Why Rural Areas Could Be a Prime Target for Behavioral Health Providers, Investors

A new report demonstrates the need and opportunity for more significant investment in the rural mental health workforce.

As behavioral health organizations and investors look for different ways to grow, rural communities present opportunities to address higher-than-average unmet needs for mental health services and capitalize on challenging workforce trends.

“If there is an equal amount of demand across just the all population bases, we know that there is less demand being met in rural areas,” Thad Shunkweiler, a professor with and the director of the Center for Rural Behavioral Health at Minnesota State University Mankato (MSUM), told Behavioral Health Business.


Shunkweiler and other researchers with MSUM and the Center for Rural Policy & Development co-authored the report on the demand for and shortages of mental health services in rural Minnesota, primarily based on survey data and interviews with leaders in rural mental health.

Minnesota presents a helpful, though not representative, example of a trend at play across several states with high rurality.

In the most extreme example of unmet need, suicide rates in rural Minnesota are higher. They have outpaced rates in the Minneapolis metro and other population centers over the last 20 years. National-level data from the Centers for Disease Control and Prevention find that population rates of suicide are about twice as high in rural communities compared to urban ones. This is an international trend as well: A meta-analysis of several Asian and European countries finds higher rates of suicide completion in rural areas, especially among men.


Minnesota’s mental health workforce is inequitably distributed in urban areas compared to rural areas. Metropolitan areas have one licensed mental health professional for every 197 residents. That ratio ballooned to 1 in every 306 residents (a 1.6x increase) in small towns and 1 in 741 residents (a 3.4x increase) in isolated rural areas.

“We know that there is less demand being met in these rural areas simply because there just aren’t enough providers,” Shunkweiler said, adding this is due to a lack of interest on the part of candidates in rural communities.

Rural behavioral health providers often struggle to compete with the compensation at hospital-affiliated or for-profit organizations that pop up in areas with a higher population, Shunkweiler said. New health care degree graduates are also more likely to locate in communities that look like the ones they grew up in or where they got their education.

There is potential for social and political dynamics to play into where people seek to practice.

“I’m not aware of any empirical data to support it, but it makes complete sense that, on average, the type of students who pursue graduate or advanced education have political leaning or cultural values that are in misalignment with what’s often represented in more rural areas,” Shunkweiler said.

Challenges and solutions in rural mental health

There is still a healthy appetite for degrees that lead to mental health certification. Most colleges and universities surveyed that offer master’s-level programs for clinical social work, professional counseling, and marriage and family therapy — 10 out of 15 — turn away otherwise qualified students because of capacity constraints.

The two thorniest issues are accreditation-related quality and classroom capacity standards and staffing issues.

The report calls for upfront tuition reimbursement programs to catch up with other health care fields, such as nursing and for states to buoy the expansion of mental health-related programs.

In the private sector, New York City-based Resilience Lab landed a $15 million Series A venture capital round to, among other things, boost its in-house education and certification program. In the autism therapy space, Maitland, Florida-based Acorn Health offers education and mentorship programs to advance clinicians into higher levels of practice. Both are recruitment and retention strategies in challenging markets.

So many of the challenges related to rural mental health tie back to money — the cost of getting a degree, the pay gap between graduation and professional certification, historically and relatively low salaries, low reimbursement rates and the lack of funding for support internships or practicum programs.

Other health care professions that require similar levels of education and certification don’t see similar challenges.

In the U.S., a licensed marriage and family therapist’s average salary of $49,880 compared to a master’s degree-level nurse practitioner’s average salary of $123,780, according to Bureau of Labor Statistics data.

The report calls for greater parity in health insurance reimbursement, a decades-long crusade of behavioral health advocates, as an accelerant to increasing interest in the field and better-enabling providers to innovate.

“A salary is often set by reimbursement rates … In the metro, you have maybe more for-profit hospitals that have more services that attract more patients with private insurance on average,” Shunkweiler said. “The cost of providing care is starting to outweigh the reimbursement for care, so that is a negative that’s putting more pressure on this workforce.”

The opportunities in rural communities

While parity and salary considerations significantly affect where providers practice, Shunkweiler argues that cost-of-living comparisons between urban and rural settings are much more favorable to the latter.

That means increases in mental health provider compensation have a more significant impact. Minnesota, on the whole, has living costs that align with the national average. However, most rural states have living costs well below the national average.

And brewing changes in the private and public sectors may shift the landscape in providing mental health in rural communities.

Mental Health Partnership LLC has made its initial foray as a behavioral health platform by acquiring small-town outpatient mental health practices and, pumping them up with better technology systems and additional ancillary services and emphasizing formal partnerships with other health-related community organizations.

At the titans-of-industry level, organizations such as CVS Health Inc. (NYSE: CVS) see rural communities as part of their equity initiatives.

The focus on rural health care is exceptionally sharp at government institutions.

All state Medicaid programs, which are most prominent in rural areas in the U.S., are maintaining or expanding behavioral health benefits and initiatives in the aftermath of the pandemic, according to a recent analysis.

And the Biden administration frequently points to the need to address the unique needs of rural mental health. Last year, the U.S. Centers for Medicare & Medicaid Services (CMS) included a provision in its annual rate-setting rule to allow hospital-based telehealth services to continue past pandemic-era restrictions, a boon for rural and critical-access hospitals.

Last year, while under Democratic majorities in both houses, Congress passed an omnibus funding bill that saw dramatic funding increases for federal programs meant to attract new clinicians to rural and other underserved communities with loan forgiveness and/or scholarship money. A behavioral health-specific program saw its annual budget increase by 22%, while a more encompassing program that also includes behavioral health specialties saw a 33% increase.

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