Growth, Opportunity on the Horizon for Behavioral Healthcare
Posted on: October 2, 2020 by ATP Insurance Program
Though 64 percent of behavioral health providers reported a decrease in revenue since March of this year, Caron Treatment Centers President and CEO Doug Tieman says the industry is projecting a tsunami of need. Pre-pandemic, the behavioral healthcare market was already set to grow more than 30 percent over the next five to seven years. The industry shakeup spurred by COVID-19, the depth of which has yet to be fully realized, only creates more opportunity for growth as providers adapt to meet critical needs in the community.
Key Market Drivers
Factors driving market growth include:
According to TMR Research, “The forecast period of 2019-2029 can prove to be the most bankable era for the behavioral health market with the COVID-19 outbreak being the main aspect of growth.” While providers undoubtedly focus on people over profits, they are being confronted by greater need for care and treatment than ever before. With a widespread increase in anxiety, depression, suicidal ideation, psychosis, opioid drug overdose and substance abuse relapse resulting from COVID-19, there’s no doubt providers will need to expand and bolster operations as they rise to meet market demand.
The growing use of telehealth for behavioral health services has been one of the most significant industry shifts during the pandemic. It is also projected to be one of the largest drivers of industry growth moving forward.
The online delivery of behavioral health services is being hailed as a lifeline, especially for those who are otherwise unable to access care, and its potential is powerful. According to a recent report from Accenture, virtual behavioral health could expand access to 53 million Americans — making digital a critical channel as need mounts.
COVID-19 has also brought welcome, some say sorely needed, regulatory changes. For example, new patients are not currently required to see a therapist for an in-person visit before they can participate in a telehealth program. Additionally, many health insurance companies are currently paying providers the same rate for virtual appointments as traditional appointments. Right now, these changes are temporary, but many are pushing for them to stay, lowering the barriers for lasting growth.
M&A Activity Ahead
Despite the overwhelming need for accessible behavioral health services, the reality is some treatment centers and community behavioral healthcare organizations won’t be able to sustain themselves through the pandemic. “Recognizing the market potential, we expect to see private equity come in and stabilize organizations that don’t have sufficient cash reserves or the level of medical sophistication necessary to navigate COVID-19,” adds Tieman. “Through mergers and acquisitions, these organizations will become well-positioned to serve the huge need for community-based facilities and services in 2021 and beyond.”
Getting Growth Partners in Place
As behavioral healthcare providers continue to adapt, business — and, notably, risk management strategies — must also evolve. To do so successfully, leaders need to make sure they have the right business partners in place, including a trusted insurance partner who can help protect their organizations as they weather the pandemic and ensure they are set up optimally for growth and long-term success.