Major Business Challenges of Behavioral Mental Health Organizations

The Major Business Challenges of Behavioral/Mental Health Organizations

Everyone, at some point in their life, deals with mental illness personally, or in the life of someone close to them, whether it’s due to anxiety, depression, overeating, under-eating etc., often brought on by a job-related pressure, grieving, divorce, moving location, stress, or other occurrences that happen in day-to-day life. In fact, according to the National Alliance on Mental Illness, one in four adults (approximately 65 million Americans) experiences mental illness in a given year. One in 17 (about 14 million) live with a serious mental illness such as schizophrenia, major depression, or bipolar disorder. All of this means that mental health and behavioral organizations within healthcare that deal with it have not only a patient volume challenge, but also a number of particular business challenges to tackle such as the ones described below.

The Drive to consolidate
The mental health and behavioral health sector has been something of a “cottage industry” for many years, with small organizational dealing with individuals with a wide range of different needs. However, this has never been a particularly cost effective model for intervention and significant consolidation is therefore like to be beneficial because larger integrated systems are more efficient than many private practices, and clinics, which have many “occupancy” gaps. In fact, many hospitals and insurance companies are already buying some mental health provider organizations while mental health provider organizations are buying other groups. The challenge therefore is with whom should a provider organization partner.

The more ubiquitous use of electronic records
As greater consolidation occurs psychologists and other behavioral health professionals need to greatly speed up their adoption of electronic medical records that will allow them to communicate with physicians and other providers and participate fully across the mainstream healthcare provider system.

Data-driven patient management-tracking value
Considerably more ubiquitous data will increasingly drive better decisions within health care in general but behavioral health can be a primary beneficiary. Patients can now have symptoms tracked while in treatment and after they are discharged so that a determination can be made as to whether or not particular interventions and treatments are working. The challenge though is to select how this is best done from many alternative options and to adopt the best possible technological assistance.

Getting behavioral health funded
Apart from physical accidents, depression is the number one health-care cost for employers, with stress just behind it. But direct health-care costs aren’t the only issue. Some other behavioral health conditions such as general anxiety or concern about weight for example, also have hidden costs, decreasing productivity and increasing sick-day use, for instance. Behavioral health professionals and organizations can help to turn these situations around but the interventions need to be funded. For those who can afford it, or have high quality insurance that covers it, this can be funded, but this is the minority. The challenge is to get Medicare to extend coverage to everyone as much as possible in the future.

Being seen as a mainstream part of the medical system
Mental health professionals suffer from having a mixed reputation not to mention some stigma from individuals about needing their help. The challenge is therefore to improve this reputation through portraying even greater professionalism and getting to be seen as a mainstream part of the medical mainstream.

Mental/behavioral health is a growing need in the adult population at large in a fast changing world. However, the sector faces a number of challenges to deal with the demand and to ensure that funding exists to give individuals the increasing levels of help that they seem to need. RX4 has experienced all of these mental health/behavioral business challenges in many different healthcare environments and can provide considerable insight and options where the knowledge is limited or does not exist internally.

Dr Jon Warner

Dr. Jon Warner
CEO-RX4 Group-Taking Care of the Business of Healthcare

Jon is the CEO of RX4 Group based in Los Angeles, California. He can be reached at

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