- Posted by Austin Swim
- On July 1, 2015
- 0 Comments
Recent healthcare legislation and rebounding state budgets resulting in increased numbers of insured Americans have opened up some major prospects of growth in the field of behavioral health.
The Affordable Care Act (ACA) is very likely the largest catalyst for this expected growth, as it is steadily increasing the population of insured Americans who have coverage. More coverage, of course, means an increase in demand for healthcare, as more and more Americans will begin seeking needed healthcare if they refrained before due to inadequate coverage. With relation to behavioral health, ACA actually designates mental health and substance abuse disorder benefits as “essential,” which means that coverage for millions of Americans who previously didn’t receive such benefits will now be required.
Previously underserved populations, then, are expected to make up a large portion of the rise in demand for behavioral health services as increased healthcare coverage sets in. Dexter Braff, president of the Braff Group, a mergers and acquisition advisory firm specializing in health care services, pointed out that many investors are recognizing this growth opportunity in behavioral health. “The behavioral health world is definitely experiencing steady growth,” he remarked. “Buyers are very interested in this space.” He went on to explain that substance-abuse services have experienced their highest amounts of merger activity recently. Between 2005 and 2014, there have been 179 merger and acquisition transactions in behavioral healthcare, all financed through private equity.
In order for behavioral health to adapt to this rising demand, it will be essential for leaders in the industry to determine which demographics in particular will be seeking care and which services will be in demand. The aging of the baby boomer generation, for example, combined with steadily increasing life expectancy, is expected to double the number of Americans over the age of 65 during the next 25 years to about 72 million people. It is estimated that by 2030, older adults will account for roughly 20 percent of the U.S. population. This means that the behavioral health industry will need to be prepared to develop tools and approaches geared toward older populations. A behavior health center might install handicapped showers, wider hallways, and handrails, for example, to adapt to this growing need.
Other populations expected to see a growing demand for behavioral health services include pediatric patients and those living in states that are passing new legislation redefining what qualifies for healthcare coverage.