Opportunity knocks with growth of behavioral healthcare

Market expansion is poised to be sustainable rather than just a flash in the pan

By Krista Mayes

Every good agent knows that getting in on a growing market can go a long way in building a strong book of business. While some industries continue to grow in spite of COVID-19, behavioral healthcare is emerging as one of the most promising growth markets for insurance because of the pandemic.

At Addiction Treatment Providers (ATP) Insurance Program, we have been partnering with independent agents in behavioral healthcare insurance for more than 15 years, and never before has the growth potential been so clear.

The industry shake-up spurred by COVID-19, the depth of which has yet to be fully realized, only creates more opportunity for growth as providers adapt to meet critical needs in the community.

Though 64 percent of behavioral health providers reported a decrease in revenue since March 2020, Doug Tieman, Special Advisor to the CEO and President Emeritus of Caron Treatment Centers, says the industry is projecting a tsunami of need. Pre-pandemic, the behavioral healthcare market, which includes mental health and addiction treatment facilities, was already set to grow more than 30 percent over the next five to seven years.

Key market drivers

With several fundamental factors driving the market, behavioral healthcare’s expansion is poised to be sustainable rather than just a flash in the pan. These drivers include:

• COVID-19
  According to TMR Research, “The forecast period of 2019-2029 can prove to be the most bankable era for the behavioral health market with the COVID-19 outbreak being the main aspect of growth.” While providers focus on people over profits, they are being confronted by a greater need for care and treatment than ever before. With a widespread increase in anxiety, depression, suicidal ideation, psychosis, opioid drug overdose, and substance abuse relapse resulting from COVID-19, providers will need to expand and bolster operations as they rise to meet market demand.
• Telehealth
  The growing use of telehealth for behavioral health services has been one of most significant industry shifts during the pandemic. It is also projected to be one of the leading drivers of industry growth moving forward.The online delivery of behavioral health services is being hailed as a lifeline, especially for those who are otherwise unable to access care, and its potential is powerful. According to a recent report from Accenture, virtual behavioral health could expand access to 53 million Americans — making digital a critical channel as need mounts.
• Regulatory changes
  COVID-19 has also brought welcome — some say sorely needed — regulatory changes. For example, new patients are not currently required to see a therapist for an in-person visit before they can participate in a telehealth program. Additionally, many health insurance companies are currently paying providers the same rate for virtual appointments as traditional appointments. Right now these changes are temporary, but many are pushing for them to stay, thus lowering the barriers to lasting growth.

• Private equity investment
  Regardless of the overwhelming need for accessible behavioral health services, the reality is that some treatment centers and community behavioral healthcare organizations won’t be able to sustain themselves through the pandemic. “Recognizing the market potential, we expect to see private equity come in and stabilize organizations that don’t have sufficient cash reserves or the level of medical sophistication necessary to navigate COVID-19,” adds Tieman. “Through mergers and acquisitions, these organizations will become well positioned to serve the huge need for community-based facilities and services in 2021 and beyond.”

Choosing a growth partner

Despite a strong forecast for industry growth and an onslaught of need, many insurance companies have been scaling back their coverage, limits, and support for behavioral health organizations as the market continues to harden, creating new challenges for both agents and insureds.

While other carriers step back, our team at ATP remains fully committed to serving the industry with best-in-class coverages and risk management strategies tailored to the unique exposures faced by addiction treatment and mental health facilities.

As you bring on new behavioral healthcare clients or reevaluate the way you’re serving your current clients in the space, don’t underestimate the importance of doing your due diligence to make sure you’re working with an insurance provider that can be a true growth partner. Look out for these key qualifications:

• Niche expertise and industry commitment
  Are you working with an underwriting team who is trained in and focused on the complexities that behavioral healthcare organizations face? No two treatment facilities are exactly alike, which is why you need an expert team that has the knowledge and experience to recognize and meet the unique needs of each account. Also investigate the provider’s commitment to continue serving the industry. Do they have a consistent track record and stay abreast of the evolving landscape of treatment and recovery services and techniques by maintaining relationships with industry advocates and leaders?
• A robust appetite
  Does the insurance provider serve a broad spectrum of classes, including outpatient and residential addiction treatment facilities, intensive outpatient and partial hospitalization programs, medication-assisted treatment (MAT) clinics, sober living homes/recovery residences, and outpatient mental health facilities — so you have a one-stop shop for all of your behavioral health accounts?
• Comprehensive A rated coverage
  Do they offer general liability, abuse/molestation, professional liability, property, inland marine, auto, and umbrella coverage? What about solutions for cyber liability and accident and health coverage for participants and volunteers? Is their insurance carrier A rated?
• Class-focused claims handling
  Is claims handling for their behavioral health business handled by the same adjusters for their other business segments? Or do they have a focused, specialized approach to managing the complexities of professional liability claims in today’s hyperlitigious environment?

With the right partner, you can capitalize on the opportunity to grow your business and help protect organizations that help those who need it most.