Volatility is expected to remain in U.S. markets this week after Thursday’s vote by the U.K. to leave the European Union—a move nicknamed “Brexit.”
“Domestically, I wouldn't think that Brexit would have any impact on behavioral health,” Dexter Braff, MBA, BS, MA, president of the Braff Group, tells Behavioral Healthcare. “While it may weaken the British pound and destabilize markets, thereby making investors nervous, healthcare has proven to be a hedge against such market forces given its inelastic demand.”
Health service benefits questioned
Acadia Healthcare holds a portfolio of behavioral health facilities in the U.K. Early in 2016, Acadia completed the acquisition of the Priory Group, which added approximately 7,100 beds in 327 facilities, but officials said they had few plans for additional U.K. deals.
“As for Acadia, one of the alleged selling points was that leaving the E.U. would free up additional monies for the National Health Service, which would presumably benefit Acadia,” Braff says. “But supporters of Brexit—notably Nigel Farage [leader of the U.K.’s Independence Party who campaigned for Brexit]—appear to be backing off of that claim.”
Some 17 million people voted to leave the E.U., many of them reportedly influenced by Farage’s projection that money previously sent to the union would instead be spent on the health service. A campaign bus driving around the country drumming up Brexit support was painted with messages on the exterior suggesting that £350 million per week would be allocated to healthcare. According to CNN, Farge, in more recent comments after the vote, is now claiming that the promise was a mistake.
“All in all, then, while Brexit may ripple through the world's economies, its only impact on behavioral health is that it will likely ramp up the anxiety level of many bankers,” Braff says.
Voters reportedly backed Brexit because they also expected immigration to the U.K. would be reduced as well.