South Florida Hospital News
Saturday October 31, 2020
Quote

test 2

September 2020 - Volume 17 - Issue 3
Advertisements

NovaMPH.jpg
advertizehere.gif

COVID-19 and Behavioral Health Investment

Behavioral health encompasses people’s psychological well-being and ability to function in everyday life. Behavioral health conditions include mental health disorders and substance use disorders. Counselors, social workers, therapists, specialized nurses, psychologists, and psychiatrists help manage patients’ behavioral health needs. Treatment includes therapy, counseling and medication.

Behavioral health conditions cut across society and are widespread, impacting one of four Americans in any given year. Within this spectrum there are many people who have a dual diagnosis. A person with dual diagnosis has both a mental disorder and an alcohol or drug problem and these conditions occur together frequently. About half of people who have a mental disorder will also have a substance use disorder at some point in their lives and vice versa.
 
There is a growing body of evidence that links behavioral health to physical health. Approximately 70% of patients with a behavioral health diagnosis also have a medical comorbidity. Traditionally, physical and behavioral health have been treated separately, but there is a growing argument for a holistic approach. The Affordable Care Act (ACA) includes behavioral health as one of the 10 essential health conditions that all health insurance plans are required to cover.
 
The need for behavioral health services is facing an unprecedented impact from COVID-19. The pandemic is placing an increasing strain on the public’s mental health with stressors including fear, anxiety, grief, isolation and uncertainty.
 
Mass unemployment and financial hardship are compounding this. When considering those two factors alone, the Global Financial Crisis (GFC) of 2007-2008 drove higher rates of depression, alcohol and substance abuse, plus an estimated 13% increase in suicides attributable to unemployment in 2008.
Early into the pandemic, a McKinsey survey from late March 2020 reported that 63% of respondents were feeling anxious, depressed or both. This number rises to 74% among those reporting a job loss or reduction. The survey also identified heightened levels of binge drinking and of taking prescription drugs for non-medical reasons.
 
More critically, the pandemic has highlighted the increasingly important role of telehealth as part of the provision of behavioral healthcare services. While prior adoption may have been slow, the pandemic has driven an increase in the use of telehealth as an effective way of treating many behavioral health conditions. There have also been rapid regulatory changes in increasing insurer reimbursement for telehealth services.
 
Treating behavioral health conditions is costly. The Colliers Advisory Board estimates that treating patients with behavioral health diagnoses costs about $900 per month more than patients without such a diagnosis and this cost differential continues to rise. Spending on behavioral health services is forecast to reach around $280 billion this year, which is 5.5% of total health care spending.
 
Nationally, construction of behavioral hospitals has accelerated in recent years. Following the delivery of 3.8 million square feet in 2018, new supply levels more than doubled in 2019 to 8.1 million square feet. A further 6.4 million square feet is set to deliver in 2020. Average construction costs rose from $346.80 per square foot in 2018 to $404.65 per square foot in 2019. Costs are expected to hold steady in 2020 at an estimated $403.60 per square foot.
 
Investment purchases of behavioral health assets started to occur (in any significant volume) in 2017. Total trades over the past three years are approximately $3.0 billion. Following an escalation in 2017 as investor interest rose, pricing has held with the $320-$350 per square foot range. Average cost per bed averages around $330,000. Cap rates for behavioral health assets average 9.0% compared with 6.6% for medical office buildings.
 
There is a need for greater collaboration and coordination in the provision of behavioral healthcare services. Successful implementation is predicated upon a model where physical and behavioral conditions are treated in tandem and there is an increase in public/private partnerships.
 
At Colliers International, we are tracking these national healthcare trends, and we work to help position our Florida healthcare clients to make the informed decisions to provide best-in-class care.

For more information, contact Alexander.Brown@colliers.com.

Share |