelden's first patient and later joined the board. His brother Patrick had been treated at Hazelden twice. The two men and their father were committed to helping other alcoholics. The board of trustees reorganized in 1952 with Patrick Butler as president. Patrick's wife, Aimee Mott Butler, would also contribute her time and talents to the success of the venture.

For the first decade or so, simplicity was the hallmark of the program at Center City. Patients attended lectures and groups, and were expected to behave responsibly. "For its part, Hazelden provided a beautiful, wholesome, and clean environment, excellent food, and an A.A. counselor," wrote McElrath. In 1953, a halfway house, the Fellowship Club, was established in St. Paul, providing a haven for homeless men attempting to recover from alcohol addiction. Patients were expected to pay for their stay in both programs. The Center City rate was $100 for the first week and $85 for any additional weeks. The Fellowship Club charged $21 per week for room and board. Grant money was procured for those in need.

Butler played an active role in ensuring the success of Hazelden. Early on, he set up an advisory committee to educate employers about the impact of alcoholism on the workplace and to promote the treatment program in Center City. He also established connections with Yale's alcohol studies program and served on the National Council on Alcoholism. The publication arm of Hazelden took hold in 1954 when Butler purchased Twenty-Four Hours a Day, a meditation book for alcoholics. Literature such as the Hazelden newsletter and several brochures had already been in print.

Carroll, in the meantime, was splitting his time between counseling duties and speaking engagements in the Midwest and Canada. "Carroll's cultivation of both the alumni and A.A. groups produced excellent results. In 1954 A.A. members referred 28 percent of Hazelden's patients, while 41 percent were referred by former patients--an astonishing total of almost 70 percent," wrote McElrath. Hazelden was a harbor for those suffering from alcoholism.

Considered "hopeless cases" during the years following the repeal of Prohibition, alcoholics often were refused even basic medical care, but in 1954 the American Hospital Association recognized alcoholism as a disease. The action opened the way for the development of new treatment models in that arena. Dr. Nelson Bradley and psychologist Daniel Anderson brought changes to the treatment of alcoholics at Willmar State Hospital, which was designated one of Minnesota's "inebriate asylums." Patrick Butler would bring their innovations to Hazelden.

New Treatment Methods Bring Big Changes: 1960s--70s

By 1960, a multidisciplinary approach to treatment was in place at Willmar: physicians, nurses, psychiatrists, psychologists, social workers, recreation directors, clergy, and recovering alcoholics serving as counselors teamed together to treat alcoholics. Anderson had already begun consulting at Hazelden. Longtime counselors, committed to the A.A. philosophy, objected to psychological aspects of the program Anderson brought with him from Willmar. But change was in the air, and Anderson was appointed vice-president and CEO of Hazelden in 1961.

The ideas and methods developed at Willmar included a detoxification program, a primary care program, a combined aftercare and outpatient program, as well as a multidisciplinary approach to alcoholism treatment. Anderson modified and adapted Willmar's program at Dia Linn, Hazelden's treatment facility for women located in White Bear Lake, Minnesota, a suburb north of St. Paul.

Dia Linn, established in 1956, drew women from around the country. While the attitude toward male alcoholics had begun to soften somewhat, women alcoholics continued to be viewed as moral degenerates. As Anderson integrated the Willmar model into Hazelden's Dia Linn program, the demand for beds at Center City continued to climb. The patient population doubled in six years, topping 500 in 1963. Hazelden purchased a nearby hotel to handle the overflow.

With a significant number of patients coming from the Chicago-Milwaukee area, Hazelden considered opening a facility in that region, but instead decided to expand at Center City. The larger facility would house the women's program as well. Even though Dia Linn's patient count was on the rise, the facility was operating in the red. The Fellowship Club also failed to earn money, but the proceeds from the sale of Twenty-Four Hours a Day balanced the books in St. Paul.

The million-dollar project resulted in residential buildings that accommodated 18 to 22 patients and a counselor. The units included such features as meeting and coffee rooms, a chaplain's office, and a library. A new main building housed kitchen and dining rooms plus a 160-seat meeting room. The construction, which included an infirmary and administration building, was completed in 1966.

With Anderson in place as director and the multidisciplinary approach about to be implemented at Center City, old counselors, including Carroll, began to depart, signaling an end to an era. The remainder of the decade, according to McElrath, was "marked by a relentless flow of ideas and endless experimentation." Hazelden developed a repeater's program, an extended care program, various training programs (up until this time there was no formal counselor training), a family program, and a research and evaluation department. Administratively, Hazelden was divided into three divisions: Treatment, Business, and Operations.

Hazelden's continued success at drawing patients led to another space shortage by the end of the decade. With a debt of nearly $2 million on the books, the organization launched a fundraising drive. An additional rehabilitation unit, a multipurpose building, and a 316-seat auditorium were completed in 1970. Since opening its doors, the Hazelden complex grew to include facilities ranging from a detoxification unit to a driving range. Over 11,000 patients were admitted to the program.

The 1970s proved to be a time of internal change following the rapid expansion in the 1960s. The board reorganized in 1971 with Patrick Butler as president and director. Operations were structured under two divisions, Administrative Services and Rehabilitation. In 1978, four more divisions were added: Education and Consultation; Personnel; Research and Evaluation; and Training.

Publication Boom, Treatment Bust: 1980s

The publication end of the business had become the largest revenue producer by the mid-1980s thanks to sales of such books as Codependent No More. First offered through Hazelden's direct-mail catalog in 1985, the Melody Beattie offering became a fixture on the New York Times bestseller list after hitting the bookstores. Hazelden sold an estimated $16 million in Beattie books and tapes in 1990. Total revenue climbed from $15.4 million in 1982 to $48.9 million in 1990.

While the publication business was peaking, the outlook for Hazelden's treatment program, which drew patients from among the ranks of the rich and famous, began to change. A 1986 article in the American Psychologist kicked off a debate questioning the effectiveness of standard treatment programs. Hazelden's $7,000, 28-day residential program began experiencing a decline in occupancy as insurers moved to shorter residential stays and more outpatient treatment coverage.

The number of chemical dependency beds in the United States had doubled between 1978 and 1984, days of liberal insurance coverage, but by 1992 half those beds were unoccupied. Hazelden's Center City occupancy rate remained above the national average at 80 percent, but a youth residential treatment program was down to 60 percent, and a Florida-based program slipped under 40 percent. An expanded fundraising program helped Hazelden's financial picture: endowments rose from $5.2 million in 1987 to $12.2 million in 1990.

New Leadership: 1990s

Hazelden turned 40 in 1989. That same year Patrick Butler stepped down as chairman of the board of trustees, a position he had held for nearly two decades. Under his guidance Hazelden established itself as the leading purveyor of the "Minnesota Model" of chemical dependency treatment, but that model was under the gun and revenue was declining.

Hazelden implemented a voluntary employee separation program in the spring of 1991. The organization also cut back on programs and sold the Employee Assistance Services division and its research consultation operation that year. While other treatment programs adapted to the changing attitude among third-party payors, Hazelden held fast to its tried and true measures. "We won't back off from what we've been doing," said Harold Swift, Hazelden's president, in a 1992 Corporate Report Minnesota article. "To do so would hurt our success rate."

The nationwide scale-back in the chemical dependency treatment industry hurt Hazelden's educational materials sales. An estimated 60 percent of the books and tapes were sold to treatment centers, hospitals, and professionals in the field. In addition, Hazelden faced increased competition. The self-help literature boom of the 1980s had drawn huge commercial publishers into the segment--the market peaked at about $60 million in the mid-to-late 1980s. Stellar sale producer Melody Beattie, in fact, switched to Simon & Schuster, Inc. in 1991. Furthermore, while other publishers pushed the envelop of the "bibliotherapy" category with books on topics such as sex addiction, Hazelden lagged behind the pack in broadening its offerings.

With for-profit hospitals and mental healthcare providers shutting down their chemical dependency units, Hazelden brought a new leader on board. Jerry Spicer was named president and CEO in July 1992. He introduced a shorter in-patient treatment option and new services such as a five-day smoking-cessation program. Spicer also initiated discussions with local service provider networks and insurers regarding future treatment offerings.

Hazelden was facing changing attitudes among the public at large as well. According to a 1993 Star Tribune article by Susan Feyder, a shift in public opinion regarding substance abuse was keeping some people from seeking help. Chemical dependency was again being viewed as moral weakness or criminal behavior rather than an illness as Hazelden and the medical profession at large maintained. In 1993, 35 staff members were laid off. The total number of employees was about 600, down from over 800 in 1992.

Hazelden added to its publications division in 1994 with the purchase of CompCare Publications and The Parkside Publishing Program, both established marketers of chemical dependency books. The introduction of a national sales force targeting treatment centers, schools, and prisons, helped boost revenues and counter the ongoing decline in interest in self-help books. To cut costs, the company closed its Ireland-based European distribution office in 1994 and shifted the operation back to Center City.

Thanks to increased marketing, shorter residential programs, and fewer competitors, patient occupancy rates rose. Treatment services regained its position as the largest revenue maker by 1994. In response to concerns regarding third-party payments, which accounted for about 50 percent of treatment revenues, Hazelden escalated its formal outcomes research efforts. Total revenues for 1995 reached $54.3 million. Patient count increased from 7,280 in 1995 to 7,837 in 1996. An increase in outpatient numbers counterbalanced a drop in the inpatient count.

In 1997, Melody Beattie returned to the Hazelden fold, and in 1998 the publications and training programs of Minneapolis-based Johnson Institute were acquired. Also in 1998, Hazelden expanded its program offerings to include treatment for chronic conditions such as eating disorders, pain, and diabetes. About 20 new related products were expected to be added in the publications area, boosting the number of titles from 80 to 100. Hazelden also planned to delve into the area of complementary medicine and other healing modalities, thus broadening its approach to treatment.

Preparing for the New Millennium

As Hazelden neared its half-century mark, scientific developments were altering how drug treatment would be carried out in the future. "The new research is a mixed blessing for Hazelden and other A.A.-based treatment centers. On the one hand, neuroscientists using advanced imaging equipment to observe changes in the regions of the brain that are known to govern addictions have provided evidence that addicts do not simply lack willpower or character," wrote David Samuels in a 1998 New Yorker article. If addiction can be treated through therapeutic drugs, programs like Hazelden, Samuels speculated, could become obsolete. Hazelden had already integrated the use of antidepressants and other therapeutic drugs in their program, an action from which some other well-known treatment centers such as the Betty Ford Clinic had abstained.

While Hazelden depended on its stellar reputation to carry it through much of its first 50 years, the organization had become more aggressive about promoting its agenda as it headed toward the next millennium. Hazelden lobbyists worked for legislative changes on a national level to bring insurance coverage for chemical dependency treatment in parity with other major diseases. William Cope Moyers, who had been treated for crack cocaine addiction at Hazelden, was director of public policy. A PBS series on addiction, narrated by his father, television journalist Bill Moyers, aired about the same time Congress began the 1998 hearings on parity legislation.

Further Reading:

  • Borger, Judith Yates, Sandra Earley, Tom Fredrickson, and Kevin Maler, "Healing Themselves," Minneapolis/St. Paul CityBusiness, August 13, 1993, pp. 5.
  • "Briefs," Star Tribune (Minneapolis), September 28, 1998, p. 2D.
  • Draper, Norman, and Allen Short, "Hazelden: Even an Elite Treatment Program Has Many Failures," Star Tribune (Minneapolis), June 27, 1993, p. 11A.
  • Earley, Sandra, "Hazelden to Pack Up in Ireland," Minneapolis/St. Paul CityBusiness, August 26-September 1, 1994, p. 2.
  • Feyder, Susan, "Fiscal Therapy," Star Tribune (Minneapolis), January 25, 1993, p. 1D.
  • Gale, Elaine, "Author Melody Beattie Will Return to a Position at Hazelden Publishing," Star Tribune (Minneapolis), October 23, 1997, p. 4E.
  • "In Brief," Star Tribune (Minneapolis), April 22, 1994, p. 5D.
  • Manning, John, "Hazelden Broadens Conditions Treated," Minneapolis/St. Paul CityBusiness, April 10, 1998, p. 13.
  • ----, "Larger Treatment Facilities Buck Admissions Downturn," Minneapolis/St. Paul CityBusiness, June 6, 1997, p. 10.
  • McDowell, Edwin, Twin Cities Area Fuels Explosion in Self-Help Books," Star Tribune (Minneapolis), September 11, 1989, p. 1E.
  • McElrath, Damian, Hazelden: A Spiritual Odyssey, Center City, Minn.: Hazelden Foundation, 1987.
  • Meier, Peg, "State Emerged 20 Years Ago As Major Center for Treatment," Star Tribune (Minneapolis), April 21, 1991, p. 4E.
  • Nissen, Todd, "Economics Spurs a New Outlook on Mental Care," Minneapolis/St. Paul CityBusiness, September 11--18, 1992, pp. 1, 32.
  • Pokela, Barbara, "New Hazelden Chief Searches for Priorities," Star Tribune (Minneapolis), June 26, 1989, p. 2D.
  • Samuels, David, "Saying Yes to Drugs," New Yorker, March 23, 1998, pp. 48--55.
  • "The Star Tribune Nonprofit 100," Star Tribune (Minneapolis), November 4, 1996, p. 4D.
  • Wieffering, Eric J., "Hazelden Is Recovering," Corporate Report Minnesota, September 1994, p. 10.
  • ----, "Trouble in Center City," Corporate Report Minnesota, January 1992, pp. 43--46.
  • Youngblood, Dick, "Drug Treatment Suffering As Companies Cut Back," Star Tribune (Minneapolis), November 4, 1991, p. 2D.

Source: International Directory of Company Histories, Vol. 28. St. James Press, 1999.