New layoffs at the end of October reflect the downward pressures on the residential care model.

Two closures have impacted 356 employees, according to public documents. One entity will continue to operate while another appears to be heading for closure.

In Dearborn Heights, Michigan, the nonprofit, youth-focused behavioral health and social services provider Vista Maria will close its residential mental health facility and lay off 154 people, effective Dec. 19. The decision came “after extensive analysis and discernment,” a letter the organization sent to a Michigan state agency reads. 

A leader of Vista Maria told local media that the residential treatment space has become more difficult to navigate and that the needs of more and more children were worsening, making psychiatric hospitals a better setting for their care. 

Still, this leader said the organization’s residential care is a “bridge between hospitalization and home” and that the state has far fewer such facilities to provide such services than in years past. Vista Maria’s other services will continue.

Vista Maria has not responded to a request for comment.

In Arizona, Buena Vista Recovery has notified a state agency that it will lay off 202. It delivered that notice on Oct. 28. Headquartered in Scottsdale, the addiction treatment provider will reportedly cease operations at two residential facilities — in Chandler and Tucson — and an outpatient/intensive outpatient facility in Scottsdale, according to local reporting. 

The Phoenix Business Journal reports that Buena Vista Recovery Interim CEO Julie Gable told employees in a letter that the “difficult decision follows an extensive evaluation of our financial position, patient volumes and the sustainability of continuing operations.” The company landed at these locations by repurposing to-be-opened senior care facilities. 

Buena Vista Recovery has also not responded to a request for comment.

Several major behavioral organizations have struggled with residential services, leading to closures.

Youth- and family-focused Newport Healthcare closed nine facilities as part of a larger repositioning of the company and its priorities. The move is intended to align the company with in-network coverage in the market.

Franklin, Tennessee-based Acadia Healthcare (Nasdaq: ACHC) shuttered several facilities in addiction treatment and eating disorders that impacted at least 400 roles.

There is likely to be a continued place for residential treatment going forward, albeit in an evolved and likely lesser role than in the past. Several behavioral health insiders say that stays in these settings will be shorter and have to be supported by several other care types.

Such understanding is inspiring some entrepreneurs to jump into the space. One longtime executive has launched a new youth residential program that will center on training clinicians and staff, for instance.