April 8, 2021

In February of 2019, Calm became the first mental health unicorn. Since then, multiple mental health companies including Modern Health and Talkspace have topped the $1B valuation milestone. Recent investments in behavioral health businesses including AbleTo, Lyra, Ginger and Upward Health have further exemplified the growing demand and interest in behavioral health.

In 2020, the importance of behavioral health was illuminated like never before. The sudden influx of isolation, economic uncertainty, and social unrest spiked consumer demand – exponentially widening the gap between demand for behavioral care services and the availability of qualified practitioners. As demand continues driving industry growth, increasing care accessibility remains critical.

The following trends are reshaping the mental health industry today and are expected to drive market opportunity moving forward.

Cultural Changes

While the stigma associated with behavioral health remains active, open discussions around mental health are becoming more common. People once driven away from care due to stigmatization have become less reluctant as cultural norms shift to promote the importance of mental health. Contributing to this change, Covid-19 forced mental wellbeing into the spotlight, dramatically increasing awareness and acceptance, and subsequently yielding a greater demand for mental health overall. As conversations around mental health continue, industry growth trajectory will continue to trend upward. CEOs should prepare to see steady market expansion as cultural changes decrease stigmatization of behavioral health treatment.

Employers, Payers & Cost

Cost has long been a barrier to access for mental health services. Low reimbursement rates and high cost to consumers has caused many individuals to go untreated. As more data becomes available – correlating mental health care to increased chronic health conditions, reduced workplace productivity, and higher physical health costs long-term – coverage will increase to include an expanding pool of mental health services. By reducing cost and expanding coverage, individuals can access care more easily, Payers can better serve their members and Employers can reduce long-term healthcare spend.

Maximizing Telehealth

Ignited by social distancing measures, telehealth exploded at the outset of Covid-19. While telehealth technologies enabled continuation of care, they did not replace the need for in-person visits across many specialties and patients have slowly returned to in-office care. Conversely, the utilization of telehealth services for mental health has continued to rise. Telehealth solves many challenges facing the behavioral health industry. For example, clinician shortages, specifically in rural communities, has made care inaccessible to many. Telehealth is enabling providers to extend their reach to these regions, increasing accessibility. Telehealth also offers a more flexible schedule to both patients and providers, easing engagement challenges. CEOs who maximize the usage of telehealth will drive patient engagement, increase accessibility, and expand growth opportunity.

Capturing Mental Health Data

Data is playing an increasing role in healthcare. Electronic health records and interoperability platforms among other technologies have proven the impact of data on patient care. Be it early identification of risk factors, like chronic disease, or remote patient monitoring, data enables providers to deliver better care.

The fragmentation of mental health industry and limited integration with physical health providers has made data collection challenging. New technologies working to capture, analyze, and utilize patient data are continuing to emerge. CEOs able to develop or deploy data-focused innovations will ensure high-quality, evidence-based patient care that can both improve the standard of care and drive long-term growth.

Care Integration

Value-based care has proven the importance of an outcomes-based approach. As data around the importance of integrating physical and mental health surfaces, the case for care integration will strengthen. In response, a growing number of providers and payers will likely transition to integrated models. CEOs that focus on data capture and interoperability will continue to drive care integration forward. While the mental health industry remains fragmented those organizations that successfully integrate will likely emerge as top providers.

Changes across the behavioral health industry will continue as demand accelerates. These five key drivers will disproportionately impact the industry and enable patients to access better care. By focusing on delivering high quality, evidence-based care CEOs can establish their companies as both the premier providers of care and the most sought-after investment opportunities

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