Behavioral Health Is Breaking The Bank — Here’s How To Invest Wisely

Behavioral health has emerged as a significant concern for families, employers, and wealth advisors. It has now become a topic of discussion in boardrooms, family gatherings, and is increasingly recognized as a risk factor for high-net-worth families. If left unaddressed, these issues can disrupt family dynamics, hinder career progress, deplete wealth, and complicate legacy planning. Despite the increased awareness, navigating treatment for behavioral health remains challenging, impacting factors such as quality of care, access to care, and associated costs. The payment for behavioral health and addiction treatment is often one of the most perplexing, inconsistent, and costly aspects of healthcare in the United States.

Much of the time, families, even those with substantial resources, do not realize the significant financial decisions they are making during crises. They may overspend on expensive programs with bold promises, neglect essential care, and struggle to develop a cohesive treatment strategy. This can lead to unfavorable outcomes, emotional exhaustion, and overwhelming financial burdens.

Mental health costs the U.S. economy more than $280 billion annually — hindering investment, productivity, wealth accumulation, and other indicators of progress. This issue extends beyond individual and family concerns; it has significant economic implications.

However, there is a way to approach this challenge differently. It requires viewing behavioral health not as a crisis to endure but as a chronic condition to manage and invest in wisely.

The Complexity of Behavioral Health

Behavioral health is inherently more intricate compared to other areas of healthcare. Here’s why:

• It often coexists with other conditions. Mental illness is frequently intertwined with chronic pain, substance use, and autoimmune disorders, making diagnosis and treatment more complex.
• Diagnosis is not straightforward. Unlike physical health conditions that can be confirmed through lab tests, behavioral health diagnoses rely on patterns, interviews, and observation, requiring time and expertise.
• Progress is not linear. Unlike measurable improvements in physical health, behavioral health progress can be subtle, with setbacks occurring frequently.
• Active patient involvement is essential. Treatment for behavioral health conditions necessitates the active participation and long-term commitment of the patient, unlike more passive forms of treatment.
• Fragmented care. Treatment for behavioral health often involves multiple professionals, including psychiatrists, therapists, and coaches, leading to fragmented care that may not always align.

Factors Contributing to the High Cost of Behavioral Health

There are valid reasons why behavioral health treatment is expensive, as well as some questionable practices.

• Unpredictable timelines. Recovery from behavioral health conditions is not always a straightforward process, with individuals requiring varying levels of support over extended periods, making cost estimation challenging.
• Variability in treatment quality. Some high-cost programs may not deliver evidence-based care, leading to inflated prices without commensurate benefits. Lack of regulation in the industry allows for both innovation and exploitation.
• Limited insurance coverage. Many providers in affluent markets do not accept insurance, forcing individuals to pay out of pocket for services.
• Work interference. Behavioral health treatment often requires time off work, leading to reduced earnings and missed opportunities, adding financial strain.
• Impaired decision-making. Some behavioral health conditions impair judgment, leading to impulsive spending, risky choices, or refusal of effective care.

The Cost of Advanced Treatment

While there are innovative treatments available for behavioral health conditions, selecting the right one can be overwhelming. Approximately 30% of individuals with major depressive disorder are considered treatment-resistant, leading to an interest in newer interventions such as ketamine therapy or brain stimulation. However, families should be prepared for high costs, uncertain insurance coverage, and the need for accurate diagnosis.

For instance, ketamine-assisted therapy is promoted as a breakthrough for treatment-resistant depression, with costs ranging from $400 to $1,500 per session and full treatment cycles exceeding $10,000, typically not covered by insurance.

Similarly, deep brain stimulation (DBS) and transcranial magnetic stimulation (TMS) can cost $50,000 or more for DBS and $6,000 to $15,000 for TMS.

While these treatments may be beneficial under specific circumstances, it’s crucial not to mistake “cutting-edge” for “guaranteed.” Without expert guidance, families may invest in therapies that do not address the root cause or may delay more effective care.

Matching Expertise to Needs

Behavioral health treatment involves a diverse range of modalities and professionals:

• Psychiatrists (MDs) manage medication, diagnose complex conditions, and sometimes provide talk therapy.
• PhD or PsyD Psychologists conduct testing and therapy sessions.
• Licensed therapists (LCSW, LMSW, LMFT) offer ongoing therapeutic support and counseling.
• Coaches, sober companions, case managers all play roles with differing credentials.

Understanding the roles of these professionals and when to engage them can prevent overspending and ensure appropriate treatment. During a crisis, a family might opt for an MD when a licensed therapist would be sufficient, or choose residential care when an intensive outpatient program (IOP) might be more suitable. Additionally, transitions between programs or providers can be challenging, often resulting in critical information being lost. Clear communication between clinicians is essential for maintaining care quality and continuity.

Dispelling the 30-Day Myth

A common misconception is that a 30-day treatment program guarantees a cure. In reality, this is just the beginning of a longer journey.

Addiction and severe mental illness are chronic conditions that often require a phased approach to treatment.

Families expecting a quick fix through a single stay in a treatment facility are often disappointed, left with a hefty bill and no clear path forward.

Strategic Planning Over Impulsive Decisions

The key to managing behavioral health costs lies in proactive planning, staged investment, and utilizing appropriate resources.

• Estimate costs by phase, not just by facility.
• Evaluate programs based on outcomes, not aesthetics. Conduct thorough research.
• Build a comprehensive care team, not just a temporary solution.
• Identify when to invest. While a $30,000/month program may be beneficial, it should not be the initial step and must be followed by ongoing care.
• Consider hidden costs. What if a 15-day evaluation program extends to 60 days? What if a loved one leaves a 30-day program after only 20 days – is there a refund policy?
• Be specific. Ensure that the program or provider specializes in the specific condition, such as eating disorders, rather than offering general services. Just as one would seek a specialized orthopedic surgeon for a knee issue, the same applies to behavioral health care.

In some instances, engaging an expert healthcare advisory team or care manager can result in significant cost savings by connecting patients with suitable providers from the beginning and maintaining continuity of care.

Shifting from Crisis Expenditure to Strategic Investment

Just as families plan for education, estate planning, and philanthropy, behavioral health should be incorporated into strategic financial planning.

Investing in behavioral health, when done correctly, not only preserves financial resources but also safeguards human capital, stabilizes families, and restores dignity. While the healthcare system may present challenges, with the right approach and resources, navigating it is possible. The rewards, when successful, are immeasurable.