New entrants to multi-services address outpatient mental health market capture

Outpatient mental health finds itself in a difficult position.

On the one hand, society sees these providers as necessary to address the mental health crisis, and investors have poured billions into the space. On the other hand, it is being attacked by new entrants with powerful commercial advantages.

Worse, outpatient mental health providers lack the capacity to respond. Startups and newcomers tend to focus on mental health as a wide range of service offerings. This allows them to offer more comprehensive services, personalized experiences and exceptional care.

In some cases, these provisions have nothing to do with health care, which creates a barrier to prevent the challenges of the mental health industry. By integrating services with other health companies, they put fences around their patients.

CVS Health Corp., representing both cases. (NYSE: CVS ) and Walmart Inc. (NYSE: WMT ) for example.

Each already has millions of customers and offers a wide range of goods and services. This gives them incredible leverage in procuring customers for new services. They are a part of many patients’ daily lives in the absence of most providers. Walmart and CVS Health together operate 14,300 locations in the U.S., according to recent data.

Walmart Health It launched in 2019 and plans to have more than 75 clinics across the US by the end of 2024. Today it operates 48 locations in Arkansas, Florida, Georgia, Illinois and Texas. Integrated clinics offer in-person and telehealth services. These include primary care, dentistry, behavioral health, lab and x-ray, and audiology.

CVS Health operates more than 1,000 outpatient clinics and 192 primary care clinics that include mental health services. Each also operates retail pharmacies.

CVS Health and Walmart’s diverse services protect them from challenges in any of them.

Outpatient mental health is a challenging area for business. And a singular focus on one service means these providers only meet one patient need. In addition, this leaves the room exposed to the wind.

Outpatient mental health is not a high-margin business. Payer rates are not equal to comparable physical health services. Mental health clinics are overcrowded.

“The reality is that outpatient mental health is a boring business,” Brian Willen, CEO of Transformational Care Network, said at the Behavioral Health Business Invest conference. “I think the opportunity is to be tight on operations, understand what it means to be a platform and focus on what it means to drive site margins.”

CVS Health and Walmart want to provide access to comprehensive mental health care. Others want to improve their personalization options in one place.

Provide personalized service

Himes & Hers Health Inc. (NYSE: HIMS ), a direct-to-consumer digital health company, has seen triple-digit growth in its virtual mental health and psychiatry line. The company’s leadership positioned the mental health service line as a key growth driver.

The gender-based virtual health company had 125,000 mental health subscribers at the end of the third quarter.

The mental health business and the women’s hair and skin care business led to a 57% year-over-year increase in revenue. Revenue increased $226.7 million in the third quarter, according to public financial statements. It reduced the net loss by 60% to 7.6 million dollars.

“Momentum in the third quarter remained incredibly strong,” said Himes & Hers CFO Yemi Okupe. Third quarter earnings call. Performance remains strong in our long-standing offerings such as Hims & Hers and Sexual Health, and we are excited to see new offerings such as Mental Health, Cardiovascular and Personal Solutions in Hair & Skin Care.

Improves outpatient mental health specialty care

Mental health services often require a level of specialization to meet the needs of the population. Organizations designed to meet the needs of a specific population have the chassis to build new mental health offerings.

Tia Health, a hybrid physical and virtual women’s health organization, will combine primary care gynecology, health and mental health into one platform from May 2023. The company offers psychotherapy, group therapy and coaching services.

Tia Health started adding mental health services two years ago, according to a news release.

Adding the service allows Thea Health to fill a gap in the health of most women. According to the company’s internal data, 91% of its patients were diagnosed with depression, compared to 49% of the general population. In comparison, 73% of TIA patients are engaged in mental health services, compared to the national average of 66%.

A company focused on women’s health wouldn’t be complete without a mental health service line. Women are twice as likely as men to report depression and report using medication for depression at much higher rates than men by race, according to data from the Centers for Disease Control and Prevention.

“With the triple threat to women’s health now – the lack of primary care, the mental health epidemic and the reproductive access crisis – there has never been a greater moral or economic imperative to invest in building comprehensive care for women,” said founder Carolyn Witt when the new mental health service was announced.

Outpatient mental health as an added value with independent business

For the aforementioned companies, the expansion of mental health services allows them to integrate fragmented patient experiences into one larger unit. That large general can meet many or specific needs. Outpatient mental health providers often meet only one need.

But this is an important factor for inpatient mental health providers.

Many of these new entrants to outpatient mental health are ultimately uninsured. It is the experience and record of caring for the mental health needs of patients that only describes the core and potential of outpatient mental health providers. Furthermore, the largely sclerotic payer, historically allergic to rapid change, has cemented these traditional models in place.

Still, mental health alone is not a good practice, and a payer-supported authority may be showing signs or erosion of its benefits.

Outpatient mental health providers are particularly exposed to these challenges. Companies that integrate mental health into larger product offerings are somewhat insulated from those barriers because they are not solely dependent on mental health. At the same time, you will experience the benefits and value of providing mental health services.

And payers are realizing the access that unconventional providers, especially retailers, can offer their members.

Ampere from the Sunshine State, owned by Centene Corp. (NYSE: CNC) announced last week that the funded AMA Exchange health plan has partnered with Walmart Health. The agreement makes Walmart Health Centers the preferred provider in select Florida counties. It also focuses on care coordination and referral management.

A primary goal of the Ambate-Walmart agreement is to increase access to affordable care. This is one of the main challenges and opportunities in outpatient mental health. And this is so compelling that it continues to attract more and more competitors, leaving traditional providers to improve their prices for patients with more and more service options.

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