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Welcome to The Census, your weekly roundup of what matters in behavioral healthcare.

Today, we’re breaking down:

• The behavioral health business models under pressure

• All your latest news headlines in under two minutes

Let’s dive in.

- Shân

P.S. A bunch of new clinics and partnerships were announced this week. Scroll down for a quick briefing. 

Reading time: ~4 minutes.

On Our Radar

What we’re watching this week 

🔎 What’s Next for Behavioral Health Business Models

The past year has revealed which frameworks are cracking, and which are leading the reimbursement race. 

Last week, BHB did an excellent analysis of the pressure behavioral health business models face, and the associated do’s and don’ts. 

Here’s what you need to know.

💸 Payers are setting investment outlooks (even for the big guys). 

They’re pressuring providers to increase access to care while also accepting rate cuts or rate increases that are ‘not enough to keep up with inflation.’ 

If you’re a provider, this is old news to you. But it matters, because just a single payer renegotiation can have serious consequences, even for behavioral health behemoths.

LifeStance Health (market cap $2B+) told investors to anticipate ‘downward revenue pressure’ after an unnamed payer brought reimbursement rates more ‘in line.’

So yeah, payers are calling the shots. But there are ways to get more negotiation heft…

💰 Payers seem to take behavioral health providers more seriously under two circumstances.

1. When they can do more for a payer’s plan member, such as provide ‘holistic approaches’ or comprehensive care

2. When (surprise) a provider manages to build a significant level of respect and authority

This fits with trends we’ve been reporting on for a while — namely, a move toward comprehensive care that attracts payers (and VC), and prepares for alternative payment models. 

💻 Digital mental health providers learned two hard-won lessons.

1. Building virtual treatment platforms is damn difficult when there isn’t an organization bringing patients to the provider or vice versa — hence the flee from B2C to B2B (lookin’ at you, Talkspace)

2. The clearer path to profitability isn’t through scale (a little example) 

This doesn’t mean D2C models or IPOs for behavioral health firms are dead. 

But digital enablement platforms and ‘business-in-a-box’ models may seriously shake up the market in the next few years.

Read the full analysis here.

Let’s get your news headlines. 

Catch Up Quick

This week’s top stories

Latest News

👀 Influential US Senators are the latest to launch investigations into PE’s increasing role in owning and operating healthcare firms.

💉 People with eating disorders are being prescribed Ozempic — and doctors say the results are dire.

⚠️ There are growing warnings about medetomidine, a potent animal tranquilizer that’s showing up in more of the illegal drug supply.

😞 The departure of three high-profile CEOs in autism therapy highlights top executives’ pressure in the space.

🍔 Colorado’s eating disorder treatment industry will soon face tighter regulations under a new law spurred in part by patient complaints.

🍄 An emerging alternative to psychedelic mushrooms is more dangerous than fentanyl, public health researchers are warning.

📝 A new bill would make it easier for veterans to access marriage and family counseling services. 

🚬 The FDA has reversed its ban on Juul e-cigarettes (for now).

🥴 Experts say ‘it’s reasonable to be concerned’ as the use of addictive nicotine patches among American teens soars. 

❤️ Early data suggests that behavioral health collaboration reduces the length of ED stays by 64% and improves overall staff and patient safety.

⛺ California’s homelessness ‘solution’ allegedly includes $80M for 1.2k tiny homes that might not even have a bathroom.

💰 The city of Baltimore has reached a $45M opioid settlement with Allergan.

🪖 The Pentagon is investigating how psychedelic medicine can help service members — beyond mental health issues.

🥇 Expect collaborative care in behavioral health to ‘become the gold standard,’ says LifeStance’s chief medical officer. 

🔎 Precision care may offer new hope for the treatment of children and youth with mental disorders.

🤦 Mallinckrodt’s internal documents contain a ‘smorgasbord’ of strategies allegedly utilized to help sway doctors to prescribe opioids.

🏥 A Medicaid experiment supporting comprehensive and crisis mental health care at community clinics is expanding to 10 new states.

💊 Ensysce announced a new drug candidate that may be able to treat OUD with fewer side effects than methadone. 

❌ The FDA’s rejection of Lykos Therapeutics’ MDMA therapy drug is a ‘speed bump, not a stop sign’ for the psychedelic industry, say insiders. 

🏡 Health insurers are investing millions into building new affordable housing units in the hope it’ll translate to healthier communities.

✅ ABA provider Spectrum Transformation Group has landed an accreditation from the Autism Commission on Quality Group for its programs in Virginia.

🗣️ How virtual SUD treatment provider Ophelia used a “F*ck Rehab” campaign to start conversations around MOUD.

Expansions, Launches, & Partnerships

📝 Upheal has partnered with Alma to offer AI-driven clinical documentation in an integrated practice management solution for mental health providers.

🫖 Envision Unlimited announced a Living Room program in Illinois as a ‘welcoming alternative’ to a hospital ER for people in mental health crises.

🧒 Caravel Autism Health opened a new autism therapy clinic in Weldon Spring, Missouri, and plans to expand with more locations in the state this year.

🏡 Spark Behavioral Solutions announced a new in-home therapy program for children with autism and other developmental disorders.

🕵️ Digital SUD treatment provider Pelago has launched a network to address rising costs, care barriers, and low inpatient treatment completion rates.

🧠 Premise Health is expanding its behavioral health care model by adding psychiatric support to its collaborative care teams.

🏛️ Lifeskills South Florida opened a new residential and outpatient facility for mental health and addiction treatment services in Orlando.

🎉 Generations Healthcare announced the grand opening of a new behavioral health building in Lakeside, CA.

🏥 California Addiction Treatment opened a new 16-bed detox facility in Orange County.  

👩‍🏫 UnitedHealthcare and Goodside Health have joined forces to provide $1M worth of integrated health care services to K-12 students in Texas.

🧑‍💻 Behavioral health EMR software firm Alleva launched a new payment solution to support the growth of behavioral health practices.

🧑‍💼 Sun Life has expanded its partnership with Goodpath to offer employer clients virtual whole-person care, including unlimited therapy sessions. 

🤝 Mineral and ContinuumCloud have partnered for better HR compliance in behavioral health.

🏠 Digital SUD treatment firm Pelago is teaming up with in-patient providers to help patients access higher levels of acuity of care.

Funding Rounds & Investor Moves

🏥 Universal Health Services is selling an 80-bed psychiatric hospital in Texas to Shannon Health System.

💲 Pennsylvania-based NeuroFlow has acquired fellow behavioral digital health company Owl to expand its measurement-based offerings.

🎉 Stitch PEO, a new startup reducing medical practices’ HR burden, has officially launched with a $8M+ seed round.

💰 Anterior, a firm built by clinicians that automates administrative health insurance procedures, raised a $20M Series A.

💡 Hybrid models represent the future of venture capital’s involvement in behavioral health, says Margaret Malone of Flare Capital Partners.

📉 PE add-on deals (acquisition + integration of a smaller company) in health care are down ~75%  this year amid closer scrutiny from federal regulators.

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Studies & Opinion Pieces

🧠 Brain overgrowth in embryos appears to dictate autism severity (study). 

🩺 The health care workforce crisis is already here (opinion). 

🧑‍💼 Related: How behavioral health providers can build a culture that retains staff (opinion).

🐕‍🦺 Service dogs can help ease veterans’ PTSD symptoms (study).

📲 For teens diagnosed with internet addiction, signaling between brain regions controlling attention and working memory was disrupted (study).

💡 Value-based specialty care is coming and — if done right — has the potential to transform how we care for millions of patients (opinion).

That’s it for this week! See you next Wednesday with the latest headlines.

- Shân

P.S. You can email me here if you want to share any feedback, or let me know about a business I should be featuring.

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