4 ways to make money in behavioral health

As more private equity drives market growth, behavioral health organizations are capitalizing on new and better ways to increase revenue and realize strategic goals. A panel of experts provided insight on today’s opportunities in the industry at the Treatment Center Investment & Valuation Retreat in Scottsdale, Ariz., this week.

“It’s okay to make money,” said Dan Gemp, president and CEO of Dreamscape Marketing. “It’s necessary to compete.”

Here are a few tips the panel members offered:

1. Don’t forget to treat clients, potential clients and families as people. According to Jason Brian, CEO of Redwood Recovery Systems, too many inbound call centers default to asking callers about their insurance situation before even asking their names. Routing calls to voicemail systems will also stand in the way of creating an engaging experience, he said. In order to ensure a sustainable business, your organization must have an effective plan to bring clients in the door that also reflects the quality of the care you are able to provide.

“Treat a person like a person and build rapport,” Brian said.

2. Don’t settle for insufficient payment from commercial insurers. According to Bill McCormick, CEO of Medivance Billing Services, commercial insurers too often ignore provider concerns about reimbursement. One way to begin addressing the issue is to provide clean claims the first time you file. It’s essential because any claim that requires manual processing or additional adjudication by the insurer is less likely to get paid properly.

But realize that it’s a two-way street.

“The people on the ground who provide care know what clients need, but on the business side, insurers’ data show patterns of fraud and abuse,” McCormick said. “In the future, insurers are going to ask for accreditation and will only pay claims for accredited organizations. That’s a trend.”

3. Track your financial metrics. Particularly for organizations that are seeking private equity or merger partners, data can make the difference between moving forward on a deal or not.

“It can be a challenge to answer the question of what your company’s true revenue is,” said Kevin Taggart, principal of Mertz Taggart. “You might do a good job tracking cash, recognizing revenue and expenses and when they hit your account. But most buyers want to see finances on an accrual basis. Are you going to collect $50 or $80 on that claim when you bill insurers? It’s a critical issue to get your financial house in order.”

Taggart also said that private equity could play a greater role in the future by identifying providers that use questionable billing practices and possibly drive them out of the market by excluding them from deals.

4. Consider the value of your website as part of the total value of your organization. The cost of paid online search tools, such as Google Ad Words, is going up 12% per year, and no organization can sustain that growth in its marketing budget. Higher ranking on traditional searches can be helpful. The value of your site as a source of potential patients and clients can be calculated by the equity you’ve built in the traffic to your site.

“Write a ton of content that answers people’s questions at an eighth-grade level,” said Gemp. “Don’t use fancy words and doctors’ language. It’s quantity and quality – you need a lot of really good content on your website.”

Finally, Gemp also recommends that residential treatment center websites always include the top most popular feature: pictures of the beds where patients will sleep and the food the patients will eat. It’s a must-have digital strategy.