One of the main reasons why bundled payments could be a stepping stone towards true value-based care is the focus on outcomes rather than services provided. Providers are incentivized to deliver high-quality care that leads to positive results for the patient, rather than simply billing for each individual service rendered. This shift in focus can lead to improved patient outcomes, reduced costs, and a more efficient healthcare system overall.
Another factor driving the adoption of bundled payments in behavioral health is the increasing pressure on payers to control costs. Behavioral health spending has been on the rise, especially in the wake of the COVID-19 pandemic, and payers are looking for ways to rein in these expenses. By moving towards bundled payments, payers can better predict and manage their costs while ensuring that patients receive the care they need.
Overall, the shift towards bundled payments in behavioral health represents a significant step towards value-based care and improved patient outcomes. While there are still challenges to overcome, such as provider readiness and risk management, the potential benefits make it a trend worth watching in the coming year.
As we look ahead to 2025, it’s clear that the behavioral health landscape is poised for significant change. With traditional PE investors eyeing smaller providers and nonprofits, an uptick in M&A activity on the horizon, and the potential for bundled payments to drive the shift towards value-based care, the industry is set for a period of transformation and growth. It will be fascinating to see how these trends play out in the coming months and what they mean for the future of behavioral health care.
Non-traditional investors continue to show interest in the behavioral health sector, with private equity investors and venture capitalists leading the way. In recent years, billions of dollars have been invested in traditional brick-and-mortar providers and digital mental health companies. However, non-traditional investors such as venture arms of payer and health systems, global sovereign wealth funds, and hedge funds have also entered the scene.
Heather Gates, audit and assurance private growth leader at Deloitte & Touche, believes that mental health is a global issue, making it attractive to venture models seeking high returns. She points out that non-traditional investors like the venture capital arms of corporations providing hospital services are increasingly investing in the behavioral health sector. Additionally, global sovereign wealth funds and hedge funds are also getting involved.
One notable trend is the involvement of large health systems through their venture arms. For instance, CVS Ventures participated in a funding round for autism provider Cortica, while Mass General Brigham Ventures invested in pediatric behavioral health provider InStride. These investments signal a growing recognition of the importance of addressing behavioral health issues and the potential for innovative solutions to reduce costs and improve access to care.
On the other hand, health plans are facing increased scrutiny for their coverage practices, with UnitedHealthcare coming under the spotlight following the murder of its CEO, Brian Thompson. Shareholders have requested a report on the company’s practices that limit or delay access to healthcare. This pressure comes amid a broader public discourse on payer denial practices, with concerns raised about denial rates and prior-authorization requirements.
In response to these concerns, the Biden administration released a final rule called The Mental Health Parity and Addiction Equity Act (MHPAEA) in September, aimed at ensuring parity for behavioral health coverage. The rule updates how health plans analyze nonquantitative treatment limitations (NQTL) and requires them to address disparities in coverage between behavioral health and physical health services.
While behavioral health advocates welcome the stronger enforcement provisions of the MHPAEA, payers have raised concerns about the legislation being vague and burdensome. With growing public scrutiny and regulatory changes, it is likely that health plans will face increasing pressure to improve coverage for mental health services and comply with parity regulations.
