Behavioral Health Technology
The behavioral health industry has grown rapidly in recent years, thanks in large part to increasing social acceptance of mental health treatment, an expansion in insurance coverage, and the growing number of patients being diagnosed with a mental or behavioral disorder. Additionally, the broader healthcare community is increasingly acknowledging the positive impact behavioral health treatment has on every aspect of care delivery. Such growth inevitably brings challenges, including those of meeting increasing patient demand, scaling treatments, and proving efficacy.
Technology and software-based tools are critical to overcoming the obstacles that the behavioral health industry faces today.
Major challenges impacting the behavioral health space include:
Severe imbalance between supply and demand: There are far more patients seeking care than the existing clinical infrastructure can accommodate, resulting in staffing shortages and underserved patients. One example are the millions of Americans diagnosed with Autism Spectrum Disorder (ASD), as many as 1 in 44, 8-year old children according to estimates from the Center for Disease Control.(1) Pairing the rate of diagnosis with the number of Board Certified Behavioral Analysts (BCBAs) quickly highlights that staffing needs have not caught up with demand, with only 60,000 BCBAs nationwide. More than half of counties in the U.S. do not have a single certified BCBA, according to a study in Autism.(3) Another example are the estimated 22 million adults needing substance abuse treatment with only 10% receiving care in 2019.(2)
Fragmented provider landscape:
There are few national providers for any specific behavioral health care type, and reporting requirements vary by state. This fragmentation requires providers to assemble their own standards of care and makes it difficult for those struggling with operational challenges to find technology solutions that meet their specific needs.
Difficulty quantifying efficacy of outcomes:
While recent expansion of health insurance coverage for behavioral health presents significant opportunities, it also forces providers to prepare for the capability of proving clinical outcomes. Commercial payors may come to expect and require results supporting the efficacy of treatment in reducing lifetime costs and avoiding more acute measures. Whereas in traditional healthcare, where outcomes are often definitive — a broken bone healed, a cavity filled, a baby born — in behavioral health the situation can be more complicated. The nature of this space requires payors and providers to seek new ways to quantify the positive impacts and effectiveness of mental health treatments.
Adoption of technology years behind:
The cost of investing in technology is significant and has been historically out of reach for behavioral health providers, especially for those within small practices. The HITECH Act provided billions to healthcare providers who adopted EHRs but mental health and substance abuse treatment providers were largely excluded from funding, causing the specialty to fall behind with respect to adoption of technology.
The Opportunity for Behavioral Health Technology
While technology vendors are making progress in expanding offerings for behavioral health, we see opportunity for technology tools to scale treatment, meet patient and insurance demands, and standardize operations across the industry. The potential upside for companies building solutions to serve this industry is significant given the overall lack of technology adoption thus far.
Technology advancements can address the needs of the growing population of behavioral health consumers and streamline care and practice operations. For example, telehealth platforms enable a single therapist to treat many individuals across the country in a day, while tech-enabled scheduling tools allow providers to maximize billable hours across an organization. Software will be able to reduce the amount of time spent processing documents or submitting clinical notes, meaning providers can spend more time on patient care.
There is a pivotal opportunity to apply the same holistic data analytics approach found within population health to the behavioral health space. Technology can make it possible for behavioral health providers to track progress over the clinical time horizon for each patient. Leveraging big data and analytics will allow providers to predict the right level of care for each patient as well as extrapolate potential outcomes – both positive and negative. This will enable payors and other risk-takers to quantify the consequences, financial and otherwise, avoided because of treatment.
We see potential for a wide expansion of tech-enabled services: empowering business owners to have more customized platforms, driving efficiencies, improving the patient experience, and increasing access to behavioral and mental healthcare services for those who need it most.
Specific areas of focus in the behavioral healthcare technology space include:
• Measurement / Clinical Data Analytics
• Predictive Analytics
• Revenue Cycle Management
• Vertical-specific EMR
• Training/Therapy Tools
Experienced Berenson Team
The Berenson team leading this effort has deep roots in the healthcare and behavioral health sector.
Dominic Carazza, Vice President:
Dom brings extensive experience in the behavioral healthcare space from his work as an advisor to several leading businesses in this area. For example, he was an essential part of the Center for Autism & Related Disorders (CARD) deal team and spearheaded leading autism therapy center ACES’ strategic partnership with General Atlantic. He sees significant opportunity for technological disruption in the behavioral health space. “Behavioral health providers are in the fourth inning of maturation, especially considering the current backing from legislation supporting insurance reimbursement coverage. The potential for further sophistication and improving service operations will stem from developing technology built to suit the specific needs of the behavioral health sector,” says Dom.
David Fetterolf, Operating Partner:
David’s career achievements span healthcare technology including electronic medical records (EMR), revenue cycle management (RCM), video interpreting, analytics, telepresence, and most recently, remote patient observation. David is optimistic about the untapped nature of the behavioral health sector. “The true opportunity going forward will be in developing new behavioral health technology. We look forward to uncovering both existing platforms for behavioral health, as well as developing pure-play solutions. The opportunity for servicing these practitioners is immense and the lack of operational efficiency is astounding. The demand is only accelerating for technological solutions to support these growing practices.”
Brendyn Grimaldi, Managing Director:
Brendyn Grimaldi has been investing in HIT for the last 15 years across businesses providing compliance, education, remote patient monitoring and revenue cycle management solutions. The firm’s most recent investment in MedSitter is helping facilities monitor patients with acute behavioral health issues. Brendyn sees similarities in behavioral health with other markets where the firm has focused. “We love end-markets that are in the early stages of technology adoption, which has driven our focus in the area. We believe in the potential for technology solutions to drive vital care improvements for those in need and improvement in operations for those delivering care.”
About Berenson Capital
Berenson Capital is the principal investing business of Berenson & Company, a leading merchant banking firm founded in 1990. Based in New York, Berenson Capital is a sector-focused private equity practice investing exclusively in Software & Tech-Enabled Services businesses. For more information, please visit www.berensonco.com.