The Business Case For Expanding Into Behavioral Health Care

Home health providers have delved into different service lines during COVID-19. Among those are high-acuity care, such as hospital-at-home and SNF-at-home programs, palliative care and respite care.

But one set of services, in particular, is beginning to make more sense for home health providers to offer: behavioral health.

Strategically, expanding into behavioral health makes sense for two reasons. Whether we’re talking about outpatient mental health, substance use disorder or a different corner of behavioral health, there’s an incredible demand for services in the U.S. On top of that, behavioral health expansion can help providers diversify revenue amid potential Medicare rate cuts.

A recent example covered by Home Health Care News is Bayada Home Health Care’s new Bayada Pennsauken Center for Applied Behavior Analysis (ABA) Services. Through that center, Bayada will offer both home- and center-based behavioral support and treatment for individuals with an autism spectrum disorder (ASD) and other intellectual disabilities.

“There’s a very significant need for services,” Jessica Shea-Brown, regional director of behavioral health services at Bayada, told HHCN. “If we can be a provider that helps families, children and adults access needed services, and break down some of the barriers to access, we certainly want to do that.”

Other providers are in lockstep with Bayada, too. Outside of just ASD, numbers suggest that over 20% of Americans are battling a mental illness, according to Mental Health America. Mental health conditions are becoming increasingly prevalent among the senior population as well.

That’s, in part, why private equity investment in behavioral health has ticked up in recent years.

“One of the reasons behavioral health is so attractive is because there is a very long length of stay,” Mark Kulik, managing director at the M&A advisory firm The Braff Group, told HHCN in May. “Just anecdotally, I just sold a 30-year-old behavioral health company and they still have several of their very first clients.”

In this week’s exclusive, HHCN+ Update, I try to find out whether this is a meaningful trend by sorting through the conversations I’ve had with multiple home health providers that have gotten into behavioral health.

Diving into behavioral health 

When a health care provider is in the home as much as home-based care providers are, a lot of behavioral health conditions are uncovered.

What to do next is the question many providers are trying to answer.

“I think we’re primarily interested in behavioral health because we see a lot of suffering and gaps in care for people in the community,” VNA Health Group President and CEO Dr. Steve Landers told me. “So it really is primarily out of a sense of obligation, that as nonprofit organizations and health service providers, we have to do more.”

Landers and I spoke at the National Association for Home Care and Hospice’s (NAHC) annual event this week. The Holmdel, New Jersey-based VNA Health Group is a home health and hospice provider that serves patients in both New Jersey and Ohio.

As mentioned above, mental health investment is trending upwards, despite some recent drawbacks due to an overall pullback in funding.

While the chart above shows investment in mental health tech specifically increasing, Landers also believes that home health providers will invest more in these types of service lines.

“I cannot pinpoint exactly how people will do it, but I do expect more attention and program and service line development in mental and behavioral health within the home health and hospice sector,” Landers said. “Because there’s gaps in need. And that both presents an opportunity, I think, for entrepreneurship and social entrepreneurship. So I think that’s going to be a continuing area of focus.”

Others agree.

When we first started exploring this as a potential new opportunity for home health providers, AngMar Medical Holdings COO Tony Miller explained the business value to HHCN. AngMar Medical Holdings is the holding company of Angels Care Home Health.

“From a business standpoint, there is potential growth — patient admission volumes and census,” Miller said. “We noticed a 20% growth in our behavioral health patient population and admission volume.”

Katherine Vanderhorst, the president of C&V Senior Care Specialists, also explained at the same time the value of delivering behavioral health services from a referral and partnership standpoint.

“It opens up a huge amount of interface with additional referral sources, and it can create a lot of partnerships,” Vanderhorst said. “A lot of the agencies we work with form partnerships with insurance companies, assisted living facilities, ACOs — because they can provide behavioral health care.”

On Landers’ end, VNA Health Group is trying to figure out how to leverage what it’s already good at to be sustainable in the behavioral health business.

The company is looking to add psychiatric advanced practice nursing services to its home visiting medical team’s arsenal.

“We think that that’s something that we can do that will complement some of the things that we’re already good at, which is supporting advanced practice nurses doing community home visitation,” Landers said.

VNA Health Group has also done a fair amount of pilot work within its home health agency on memory care, including dementia-related conditions or for those suffering from delirium after a hospital stay. To meet that need, it has ramped up its training to prepare its home health social work and nursing teams to recognize these conditions in patients.

Landers added that this should be easier in the future by virtue of OASIS-E, which will be fully implemented on Jan. 1, because there’s more focus on that aspect of the patient assessment.

The company had a psychiatrist on the team for a couple of years, but once the person in that role had to move, it has been hard to fill.

“Most of the time, dementia-related issues in the home health population are under-addressed, under-treated, and I think that drives [poor] outcomes,” Landers said.

The business reason

Besides the obligation to meet unmet need, there’s also clear value to pairing behavioral health services with at-home care services.

As Landers mentioned, anything that drives bad outcomes – especially under models like Home Health Value-Based Purchasing (HHVBP) – should be addressed.

Thus, in January, the Maine-based Androscoggin Home Health Care + Hospice acquired the home and behavioral health care company Care & Comfort. Its CEO, Ken Albert, explained the company’s thought process to me on that transaction.

“From a business perspective, you have a situation where it’s a home- and community-based service,” Albert said. “So we’re a natural ally in the provision of behavioral health services, and oftentimes those alliances end up resulting in business partnerships or business relationships.”

In the past, behavioral health data and medical records have often been kept separate. But with the growing understanding that behavioral health issues end up affecting the rest of a senior’s health, there’s a push to integrate the two.

In Maine, behavioral health was identified as the No. 1 gap in care in every single country throughout the state.

“We need to merge them if we’re going to effectively manage chronic disease more effectively,” Albert said. “From a business perspective, we address that readmission perspective. And as we’re looking at continuing health care needs, looking at our skill set, and looking also at our need to diversify our revenue streams for sustainability, it makes sense [as a service line].”