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Tackling the Top 3 Challenges in Behavioral Health

Analysis  |  By Christopher Cheney  
   December 01, 2021

Behavioral health is among the most challenging patient service offerings at health systems and hospitals.

Editor's note: This story appears in the November/December 2021 edition of HealthLeaders magazine.

HealthLeaders talked to several health system and hospital executives who identified three primary challenges in their behavioral health programs. They struggle with inadequate reimbursement for behavioral health services, patient access, and workforce shortages of psychiatrists and other behavioral health professionals.

Sabina Lim, MD, MPH, system vice president for behavioral health safety and quality at Mount Sinai Health System in New York, says inadequate reimbursement has far-reaching consequences. "One of the biggest challenges is the lack of appropriate reimbursement for behavioral health services. In many ways, this challenge drives a lot of the other issues. Most behavioral health providers are under-reimbursed. That affects the ability to attract workforce, which affects access issues."

Wayne Sparks, MD, senior medical director of behavioral health services at Atrium Health, says meeting the demand for patient access is a daunting challenge. "For us, the biggest challenge is access for patients to get care. We know there are many people dealing with mental health issues, and that has been on the rise even before the pandemic. One in five American adults have a diagnosed mental illness, and about half of those with chronic mental illness start before the age of 14. So, we are trying to do more to provide screening and access."

The shortage of psychiatrists is acute, he says. "There is a shortage of about 25,000 psychiatrists in the country. An amazing stat is that about 60% of practicing psychiatrists are over the age of 60. That is a frightening stat."

Behavioral health nurses are also in short supply, says Christian Thurstone, MD, director of behavioral health at Denver Health. "On the inpatient side, there are staffing shortages particularly with respect to nurses. We have 57 beds on the adult side, and our average daily census for the year is at about 41, but that is only because of staffing. If we were fully staffed, we believe we would fill all 57 beds every day. The challenge of hiring nurses and retaining them has been considerable and has limited our census."

While these challenges exist, the health system executives also shared insights about how they solved these three top issues at their organizations.

Address inadequate reimbursement

A primary strategy to address inadequate reimbursement of behavioral health services is subsidization, says Doug Henry, PhD, vice president of the Allegheny Health Network Psychiatry and Behavioral Health Institute.

"What we do is rely on the generosity of our network and our enterprise, which is Highmark Health. AHN and Highmark recognize that underdiagnosed and undertreated mental health disorders are a great burden on the community. They contribute negatively to overall medical spend and community unwellness. Our health system is willing to accept losses in behavioral health for a larger cause, which is community wellness. It is both good business for the health network and good dedication to the community," he says.

Lim says subsidization is critical to keep Mount Sinai's behavioral health programs running. "We need to continue to be subsidized because our health system is heavily invested in behavioral health. They believe it is the right thing to do. Behavioral health needs keep growing and growing. So, the health system is invested, but it puts pressure on other parts of the health system. We have about a $200 million budget. We are close to meeting our direct costs, but the indirect costs are subsidized substantially."

Subsidization is necessary because patient revenue does not cover the costs of all behavioral health services, Sparks says. "We do get subsidy from the overall system because if we only relied on patient revenue, it would not cover what we are doing."

Even in a good financial year, subsidization is required, says Thurstone.

"As a department, we are typically budgeted to lose about $4 million. This year, we will lose much less than that. I attribute a lot of this performance to the increase in telehealth and the increase in demand. For example, our outpatient visits are up 30%, and we attribute that to COVID and telehealth, which leads to fewer no-shows. Our inpatient child unit has been running at capacity because of COVID demand. We are not making money for the hospital system, but we are losing a lot less money than we were budgeted to lose. We were budgeted to lose about $4 million, and we will probably lose about $1.5 million," he says.

Optimizing revenue cycle helps to ease financial losses in behavioral health programs, Lim says.

"Behavioral health finances are complicated—they are often paid under different payment systems. We have many codes that are difficult, and there is a tremendous variation in the types of codes. So, we have worked over the past eight years to dive deeply into revenue cycle. We have decreased our inpatient denials and outpatient denials by huge percentages. We have focused heavily on how we can make sure that we are correctly sending out our bills and making sure that we appropriately advocate and fight for all inappropriate denials. The revenue cycle work has been tremendously helpful for us not only to increase our bottom line but also to think about how we do work and how we do work more efficiently," she says.

Behavioral health programs can also address financial losses by cobbling together sources of financial support, Henry says.

"As administrators, we hustle hard to braid public and private financing. This includes grants from the federal government, grants from the counties, and grants from the state. We combine these grants with private funding, which includes foundation funding such as private foundations that support programs in the schools. We braid these funds with third-party insurance revenue in ways that allow us to build sustainable programs," he says.

Philanthropy is a significant source of financial support for behavioral health services at Denver Health, Thurstone says. "We have gotten several private foundation grants recently to expand services related to infant mental health and substance treatment. Everybody seems to be talking about behavioral health. It is a hot topic, and that has created some philanthropy dollars that have helped us expand as well as cover some of the financial gaps. These grants have been about $2 million over the past two years."

Grant funding and philanthropy have bolstered the finances of Atrium Health's behavioral health services, Sparks says.

"Financially, we have been able to leverage our ability to get some innovative programs started with grant funding. There has been a snowball effect with one of our funding sources—The Duke Endowment. It seems that once you get a good program going, they want to hear more. This is how we got a virtual patient navigation program started. When we get programs started with grant funding, we can share our data with our overall organization, show benefits, and get the support to continue. We also rely on philanthropy. Our foundation has been successful getting donations from the community. We recently got a $350,000 donation from a former patient's family because of their experience and how well the patient did," he says.

Financial losses at behavioral health programs need to be viewed through a broad lens, says Ruth Benca, MD, PhD, professor and chair of the Department of Psychiatry at Atrium Health Wake Forest Baptist.

"The big picture is about the overall medical spend. It is not just about what psychiatry can do to make money. It should be about how we can provide cost-effective mental healthcare that is going to improve the overall health of our population. We know that poor mental health contributes to poor physical health and disability, and that is what is costing us billions and billions of dollars," she says.

Behavioral health programs reduce the total cost of care at health systems, Sparks says.

"As an organization and as a service line, rather than focusing on the revenue bottom line we have tried to focus on how the behavioral health program fits into the larger health system. In an organization like ours, we have been focusing as much as we can in moving toward a population health model and value-based model. We know that you really cannot do a population health model without significant behavioral healthcare. We have tried to look at finances in that way—not looking at how much behavioral health is bringing in but how much we are able to lower the overall cost of care for patients," he says.

Improve patient access

A primary strategy for addressing patient access is integrating behavioral health into specialty practices—particularly primary care, Henry says.

"We put behavioral health professionals and psychiatrists into primary care practices and other medical subspecialties. We began doing that in 2019 and have just completed our 75th integrated practice. So, just in the past couple of years, we have added 75 new access points for behavioral health services in Western Pennsylvania. Fifty of those sites are primary care practices, and 25 are other medical subspecialties such as pain, neurology, endocrinology, gastrointestinal, orthopedics, and oncology," he says.

Integrated behavioral health can be achieved by utilizing social workers, says James Kimball, MD, a psychiatrist at Atrium Health Wake Forest Baptist. "Essentially, we are reaching out to primary care practices through a social worker. The social worker is doing some basic counseling with patients and doing depression and anxiety ratings scales. A psychiatrist will supervise them and advise the primary care clinician on possible medication options for the patient in a way that can better manage depression and anxiety."

Atrium Health has established a virtual behavioral health integration program, which operates in about 60 of the health system's 200 primary care practices, Sparks says.

"The primary care provider can connect with our team virtually, and a licensed clinician will evaluate a patient in the office at the time of the primary care visit. Then patients can connect with services through our program. The primary care clinician can connect on the spot with a provider such as a psychiatrist or an advanced practice provider to get recommendations for any medications or any revisions of medications," he says.

The virtual behavioral health integration program has performed well on key metrics, Sparks says. "We have had a significant decrease in patients coming to our emergency department and going into the hospital because of this program. It has been about a 25% reduction in avoidable inpatient stays and about a 13% reduction in emergency care."

Opening new facilities is another strategy to address patient access.

Mount Sinai is planning to open a new comprehensive behavioral health center in Lower Manhattan next year, Lim says. "We basically are creating a wide continuum of behavioral healthcare in one building. We will have inpatient services, intensive outpatient services such as partial hospitalization, and crisis and respite beds where people can stay seven days a week if they are experiencing a behavioral health crisis."

Mount Sinai is also set to open a new behavioral health ambulatory center in Uptown Manhattan that will include adult and child psychiatry clinical services as well as a partial hospitalization outpatient program, she says.

The metrics for evaluating the new facilities will include the impact on psychiatric hospitalizations and quality-based measures such as suicide prevention, Lim says. "It is extremely difficult, but we are always aiming for zero suicides. We will also be looking for decreased no-shows and increased visits."

AHN is opening several community mental health centers, says Henry.

"Our approach is neighborhood-centric. That is harmonious with Allegheny Health Network's overall strategy of serving neighborhoods instead of building large medical centers in urban areas. We heat-mapped the points of most frequent origination for more acute psychiatric needs. We did this by ZIP code, and we dropped outpatient and intensive outpatient behavioral health clinics into regions that had the highest frequency of need. We have opened three clinics in the past year using that methodology. We will open three more clinics next year, and we will open three more in 2023," he says.

Shore up workforce shortages

Compensation is a primary strategy to address workforce shortages, Henry says.

"Several years ago, we designed a new compensation plan that set a productivity target for our physicians. Beyond that productivity target, physicians can keep 100% of the average net revenue that we bring in for their efforts. For example, if somebody has a large student loan burden, they can work a little extra and it absolutely gives them an opportunity to make more money," he says.

Allegheny Health Network has also raised base compensation for psychiatrists, says Anthony Mannarino, PhD, vice chair of the AHN Psychiatry and Behavioral Health Institute. "Our base compensation for psychiatrists has risen over the past five to six years. Ten years ago, it was much lower than it is now. We have tried very hard to look at the benchmarking standards to make sure that our base salary is as competitive as possible to recruit and retain physicians."

At AHN, a base salary is about $225,000 for an outpatient psychiatrist and $240,000 for an inpatient psychiatrist, Henry says.

Denver Health is looking for ways to decrease pressure on nursing resources, Thurstone says. "I have asked my team about whether anyone has seen other staffing models that utilize licensed practical nurses or behavioral health technicians to the maximum of their potential. I also have asked whether there is a way to protocolize care on our inpatient units so that we could utilize behavioral health technicians more. I am looking for staffing models that are not as heavily dependent on registered nurses."

Atrium Health Wake Forest Baptist has adopted a team approach to behavioral healthcare to address staffing shortages, Benca says. "One of the ways that we are addressing not having enough psychiatrists is developing treatment teams. The idea is to have several mental health providers all working up to the highest level of their license. By having teams that include nurses, mental health workers, psychologists, social workers, and psychiatrists, we can start to provide different levels of care to patients and move them up the ladder as needed. It also allows us to provide more cost-effective care to patients."

Atrium Health is trying to boost its number of clinicians through internal training, Sparks says.

"Five years ago, we started a residency program, so we are trying to build our own pipeline of residents. We also have built an advanced practice provider fellowship. This is for nurse practitioners and physician assistants who have finished their training but have decided that they want to focus on behavioral health and psychiatry. They come for a year with us as a fellow. They are employees, so they see patients with guidance similar to a residency program. Over the eight years of the program, we have retained 75% of the fellows to be a part of our workforce," he says.

There is a key metric for staffing success, Sparks says. "It is mainly the ability to keep our programs going. If we can keep our programs fully staffed and move to a point where we can expand services, then we feel we have been successful."

Illustration by Hanna Barczyk

Christopher Cheney is the CMO editor at HealthLeaders.


Even in a good financial year, subsidization is required to address inadequate reimbursement of behavioral health services, says one director of behavioral health.

Behavioral health programs reduce the total cost of care at health systems, says another senior medical director of behavioral health.

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