The quest for value-based care in behavioral health is driving far-reaching changes that could upend industry practices for payers and providers.

Notably, this could result in the extinction of behavioral health carve-outs. Top executives told attendees of VALUE, a Behavioral Health Business event, that carving out behavioral benefits acts as an impediment to addressing the total cost of care of enrollees.

“We can eliminate the carve-outs,” Dr. Katherine Knutson, senior vice president at UnitedHealth Group Inc. (NYSE: UNH) and CEO of Optum Behavioral Care, said at the BHB’s event VALUE. “That is the work that we’re doing. We’re pushing very hard at [UnitedHealth] with a lot of promising models to really move forward with a total cost of care approach.”

Knutson’s comments — and those of the other panelists — during the panel talk reflect a deeper realization of the interplay between behavioral and physical health and the impact of efforts to address that interplay.

“Many of … the people that we serve have both physical health and behavioral health conditions and social conditions as well,” Knutson said. “So being able to think about these holistically, when you’re thinking about that denominator of cost, is really important.”

Patients with behavioral health issues generate 3.5X more health care costs than those who don’t with only 7.9% of that spending being related to behavioral health care, according to a recent review by Moody’s Investor Service.

“I think carve-outs are a thing of the past,” Corbin Petro, CEO and C0-founder of Eleanor Health, said, adding that she would eliminate them in her previous role running health plans.

Petro co-founded Eleanor Health in 2019 to provide serious mental illness and substance use treatment on a value-based care and population health-driven basis.

Beyond strategy changes like eliminating carve-outs, health care entities are also realizing the upstream issues of accessing the right kind of care in a way that’s convenient and affordable. Cara McNulty, president of behavioral health and employee assistance program at Aetna, part of CVS Health Inc. (NYSE: CVS), said during the panel that most people in the U.S. are within 10 miles of a CVS retail location.

CVS Health operates 1,200 MinuteClinics, the company’s branded walk-in primary care clinics, in its 9,900 retail locations. The company plans to convert about 300 existing locations into CVS HealthHUB, a more sophisticated primary care offering than MinuteClinic.

Behavioral Health Business

HealthHUBs, which launched in 2019, offers mental health services through regular in-person or telehealth visits with therapists. CVS said that it had planned to have 1,500 HealthHUB locations in operation by the end of 2021. At the end of last year, CVS Health conducted 8 million virtual behavioral health visits.

McNulty said that CVS Health won’t move into more advanced forms of mental health, such as psychiatry, but will partner with local health systems to get people to the right level of care.

“The reality is it’s going to take CVS, it’s going to take Optum and [UnitedHealth Group], it’s going to take all of us to support and improve the mental health and well-being of our communities,” McNulty said.

Optum and its many fellow enterprises under UnitedHealth Group’s umbrella will also have a major role in providing mental health services as part of its wider value-based care approach.

Optum recently acquired Jacksonville Beach, Florida-based Refresh Mental Health for an undisclosed amount. Refresh Mental Health is one of the largest outpatient mental health providers in the country with over 300 locations in 37 states.

The CEO of UnitedHealth Group said during a recent earnings conference call that the Refresh acquisition “fits right into that value-based proposition” which calls for bringing alignment to behavioral and physical health.

“We’re … almost singularly focused on the outpatient setting because that’s where the most clinically and cost-effective treatment is delivered,” Knutson said. “And our goal is to get that full spectrum available in every market for our members.”

While most Optum behavioral health assets are focused on addressing mild to moderate illness, Knutson said the company’s focus is “building out that more severe and complex spectrum as well for severe mental illness and substance use disorder.”

Eleanor Health, which has partnerships with Aetna and UnitedHealth Group plans, will see 85% to 90% of the company’s revenue in 2022 come from a combination of value-based care, population and bundled payments, Petro said.

About 10% of revenue will come from fee-for-service payments.

Petro concedes that many payers, health care systems and behavioral health organizations are not ready to move strongly toward value-based care models, citing the lack of a consensus on what’s worth measuring in this kind of arrangement and the lack of systems that can measure care outcomes.

Despite the challenges, McNulty said eliminating carve-outs and addressing the total cost of care is the synthesis of many overlapping efforts by payers and behavioral health providers.

“When we stop treating people’s head and heart as separate — and we focus on that prevention, that intervention, that high acuity, using data, driving that social determinants, addressing people holistically — that’s when we get the best outcomes for the individuals,” McNulty said.