Staffing challenges plagued the behavioral health workforce in the wake of the COVID-19 pandemic, but the employment environment might be improving for operators.
In 2023, 53% of behavioral health insiders said that staff was the biggest challenge in the industry, which dropped to 42% in 2024, according to a Behavioral Health Business survey.
Several tailwinds could be helping to remedy the workforce shortages.
One of the significant factors is a decrease in wage inflation. For example, Acadia Healthcare, one of the largest behavioral health providers in the country, reported that its wage inflation peaked at 8% during the fourth quarter of 2022 but had dropped to 5% by the fourth quarter of 2023.
However, it isn’t just macroeconomic factors changing the face of the behavioral health workforce. Several new developments unique to the industry, including the rise of private equity investors, the use of non-clinical roles, and Medicare’s coverage expansion, are shaping the behavioral health workforce in 2024.
A larger non-clinical workforce
While clinicians continue to make up most of the behavioral health workforce, more providers rely on non-clinical staff members to help tackle care gaps.
One of the most common non-clinical roles is behavioral health coach. Coaches can help support patients in between therapy visits or can be an alternative to therapy for lower-acuity clients.
“We think of coaching as the ‘in-between’ support that can help members stay on track and feel supported between their therapy visits,” Dr. Jenna Glover, vice president of care services at Headspace, previously told Behavioral Health Business. “We feel strongly that mental health and well-being require more than just a one-hour therapy or psychiatry visit each month.”
Headspace offers a full spectrum of mental health supports, including self-guided meditation and mindfulness content, coaching, therapy and psychiatry.
While some have criticized the use of behavioral health coaches because the industry lacks cohesive, standardized regulations, behavioral health coaches are likely here to stay.
But coaches aren’t the only non-clinical role that is quickly gaining steam. Many providers are implementing peer support programs. Peers are individuals with lived experience who help coach others who are experiencing a mental health or substance use disorder challenge.
Historically, reimbursement challenges and varying state licensure requirements have hindered the peer workforce. However, in 2023, the Substance Abuse and Mental Health Services Administration (SAMHSA), the Office of Recovery, and the U.S. Department of Health and Human Services (HHS) released new national model standards for peer support certification focused on the behavioral health workforce.
Many peer advocates have said this new model could help create universal standards nationwide and professionalize the peer workforce.
Medicare covers more providers
Last year, Medicare opened the door for a new group of behavioral health providers to offer care to its beneficiaries.
In November of 2023, The Centers for Medicare and Medicaid Services (CMS) announced a new ruling that allows marriage and family therapists (MFTs) and mental health counselors (MHCs), including substance use disorder counselors to enroll in Medicare for the first time.
The new ruling expanded the behavioral health workforce that Medicare beneficiaries can access. It could also help operators treating Medicare beneficiaries tap into a new workforce that was previously excluded from reimbursement.
“The impact of these changes means that people with Medicare will be able to access Marriage and Family Therapists and Mental Health Counselors for behavioral health treatment, access culturally-sensitive care from community health workers, care navigators, and peer support workers, access primary care where the provider is invested in a long-term, trusting relationship, and that caregivers for persons with Medicare will have access to appropriate training,” Dr. Meena Seshamani, CMS deputy administrator and director of the Center for Medicare, said in a statement.
Private equity investment continues to stream in
Behavioral health continues to be a hot investment area for private equity firms. This is quickly shaping the industry and transforming the workforce. For starters private equity is able to infuse capital into a provider’s office, this could lead to a rise in salaries.
Still, that’s not a guarantee, as salaries are very dependent on reimbursement trends.
“Rates haven’t increased as fast as wage inflation has,” Pete Tedesco, managing director at Avesi Partners, said at Behavioral Health Business’ INVEST event. “[We have to consider] what other things we can do to keep our staff happy while ensuring that the economic model makes sense and we have a business to run.”
Some private equity firms are using innovative ownership structures, like equity in the company, to incentivize staff to stay. Although private equity firms often use this type of incentive, owner-operators could also offer it.
Still, ownership incentives can come with mixed reception and often require education.
“There’s a bit of an education process around it, and [the staff] understanding what it means and why it is a benefit is the linchpin to making it successful,” Tedesco said. “When folks don’t understand it or don’t value it, it’s not going to work.”
While private equity could bring new capital into a maturing industry, there has been a fair bit of skepticism from clinicians about their involvement. This could mean some providers self-select to work in a mission-driven non-profit environment.
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