Healthcare Business News

HCA to grow presence in behavioral health, official says

By Beth Kutscher
Posted: April 19, 2013 - 2:15 pm ET

HCA, the Nashville-based hospital giant, is building its presence in the behavioral health space at a time when the field is poised to grow.

The publicly traded company has been a “re-start-up” in the sector since late 2009, said Terry Bridges, president of behavioral healthcare services, who spoke at an Avondale Partners' behavioral health conference this week in Nashville.

Bridges joined HCA that year from Psychiatric Solutions, where he was co-chief operating officer. Universal Health Solutions bought Psychiatric Solutions in 2010, and Bridges' arrival at HCA was seen as sign that it planned to boost its own mental health services.

“We're pursuing all avenues of growth,” Bridges said on Wednesday, referring to new projects and acquisitions. “We're looking to grow.”

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Bridges said the company, which has 240 psychiatric beds, has been one of the largest providers of acute-care psychiatric services, though significantly behind King of Prussia, Pa.-based UHS. But he added that its position in the market may soon be overtaken by other players boosting their own acute-care operations.

HCA, which operates 162 acute-care facilities, has five psychiatric hospitals and 41 hospital psychiatric units, according to its annual report. It does not break out behavioral health revenue.

Mark Kimbrough, vice president of investor relations, said its behavioral service line has continued to increase, gaining market share during the past year.

The behavioral health space is poised to grow under health reform next year, thanks to expanded insurance coverage and the 2008 Mental Health Parity and Addiction Equity Act. “The upside for us could be substantial,” Bridges said, adding that 13% of its behavioral health patients currently self-pay.

Investors in the space also point to a greater awareness and diminishing stigma against mental illness, which is leading to more adults being treated for behavioral disorders. And at a time when most federal agencies are tightening their belts, President Barack Obama's fiscal 2014 budget requests $235 million for mental health initiatives.

HCA is also pursuing a model of integrating physical and behavioral health services, with Bridges noting that emergency departments play a key role in diagnosing mental illness. “And who has more EDs than HCA?” he said.

He also noted that about one-third of patients have a co-morbid mental illness, and two-thirds of mental health patients have a co-morbid physical condition. The company is also looking to double outpatient services this year as another area to expand its services.

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