The solution lies in reimagining how we deliver and pay for behavioral health care through value-based partnerships.
As a psychiatrist who has led the behavioral health strategy at national payer organizations and now heads a tech-enabled behavioral health company, I’ve witnessed firsthand how the right partnerships can transform care delivery and control costs. The key is moving beyond conventional models that separate physical and behavioral health and create silos for payment and care delivery. True alignment between payers and providers – across all aspects of patients’ health and social needs – drives coordinated, safer, and higher quality care.
Consider this: Studies show that individuals living with serious mental illness have health care costs 2-3 times higher than those without, primarily due to emergency department (ED) and inpatient utilization for co-occurring physical health conditions. Once in the ED, they are twice as likely to be admitted to an inpatient medical or psychiatric unit.
To reduce this crisis-based care, advanced payment models must fund the work outside of traditional health care that is required to fully address patients’ health and social needs. Additionally, financial incentives for inpatient and outpatient providers should align to reduce readmissions -keeping patients in their communities and out of facilities is a better outcome for all.
The impact of behavioral health conditions on physical health outcomes is particularly stark when we examine the data: up to 70% of primary care visits have an underlying behavioral health component. 68% of adults with mental health conditions have co-occurring physical health conditions but often lack access to care. As a result, the life expectancy for individuals with serious mental illness is 10-25 years lower than that of the general population. This interconnection demands an integrated approach to payment and care delivery.
Redefining Success Through Value-Based Partnerships
Successful value-based behavioral health partnerships rest on three fundamental pillars:
- Integrated Care and Coordination: Breaking down silos between behavioral and physical health through shared data and collaborative care teams
- Technology-Enabled Care Delivery: Leveraging predictive analytics and digital tools to identify at-risk members early and engage them in appropriate levels of care
- Outcomes-Based Payment Models: Aligning financial incentives with meaningful clinical outcomes and total cost of care reduction
In my experience leading behavioral health integration, I’ve directly observed how properly structured value-based arrangements reduce medical expenses for high-risk populations while significantly improving access to care and patient and provider satisfaction.
For example, our care model at Author Health is integrated with primary care providers and health systems. By leading with a behavioral health intervention and supporting engagement with primary care, our teams demonstrate a 46% reduction in inpatient admissions and a 33% decrease in ED utilization for both physical and behavioral health, compared to a control group.
Our patients and care team also show improved engagement in health care services, medication adherence, crisis prevention, and coordinated care management between behavioral and physical health providers. These impacts drive improved overall health and reduced medical expenses – a win for patients, families, payers and providers.
Building Effective Partnerships
For payers considering value-based behavioral health partnerships, several factors are critical for success:
- Clear outcome metrics that matter for both clinical quality and cost management
- Robust data-sharing capabilities to enable real-time care coordination
- Flexible payment models that account for population complexity
- Technology infrastructure to support scale and efficiency
- Robust governance frameworks to guide ongoing collaboration
Behavioral and physical health providers need support to implement the changes required to succeed. Specifically, investments in provider education, data sharing, and technical support are critical. Only with these supports, can payers leverage value-based payment to create a glidepath for providers to accept financial accountability for improved health and cost outcomes. This aligns the system to be more efficient and to direct our limited resources to patients with the greatest need.
Looking Ahead
The evidence is clear: value-based behavioral health partnerships work. The question is no longer whether to pursue them but how to implement them effectively. For payers ready to take this step, the opportunity to transform care delivery while reducing costs has never been greater.
Dr. Katherine Hobbs is CEO of Author Health, a tech-enabled mental healthcare provider offering treatment for Medicare Advantage members living with serious mental illness, substance use disorders, and dementia. Previously, she was CEO of Optum Behavioral Care and Chief of Behavioral Health at Blue Cross North Carolina.
References:
- National Institute of Mental Health. (2024). Mental Illness.
- The Commonwealth Fund. (2020). The ACA at 10: How Has It Impacted Mental Health Care?
- Jama (2019). Association of Mental Health Disorders With Health Care Utilization and Costs Among Adults With Chronic Disease.
- American College of Emergency Physicians. (2019). The Impact of Boarding Psychiatric Patients on the Emergency Department: Scope, Impact and Proposed Solutions.
- American Psychological Association. (2014). Briefing Series on the Role of Psychology in Health Care: Primary Care.
- BMC Psychiatry. (2017). Psychiatric readmissions and their association with physical comorbidity: a systematic literature review.
- Annals of General Psychiatry. (2021). Mortality gap and physical comorbidity of people with severe mental disorders: the public health scandal.
