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Your 2017 strategic plan

November 28, 2016
by Julie Miller, Editor in Chief
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There’s no doubt the opioid crisis will be among the continuing challenges for healthcare stakeholders in 2017, despite the efforts made this year by many to drive large-scale solutions. New federal and state laws aim for comprehensive change, meanwhile, behavioral health treatment centers are facing new demands with seemingly status-quo resources.

“Everyone is interested in mental health and addiction treatment, and that’s the good news,” says Linda Rosenberg, president and CEO of the National Council for Behavioral Healthcare. “There is work to be done, and we need a new administration and Congress willing to make investments, regardless of their party.”

While treatment center executives can lobby at the state and federal level for resource investment and positive change, strategic moves always begin closer to home. Behavioral health experts are weighing in on a number of issues that must be on the radar for treatment centers in 2017.

Getting Paid

Rosenberg says community mental health centers are wondering if they can survive in the era of mergers and acquisitions, where larger provider networks will be favored by payers over one- and two-site facilities. Even hospitals that are seeking to create provider connections to deliver comprehensive care are looking for community providers that are willing to be part of a network.

“There’s managed care, and there’s hospitals. And then there’s the community mental health center in this kind of trickle-down economics,” Rosenberg says. “They wonder what is left for the [patients] they work with. So that’s the payment uncertainty.”

Becoming a preferred provider should be on the strategy list for treatment centers in 2017, she says. But some might even question whether they should be acquired by a hospital system or merge with another provider to achieve scale.

“We need to look at what is going on in our industry as it continues to boom,” says Marvin Ventrell, executive director of the National Association of Addiction Treatment Providers (NAATP). “And the key watchword is ‘discernment.’”

He cautions that providers must remain thoughtful in evaluating new players entering the market these days because the industry has seen waves of investment interest before that resulted in relatively short tenures. While it can be tempting to go after an emerging opportunity, it’s important to frame decisions in a long-term context.

“It affects individual providers’ perspectives when they make business arrangements,” Ventrell says. “We have to play the long game, even when it seems like folks can get rich quick. We have to see who the legitimate players are.”

As investment firms announce new acquisitions, many are making deals with experienced behavioral health executives who can stay on with the organization and manage the important task of driving the mission of quality care. Meanwhile, the investors can keep an eye on business growth.

“Reimbursement is certainly the most challenging issue,” says Dave Johnson, president of the behavioral health division of Alanco Technologies, an investment firm. “How are third-party payers going to be [working with] the substance use disorder and mental health providers in the next year or two?”

A former Hazelden Betty Ford executive, Johnson has facilitated merger and acquisition deals in the market.

“Treatment center operators have to explore all of their options regarding the longevity of out-of-network and the potential of in-network contracts as well as the ability to negotiate rates on either of those,” he says.

Further, Johnson says, some operators are unaware of the fact that the payers’ rates are negotiable. Executives can often find success in payer-contract negotiations if they can present a track record of quality care.

Value-Based Payment

Healthcare overall is moving toward a value-based payment system, however, the logistics of the model are complex and require a significant investment in data analytics. In order to be paid for value, providers must be able to track that value objectively in terms of dollars and cents—a tall order. Hospital systems, arguably the leading provider segment in terms of adoption of value-based care delivery, are increasingly negotiating risk-based contracts with payers of all types, banking on the idea that they can provide good care for a good price. Positive outcomes, such as reduced hospital readmissions, result in financial rewards, while poor outcomes might result in pay reductions under such models.

How value is determined and how rewards might stack up for behavioral health remains to be seen.

“Nobody knows what value-based purchasing means yet because we don’t see much of it on the community side,” says Rosenberg. “There are pilots with rewards for managing a high-need population with an insurance company contract, but that’s the extent of what we’re seeing.”

Future planning might include a hard look at actual costs for mental health and addiction treatment per patient, per episode or per year—and where value opportunities lie.

“This creates a setting where the provider can create an upward spiral of new funding based on success, expanding the program as they rack up successes,” says consultant Dale Jarvis, CPA. “If an addictions provider is not prepared to enter into this type of risk-bearing contract, they are probably not adequately prepared to survive in the new value-based purchasing healthcare ecosystem.”

Integration

Ample opportunities exist for integration efforts. For example, many organizations are actively working with or looking to engage primary care providers to better coordinate care. Treating the whole person in a comprehensive manner has increasingly become the ultimate goal with payment incentives to match.

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