The crisis care chasm
The confounding inadequacy of our emergency psychiatric care infrastructure
why waste time dial lot number when few number do trick?
Earlier this month, SAMHSA announced that the National Suicide Prevention Lifeline will be overhauled into 988, “an easy-to-remember three-digit number for 24/7 crisis care” powered by a network of >200 call centers. The move simultaneously underscores the massive scale of the country’s mental health crisis while illuminating the gaps that exist in our emergency mental health infrastructure.
For example, skeptics point out that crisis call centers are already severely understaffed, leading to high (~20%) abandonment rates on calls into the Lifeline; the proposed investment is unlikely to provide sufficient resources to satisfy increased call volume expected from the 988 overhaul.
More importantly, even when we are able to successfully intervene with an individual experiencing a psychiatric emergency, we often have nowhere to direct them to receive care:
We do know that when someone calls and connects with a caring and trained human they often can benefit, but if they need more than a crisis counselor, the rest of our outpatient and inpatient mental health infrastructure is still woefully inadequate. This is not dissimilar to what happened with COVID-19. Sure, we could set up a memorable shortcut to reach an understaffed COVID hotline but what good will that do if the hospitals are full and all the ventilators are spoken for?
Source: Carlene MacMillan, MD and O. Scott Muir, M.D - The Frontier Psychiatrists
The inadequate supply of emergency psychiatric care is partially why individuals with high acuity mental health needs experience poor clinical outcomes and disproportionately outsized health care costs. And while surging capital formation in the behavioral health sector is democratizing access on the lower acuity end of the care continuum, it may actually be warping incentives for providers and exacerbating constrained access to high acuity care where financial realities (low reimbursement, unpredictable volume, clinical labor cost inflation) stifle private sector investment.
Instead, innovators in high acuity behavioral health care will likely need to build longitudinal care models (e.g. care teams that can address an individual’s holistic needs) in order to bend the cost curve and improve outcomes. Getting this right could drive tremendous value to stakeholders, representing a big opportunity for entrepreneurs and investors.
More on this below. If you’re working on something interesting in high acuity behavioral health care, I’d love to learn about it.
Where are all the psychiatric hospitals?
Psychiatric emergencies are defined as disturbances of thought, mood or behavior that require immediate intervention; typically the individual poses a threat to their own safety or the safety of others.
Patients with a psychiatric emergency must be stabilized via counseling or medication to the point that they are no longer a threat to themselves or others. That commonly requires a 24/7 inpatient treatment facility with dedicated psychiatric care resources.
There are three major models/settings for emergency psychiatric care where a person could be safely stabilized during a crisis - co-located treatment within an existing medical emergency department (ED), dedicated psych wing within a medical ED/hospital, or a standalone psych facility.
While standalone psychiatric facilities are ideal because they have dedicated focus and resources, the number of standalone sites has declined monotonically decade after decade. From 1970-2014, the total number of inpatient psychiatric beds decreased 64%. Meanwhile, ED utilization for mental health issues is skyrocketing. From 2006 to 2014, overall utilization of the ED increased 15%, but ED visits for suicidal ideation and intentional self-inflicted injury increased by 415%.
Why are there so few dedicated inpatient psych facilities? With the disclaimer that I’m not a historian, a crude summary of the 70+ year timeline of how we got here is: in the 1950s most individuals with severe mental illness (SMI) - and many people who did not have SMI (e.g. loosely defined “senile” geriatric population, orphans, wards of the state) - were institutionalized. This led to a massive population (>500k people) in mental institutions. These institutions were generally overcrowded/underfunded and poorly run. This was objectively a terrible standard of care. Around this time, advancements in pharmaceuticals made it possible to manage SMI conditions in less restrictive settings. The 1963 Community Mental Health Act was enacted with the goal of decentralizing psychiatric care by moving patients from state-run facilities into local/community care settings. Additional drivers of deinstitutionalization included the rise of professional psychiatry in outpatient settings, cultural criticism of institutions and the advent of Medicare/Medicaid (which did not cover patients' costs for living in state mental institutions). Unfortunately but unsurprisingly, the government fumbled the transition to community based care via a classic combo of underfunding/mismanagement and <40% of the originally contemplated capacity for community-based psychiatric care was ever created.
As a result, we’re left with the status quo where the standard of care for a person experiencing a psychiatric crisis is pretty much 1) showing up to the ED and being boarded for literally days and weeks until a psychiatrist is available to provide care or 2) going to jail because the only “resource” to deal with the individual is law enforcement (in 44 states, a jail or prison holds more mentally ill individuals than the largest remaining state psych hospital).
Big dollars
Like many areas of healthcare where cost burden exhibits a pareto-like distribution, individuals with high acuity mental health needs have disproportionately high cost of care.
Individuals with schizophrenia or severe bipolar disorder represent <3% of US adults, but these conditions are the primary or secondary diagnosis for almost 10% of annual ED visits and represent ~$30bn of hospitalization spend alone. This doesn’t include the impact borne by overburdened ED’s, the judicial system, and social services.
One reason driving the exorbitant cost of hospital care for individuals with SMIs is the recurring cadence with which these individuals are showing up to the ED. 23% of individuals with schizophrenia discharged from the ED are readmitted within 30 days. In NYC, 30% of all patients who made five or more ED visits from 2007 to 2010 had schizophrenia or bipolar disorder.
This matters a lot to health insurers. And not just Medicaid (contrary to prevailing assumptions); while Medicaid membership exhibits slightly higher prevalence of of SMIs, most individuals with SMIs are actually covered by private insurance.
Successfully managing these crisis flashpoints of care, including post-discharge aftercare, could drive tremendous cost savings while also improving clinical outcomes for patients.
Solutions?
It’s unlikely that the industry will manifest significant capital formation behind new crisis care centers. This is because on a fee-for-service basis, the point-of-care economics of managing psychiatric emergencies are not compelling. >50% of the nation’s 1,700+ inpatient psychiatric facilities had negative net operating margins in 2016. A study of children’s hospitals found significantly lower financial margins for mental health and suicide attempt hospitalizations (~11% of all hospitalizations at these sites) than for other medical hospitalizations.
Source: Journal of Hospital Medicine, Dec 2020
In the absence of de-novo psychiatric bed capacity, there are still opportunities for private capital investment to drive meaningful value creation at these crisis care flashpoints. Here are some ideas I’ve seen in the market:
Urgent Mental Health Care - replicating the urgent care model in primary care (i.e. walk in or same-day/next-day appointments) for psychiatric care needs could help de-escalate situations before they rise to crisis level. Examples: Mindful Care (Sopris Portfolio Company) provides next-day access to psychiatric health care via its network of brick-and-mortar locations and telehealth.
Steering Care Away from the ED - many individuals don’t need to be transported to the ED to receive care; the ET3 model for EMS opens the door to delivering care (via telemedicine) to the patient where they are. Something ET3 for 988 with warm handoffs to on-demand psychiatrists could be an interesting model, particularly in regions with highly concentrated payor mix. Examples: companies like PriorityOnDemand are positioned to deliver on this.
Coordination of Existing Supply - often, stakeholders don’t know what bed capacity in the community is open to take in an individual in a crisis. Enabling interoperability between disparate systems and data sources could work to compress the timeline to successful referrals. Examples: OpenBeds (now part of BambooHealth) provides real-time psychiatric bed inventory data to stakeholders to help direct patients to care venues with available capacity
ED Integrated Telepsychiatry - deploying telepsychiatry can help fill the gap for hospital emergency departments that don’t have access to a full-time psychiatrist, reducing wait times for patients. Examples: QLER Telepsychiatry embeds its psychiatrists on-demand for partner hospitals to resolve this access problem
Longitudinal Wraparound Care Coordination - this is probably the biggest idea/opportunity I can think of. Given that individuals with SMIs are prone to super-utilization of emergency services, creating a care team that wraps around the patient with a holistic approach (e.g. addressing social determinants of health) could have a huge impact to outcomes and costs, particularly if that relationship can be sustained over multiple months or years. Imagine a situation where an individual who otherwise would be in-and-out of the ED can call on their trusted care advocate/coach as symptoms escalate. Care teams can also play a big role in post-discharge aftercare planning to avoid recurring rehospitalizations. Examples: Companies like Amae Health and Firsthand appear to be building a platform like this (I think)
High Acuity Substance Use Disorder (SUD) Care - the SUD treatment space is in dire need of greater supply of clinically validated, high acuity care, particularly in the earliest phases of an individual’s journey through treatment. Examples: Gallus Detox (Sopris Portfolio Company) utilizes a data-driven approach to medical detox to drive significantly better outcomes and adherence to aftercare.
The usual obstacles to adoption of mental health solutions will be even more pronounced for innovators in high acuity care. For example, non-existent outcomes measurements + data will be a hurdle to demonstrating value. Developing solid outcomes measures will help innovators communicate value back to stakeholders (i.e. payors). Increasing cost of clinical talent will be particularly challenging as the pool of clinicians who can/want to treat SMIs is smaller than the general pool of mental health clinicians, which is already really small. Models that can leverage lower cost resources (e.g. non-clinical care advocates or coaches) should find more sustainable economics.
All told, there is a massive opportunity to create financial and societal returns by elevating the standard of psychiatric crisis care; as we look to the next leg of behavioral health care innovation, this is an area to watch.