Latest / Becker’s Payer Issues Podcast / How to Optimize Behavioral Health Benefit Expense Management with a Great Tag Team of Guests

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How to Optimize Behavioral Health Benefit Expense Management with a Great Tag Team of Guests · Becker’s Payer Issues Podcast

• 0:00
  Hi, everyone. This is Lucas Voss with Becker's
• 0:02
  Healthcare. Thanks so much for tuning in to
• 0:04
  the Becker's Healthcare podcast series. It's great to
• 0:06
  have you. Today, we'll be discussing how to
• 0:09
  optimize behavioral health benefit expense management
• 0:12
  with
• 0:12
  a great tag team of guests. I'm excited
• 0:15
  to have them. Charles Phan, he's the president
• 0:17
  of Headspace, and Charlie Andres, he's the lead
• 0:19
  actuary at Headspace. Charles and Charlie, thanks so
• 0:23
  much for being here today. It's great to
• 0:24
  have you. Absolutely, Lucas. Thanks for having us.
• 0:26
  Thrilled to be here.
• 0:28
  Yeah. Super excited to be here. I wanna
• 0:30
  hop right into the conversation, but for those
• 0:33
  that might not know you yet, I do
• 0:35
  wanna start us off with a little bit
• 0:37
  of an introduction to who you are,
• 0:40
  what you do, who health Headspace is, and
• 0:43
  and your work in health care.
• 0:46
  Charles, I'll start off with you.
• 0:48
  Yeah. Thanks, Lucas. As you described, I'm the
• 0:50
  president of Headspace.
• 0:53
  I've spent nearly three decades in health care
• 0:55
  as a care provider, a consultant, and a
• 0:58
  business leader with the last decade or so,
• 1:01
  being in behavioral health. But I actually started
• 1:04
  my career in consumer products.
• 1:06
  And since then, I've been bringing the consumerism
• 1:09
  kind of mindset
• 1:11
  into population health and value based care types
• 1:14
  of of models.
• 1:15
  You know, largely, my work is using this
• 1:17
  consumerism lens to drive better patient outcomes at
• 1:22
  scale through greater engagement,
• 1:24
  improved outcomes, you know, making the overall care
• 1:27
  model work better at scale.
• 1:29
  I'm excited to talk about that today. It's
• 1:31
  certainly one of the big trends in health
• 1:33
  care is the consumer aspect. Excited to have
• 1:36
  you. Charlie,
• 1:37
  over to you.
• 1:38
  Awesome. Yeah. So my name is Charlie Andrus.
• 1:41
  I lead our actuarial practice here at Headspace.
• 1:43
  Actuarial encompasses all things risk, ROI, and pricing.
• 1:47
  I've worked as an actuary specifically in digital
• 1:49
  health for the last five years, wearing all
• 1:50
  sorts of hats that's required at a smaller
• 1:52
  company while maturing their actuarial practices as well.
• 1:55
  Prior to the jump to digital health, I
• 1:57
  worked in actuarial consulting,
• 1:59
  where I really specialize in the intersection between
• 2:01
  data science and actuarial work. So I've been
• 2:04
  really fortunate to see lots of different parts
• 2:05
  of the industry, and I've always been
• 2:08
  always leaning to the more innovative innovative side
• 2:10
  of health care and actuarial work. And so
• 2:11
  the time in Headspace has just been super
• 2:14
  interesting and super special to me, and I'm
• 2:15
  so psyched to hear to talk to you
• 2:16
  guys.
• 2:17
  Yeah. I'm excited to have you as well.
• 2:19
  This is gonna bring an exciting lens to
• 2:20
  the conversation too. I wanna start us off
• 2:22
  with level setting the conversation a little bit
• 2:24
  too and talk a little bit about the
• 2:26
  spending that's been going on in behavioral health.
• 2:28
  Again, it's been more than tripled over the
• 2:30
  past two decades. There's been a lot of
• 2:32
  talk about that here in health care. And,
• 2:33
  again, it also continues to climb 2026 into
• 2:36
  2027 and certainly beyond.
• 2:39
  How is the outpatient
• 2:41
  therapy system contributing
• 2:43
  to these rising costs? Charles, we'd love to
• 2:45
  start off with your perspective here.
• 2:47
  Yeah. Thanks, Lucas.
• 2:49
  I would say that, to your point, you
• 2:51
  know, the behavioral health spending in the aggregate
• 2:53
  has tripled over the past two decades, but
• 2:56
  I would argue that, there's really an era
• 2:58
  of kind of before,
• 3:00
  say, 2020
• 3:02
  and then after
• 3:03
  2020.
• 3:05
  You know, a decade ago and and earlier,
• 3:07
  the industry's challenges were largely all about access
• 3:10
  to care. Right? In some regards, we were
• 3:12
  almost just, like, begging for more outpatient therapy,
• 3:16
  But it was constrained on both the demand
• 3:18
  side as well as the the supply side.
• 3:20
  On the demand side by consumer stigma
• 3:23
  and on the supply side by provider supply.
• 3:27
  And in many ways, you know, in the
• 3:29
  past, you know, since 2020 or so, we've
• 3:32
  actually seen a lot of these barriers actually
• 3:34
  have been now meaningfully addressed within The United
• 3:37
  States. You know, there's been a lot of
• 3:39
  anti stigma efforts on the demand side. We've
• 3:42
  had a lot of very access friendly or
• 3:44
  pro access regulations.
• 3:46
  And then there's been a substantial
• 3:48
  increase in just the availability of the provider
• 3:51
  base, especially through virtual care models.
• 3:54
  But while we're celebrating this, I think we're
• 3:57
  also now somewhat
• 3:58
  facing the opposite problem, which is how to
• 4:00
  ensure the right care at the right time.
• 4:04
  As you cited, you know, behavioral health cost
• 4:06
  continues to rise at levels that are, like,
• 4:09
  multiples
• 4:10
  of overall medical cost,
• 4:12
  inflation.
• 4:13
  That behavioral health is is more than double
• 4:15
  right now. But what's different is in this
• 4:18
  latest era,
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  the majority of this behavioral health spend is
• 4:22
  not coming from inpatient or emergency room use.
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  It's actually being driven by outpatient therapy utilization.
• 4:30
  So today,
• 4:31
  we're at roughly $60,000,000,000
• 4:34
  of outpatient behavioral health therapy that's being delivered
• 4:37
  in The United States.
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  You would expect, right, if this were primary
• 4:41
  care, when we're thinking about primary care versus
• 4:43
  specialty care, you would expect that had primary
• 4:46
  care doubled, you would see a reduction in
• 4:48
  inpatient bed days and ER usage.
• 4:52
  What's really interesting about this behavioral health trend
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  is we're not seeing that. We literally doubled
• 4:57
  the amount of therapy,
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  but inpatient bed days remain relatively
• 5:01
  flat to slightly increasing,
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  and ER usage is doing that as well,
• 5:06
  which really starts to beg some questions
• 5:09
  on, you know, how do we make sure
• 5:11
  we're getting actually right care,
• 5:13
  right time?
• 5:14
  The other kind of conundrum for the payers
• 5:17
  is that because of a lot of the
• 5:19
  regulation
• 5:19
  that I was describing, right, things like the
• 5:21
  mental health parity act and things like that,
• 5:24
  there is actually very little ability for your
• 5:27
  classic payer to deploy,
• 5:29
  their utilization management or their medical necessity sorts
• 5:33
  of of requirements,
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  which means, you know, in short, we've got
• 5:37
  almost like a tiger by the tail here.
• 5:39
  There's rapidly increasing
• 5:41
  outpatient
• 5:42
  trend,
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  And it's not just outpatient trends contributing
• 5:46
  to behavioral trend. It almost is the trend
• 5:49
  in many respects.
• 5:51
  Charlie, Charles outlined this in a in a
• 5:53
  fantastic way in terms of what this means
• 5:56
  in an old from an overall perspective and
• 5:57
  what this looks like in The United States.
• 6:00
  What does this look like from an actuarial
• 6:02
  perspective? Right? How are you seeing these contributors
• 6:06
  making a difference
• 6:07
  to these rising costs?
• 6:09
  Yeah. Absolutely. And I think that
• 6:12
  if you look at the national level, outpatient
• 6:15
  behavioral health spend has been growing 15 to
• 6:16
  25%
• 6:17
  year over year since 2020. And talking to
• 6:20
  peers in the industry and peers that are
• 6:21
  in payer groups, they think that trend for
• 6:23
  behavioral health is going to continue at 10
• 6:25
  to 20% for the foreseeable future. So this
• 6:27
  is gonna continue to rise.
• 6:29
  One anecdotal story that I find fascinating is
• 6:32
  one of our partners at a regional payer
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  in 2020, outpatient behavioral health made up about
• 6:38
  50% of their total behavioral health spend.
• 6:41
  That spend grew since 2020 since 2020 to
• 6:44
  2024.
• 6:45
  Now outpatient behavioral health makes about 75%
• 6:48
  of their behavioral health spend. So not only
• 6:50
  is the overall behavioral health pie getting bigger,
• 6:53
  the slice that is behavioral health is also
• 6:55
  getting much, much larger.
• 6:58
  This gap that you've just described, right, is
• 7:01
  tremendous. And and Charles also mentioned
• 7:04
  the understanding that how this has grown over
• 7:06
  the last couple of years and the match
• 7:08
  between access and demand, etcetera.
• 7:10
  When you're thinking about
• 7:12
  this gap, where do you see
• 7:15
  the biggest gap today between how health plans
• 7:17
  are approaching behavioral health and getting a handle
• 7:20
  on what they're actually spending?
• 7:22
  Yeah. That's such a great question.
• 7:24
  For me,
• 7:25
  the biggest gap is the lack of optimized
• 7:28
  care pathways for behavioral health. So if you
• 7:30
  look in physical health, we've seen significant progress
• 7:32
  steering patients towards the most effective and cost
• 7:35
  efficient interventions.
• 7:36
  There's all sorts of solutions for chronic conditions
• 7:38
  like cancer, cardiovascular disease, CKD, diabetes, but for
• 7:42
  some reason, behavioral health really hasn't caught up.
• 7:45
  Outside of some high cost specialty care that
• 7:47
  has there's very limited systematic guidance
• 7:50
  directing individuals to the right level of care
• 7:52
  at the right time for behavioral health,
• 7:54
  which has led us to this significant overreliance
• 7:56
  on therapy.
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  Therapy is very clinically effective at the individual
• 8:01
  level, but it really doesn't scale efficiently across
• 8:04
  an entire population.
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  So I think the key to closing this
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  gap is really improving the care pathways that
• 8:10
  are available to patients so payers are able
• 8:12
  to spend their behavioral health dollars more efficiently
• 8:14
  and effectively across the entire population.
• 8:18
  Now what you've just described
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  brings me to my next point, which is
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  the importance of a more integrated approach and
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  being able to connect the dots a little
• 8:27
  bit better to what you've just described. And
• 8:29
  and, Charles, I I know that you've talked
• 8:30
  about this quite a bit, which is, again,
• 8:32
  creating a more integrated preventative approach to behavioral
• 8:35
  health in general.
• 8:37
  Can you walk us through what that looks
• 8:39
  like for health plans today and and why
• 8:42
  it's a better long term bet for payers
• 8:44
  specifically?
• 8:46
  Absolutely.
• 8:48
  I think for payers right now,
• 8:50
  the core question really boils down to, how
• 8:53
  do you meet, you know, these growing behavioral
• 8:55
  health needs within the broader population in a
• 8:58
  way that's both scalable
• 9:00
  as well as cost effective?
• 9:02
  And we think the answer is to borrow
• 9:04
  some concepts from how we manage, you know,
• 9:07
  chronic conditions in other parts of health care,
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  which really is, a population health management and
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  kind of integrated,
• 9:15
  approach.
• 9:16
  It starts really first with engagement. Right? Early
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  and and longitudinally,
• 9:22
  you wanna reach people before they hit a
• 9:24
  crisis
• 9:25
  and to stay with them over time. And
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  that's where tools like meditation, mindfulness, sleep support,
• 9:31
  you know, play a a very critical role.
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  But you parlay that engagement in the second
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  piece, which is early detection,
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  identifying when somebody might have needs for additional
• 9:42
  sorts of support
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  and then navigating them into some sort of
• 9:45
  a personalized care model that has really clear
• 9:48
  pathways. Right? Active steerage and navigation into that
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  sort of right care.
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  The third is what Charlie was describing. You
• 9:55
  know, optimizing the care model itself, ensuring that
• 9:58
  people are getting the right care at the
• 10:01
  right time.
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  And importantly,
• 10:03
  we think about behavioral health oftentimes, you know,
• 10:06
  that outpatient care paradigm is oftentimes just weekly
• 10:09
  therapy, and in between sessions, there's not a
• 10:12
  lot going on.
• 10:14
  Headspace would argue that the weekly therapy or
• 10:17
  the episode of care can be
• 10:19
  significantly
• 10:20
  more effective,
• 10:22
  significantly,
• 10:23
  more timely
• 10:24
  if you're adding daily practices
• 10:26
  like journaling or other sorts of, you know,
• 10:29
  guided homework, if you will.
• 10:31
  And then finally, the piece that I think
• 10:33
  the system misses out on a lot
• 10:36
  is after the episode of care itself,
• 10:38
  the goal is actually more sustained well-being.
• 10:42
  Right? How do you maintain that member in
• 10:44
  some sort of a a healthy stability through
• 10:46
  different sorts of daily habits
• 10:48
  while continuing to monitor and catch signs that
• 10:51
  might require additional interventions?
• 10:54
  But that sort of a stable wellness, you
• 10:56
  know, maintenance, if you will, is oftentimes
• 10:59
  a missing element of this broader kind of
• 11:02
  end to end model.
• 11:03
  None of this is necessarily rocket science. Right?
• 11:06
  It's actually not that dissimilar to how, say,
• 11:08
  diabetes
• 11:09
  might be managed.
• 11:10
  But it's interesting that this type of model
• 11:13
  has not historically existed within behavioral health, but
• 11:17
  this is exactly what we've built at Headspace,
• 11:19
  and this is exactly what we're partnering with
• 11:22
  payers to deliver at scale.
• 11:25
  You've both touched on something very important here,
• 11:28
  which is, again, that the the model of
• 11:30
  therapy itself and what therapy looks like and
• 11:34
  how it's perceived
• 11:36
  is changing and needs to change. Again, to
• 11:38
  to be able to actually say again, we
• 11:41
  are
• 11:41
  improving downstream
• 11:43
  costs right now.
• 11:45
  I'd love to know as we close our
• 11:46
  conversation here today from both of you,
• 11:49
  what's that number one thing
• 11:52
  about what prevention behavioral health actually needs to
• 11:55
  look like
• 11:56
  today? Charles, I'll start off with you. Yeah.
• 11:59
  Thanks, Lucas.
• 12:00
  If if your listeners remember
• 12:03
  nothing else from from this discussion,
• 12:06
  I would I would remember that
• 12:08
  the idea of a population health management model
• 12:12
  is actually the key to unlocking
• 12:15
  the better,
• 12:16
  faster,
• 12:17
  more cost efficient
• 12:19
  relief, basically, for for the member.
• 12:22
  There really hasn't been a concept of preventative
• 12:25
  care within behavioral health since, you know, the
• 12:28
  very early days of of behavioral,
• 12:30
  which is why in general, you are seeing
• 12:33
  that therapy ends up being almost the the
• 12:35
  first line treatment within behavioral health.
• 12:39
  Again, given that, we're seeing these exploding rates
• 12:42
  of utilization
• 12:44
  without a commensurate offset in some of the
• 12:46
  higher levels of care,
• 12:48
  our very strong hypothesis that we're seeing in
• 12:51
  market and validating with with some of the
• 12:53
  return on investment numbers
• 12:55
  is that the battle's actually being won or
• 12:57
  lost at the intersection of this subclinical
• 13:00
  kind of prevention
• 13:01
  element
• 13:02
  with the actual smooth and seamless integration
• 13:06
  into the the care model itself.
• 13:09
  And, again, at the end of the day,
• 13:11
  a a smooth ecosystem that can detect those
• 13:14
  needs,
• 13:15
  build trusted credible relationships with the member that
• 13:18
  allow the member
• 13:20
  to accept the serage
• 13:22
  from, you know, that that ecosystem
• 13:25
  versus, you know, oftentimes, I know payers sometimes
• 13:27
  struggle, right, with gaining that sort of of
• 13:29
  member credibility.
• 13:31
  I think that's really the linchpin to then
• 13:33
  getting to the right care, right time, right
• 13:35
  place
• 13:36
  in integrated care model sorts of fashions that
• 13:39
  are looking at both the therapy, but augmented
• 13:42
  sometimes with, say, coaching and behavior change,
• 13:45
  as well as, like, daily, you know, content
• 13:47
  work within within an app and then maintaining
• 13:50
  them in stable wellness.
• 13:52
  That for us is really how to take,
• 13:54
  you know, the goodness of a population health
• 13:56
  management approach into this, you know, very newly,
• 14:00
  I think, emerging challenge on on the cost
• 14:03
  side. Yeah. I just wanna piggyback a little
• 14:04
  bit on the prevention that Charles is talking
• 14:06
  about. I think if you look at physical
• 14:08
  health, we have so many tools to
• 14:11
  prevent physical health symptoms. We have the gym.
• 14:13
  There's all sorts of apps. But I think
• 14:15
  for behavioral health, having that comprehensive tool that
• 14:17
  focuses on
• 14:19
  preventing mental health issues
• 14:21
  is very new. And I think getting members
• 14:23
  access
• 14:25
  to those tools readily available to them to
• 14:27
  prevent downstream mental health conditions
• 14:30
  is really new and is really exciting to
• 14:32
  be in. And I think that's our best
• 14:33
  way to prevent them is, like, getting members
• 14:35
  access
• 14:36
  to better tooling to try to reduce these
• 14:38
  overall downstream impacts for a mental health condition.
• 14:42
  As you've both outlined, what it does is
• 14:44
  it creates a more proactive
• 14:46
  approach
• 14:47
  than being reactive all the time, which certainly
• 14:50
  then trickles down, and it helps members. It
• 14:52
  helps improve behavioral health outcomes, which is so
• 14:55
  crucial.
• 14:56
  Charles and Charlie, thank you so much for
• 14:59
  your time and insights today. It's great to
• 15:01
  have you on. Thanks for being here.
• 15:02
  Lucas, thank you so much.
• 15:04
  We also want to thank our podcast sponsor,
• 15:06
  Headspace, for bringing us together, and you could
• 15:08
  connect with Headspace in person at Booth 33063306
• 15:14
  during Becker's spring payer issues roundtable in Chicago,
• 15:17
  April
• 15:19
  the fourteenth. We certainly hope to see you
• 15:22
  there and that you stop by. You could
• 15:24
  tune into more podcasts from Becker's Healthcare by
• 15:26
  visiting our podcast page at beckershospitalreview.com.