The past few years have seen growing recognition and destigmatization of mental health issues, with COVID-19, social media, and celebrity mental health discussions accelerating awareness. As a result, a variety of apps and other technology-enabled care solutions have flooded the market, targeting issues such as stress, anxiety, and depression. But for healthcare organizations, the soaring demand for behavioral health services is outpacing the supply of counselors, psychiatrists, and psychiatric nurse practitioners trained in medication management. 

The unprecedented surge does not only comprise patients with mild or moderate mental health issues; it also includes people with severe mental illnesses (SMI) such as schizophrenia, schizoaffective disorder, bipolar disorder, and more. These patients may present to the emergency department (ED) and urgent care clinics, further straining capacity and affecting overall health outcomes. 

In the face of this crisis, healthcare leaders are tasked with addressing several concerns: a lack of accessible care due to the shortage of behavioral health professionals, soaring personnel costs against inadequate reimbursement rates, and, at the same time, managing the behavioral health needs of their own workforce. 

Tackling the reimbursement challenge

It’s one thing to talk about demand, but another key factor driving the current crisis is that there are limits to behavioral health’s diverse set of funding streams. Behavioral health is historically not prioritized by payers, and with reimbursements that are lower than that of primary medical care, providers are disincentivized to expand services and increase access. Lower reimbursement rates yield low network participation.

Fair rate setting is needed to address the issue. Payment reform has slowly been taking place in the realm of public insurance, with many states increasing Medicaid reimbursements for behavioral health providers in 2024 and Medicare expanding payment codes and provider types to create billing flexibilities. But other tactics are required to combat long-term underinvestment in behavioral health. 

Telehealth is one area where reimbursement policies continue to evolve. For health systems that can afford it, telehealth provides an opportunity for patients to participate in counseling sessions or quick, follow-up medication management with a psychiatrist. This can help improve compliance to treatment plans and reduce visits to the ED, which is one of the highest cost-of-care locations for an individual experiencing an acute episode. Another cost-saving measure is to take steps to identify patients’ behavioral health issues early on to provide a clinical diagnosis – for example, by offering routine screening during primary care visits. 

Planning for financial stability also looks different for not-for-profit entities than it does for for-profit ones. 

Further considerations apply to those operating as Certified Community Behavioral Health Clinics (CCBHCs), a program model developed by the federal government to provide coordinated care that supports community needs related to mental health and substance use. CCBHCs must meet certain standards for the range of services they provide, so it’s worth seeking out performance improvement strategies for sustainability efforts. This might include evaluating how to best leverage grant funding and streamline grants management, as well as how to continue providing CCBHC services after grant funding ends. For CCBHCs in Medicaid Demonstration states, understanding the new Medicaid Prospective Payment System rate-setting methodology may assist with adequately funding operations.

Addressing the workforce shortage

Staffing and reimbursement are related challenges, because poor reimbursement makes it difficult to retain behavioral health professionals, and rapid turnover means the quality of care suffers. This is particularly true in rural settings. 

Offering competitive compensation and benefits is an obvious way to address the issue. Hospitals and health systems of all types must be mindful of the best and most appropriate payment and incentive structures that will attract the most talented and highest-quality providers. Additionally, CCBHCs can leverage grant funds and Medicaid reimbursement, if available, to aid in hiring and retention. In fact, these clinics must recruit staff positions as they expand services to stay within statutory requirements.

Another strategy is to increase training and education for behavioral health specialists and primary care providers (PCPs) who screen, diagnose, and treat a variety of behavioral health issues. Additionally, shifting to a team-based integrated care delivery model – in which a PCP coordinates with other clinicians, such as a social worker or psychiatrist – can make better use of the providers already on staff and reduce administrative burden. AI dictation is another tool to deploy in the documentation-heavy behavioral health sector to help ease workloads.

Improving behavioral health for employees 

Part of keeping employees in-house is providing them with much-needed behavioral health services. In a post-pandemic landscape, employees across all industries are asked to do more. The workday is longer, demand for services has increased, and salaries have not increased alongside mounting expectations. In the behavioral health space, moral distress and compassion fatigue further compound the issue. Burnout not only leads to employee absenteeism and turnover in an already strained industry, but can also result in increased rates of medical error – a safety issue for patients and a costly problem for employers.

Solutions for addressing burnout include implementing flexible work arrangements when possible; offering employee wellness programs (e.g., stress management training and mindfulness tools); and instituting changes to policies around time off and leave. Interventions should happen at the individual level, but it’s critical that they are an organizational priority as well, with clear leadership support of their implementation and use. 

In conclusion

The growing prevalence of behavioral health issues presents a significant challenge for healthcare organizations. Amid staffing shortages, poor reimbursement, and other pain points, healthcare leaders must be creative and resourceful in how they respond to demand – including demand within their own walls. 

One thing is clear: The relationship between physical and behavioral health can’t be overemphasized. Left untreated, behavioral health conditions can exacerbate other comorbidities and lead to preventable readmissions, a substantial cost to the health system. On the flip side, regular outpatient behavioral health care can help bring down overall health costs, especially as value-based care gains momentum. Looking for ways to integrate behavioral health into primary care not only improves patient access and outcomes; it also boosts the bottom line.