Despite slower dealmaking in 2024, behavioral health developments kept the Behavioral Health Business team busy throughout the year.
As the editor of BHB I hear a lot of pitches throughout the year–both from industry insiders and our reporters. While many of these pitches make for a good story, every year a handful come to fruition as a unique story that offers a new perspective on a topic with fresh voices and impact.
Whether it is diving into the potential benefits and dangers of abstinence-only substance use disorder care or looking at the role of parents in autism treatment, these stories have offered something new to our readers.
Last week we published a list of our most read stories in 2024. In this Update I wanted to explore the hidden gems from this year.
In this Update I will discuss:
- The most interesting stories defining 2024
- Long-term industry implications and emerging trends
- Lessons learned for providers, payers and investors
Optum-Backed Refresh Mental Health Acquires CARE Counseling
While investors were sluggish on M&A in 2024, one major deal made waves in the industry. Behavioral Health Business got the scoop that Optum-owned Refresh Mental Health acquired fast-growing outpatient mental health provider CARE Counseling.
CARE Counseling made its way onto the Inc.’s list of the 5,000 fastest-growing companies in 2022 and 2023.
The deal came roughly two years after United Health subsidiary Optum acquired Refresh Mental Health in a deal worth approximately $1 billion.
The deal demonstrated Optum’s commitment to expanding its behavioral health offerings. It’s also one of the largest deals of 2024 and, interestingly, from a payer-backed provider.
In 2024, we continued to see payers build up their behavioral health service offerings. For example, in March, Cigna’s (NYSE:CI) health service division, Evernorth, launched a new behavioral health care group.
Health plans will likely accelerate acquisitions of behavioral health providers, driven by their need for growth amid antitrust restrictions on insurance market expansion.
‘Parents Are Desperate’: Parent-Led ABA Provides Tantalizing Remedy to Autism Therapy’s Challenges
Autism therapy is more in demand than ever before and providers are struggling to keep up. One option that has come up to deal with these challenges is offering parent-led applied behavior analysis (ABA).
Parents are trained in ABA and become live-in registered behavior technicians (RBTs). The goal of the practice is to maximize access to care.
Several industry insiders said the practice would be cheaper than in-home or in-center ABA. Additionally, it would help with the massive turnover rates of autism providers, which are driven by low payer reimbursement rates and, in turn, lower RBT wages.
Still, this practice could have several hurdles. For starters, health plans recognizing parent-led ABA pay hour rates are half of what BCBAs are paid for supervising RBTs, which doesn’t incentivize providers to offer the services.
It’s an interesting story from one of our sub-brands, Autism Business News, that takes a fresh perspective on the staffing shortages in the ABA industry and the creative options providers are considering. As the supply and demand issue continues, I think we’ll see more of these out-of-the-box ideas spring to life.
Addiction Providers Embrace Harm Reduction and MAT, But Abstinence-Based Treatment Isn’t Dead Yet
Abstinence care was once a cornerstone of substance use disorder treatment. But over the last decade, care has turned toward harm-reduction and medication-assisted treatment approaches.
Recently, research demonstrated that abstinence-based SUD treatment is deadlier than no treatment at all.
Still, many providers say that more traditional approaches, including abstinence, will remain an essential part of the SUD treatment spectrum. Abstinence models, such as Alcoholics Anonymous (AA) and Narcotics Anonymous (NA) ‘s 12-step program, are still used by 65% of addiction providers.
This story explores the benefits and risks of abstinence-only programs and why so many of these programs exist despite the growing body of evidence that demonstrates MAT is the most effective method of treatment.
The article makes sense of the phenomena by digging through reimbursement trends, regulation and stigma surrounding SUD care. It also explores why abstinence-only care could work for specific patients who want to pursue that type of care.
I think it’s an important story as the industry’s shift toward harm reduction reveals the obstacles standing in the way of implementing such care.
I was cautiously optimistic when Walmart first announced it was entering the health care industry, mainly because of Walmart’s price transparency efforts and its ability to reach folks in rural communities.
But after the company announced its healthcare offerings did not provide a “sustainable business model,” I started exploring why the practices that made it stand out could have led to its downfall.
Walmart was one of the retailers that posted its prices on billboards. While I was excited that this could potentially lead to a democratization in healthcare, the practice may have backfired. During Walmart’s five-year run as a provider, with several behavioral health services in its arsenal of services, wage inflation hit an all-time high and even some of the big names in the industry, including Acadia (Nasdaq: ACHC) and Universal Health Services (NYSE: UHS) struggled to recruit and retain mental health professionals.
Charging low rates could have been at odds with the company’s ability to retain a behavioral health workforce. The price transparency efforts could have also impacted Walmart’s ability to work with payers because it would be difficult to negotiate rates with payers that are higher than the ones listed on the billboard.
Walmart’s focus on rural areas could have also added to the complexities. Recruiting staff in traditionally underserved areas has been a pain point in the industry for many years.
This story was important because of the implications this high-profile failure could have for future retailers. In the future, we could see other retailers shy away from offering health care services, including behavioral health.
Venture Capital’s Priorities Are Evolving As Behavioral Health Market Matures
Venture capitalists were once seen as behavioral health care disruptors. In the early 2020’s we saw a growing number of venture capitalists place bets on behavioral health providers–the bulk of these were digital providers. VCs were willing to explore new business models with significant growth potential. On the other hand, private equity firms have stuck to tried and true business models.
However, as venture capitalists investing in behavioral health mature, the expectations of companies are beginning to evolve. VCs are now seeking out business models with proven track records and taking calculated risks on innovative approaches.
I thought this story was enlightening because it takes a closer look at venture’s role in behavioral health. It also evaluates how the venture’s role is changing from disruptor to savvy investor in the behavioral healthcare ecosystem.
