They say that every dog has its day, and now it seems as though conditions are perfect for sweeping change in the behavioral health sector. Much of this fairer climate has legislation to thank, but these policy changes are in fact another result of the changing attitudes toward mental and behavioral health that are helping to bring them into the discussion.
As you have probably guessed, the legislation in question involves the Patient Protection and Affordable Care Act (PPACA), but bonus points if you also guessed the slightly older Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). Together these acts do two very important things for behavioral health. The MHPAEA requires that coverage be increased by payers so that mental health benefits have parity with surgical and medical benefits, while the PPACA increases access to these benefits. In other words, more people now have better coverage. This translates into more money for treatment that has predominantly been expensive and self-pay.
Besides potential for new revenue, there also exists extraordinary demand that cannot be adequately satisfied by the current structure. Due to expanding coverage and improving public views on mental health care, an increasing number of individuals are seeking treatment. This also comes at a time when the number of providers has been dwindling, thus necessitating a new strategy. One solution is to enact a similar strategy of “roll up” that has been suggested by the authors of the article, Bullish Behavioral Health Market Drives Investment. The goal is to inexpensively create skilled networks of care that would benefit from an economy of scale, and more effectively address the needs of an expanding patient population.
Proactive investors have another opportunity to be highly effective by focusing on the highly sensitive, and often overlapping, areas of recovery and co-occurring conditions. Each field presents its own challenge in terms of efficiency and waste. The most expensive setback in recovery is relapse, which happens to half of candidates during their first year. When co-occurring conditions are in play, treatment becomes increasingly difficult and costly; more so in cases of substance abuse. Any improvement in these areas has the potential to drastically cut losses, positively affecting the bottom line.
So this certainly sounds like a great opportunity, but that usually indicates a catch. Here it is: You must prove your success. There is also no accepted method for calculating success; no figure that is universally accepted. Yet, without outcome-based measures, there will be significantly more pushback from payers, and a steeper hill to climb during each funding round.