The allure of being a one-stop-shop for health services is waning for behavioral providers.
Instead, we are seeing the rise of partnerships to help with referral pathways and provide specialty care. While there is a drive for more integrated services with a holistic approach, many providers are recognizing their limitations, particularly in the digital space.
Besides a large health system, it would be unrealistic for a behavioral health provider to serve as a mental health, addiction treatment, primary care, women’s health and oncology provider, for instance.
Even within the behavioral health umbrella, many providers acknowledge their strengths and blind spots. Over the last year, we’ve seen at least two significant deals from mental health providers teaming up with substance use disorder (SUD) providers.
I think we’ll continue to see more of these partnerships as the demand for integrated services rises. It’s a smart move for providers to focus on what they do best instead of trying to do everything — and underdelivering.
As part of this week’s exclusive, members-only BHB+ Update, I offer my thoughts on why it makes sense for behavioral health providers to stick to their specialty and find partners.
Among the topics in this BHB+ Update, I explore:
– Why mental health and addiction treatment partnerships are a perfect match
– Why trying to do everything in behavioral health may not pay off
– Where there is room for more partnerships in the future
Within the behavioral health ecosystem
During the digital boom of 2021 and 2022, many mental health companies specialized in one patient population. This has served many well. The demand in certain sectors, such as youth mental health or college students, has remained high.
However, the initial specialization leaves many providers with a growth decision: go deep with one type of care or begin to diversify offerings. While diversification offers providers the chance to gain a more significant foothold in the market — competition for employer and payer contracts is fierce.
The decision is similar for traditional mental health providers, both digitally and in brick-and-mortar: expand into subpopulations, or partner?
One area that I think is very interesting: partnerships between mental health and addiction treatment providers. Individuals with a mental health condition are more likely to also have an SUD than those without, according to the Substance Abuse and Mental Health Services Administration.
Yet addiction treatment can be a problematic expansion opportunity for mental health providers and often requires clinicians who can prescribe medication-assisted treatment.
Recently, Thriveworks, one of the country’s largest outpatient mental health providers, teamed up with digital SUD provider Ophelia. The partnership is focused on helping patients with comorbid conditions get access to care quickly.
Deals like this let providers stay in their field of expertise while also providing patients needing other services an avenue to access that care.
“We’re a specialty care provider,” Zack Gray, founder and CEO of Ophelia, previously told Behavioral Health Business. “We try to treat them for other conditions, but we’re limited in what we can do. … We look to partners to make that happen, and Thriveworks is one of the best out there. When we think of the value-add to Ophelia, it’s obviously add-on psychiatric services for our patients, but also for our patients’ families.”
This isn’t the only deal between a mental health and SUD provider. In February, Talkspace (Nasdaq: TALK) announced a new deal with digital SUD provider Bicycle. The deal enabled Bicycle and Talkspace clinicians to refer patients to specialized care from either organization.
Still, we have seen some digital providers attempt to be the one-stop-shop, and it ended up being a cautionary tale. For example, digital behavioral health provider Cerebral once offered mental health, substance use disorder and ADHD care. At one point, the provider even noted its expansion into serious mental illness care.
But we’ve seen Cerebral slowly slash services. For example, in 2022, the company stopped offering counselor services. Then, in 2023, it began to close its MAT program for opioid use disorder (OUD). When the company stopped this service, a spokesperson revealed that it had less than 20 clients for OUD.
Partnering takes fewer resources and also solves the issue of hiring a new workforce — a problem that has plagued the behavioral health field since COVID.
Beyond behavioral
While behavioral health providers often see an opportunity to team up with others under the same umbrella, many physical health conditions are connected with an increased need for mental health services.
For example, Lifestance (Nasdaq: LFST), another one of the country’s largest outpatient mental health providers, partnered with women’s health company Gennev in a collaboration focused on caring for patients going through menopause.
Talkspace has a similar menopause-focused deal with women’s health provider Evernow.
While Lifestance and Talkspace probably would never hire a team of women’s health clinicians, these deals represent a healthy referral pathway. And it’s wise to tap providers caring for patients with high comorbidity rates.
One place there could be room for more deals is oncology. We’ve seen payers try to integrate behavioral health and oncology services. For example, Evernorth, Cigna’s (NYSE: CI) health service division, has incorporated behavioral health distress screenings into its oncology care case management program.
Still, many oncology providers need help determining where to send patients if they start exhibiting behavioral health needs. This could be a fertile place for behavioral health providers to forge partnerships.
Overall, going deep into an expertise might pay off. Providers with a specialization could become the go-to for partnerships, boosting referrals. It could also mean fewer mistakes by spreading organizations too thin.
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