U.S. behavioral health providers' net patient revenue grew marginally in 2013 and providers will need flexibility in care models to see future revenue growth, industry experts agreed.
“Revenue will go to programs that are collaborating,” said Bryan Cote, managing director at Berkeley Research Group.
Total net patient revenue at the nation's behavioral health providers rose 3.7% in 2013 compared with 2012, according to the latest available sector-wide data that was supplied by American Hospital Directory to Modern Healthcare.
At Sheppard and Enoch Pratt Hospital, Sheppard Pratt Health System's psychiatric hospital in Baltimore, for example, net patient revenue rose to $112.9 million in 2013, up 1.3% from 2012. Modern Healthcare ranked it No. 1 both years. Sheppard's net patient revenue continued an upward tick in 2014, rising 2.3% to $115.5 million.
The hospital's biggest growth area has been community care, said Dr. Steven Sharfstein, president and CEO at Sheppard. Community care focuses on a continuum of care model, where 600 to 700 patients live in supervised group homes and still work while receiving treatment at the hospital, Sharfstein said.
Revenue from inpatient care has fallen over the past 30 years. In 1986, 92% of the hospital's revenue came from inpatient care compared to 40% currently, he said. The hospital also is partnering with schools that provide special education for 800 autistic children, which Sharfstein said were funded by a mix of federal and local dollars.
Other behavioral health providers are streamlining operations and forming collaborations. Alexian Brothers Behavioral Health Hospital in Hoffman Estates, Ill., which saw its net patient revenue increase 3.1% to $66.1 million in 2013, is investing in more partial hospitalization and intense-outpatient programs, said Clay Ciha, the hospital's president and CEO. The hospital's intense-outpatient program saw 1,750 more patients in 2014 than in 2013, he said. Net patient revenue grew to $66.7 million in 2014.
Alexian's residential treatment program also is growing. Its patients join self-help groups and are in treatment 24 hours per day, sheltered from alcohol and other drugs, and the treatment steps down from there, Ciha said.
“Mental health is a chronic condition. If you treat it well and manage it correctly, you're able to avoid more costly care,” he said.
Alexian Brothers Health System followed the collaborative trend and formed a joint operating company with Adventist Midwest Health, which was finalized earlier this month. The agreement will allow the new nine-hospital system to see more adult Medicaid patients, as IMD exclusions forbid Alexian from billing Medicaid for the treatment, Ciha said. Adventist GlenOaks Hospital has no exclusions, Ciha noted.
Its likely more providers like Alexian will see opportunities to expand, noted Dr. Mitchell Morris, the U.S./Global Health Care Providers sector leader at Deloitte Consulting. Consolidation and group models will shape behavioral health providers, and bigger organizations will continue to get bigger through consolidation, he said.
The ACA and Mental Health Parity and Addiction Equity Act have provided millions with new access to the behavioral health system, and more individual needs will now be met, Morris said.
“That will increase revenue,” he said.
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