Behavioral health investors and entrepreneurs are frequently drawn to Behave Health’s all-in-one EMR because our simple, powerful platform streamlines clinical operations and turbocharges revenue cycle performance. We build simple, efficient systems that just work.
Our systems work so well, in fact, that many clients describe our EMR as their secret weapon for lean scalability.
Once in place, our EMR unlocks the “cheat code” to friction-free M&As.
(That’s “mergers and acquisitions” for those who can do without the acronym.)
In this post, we’ll look at how clients have leveraged Behave Health before, during, and after the M&A process for smooth organizational transactions and transitions. We’ll show you how to use Behave Health to instill a sense of confidence and consistency throughout your organization as it grows.
M&A in the addiction treatment space are on the rise - and having the right tool for the job is critical
At Behave Health, we’ve noticed that M&As in the addiction treatment space have risen steadily over the years. Of course, M&As are trending in the behavioral health space for good reason. There’s a supply-demand imbalance driving a huge growth in this sector, especially in the outpatient treatment and Medication Assisted Treatment (MAT) space.
Private equity has been investing heavily in behavioral health, yes, but perhaps not as heavily as you’ve been led to believe. There’s still plenty of opportunity for startups and smaller-scale players. More on that later.
In any event, there is opportunity in this industry for anyone who is willing to work hard, leverage the right tools, and take informed, calculated risks to reach SUD patients who desperately need timely, competent, compassionate care.
Behavioral Health M&As spark excitement and anxiety in the most experienced addiction treatment leaders and investors
There is excitement and, yes, anxiety, that comes with pulling off a successful M&A. The nerve-wracking nature of mergers and acquisitions - no matter what size the deal - is a common flashpoint in the behavioral health business community, even among experienced organizational leaders.
In most cases, the worries start long before entering into a letter of intent (aka LOI). Market analysis, referral partnership audits, and mapping the competition can address some concerns, but they can also highlight remaining uncertainties or “known unknowns.” Arriving at an accurate valuation to assess your target’s viability and financial past, present, and future can feel more like running after a moving target than finally arriving at a long-awaited destination.
If you’re looking at operating in a new state, or sometimes even a new city, there’s a new set of regulatory nuances to master in order to properly assess your target’s level of compliance and minimize unforeseen liabilities.
By the time you get to evaluating your target’s human capital - the expertise, productivity, and work ethic of its clinical leadership - it can be easy to miss red flags that may not align with the culture of excellence you expect from providers representing your organization.
There is still a lot of opportunity for mergers and acquisitions in the Behavioral Health and addiction treatment space
A recent study published by researchers at OHSU, U Penn and Yale found that only 652 of 10,324 mental health facilities in the United States are private equity-owned. The same study found that only 1,152 of 16,174 addiction treatment or SUD facilities in the US are owned by private equity. These figures do not include eating disorder treatment, inpatient psych hospitals or ASD/ABA treatment centers. All in all, private equity has only penetrated 6.2% of the mental health space and only 7.1% of the Substance Use Disorder treatment space.
This same study also cites research at SAMHSA, the federal government’s now-shuttered agency for mental health and addiction treatment, that says 42.5% of all addiction treatment centers in the US are private, for-profit organizations. That still leaves a lot of potential deals on the table for those willing to network and prospect for them.
Note that some facilities prefer to remain independent. So it is unclear what fraction of the 42.5% figure would actually be open to a potential M&A deal. Behave Health supports compassionate high-quality care and does not take a stance regarding funding sources.
With all the talk of large private equity interest in behavioral health, it’s easy to believe that there are no stagnant, neglected addiction treatment organizations with upside potential left for consideration in an M&A deal. Fortunately, that assumption is not borne out by the evidence.
What can Behave Health’s all-in-one EMR do to make addiction treatment M&As (almost) painless?
Behave Health informs leadership and decision-making at every stage of the M&A process.
Your organization can’t make its next big move unless you have robust data on your starting point. Implementing Behave Health at your existing facilities gives you granular, dynamic insight into the financial health of your organization. This documentary proof of your organizational effectiveness can be leveraged, along with clinical KPIs, in your next deal. Not only does this information provide a benchmark for comparison, it can also provide a key piece of information to stakeholders, investors, and partners.
Once the deal is complete, Behave Health offers an incredible number of post-acquisition opportunities, including:
Concierge help from our trained experts at Behave Health throughout the integration process
Hands-on assistance with EMR training and implementation, including patient transfers and employee onboarding
Quick adoption of telehealth best-practices, especially vital for organizations that were previously slow to adapt to modern patient demand
Easy implementation of app-based services, another low-hanging fruit for efficient, patient-friendly modernization
Instant expansion of capabilities around patient admissions, intake, and onboarding
Simple integration of all revenue cycle management between organizations
Full transparency into all organization operations, including incident reporting, employee profiles, and day-to-day information on everything from clinical services and billing to building maintenance
Other blog posts of interest to M&A - minded Behavioral Health organizations and professionals
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