Behavioral Health Providers are Failing: Why Data Analytics is the Solution
Today, behavioral health is more important than ever. Major news outlets, from The New York Times to The Wall Street Journal, constantly cover the mental health epidemics wracking the nation, be it widespread opioid abuse or the steady, upward creep of suicide and self-harm.
Spurred on by the scope and severity of these societal problems (as well as new legislation passed to address them), the behavioral health sector has grown exponentially. Yet this field is not without its problems: despite favorable regulation, behavioral health is a highly fragmented sector, split between hundreds of competing providers. There are also plenty of unique challenges, be it the difficulty of long-term care and billing or the lack of contracts with insurers.
At the same time, opportunity co-exists alongside adversity. Without a single, established incumbent to dominate the field, there are plenty of openings for driven, innovative entrepreneurs to succeed.
It seems that the need for behavioral health services will only increase with time. Some experts estimate that close to two million Americans have become dependent on opioids, both in the form of prescription pills and street drugs, while 2016 saw over 63,600 drug overdose deaths. In addition, suicide rates are rising nationwide. Nearly every state, with the exception of Nevada, has seen at least a six percent increase in suicide rates; North Dakota, for instance, has seen a 57 percent increase.
Even before these epidemics reached their peak, Congress had laid the groundwork for a strong response. In 2008, Congress passed the Mental Health Parity and Addiction Equity Act (MHPAEA), the first in a series of laws that would ultimately strengthen the behavioral health sector. Better known as the Parity Act, this legislation stipulated that benefits plans had to cover behavioral health treatment in the same way as other medical conditions–lessening some of the financial hardship and stigma surrounding access to care.
The Affordable Care Act (ACA) only reinforced this. Under the ACA’s pre-existing conditions clause, insurers could not take medical conditions into account when approving buyers, calculating premiums, or paying providers. Moreover, children could stay on their parents’ health plans until the age of 26; as a result, young adults, who historically suffered from high levels of behavioral health needs but low levels of treatment, benefited greatly. Given that behavioral health conditions, such as substance abuse or depression, are widespread and very costly to treat, this law further increased access to care.
Unfortunately, the revolution in patient access has not been followed by similar, drastic changes in treatment and billing. Take CHAPS Academy, a Wisconsin-based provider that closed in early 2018. Despite being in business since 2004, CHAPS cited low reimbursements and high fixed costs. As a small company, CHAPS faced difficulty negotiating good rates with insurers, especially where it concerned long-term care.
CHAPS isn’t alone. Across the country, more and more large behavioral health facilities have closed over the past decade, leaving fewer beds available–especially where it concerns long-term care. One 2012 report estimated that the number of psychiatric beds decreased by 14 percent from 2005 to 2010; nationwide, the number was only 50,509 beds–or about 14 beds per 100,000 Americans. In contrast, experts recommend a minimum of 50 beds per 100,000.
Blame insurer contracts–or the lack thereof. In-network providers have the best deal: an ironclad agreement with insurers, with fixed rates for various services. Unfortunately, they’re also the exception, not the norm. A 2013 study found that out-of-network provider use was more common in behavioral health than in general healthcare, especially amongst those with private insurance.
Unfortunately, this is by design.
