As patient care increasingly moves into the home, some home health providers are adding services to tap into the $80 billion behavioral health sector.
Some companies are providing in-home treatment and support for mild anxiety and depression, while others are targeting more serious mental health conditions such as schizophrenia, bipolar disorder, substance abuse and autism.
The growth is driven by increased diagnoses of mental illnesses. The Centers for Disease Control and Prevention estimates 1 in 5 adults has a behavioral health condition, and since the COVID-19 pandemic, more Americans have sought treatment for depression and anxiety. Telehealth has made access to behavioral healthcare more accessible.
Home health firms also are benefiting from a Centers for Medicare and Medicaid Services requirement that took effect in January requiring them to screen for depression and cognition deficits during patient assessments.
Treating behavioral health conditions in the home isn't new. Amedidys, the nation’s second-largest home health firm, has offered in-home mental health therapy, education and emotional support to patients with depression and anxiety for the past decade.
Competitors are emerging in part because it could make them more attractive partners with health insurers. Addressing patients’ mental health can improve their overall health and potentially reduce hospital admissions. In-home treatment can also be less expensive than facility-based care. That combination can be a big selling point for home health companies when negotiating contracts with health insurers, especially Medicare Advantage organizations.
“You’ve got a better mousetrap,” said Laura Wilson, clinical strategies vice president at healthcare consulting firm SimiTree. “From that perspective you can make a case about why you should be at the table.”
In January, Dallas-based home health and hospice firm Elara Caring began offering behavioral health services to Medicare patients in 11 of the 16 states it serves. Social workers and nurses provide virtual and in-home counseling to treat Medicare patients who have depression and anxiety. Psychiatric nurses treat patients with more severe mental health issues.
Elara Caring Chairman and CEO Scott Powers said behavioral health has the potential to grow from 7% of the company’s revenues to 25%. “The demand is there, " Powers explained. “We just need to staff up for it.”
Some home health providers are targeting niche segments of the market. Bayada Home Health Care, which operates 380 offices in 24 states, is targeting home-based treatment for autism and other intellectual disabilities. Although behavioral health makes up only about 1% of its revenues, CEO David Baiada said an increase in autism diagnoses could help it capture a bigger share of the market.
“There’s growth potential there,” Baiada said. “Our high quality of care and protective status as a nonprofit organization are going to contribute to our tailwinds in the behavioral health market.”
Innovive Health is targeting low-income Medicaid patients with chronic health conditions. The company has been providing in-home care to patients with severe mental illness in Massachusetts for the past two decades and expanded to Colorado in April. Increased funding for Medicaid home- and community-based services through the American Rescue Plan Act prompted the Colorado expansion and could help the company expand to other states, said CEO Joseph McDonough.
Bringing mental health services into the home also could help fill a void in rural communities where the nearest facility-based behavioral health providers can be at least 50 miles away.
Angels Care Home Health is providing in-home behavioral health counseling and treatment to patients in 75 locations across nine mostly rural states including Kansas, Nebraska, and Oklahoma. “We might be the only care they can get,” said Amanda Redlinger, the company's director of behavioral health.