Stacy and Solome on stage at MCHA

Over a total of 200 days on the road, traveling to an array of healthcare conferences, we’ve had the chance to immerse ourselves into the latest trends, insights, and innovations shaping the behavioral health industry.

Over the last 12 months, we have given dozens of keynotes, moderated main stage sessions, co-hosted national and regional industry events, lead webinars, published white papers, and provided strategic guidance to providers, digital tech startups, investors, state departments of human services as well as the Department of Justice. Over a total of 200 days on the road, traveling to an array of healthcare conferences, we’ve had the chance to immerse ourselves into the latest trends, insights, and innovations shaping the behavioral health industry. This week, we had the opportunity to converge our experiences and reflect on our findings at the MHCA conference. We shared controversial event sessions, recurring themes, which conversations were most surprising, and what keeps thought leaders in mental health up at night. We covered the macro trends impacting our sector, M&A news across nonprofit and for-profit behavioral health, and our personal takes on what executive teams should expect to see in 2024 and beyond. Here’s what you missed…

Major Digital Health Trends in 2023

All Stakeholders Are Moving Beyond Telehealth and EHR

Across the board, providers, payers, digital health companies, and investors are starting to expect more with the technology we have at our fingertips. We are beyond table stakes operating systems like EHR​. Now, more condition-specific and population-specific solutions are rising to the forefront.

Evolution of Solutions and Support for Patients and Physicians

Ongoing advancements in digital solutions are providing better support for both patients and physicians.​ The aim is to improve the overall efficiency and effectiveness of health care services through technological evolution.

Digitization and Automation Offering Potential for Improved Health Outcomes

The process of digitizing and automating health care systems holds tremendous potential.​ This potential is expected to translate into better health outcomes for individuals, with streamlined processes and improved access to care. (Greater margins!)

Other Trends:

  • Women’s Health (Including Maternal Mental Health) Attracting Attention, Investment, and Innovation
  • Advancements in Mental Health Through Digital Tools
  • Focus on Costs, Efficiency, and AI’s Role in the Industry
  • Strides in GenAI With Vast Data Landscape Additions

Forecasts for 2024

Funding and M&A

Behavioral health startups experienced a funding slowdown last year, but venture investors remain optimistic about the sector's future despite the anticipated consolidation in the space, due to valuation cuts or business closures. The pediatric behavioral health crisis is garnering increased attention, driving more investment toward youth mental health initiatives. Meanwhile, the industry continues its shift toward value-based care, necessitating adaptations from providers and payers to embrace risk-based contracting models. As demand for behavioral health services rises, providers and health systems are expanding through joint ventures (JVs), recognizing the potential for substantial benefits despite the complexity and patience required to establish these partnerships.

Non-Traditional Entrants — New Competition from Big Retail

CVS/Aetna, Walmart, Amazon, Google (GV), and Best Buy are examples of large retail companies entering the healthcare industry, who are finding their “dance partners” for mental health and physical health.

Value-Based Care for Substance Use Disorder

The Substance Use Disorder (SUD) treatment landscape is shifting towards value-based revenue models aimed at improving outcomes. To address challenges such as fragmented care and escalating costs, providers are increasingly turning to case rates, bundled payments, and capitated rates. The Shared Risk Revenue Model, offering advantages to providers like advanced payments and bundled care continuum payments, while also delivering benefits to payers through reduced administrative expenses and enhanced member value. However, successful implementation of a value-based model necessitates organizational efficiency and alignment of stakeholder interests for successful SUD treatment.

VR Outlook

Virtual Reality (VR) combined with large language models is rapidly evolving in healthcare, particularly in behavioral health, for conditions such as anxiety, PTSD, and autism. However, despite its potential, VR in healthcare faces hurdles such as reimbursement issues, logistical complexities, and regulatory pressures. Nevertheless, the recent approval of the first-ever CPT code for VR-mediated therapy by the American Medical Association signals progress in this area. The Department of Veterans Affairs is incorporating VR in care delivery and staff training, showing decreases in stress, anxiety, and PTSD symptoms. Looking ahead, future developments in VR healthcare are expected to integrate AI and surmount operational challenges for further enhancement.

Policy and Advocacy

The White House's AI Executive Order guidelines focus on safety and security, urging federal departments to prioritize AI advancements and implement directives within their authority. The order mandates developers of significant AI systems to disclose safety test results to the U.S. government and advocates for the creation of AI safety and security standards to mitigate risks. Emphasis is placed on privacy protections for Americans and equity and civil rights advancements. Promoting responsible AI use in healthcare and education, the order advocates for the development of a safety program for AI-related healthcare incidents. The order highlights support for workers against negative AI impacts and aims to foster innovation and competition in the AI sector.

Emerging Microtrends:

  • Medicaid is increasingly becoming a focal point for innovation, emphasizing the importance of creating a healthier population.​
  • The healthcare startup ecosystem is seeing renewed growth, with various stakeholders joining forces to tackle industry challenges.​
  • Founders and investors are urged to recognize the importance of addressing large market needs, particularly in underrepresented areas.​
  • AI and trust issues are major concerns for payers, emphasizing the need for equitable data and AI models in healthcare.​
  • Content creation, especially in behavioral health, is emerging as a new market, with startups focusing on community platforms and engaging content.​
  • Despite a market slowdown, Remote Patient Monitoring (RPM) continues to see innovation, particularly in wound care and physical therapy monitoring.

Caution and Realism in Digital Health​:

  • Health IT leaders express skepticism about rapid advancements in AI and healthcare affordability improvements in 2024.​
  • Generative AI in healthcare faces challenges, including potential biases and the complexity of integrating with existing data ecosystems.​
  • Healthcare IT purchasing remains intricate, with executives focusing on essential technologies rather than 'nice-to-haves'.​
  • The role of physicians in influencing digital tool adoption and business decisions in healthcare continues to be significant.​
  • Financial pressures and operational complexities in health IT are expected to persist, impacting vendor strategies and value creation for buyers.

Our 200 days on the road have given us invaluable insight into all of these trends and more. While there are challenges to be faced, we are predominantly optimistic about the potential 2024 holds for the behavioral health industry.