Behavioral Health: Increasingly Essential to Your Health System Portfolio

Spending on mental health services is at the top of all health care expenditures in the US, with $201 billion spent in 2013. In addition, drug addiction rates have reached epidemic proportions, largely driven by prescription opioid and heroin use, leading to a presidential initiative and bipartisan support for not just 1 but 18 bills to address this issue. Increased spending on mental health overall is due to a rise in the prevalence of mental health and substance use disorders, but the real issue is that we are still greatly underserving this patient population. We have large gaps in the behavioral health System of CARE, resulting in increased use of high-acuity, high-cost care sites such as the ED and the inpatient setting. In many markets, access to available services is limited to patients willing to pay out-of-pocket or with good commercial insurance.

To further complicate care for this patient population, behavioral health diagnoses (which include mental health and substance use disorders) are rarely isolated. One-third of individuals with a chronic medical condition suffer from a secondary diagnosis of mental health. And nearly 70% of those with a primary mental health condition have a secondary chronic medical condition. Quality and cost data show that when managed separately or when only 1 condition is managed, these patients’ quality of life is lower and cost of care is higher. Medical patients with a comorbid mental health condition are more likely to seek health care services, are more frequently admitted and readmitted, and have a longer average length of stay. As health care shifts toward providing greater value and improving the health of populations, behavioral health services become integral to your system’s portfolio of care.

Sg2 Forecast Accounts for Rising Demand and the Maturing System of CARE
Sg2’s 2016 Impact of Change® forecast highlights the expected growth for mental health and substance use services. Over the next 5 years we expect inpatient services to grow nationally by 6%—that’s faster than any other IP service line. This growth is driven largely by increased access to services through insurance expansion as a result of mental health parity provisions under the Affordable Care Act, as well as rising awareness and increasing prevalence. Inpatient growth will flatten over the last half of the decade as care delivery innovation emphasizes early intervention and treatment and access to nonacute services increases across the System of CARE. Sg2 projects outpatient demand, which includes everything from provider visits to partial hospitalization programs to ED visits, to grow by 18% over the next 10 years.

The scenario playing out nationally will evolve at different speeds in local markets, as payment, policy, provider access and the pace of developing partnerships will drive an individual market’s rate of change.

Solutions and Innovations Abound
While your local market may be struggling, there are solutions. Whether your challenge is high utilization in the ED, provider shortages, poor payment or a total lack of community infrastructure, there are other organizations that have taken innovative approaches to address these challenges, improving access to BH care while driving small but meaningful profits. Solutions include investment in targeted case management, psychiatric emergency services, specialized crisis stabilization units, integrated care models and full System of CARE development. And the more you invest, the more you will see the benefit.

The Sg2 consulting team recently worked with a client who had 2 main challenges in behavioral health: an ED throughput issue and significant gaps in their System of CARE that were a deterrent to their population health goals. The Sg2 team identified and staged a set of solutions that would reduce the demand for ED services, accelerate throughput and, in the long-term, create a stronger System of CARE for the communities they served. The stepwise addition of ambulatory services, including case management and telepsychiatry, is expected to drive an ROI of nearly 2.5 in cost avoidance for this major health system. These outcomes demonstrate the significant opportunity to change the total cost of care by investing in behavioral health.

However, many health systems struggle with not knowing where to start and how to stage development of behavioral health initiatives. Sg2 is here to help.

  • Using the System of CARE as a market gap analysis tool, we can help you identify market opportunities to better support patients at earlier stages of behavioral health disease. Gap analysis results are compared to health system and market resources to identify investment opportunities and potential partners.
  • Sg2’s Impact of Change forecast now includes behavioral health flags, which will enable you to identify where patients with a secondary mental health or substance use diagnosis are within your acute care hospital.
  • Using Sg2’s Ambulatory Market Strategist, we can assist in identifying key providers of behavioral health services.
  • Sg2’s newest product, Patient Flow, will enable providers to understand the patient journey, identifying opportunities to improve access early in the disease and highlight paths taken by populations driving ED utilization.

These tools will help you prioritize solutions and align them with the pace at which your organization is taking on risk.

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As of February 11, 2016, Vizient, Inc. has completed its purchase of MedAssets Sg2 and spend and clinical resource management segments from Pamplona Capital Management, LLC. MedAssets revenue cycle business will continue to operate as a wholly-owned subsidiary of Pamplona Capital Management LLP.

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