Frawley Seeks Cure for Profit Setbacks : Detox: With increased competition and insurance cutbacks, Schick centers find themselves in need of therapy.

Patrick J. Frawley Jr. has had a diverse career. He started in the import-export business, ran a company that makes ballpoint pens, chaired the Schick Safety Razor Co. and another concern that makes movie prints. He is also a wealthy man and recently sold one of his Holmby Hills estates to television producer Aaron Spelling.

But for the last 20 years, Frawley, 65, now chairman and president of Frawley Corp. in Studio City, has had a one-track mind. He wants to cure the nation’s alcoholics, drug addicts and smokers of their habits, and he thinks his company’s Schick hospitals and clinics are the places to do it.

“My entire focus is on the hospitals because it’s a life-and-death matter,” said Frawley, who ought to know: He is a reformed alcoholic and he believes addictions can be cured through negative reinforcement.

Drug and alcohol treatment would seem to be booming these days, with movie stars and athletes coming out of the closet with their substance-abuse problems and because of the nationwide charge started by former First Lady Nancy Reagan to “just say no” to drugs. Indeed, the number of drug and alcohol programs in the United States increased from 5,747 in 1982 to 6,866 in 1987, according to the National Assn. of Addiction Treatment Providers, an Irvine-based trade group.

“It’s big business now,” said Alan Haveson, spokesman for the National Council on Alcoholism, a New York-based research and education group that estimates about $15 billion a year is spent on chemical dependency treatments.

But Frawley’s three Schick Shadel hospitals and three smaller Schick clinics in California, Washington and Texas--which originally adopted their names from the Schick razor company and have been around since before former First Lady Betty Ford even admitted she was an alcoholic, much less started her own clinic--are in need of some therapy themselves.

In the nine months that ended Sept. 30, Frawley lost $1.2 million on revenue of $21 million, and its stock, which is listed on the Pacific Stock Exchange, has slipped from a 1988 high of $8.50 a share to $6.50. The number of patients admitted to Schick fell 18% in the last year, to about 2,000, and company officials admit a return to profitability isn’t right around the corner.

That is partly because of the growing competition, but Frawley said the company has been hurt even more by recent cutbacks in insurance coverage for chemical dependency treatment.

Employers and insurance companies are increasingly favoring outpatient care over inpatient programs, which often are more than twice as expensive. That’s bad news for Schick’s drug and alcohol programs, which require patients to stay for about two weeks and which cost $12,000 or more.

“What they’re doing is trying to save dollars, not do what’s best for the patient,” said David Batt, Frawley’s vice president, treasurer and secretary.

But Robert Waldron, spokesman for the Health Insurance Assn. of America, a Washington-based trade group, said insurers are justified in emphasizing outpatient treatment, because recent studies show that outpatient programs are as effective as inpatient programs for most addicts.

Frawley isn’t the only company in the industry that’s suffering. Comprehensive Care Corp. of Irvine, the nation’s largest alcohol and drug treatment concern, has been losing money; its stock has plunged, and it’s trying to stave off creditors who want payment of $25 million in overdue loans.

Batt said Frawley is combatting the slowing business by cutting costs for such things as travel and by hiring fewer medical workers on a contract basis. It is also increasingly courting major employers in hopes of winning long-term deals for employees in need of treatment for drug, alcohol abuse or smoking.

Meanwhile, another Frawley division, two small Catholic newspapers run by Frawley’s wife, GerardineFrawley, is also losing money. Frawley Corp. does hold an ace card, however, in the form of hundreds of acres of undeveloped land in the Santa Monica Mountains near Agoura.

Batt said Frawley is in the process of putting some of the land up for sale and might develop other parcels itself. “The real estate can help us get over some of the tough times in chemical dependency,” he said.

Frawley, who refused to have his photograph taken for this article, will talk of little else but his method of treating addictions. He advocates the Schick technique with the fervor of a fundamentalist preacher, and refuses to discuss aspects of the business other than his views on treating addicts.

When a visitor asked him recently about plans for the company, he launched into a discourse about Kitty Dukakis, the wife of former presidential candidate Michael Dukakis, and her much-publicized substance abuse. Frawley maintained that Kitty Dukakis could be cured by the Schick method.

This method uses negative reinforcement to teach the subconscious mind to dislike the addictive drug--sort of a twist on Pavlov’s dogs. Patients are confronted with the substances they are addicted to, while small electric shocks and drugs that induce nausea are administered.

This technique is markedly different from the abstinence, counseling and “talk therapy” favored by Alcoholics Anonymous and well-known detoxification centers, such as the Betty Ford Center in Rancho Mirage and Hazelden in Minneapolis.

But Max A. Schneider, medical director of family recovery services at St. Joseph’s Hospital in Orange, said there is no single treatment that works for all people. “Most of us feel there is a place for aversion therapy,” he said. “Our problem is in appropriate selection of patients.”

P. Joseph Frawley, Patrick’s son and a doctor who runs the Schick Shadel Hospital in Santa Barbara, admitted that the Schick method isn’t foolproof. One year after treatment, 65% of the patients treated at Schick for alcohol dependency, 52% of the smokers and 51% of the cocaine addicts remain free of their habits. Still, he said, those results compare favorably with many other drug programs.

Frawley’s departure into drug treatment capped a long and varied career. He started in the import-export business in San Francisco more than 40 years ago. When a loan he made to a company that made ballpoint pen parts wasn’t paid back, he took over the business, which became the Papermate Pen Co.

Frawley sold Papermate to Gillette in 1955 for $15.5 million, which back then was a considerable fortune. In 1958, he became chairman and chief executive of Schick Safety Razor Co., where he stayed until 1970. From 1961 to 1970, he was also chairman of Technicolor, a North Hollywood company that makes film prints and videotapes.

While he was at the Schick razor company, Frawley earned a reputation for tempestuousness. Frawley “was a temperamental individualist whose erratic traits were magnified by a drinking problem,” wrote Russell Adams in his book “King C. Gillette, the Man and His Wonderful Shaving Device.”

It was during his tenure at Schick that Frawley realized he was an alcoholic and sought treatment at Shadel Hospital in Seattle. He was so impressed with the program that he bought the hospital.

In 1970, Frawley sold the Schick razor blade business to Warner-Lambert, but kept the hospital, which he had renamed Schick Shadel. “I couldn’t keep my mind on it so I sold it,” he said of the razor business. “People were dying. What would you do?”

Frawley and his family own 67.3% of the company’s stock, and he owns several homes and plots of land in Southern California, including his estate in the exclusive Holmby Hills area of West Los Angeles.

In 1987, Frawley sold a 4.5-acre property in Holmby Hills, which housed the old Bing Crosby mansion, to Spelling for $10.25 million. Spelling demolished the house and is building a 56,000-square-foot house on the land, which has angered his neighbors because of its size. Last year, Frawley sold another Holmby Hills property for about $11 million.

But Frawley says he’s not interested in money these days, only in continuing his crusade to cure drug and alcohol addiction, and in fighting the “misinformation” being circulated about which types of programs are most effective.

“We expect to be successful,” he said. “We have logic on our side.”