Behavioral health dealmaking has seen a steady rise in 2025, although it has not reached the blockbuster levels that analysts had predicted. The growth in this sector has been somewhat tempered due to uncertainty in the Medicaid market, one of the key payers in the behavioral health space. Additionally, the industry continues to face challenges from high interest rates and wage inflation.
The passing of the One Big Beautiful Bill Act (OBBBA) by Congress over the summer has further added to the uncertainty in the Medicaid market. This legislation included cuts to Medicaid and changes to the Affordable Care Act (ACA) and health insurance marketplaces, which has had a ripple effect on the behavioral health industry. Keith Farrow, managing director at Nautic Partners, highlighted the impact of these changes at Behavioral Health Business’ INVEST event, noting that investors are now focusing more on driving bottom-line performance rather than relying on valuation multiples.
Nautic Partners, a private equity firm with several behavioral health companies in its portfolio, including Advantage Healthcare Services and Odyssey Behavioral Health, recognizes the potential for expansion in the behavioral health sector. Providers who can demonstrate quality measures to payer partners are well-positioned to capitalize on this opportunity.
Medicaid remains a critical player in the behavioral health sector, with many providers heavily reliant on it for revenue. Despite potential cuts, Medicaid is expected to remain a key payer in the industry. Dave Gomel, CEO of Rosecrance Behavioral Health, emphasized the importance of diversifying revenue streams to future-proof businesses in the face of changing Medicaid regulations.
State-by-state Medicaid regulations also play a significant role in driving or limiting growth opportunities for providers. While federal policy changes grab headlines, executives emphasize the importance of understanding and adapting to the Medicaid landscape at the state level.
Investors continue to see value in the behavioral health sector, particularly in Medicaid, due to the high demand for services and the presence of quality providers. The focus on quality outcomes has become increasingly important for providers as payers seek evidence of value in their investments.
Thriveworks, one of the largest outpatient mental health providers in the country, highlights the shift towards demonstrating improved outcomes and reduced costs in behavioral health care. Providers are taking the lead in driving value-focused conversations with payers and are actively seeking opportunities to differentiate themselves through quality, training, and outcome tracking.
Overall, the behavioral health industry is poised for continued growth, despite challenges posed by regulatory changes and market uncertainties. Providers who prioritize quality measures and demonstrate value to payers are well-positioned to thrive in this evolving landscape. Family Care Center is making waves in the crowded outpatient behavioral health market by offering a wide range of services across five states. From therapy and counseling to psychiatry and medication management, transcranial magnetic stimulation, and intensive outpatient programs, the center is dedicated to providing comprehensive care to its patients.
During a recent presentation at INVEST, Dr. Chris Ivany, CEO of Family Care Center, emphasized the importance of demonstrating the value of their services to stand out in the competitive market. By showcasing how their programs can lead to cost savings and improved outcomes for payers, the center is positioning itself as a leader in the industry.
According to Ivany, untreated behavioral health conditions can be a significant cost multiplier for payers. By addressing these issues proactively, Family Care Center is not only helping individuals improve their mental health but also reducing overall healthcare costs in the long run. This approach has resonated with payers who understand the importance of preventive care in managing healthcare expenses.
With a focus on evidence-based practices and a multidisciplinary approach to care, Family Care Center is setting itself apart from other providers in the outpatient behavioral health space. By demonstrating tangible results and emphasizing the long-term benefits of their services, the center is building trust with payers and patients alike.
As the demand for mental health services continues to grow, Family Care Center is well-positioned to meet the needs of individuals seeking quality care. By staying true to their mission of providing accessible and effective treatment options, the center is making a positive impact on the lives of those struggling with behavioral health issues. With a commitment to innovation and excellence, Family Care Center is paving the way for a brighter future in the field of outpatient behavioral health.
