Mental Health Executive Forecast: New Business Models, AI and Value-Based Care to Define Industry in 2024

The mental health industry is pivoting after the market’s rapid expansion related to COVID-era telehealth and increased demand for behavioral health services.

Mental health providers are now seeking new methods of care, including AI-enabled tools, to improve existing mental health treatment frameworks, industry insiders told Behavioral Health Business. Mental health companies are also seeking new business models and partners to grow.

Rising workloads for clinicians, and too few appointments for patients, are among the reasons providers are looking to course-correct.

To reveal the challenges and trends that will shape the mental health industry in 2024, Behavioral Health Business caught up with 10 mental health authorities offering their predictions. The responses, below, were edited for length and clarity.

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Advancements in technology will continue to evolve how individuals interact with service providers, and in our industry, transform and improve the way health care is delivered.

For example, at Universal Health Services (UHS) our commitment to technology advancements includes our investment in General Catalyst, a leading venture capital firm ushering in a new era of patient care through health assurance investments and collaboration. During 2023, UHS was announced as a founding partner in Hippocratic AI, a technology company that is building the industry’s first safety-focused Large Language Model with an emphasis on non-diagnostic, patient-facing applications.

While the pandemic is in the rearview mirror, we see strong demand for high-quality behavioral health care services. Services that are accessible across all settings – inpatient, outpatient and telehealth. Sadly, we saw news reports indicating that the number of suicides reached a record high in the U.S. in 2022, with older men at highest risk. Yet, there is evidence that efforts to reach young people in crisis are helping. Suicide rates for children 10-14 and people 15-24 declined by 18% and 9%, respectively, last year from 2021, bringing suicide rates in those groups back to pre-pandemic levels.

We know adults are learning how to talk to children about suicide, and I am certain that the 988 hotline plays a role. With the one-year anniversary of the launch of 988 during 2023, I predict and welcome the continued expansion and traction of this valuable resource, staffed with trained crisis experts available 24/7, providing 100% privacy to those in need.

– Marc D. Miller, president and CEO, Universal Health Services (NYSE: UHS)

The influence of AI is set to revolutionize our approach to mental health care in 2024. However, as we embrace these advantages, we must grapple with challenges related to ethical considerations, data privacy concerns, and the need for responsible AI implementation, not only in the behavioral health industry but encompassing the entire field of health care.

Moreover, we anticipate a surge in collaborative efforts between the public and private sectors to broaden the scope of mental health initiatives. Additionally, we can anticipate a wave of consolidations between mental health and well-being companies, as employers and payers grow increasingly weary of point solutions, and seek comprehensive, one-stop-shops that address both mental and physical health, driving the industry towards more integrated and holistic approaches.

In 2024, companies will likely explore new business models, such as strategic go-to-market partnerships, and revenue streams to diversify their offerings. With a growing awareness of mental health’s inseparable connection to overall well-being, there may be a shift towards integrated health solutions that encompass both mental and physical health aspects.

We can also expect to see an emphasis on expanding access and reach, with a concerted effort to bridge the gap for underserved populations, particularly in rural areas where mental health resources are scarce.

– Nikole Benders-Hadi, chief medical officer at Talkspace (NASDAQ: TALK)

Tech-enabled care – including behavioral health – is no longer a forward-thinking approach. Mental health providers risk being left behind if they don’t embrace a blend of in-person, virtual and automated care.

These delivery models are vital at a time when behavioral health professionals can’t keep pace with the growing demand for their services. In 2024, we’ll see more health systems, payers and employers leverage technology to increase the availability of mental health support.

They’ll follow the lead of organizations like Northwell Health. The provider uses chatbots to identify urgent mental health issues among high-risk pregnant moms and alert clinicians to the need for support. Or CommonSpirit Health, which relies on digital tech to provide immediate access to behavioral health services in its emergency department, reducing average bedside response times to less than 50 minutes.

The foundation of behavioral health care is human-to-human contact and infusing technology won’t replace that. However, it will minimize the time it takes to see a new provider and keep patients and clinicians connected in the gaps between appointments.

By leveraging health tech, the industry can support more people in the coming year without adding to the burden of an understaffed workforce. It’s how the industry can care for those who need it and for those who do the caring.

– Roy Schoenberg, president and CEO of Amwell

I predict that long-standing discussions over how to measure the quality of care in behavioral health will make progress over the coming year. While these conversations are not easy, they will be propelled by a tangential need: The desire to figure out who gets credit for outcomes and spending within integrated value-based care models.

As value-based physical and behavioral health care models become more integrated, agreements will have to define each party’s roles and responsibilities more clearly, as well as how cost and quality will be measured. Yet today, behavioral health is largely measured using process metrics rather than outcomes metrics. This will no longer suffice.

Further, the use of novel treatments, including psychedelics and new drug discovery, will be important in the year ahead.

We’re entering a new and interesting era in the search for behavioral health biomarkers, which will likely substantially impact future diagnoses and treatments. This includes studies that indicated functional magnetic resonance imaging (fMRI) in diagnosing and choosing treatment types for behavioral health conditions, the role of genetic testing and pharmacogenomics and the ability to help evaluate schizophrenia.

As exciting as this new era will be, it also promises its fair share of complications. Much like we’re already seeing with pharmacogenomics, personalized medicine in psychiatry will require payers and practitioners to balance ethical considerations alongside cost and quality.

– Caroline Carney, president of behavioral health and chief medical officer at Magellan Health

In 2024, I expect we’ll continue to see the integration and use of new tech across the industry.

At Author Health, we’re rapidly investing in and exploring how our proprietary technology can continue to deliver inclusive and effective mental health treatment for our aging population and people who previously have been unable to access high-quality care.

As an industry, I think our greatest challenge in the year ahead will be what many of us are already actively trying to solve: making mental health care a priority investment area across health care stakeholders and creating equitable access to mental health services.

Three things will be essential for companies looking to grow in 2024: strategic partnerships, continued tech innovation and a commitment to evidence-based practices. Collaborations with payers and other health care organizations will expedite accessibility of mental health services. The adoption of new tech, including AI-driven solutions, will help address the evolving mental health needs of more diverse populations. Research demonstrating the long-term efficacy of mental health interventions will drive the development of more effective treatment modalities. At Author Health, these are the things we’re primarily focused on, and I expect our company will continue to experience rapid growth throughout 2024.

– Katherine Hobbs, CEO of Author Health

We need to take a critical look at how we are tracking outcomes and what high-quality mental health care looks like in virtual, tech-driven models.

In 2024, we’ll start to see more digital mental health providers release ROI studies that show cost and outcome improvements – things like a reduction in outpatient costs, a decrease in spending for comorbidities, increased engagement over the long term, and improved PHQ and GAD scores. These proof-of-concept studies will help increase interest in the pay-for-outcomes model among payers and employers.

Eventually, we’ll get to a point where the majority of new contracts between payers or employers and their digital mental health care providers are paid for based on utilization and achieving outcomes.

Despite a turbulent economy, employers and plans are still committed to investing in mental health benefits. That said, plans and employers are looking to consolidate their offerings as much as possible to minimize disparate benefits that focus on quality over quantity.

In 2024, we’re going to see more decision-makers assess their benefits, especially in the mental health category, against two criteria: the ability to succeed in value-based contracts and the breadth and depth of their offerings.

– Katie DiPerna Cook, senior vice president of partnerships at Headspace

I predict that payers will start to get much more aggressive around payment integrity programs. The relaxation of standards during the pandemic created a permissive environment at a time of greatly expanded network participation. Today, most payers are under significant cost of care pressure, in general, and specifically in mental health. They are worried about the economy and employment. Health care inflation, especially in acute settings, is extreme. They are looking for dollars and they need to reign in bad practices in their new, far-flung networks.

The big opportunity right now is to stay focused, to be disciplined, to be an excellent operation and to focus on sustainable margins. The market is beginning to consolidate. The winner will be the operator that can scale across geographies in a manner that is supportive of clinical staff, differentially excellent on intake and access, and tough-minded with payers.

New locations are the main driver of growth right now, driven by excellent talent acquisition and recruitment. In the new locations, we will build out physical space that will accommodate a more interventional approach to psychiatry. Ketamine, esketamine (Spravato) and TMS are really important modalities if we’re going to win the battle against suicide, ED boarding, inpatient bed shortages and endless cycles of readmission. There are still huge challenges around reimbursement in these critical treatments, but again, this is an area where patient, well-operated practices will win in the long run.

– Brian Wheelan, CEO of Transformations Care Network

Benefits leaders told us their top benefit-related priority for 2024 is “implementing or extending benefits programs to support employee sub-populations,” such as BIPOC and LGBTQIA+ workers. We expect support for historically marginalized employees to strengthen through comprehensive, tailored mental health offerings and a rise in employee resource groups (ERGs).

Despite pandemic restrictions and social distancing being far behind us, addressing loneliness and isolation will be critical. Employers will place a renewed emphasis on bringing people together in the workplace, whether in-person or virtual after the U.S. Surgeon General urgently called for priority measures.

Mental health companies need to partner with HR and benefits leaders to help them recognize the essential role they play in cultivating a mentally healthy work culture and how to identify and solve the work-related factors impacting employee mental health and well-being. As part of a comprehensive benefits portfolio, organizations should work with a workforce mental health provider to offer employees access to care for every person and every need – not just the mild or destigmatized. That care should be evidence-based to produce real results, and culturally responsive so that everyone feels safe enough to fully participate in the process.

– Connie Chen, chief operating officer at Lyra Health

In 2024 the Biden administration is set to finalize its groundbreaking new rules on the Federal Parity Act. More than 15 years after the Act was passed, we will take a huge step closer to realizing the full promise of parity. This action cannot come soon enough – amid record deaths of despair, it has the potential to drastically increase access to mental health and addiction care aiming to end decades of discrimination and unfair denials of care.

In my eyes, addressing workforce, technology, and youth are the key growth areas for 2024 across the industry. We all know we have a workforce shortage, but what that breaks down to is we have lower provider reimbursement rates, we have a lack of diversity and we have providers struggling with their own mental health and are burned out.

On the data/technology front, we’re miles away from other health areas in terms of the population level data available, we don’t provide federal subsidies for electronic health records the way we do for physical health, and we don’t have comparable dollars allocated for new treatment research.

If we want to get real about long-term solutions to this mental health and addiction crisis we have to go upstream, focus on prevention and early intervention, and give our young people the resources they need to thrive.

– Patrick J. Kennedy, former U.S. Representative (D-R.I.) and founder of The Kennedy Forum

Hundreds of thousands of people across the world live with serious mental health conditions for which there is no good standard of care. The growing awareness of this crisis and the early promise of new approaches have led to a renewed interest in psychiatric drug development.

We will see some important data read-outs next year. Compass will have data from one of our two phase-3 studies of investigational COMP360 psilocybin treatment for treatment-resistant depression, and there are several other psychedelic companies pursuing studies of other compounds in different psychiatric indications.

If approved, a recent new drug application submission to the FDA in post-traumatic stress disorder (PTSD) will test psychiatrists’ acceptance of new treatments. If MDMA-assisted therapy is approved as a treatment for PTSD, it would be the first time that patients have access to an approved psychedelic medicine and would represent a new paradigm of care. There will undoubtedly be multiple challenges to adoption and patient access, but successful approval and implementation offer the hope of moving the needle for patients and will pave the way for the rest of the field.

– Kabir Nath, CEO of Compass Pathways (NASDAQ: CMPS)