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The future of behavioral health: Under construction

March 31, 2014
by Dennis Grantham
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Linda Rosenberg

One picture of the current state of behavioral health might well show a building, obviously a going concern, that is doing business through the front door, yet undertaking an urgent and vast expansion project in its back lot. Activity is underway, despite the fact that the blueprints aren’t complete because some of the partners who will influence them aren’t in place yet. Financing, too, is a question, though managers are sure they’ve got a product that no partner can do without, one that technology will only make easier to deliver. Employees anticipate great success, yet know they’ll face unexpected challenges as the project unfolds. 

So, who might lead such a project in an uncertain market that faces nearly as many questions as it has answers? 

Linda Rosenberg took on this job, and many like it, when she became CEO of the National Council for Behavioral Health nine years ago. And, in a recent exclusive interview, she sought to sketch a structure for the future of the behavioral health industry that many still struggle to see.

The structure’s foundation is still forming around what she terms “phase one” of Obamacare – the effort to increase enrollment and insurance coverage nationwide. The structure itself will rise around “a new, post-Obamacare policy approach built on two elements: using analytics to identify high-cost populations and then treating them in integrated settings.” Though the Medicaid expansion is a contentious issue in more than 20 states, she maintains that “we’ll see more and more states moving toward expansion following November’s midterm elections.”  

Within the next two to three years, she expects “the more complex phases of Obamacare to take shape: service delivery redesign and payment redesign. When we talk about changing and integrating delivery,” she continues, “we’re really talking about integrated settings like accountable care organizations (ACOs), medical and health homes – the kind of delivery mechanisms that reflect the belief in ‘population health approaches’ that seek to define populations, improve their care, and reduce costs." 

Long-anticipated change around payment structures is coming next. It is essential, she says because “what we’ve seen around integration studies so far is that they’re not necessarily resulting in reduced costs because they’ve been operating in a fee-for-service world.” She asserts that “bundled, capitated, shared-risk models will be the next big step.”

If you can’t envision such changes in just two or three years, look 10 years out, she suggests. By then, the new payment structures will be in place and then, the question will be whether they live up to expectations. What’s not in question now, she continues, is that an influx of new money and an expanding number of would-be patients means that “everybody’s in our business now” and that the field is becoming part of the bigger business of healthcare.

“People have wanted this change for a long time.” But now that it’s really here, however, Rosenberg says that “some are really shaken up by it, I think.”

The driver is, of course, money. “Thanks to parity, which is now the rule in Medicaid and in the exchanges, people now see money in mental health and SUD treatment that they hadn’t seen before.  This, together with the broader push toward integrated services, has gotten other, much bigger players interested: big medical practices, pharmacies, private equity firms, and big hospital chains. 

With all of this comes the one big question for behavioral healthcare: Can we survive as a separate, distinct specialty operation? The answer to that is mixed, she says.

Already, the rising number of mergers involving behavioral health organizations demonstrates one concern: “the need to have some size in order to meet current and future demands for investing in technology, conducting research, and bringing research into practice.” Though it is possible to be small and do these things, Rosenberg notes that, “it is very difficult.”

“Getting bigger” is happening in two ways. Mental health and SUD treatment organizations are coming together, becoming larger within the field, and behavioral health organizations are merging and partnering outside the field, reflecting the likely need to “operate while taking responsibility for total populations, not just for mental health or SUD treatment.”

“It’s the same in every state: a move toward integration, a move toward managed care in order to contain costs, steps toward getting ‘ownership’ of populations, and concerns about workforce and what it will look like in the future,” she explains.  Oh, and one other item, she notes:  the need to adopt new technology and finance its improvement on an ongoing basis.

The influx of new players, additional technology, and a growing list mergers and acquisitions are signals of “the movement of big business into our industry, something we haven’t seen up to now and aren’t used to,” given that most providers are “essentially small businesses.” Realistically, the future means one or two things: “We need to be bigger to afford the infrastructure that healthcare organizations have to have now, or we need to be so unique that payers will purchase services because nobody else can do what we do.” She describes the field’s “sweet spot” as “managing complex conditions in vulnerable people.”

Ultimately, even the largest National Council members are unlikely to have the capital needed to change business and service practices,” says Rosenberg, noting that for-profit businesses generally raise and spend significant capital before embarking on new ventures. Hence the complexity of management’s task: – running a day-to-day business through the front door while building the future of the business out the back door.