This week has been a rough one for U.S. stocks, with the S&P 500 halting trading twice and the Dow Jones Industrial Average experiencing its worst drop since 1987. Concerns over the coronavirus, or COVID-19, were largely to blame.
The market’s drop took behavioral health stocks down with it, with Universal Health Services (NYSE: UHS) and Acadia Healthcare (Nasdaq: ACHC) down and trading below normal range.
Despite the ongoing turmoil COVID-19 is causing around the globe, the viral outbreak shouldn’t hurt the behavioral health industry long-term and could even lead to a higher demand for mental health services, experts told Behavioral Health Business.
“I think what’s happening is that these stocks are just selling off with the broader market,” Jefferies analyst Brian Tanquilut told Behavioral Health Business. “But I don’t think COVID-19 should have much of an impact on their fundamental business. The demand for mental health and substance abuse services is still there.”
In fact, the World Health Organization has acknowledged that the coronavirus is causing stress across the globe, last week publishing mental health tips for health care workers, caretakers and those affected.
San Francisco-based Ginger, a virtual behavioral health care system, has watched stress levels increase first-hand. It has seen business pick up in the past few weeks as the coronavirus has worsened.
Ginger delivers coaching, therapy and psychiatry services to patients via text and video. Coaches are employed by Ginger, while therapists and psychiatrists are contracted.
In the past two weeks, the startup has seen an increase of about 16% in the total number of sessions it has delivered, according to internal metrics shared with BHB.
“There are a lot of things happening in the world right now that could contribute to that usage,” Dana Udall, chief clinical officer at Ginger, told BHB. “We can’t attribute that entirely to the COVID-19, but we do believe that’s a significant portion of it.”
That belief is backed by reason. In addition to showing an increase in utilization, Ginger’s data also shows a spike in members mentioning “coronavirus” or other related terms during text-based conversations with behavioral health coaches.
Because Ginger is a telehealth provider, it’s well-equipped to handle member’s concerns related to and amid the coronavirus, Udall said.
“You could be talking with a coach, a therapist or a psychiatrist from the comfort and safety of your own home without having to expose yourself … in a clinic or a hospital-setting, where the potential for contamination is much greater,” she noted.
Organizations that do things in-person, on the other hand, must take additional precautions to prevent the spread of COVID-19. That includes providers and trade associations in the behavioral health space.
For example, the National Association for Behavioral Healthcare (NABH) — one of the industry’s biggest trade organizations — on Tuesday announced it would cancel its 2020 annual meeting “to protect the health and safety of all meeting participants and minimize unnecessary risks to exposure of the COVID-19 virus.”
The meeting was set for March 16 through 18.
Mitigating risk is also top of mind for Beacon Health Options, a spokesperson told BHB. Boston-based Beacon, which was recently acquired by Anthem (NYSE: ANTM), is one of the country’s largest behavioral health organizations, serving more than 36 million people nationwide.
“Beacon Health Options is actively monitoring the COVID-19 (coronavirus) situation along with all recommendations from the Centers for Disease Control and Prevention and the World Health Organization,” Beacon told BHB in a statement. “The safety of our members, care providers and employees is our primary concern.”
Like Ginger, Beacon acknowledged that COVID-19 could lead to increased stress and anxiety nationwide. In response, it’s published resources for members, clients and providers.
“Beacon is building awareness of behavioral health resources and additional educational materials to help individuals navigate the stress and anxiety that can accompany an epidemic such as this,” Beacon told BHB in a statement.
Despite the potential increase in demand for mental health services, the Trump administration took nearly $5 million from the Substance Abuse and Mental Health Services Administration (SAMHSA) to help fund its coronavirus response efforts. The move has drawn criticism from behavioral health advocacy groups such as the National Council for Behavioral Health.
“It’s a short term solution that creates other problems,” National Council President and CEO Chuck Ingoglia told BHB. “Those funds were earmarked for important things, otherwise Congress wouldn’t have earmarked them. This is why we need more stable funding.”
As of March 10, the U.S. had more than 700 confirmed cases of the coronavirus and 27 deaths, 22 of which were in Washington state.
UHS’s stock was up more than 4.3% as of end-of-day trading Tuesday, at $119.56 per share, while Acadia’s stock was down more than 1.9%, at $26.26 per share.