Dr Chris Stout on Behavioral Healthcare Spending and Payer Trends
[Music] Hi, I’m from Searsite calling about your AI powered interview. How are you doing? I’m good. How are you doing? Glad to hear that. I’m doing well. Thanks for asking. So, to get started, could you tell me a bit about yourself and your background? Uh, sure. Uh my name is Dr. Chris Stout. I’m a licensed clinical psychologist. I have a varied background in medicine, healthc care, education, academia, entrepreneurship, startups, uh global health, uh for-profit, nonprofit areas. Um I was on faculty for a number of years at Northwestern’s Fineberg School of Medicine and then at the College of Medicine and University of Illinois. I helped co-found their center for global health, started my own nonprofit, uh the center for global initiatives. uh worked with a number of startups. I’m currently uh consulting with three AI startups. Um I write a great deal. Um just have done two second editions of a couple of my books for uh WY and Sun. So really kind of a a broad diverse area in technology, healthcare, uh startups, private equity, uh venture capital, uh etc. So uh happy to be here today with you and talk about the behavioral aspect of things. Wow, that’s an impressive and diverse background. Dr. Stout, with all that experience, especially in healthcare and startups, I’m curious, how have you seen behavioral health spending change since the CO 19 pandemic? Uh, that’s a great question. Um, for years I was a federal ad advocacy coordinator to the American Psychological Association for the state of Illinois. So for 12 years, I would go to the Hill and meet with our elected representatives to talk about um patient advocacy kinds of things, what was called mental health parody in terms of insurance reimbursement, etc., etc., and always kind of fighting this tacit um stigma against mental health or behavioral health kinds of issues. And I tell you with the advent one of maybe the only good thing that came from COVID was u it really destigmatized uh mental health needs and issues. I think a variety of people, celebrities, um military, athletes, you know, you name it. Anybody from any kind of uh background and whatnot, uh you know, who might have typically have kept mental health concerns of their own or their family members kind of behind closed doors became very public and very fullthroated about talking about their own experiences, etc. and the co 19 circumstance really acted to diminish that stigma much more than the 12 years of me going out to DC or and along with my colleagues. Um to your point about the so therefore a result of all that is that behavioral health care spend has dramatically increased um since the pandemic and kind of maybe the backlash to that or the flip side of that is really it’s caused a lot of payers to pay closer attention to their costs and adjust premiums accordingly. It also did a lot to put a shot in the arm to tellaalth. Uh before a lot of payers would not pay for that. Um I know my practice in in uh Chicago uh and consulting with other people in their practices uh for example to pick on Blue Cross Blue Shield for a second. Blue Cross Blue Shield typically wouldn’t provide uh any kind of reimbursement for teleaalth services until COVID came along. And then they gave parody in terms of uh an hour of psychotherapy face toface versus an hour of psychotherapy via teleaalth had parity in terms of payment. Both were being reimbursed at the same level. One of the last times that um I checked into this was that now there was a concern that they were going to go back to charging less or reimbursing therapists less for their teleaalth services which I’ve never really heard any good argument as to why that is. I suppose you could kind of say, well, there’s less overhead because maybe they’re doing it out of their bedroom or something, but I know most people that do have a teleaalth component to their practice other than it being someone in a different state, they still maintain all the expenses of um staff and office rental and all those kinds of things. So, um I think that, you know, we’re going to see kind of maybe a the pendulum swinging kind of wildly around, but um it seems now that third party payers are really starting to get back to paying closer attention to their costs and then start to adjust premiums and co-ayments, etc. accordingly. That’s a really insightful take. Co definitely shifted the landscape, especially with teleaalth becoming mainstream almost overnight. You mentioned payers are now scrutinizing costs more closely and adjusting premiums. What other factors besides teleaalth and behavioral health spending do you think are pushing payers to reassess their premiums right now? Uh great question. I think um there’s also from the data that I track um there’s rising hospital costs. Um there’s you know GLP one medications are quite invogue uh now. uh it seems like you can perhaps in some situations even get them you know over the counter through certain uh uh startups as well. So maybe there’s opportunities there for some people but um there’s a high expense of those kinds of things hospital costs and GLP1 meds etc. And when you combine that with increased behavioral uh uh health care uh treatment spending that um that’s I think one of the things that really kind of caused them to uh prompt the reassess this reassessment. Got it. So it’s a mix of rising hospital costs, the pricey GLP1 meds, and the surge in behavioral health spending all piling up. With that in mind, what trends do you see driving the increased behavioral health utilization itself? Is it mostly the dstigmatization or are there other factors at play? Yeah, I think dstigmat dstigmatization um really has played a key role uh with that. People aren’t as inhibited. Uh people it’s we’ve moved I think we’re moving away if not hopefully totally moved away from the blaming the victim kind of mentality. The old you know just pull yourself up by your bootstraps or people not having an understanding or at least not an empathy uh with regard to what anxiety, depression, etc. is like I think there’s also somewhat of an uptick of it. It’s sort of hard to tell epidemiologically. Is it just that people are more comfortable with talking about it, seeking treatment for it, etc. Or is there actually, you know, epidemiological increase in these kinds of things? You can see in a variety of other uh areas that there’s a concern that social media has increased um these kinds of things that maybe there’s a Gen Z factor that there’s higher levels of um anxiety, depression, things like that. But I do think that uh since uh therapy has gotten a bit more of a mainstream acceptance that it’s not the embarrassment or stigmatized kinds of thing uh and that and that people are saying that therapy is beneficial. I mean a lot of times when people do talk about engaging in treatment or going into a rehabilitation facility or whatever that things have gotten better. uh cognitive behavioral therapy demonstrates very good outcomes that are robust uh short-term levels of care, let’s say, and uh that has uh staying power that uh you know, every things happen to people. So, sometimes they may have to go back into therapy, etc., but get a booster, so to speak. But um you know the the sustainability of people’s impact on their mental health status after uh have being in in care um is very robust and it’s wonderful to see there’s a lot of published studies you know that um indicate that I think um all of those things lower the bar in terms of people wanting to uh get behavioral health care services um even those without a formal diagnosis. I think also um think about you know how health care is reimbured for most pe some people pay out of pocket but for most people it’s by virtue of their insurance how do they get insurance they have jobs those jobs those employers one of the things to attract the kinds of employees that they want that are highquality highc caliber and to keep those cal those employees that are high quality high caliber they need to have not just good salaries um but part of their good benefits package is a very comprehensive third-party payer insurance package So um that makes it incumbent upon uh employers to provide good care and levels of service virtue of the insurance but then also insurance companies need to be able to you know they’re they’re a for-profit company so they need to maintain their profitability to their shareholders but they also um I think there’s still kind of maybe a backlash visa v managed care and those kinds of things where people um found that they were not getting adequate levels of care and that that was pretty much more so precoid kind of thing that hopefully has gotten a little bit more rationalized today. That’s a really thorough perspective. So, it’s a mix of dstigmatization, some possible real increases in anxiety and depression, plus employerdriven demand for better behavioral health benefits. You mentioned therapy’s lasting impact and how employers play a role in pushing for coverage. Do you think payers see therapy for all as a sustainable model, or is that raising red flags for them? Well, you know, it’s sort of like why why separate out behavioral health care as as health care for all? I mean, it’s sort of like would someone if they were diabetic, would they not get care for their diabetes? If they were, you know, had a cancer diagnosis, would they not get care for their cancer? If they had a depression diagnosis, would they not get care for their depression? It’s still by by virtue, and I understand this things people think, there’s still this body mind separation. Um there’s also a great robust literature called medical cost offset. I was just reviewing a study for a group that I’m consulting with and that showed um there’s a study done by Evernorth and they were showing that um you know when you provide behavioral health care services you have downstream u medical cost offsets medical cost savings that can more than cover the cost of the behavioral health care aspects if not then some. So I think that we need to quit having this sort of separation of the behavioral health from health care insurance. It should should just be overall health care insurance and then depending upon you know if it’s a HMO or PO or fee for service or whatever kinds of models you know maybe we go to more shared risk kinds of contracts maybe we go to more um uh capitated kinds of models. I think there needs to be more of a perspective of looking at um more robust payer models that provide I understand profitability for insurance companies but let’s call it fair profitability and then also being able to provide ultimately good care for anybody in need of whatever kind of care they have psychological biological medical you name it and then also being able to provide um good uh reimbursement for the uh whoever it is that’s providing that level of care. I love that breaking down the artificial divide between behavioral and physical health makes so much sense, especially with evidence showing behavioral care can actually reduce overall medical costs. Given that, how do you see therapy for all differing from therapy only for those with a formal diagnosis? Well, I think the the I when I hear the thing the term therapy for all, I presume it’s because people need care. It’s not something that’s just cosmetic. It’s not something for personal growth, etc. All of those kinds of things, you know, can be handled a variety of different kinds of ways. My personal opinion is that um if you have a clinical diagnosis and you need a professional licensed person to provide that care, that should be covered by your insurance. Period. Full stop. If you have issues around personal growth, then maybe you need to get a life coach or if you have issues around um consultation or things like that with your job, then maybe you need to get specialty areas in that. But otherwise, um, the whole aspect of getting psychotherapy means that you have a diagnosis and that you need to have care. Sorry. Sorry about the dogs in the background. No worries about the dogs. Add some charm. That distinction you make is really clear. Therapy covered by insurance should be for clinical needs, while personal growth or coaching falls outside that. How do you think payers are responding to this kind of differentiation? Are they open to covering therapy strictly for diagnosed conditions or is there pressure to broaden coverage? I think that uh you know honestly with diagnosible conditions there’s still a concern that there’s not enough ad there’s not enough or adequate coverage for that. Um you could say that depression is covered but that uh so that’s great diagnosis depression therapy provided but how much therapy? What type of therapy is it just going to be medication? Is it just going to be psychotherapy? Is it going to be combined therapy? Is it going to include innovative kinds of therapies in terms of transcranial brain stimulation? Is it going to include ketamine? Is it going to include um uh psychoactive kinds of medications or um uh psychedelics? Um is it going to include inpatient? Is it going to include partial hospitalization, intensive outpatient, residential? All of those the more hospitalized kinds of things, more residential kinds of services, institutionalized kinds of services are going to have much greater costs, but the length of stay in a number of those facilities today versus what it was 10, 15, 20 years ago are much much shorter. And again, we’re looking at tracking outcomes. So we can kind of see if someone gets um hospitalized or if someone gets uh residential care um you know they it’s incumbent upon them to demonstrate that the quality of care and services that they provide is what’s you know is necessary and eventually then creates a greater you know benefit. If someone stops using substances because they’ve been in rehab, then their health care costs will or their their subsequent biological health care costs will diminish because they won’t have all the comorbid problems that come along with substance abuse, for example. So, I think that um it’s that I don’t know of any insurance company that pays for any kind of personal growth, for example, because there’s no diagnosis to go with personal growth for therapy, so to speak. And I don’t really in my own head think of that as therapy. I think of it as you know personal growth, enrichment, philosophical discussion, things like that. So in that opus I think really the issue comes down to type of care. How managed is that care? Is there going to be a burden to the therapist that they need to send in their clinical notes every third session to demonstrate that the patient is showing progress but and still needs care. Um, those are the kinds of things and shenanigans that a lot of times insurance companies will play games with with therapists. I’ll give you another quick example. Historically in the state of Illinois, this is something that we worked with through the Illinois Psychological Association. Insurance companies um were not promptly paying. So, we actually had to institute what was called a prompt payment act that had to be uh approved that was approved by the Illinois legislature uh saying that if an insurance company got a what was called clean claim, meaning that the billing was all done correctly, that they had a a clock put on it of 45 days, that they needed to reimburse the therapist 45 days. Think about any other kind of profession out there, you know, anything. Your mechanic, you know, at the time you get your car fixed, you pay the mechanic. um the um the issues of having to h actually have legislation to force insurance companies to pay within 45 days. You you’ve got an accounts receivable account that’s you know out there for 45 days to finally get paid. And it’s very hard to maintain a solo independent practice if that’s what’s happening with you. So I think the issue really boils down to if people need therapy, it should be covered is my bias and it should be covered at a level that is adequate with what the literature says in terms of type of care and duration of care. That’s a powerful breakdown. So even when therapy is covered, the type, duration, and reimbursement delays create real challenges for providers and patients alike. You mentioned innovative treatments like ketamine and psychedelics. Do you see payers warming up to covering these newer approaches or is that still a tough cell? It is still it is still a very tough cell. Again, the uh there’s promise to it. Um you know, we there’s it’s interesting because it seems like there’s a lot of clinical application to it even though there’s kind of not a fully robust built out science behind it like you would think maybe with other kinds of psychotropic medications and anti-depressants etc. So a lot of these kinds of things u might be off label use or might be u not reimbursed by an insurance company. So um there’s a lot of you know additional kinds of um uh issues to consider with that. I think that, you know, honestly, if we were to find that XYZ treatment, no matter what it is, biological, psychological, technological, if XYZ treatment showed really good treatment outcomes that had good uh durability to them, um, you know, and could be done done in a cost-effective kind of way that insurance companies would be, you know, making a line to their door to be able to provide that. And perhaps my fantasy would be to um, you know, maybe pay a premium for that. I mean economically in terms of of of medical economics to me it would make perfect sense to say if I could provide even though it might cost a little more to provide this care if this person’s uh relenting suicidal ideiation might occur for a period of 18 months which they’ve never had that long of period of time before by virtue of having this xyz treatment that that would be a huge cost benefit to be able to to do that to keep that person alive or to my point earlier about medical cost offset. If someone had their anxiety, had their depression treated, etc., etc., and then that showed downstream cost savings, then that XYZ treatment, which I would say we have it now, it’s not XYZ, it’s CBT, cognitive behavioral therapy, would show all these kinds of um cost effectiveness and from a medical economics perspective, you know, is is quite viable and quite important and should be from a humanitarian perspective important for insurers, from a business perspective important for employers. That makes a lot of sense. Payers want solid proof that new treatments deliver lasting results and cost savings before jumping in. You mentioned CBT as a proven costeffective approach. How do you see alternatives to traditional therapy like digital health solutions or triage tools fitting into the behavioral health landscape? Oh, I think they’re huge. I think they’re huge. I think they um help get people engaged in care much earlier. I think um technologies like CBT informed chat bots um can be a nice prelude or a nice bridge to uh the time until person can get a regular appointment be it face toface or tellaalth or pharmacological intervention with a licensed health care professional. So I think those are all very very very beneficial kinds of things that um you know should be part and parcel. They’re also hugely cost-effective. I mean, the the whole digital aspect of these kinds of things, I I haven’t seen a in an economic breakdown. I think that’d be a very interesting article or paper. But I I can’t help in my heart of hearts think that, you know, the the cost of that, the scalability of that, the um economics of that, the economic benefit of that are just huge. So, I think there’s great potential there. I think that, you know, with startups and etc. um or even existing practices doing this to augment um it’s a great great area of promise. Absolutely. Digital tools can really lower barriers and speed up access to care. You mentioned chat bots and tech bridging the wait for appointments. Do you see payers or providers investing more in these tools to manage the rising demand? How are they balancing cost and quality? I don’t see payers doing this. I seeing I see this as just being uh maybe the cost of doing business for innovative practices. I think probably we will see if there’s enough volume out there that these might become best practices for facilities. Uh you might see it maybe start off with being hotoused in academic uh clinical settings for example where they can research it uh as well as kind of seeing you know kind of what’s what with it. So, um, and I don’t know. I mean, I think it’d also be kind of hard to associate, um, reimbursements for that, um, because it’s really, again, the the cost of doing it would be so minimal. Like a insurance company’s not going to pay a clinician for their electronic medical record that having a subscription or purchasing an electronic medical record system um, is all kind of part and parcel of having your practice. So I see those kinds of digital tools that we’ve been talking about as being part and parcel of a person’s practice depending upon the size of it, the scale of it, the type of patients they see, if it’s a group practice, if it’s a clinic setting, hospital setting, you know, what have you. Um, I also would imagine that the cost of those tools are not uh hugely prohibitive and that as time and technology improves, time passes and technology improves that those price points will be driven down. the better quality for less cost. That’s a solid point. Digital tools might just become standard practice expenses rather than reimburseable services, at least for now. Shifting gears a bit, what role do you see community programs playing in behavioral health care? Are they helping ease the pressure on payers and providers? Well, gosh. Um I was uh chief of psychology for the state of Illinois for about five years. And one of the problems at that point in time was that um community meal health centers and I don’t know under the current administration that this has gotten any better um we’re going out of business because they just they had uh long lags of getting reimbursed um through Medicare, Medicaid, state funding system. So I think it’s more and more difficult for community um service provision to be able to do that. And when I say community, I I presume from your question, you mean like um community meal health centers, things along those lines. Um maybe even centers that are parts of public health departments, not private practices or private hospitals. So I’m a little worried right now in terms of access in terms of uh you know having adequate amounts of staff because there’s funding and budgets are always a problem but right now by virtue of what’s going on with u uh Medicare uh Medicaid uh and other kinds of state funding sources being diminished not increased or even held stable. is going to create a a backlash in terms of demand is not going to diminish but supply is going to diminish in terms of of treating them. I think uh what has happened in the county where I was on the board of health, what we saw was that uh basically uh department of corrections became the de facto service providers because a lot of times these folks when they don’t get care um and don’t have any place to go become uh unhoused and then oftentimes find themselves in precarious positions with um law enforcement and then wind up go off meds, don’t get good adequate care and uh wind up as a Department of Corrections problem. And then you’re going to have those knock-on effects of over uh population, not enough staffing, uh maybe not the adequate type of staff for that. You get people just kind of warehoused and it just creates a um a cuckoo’s nest, a bedum kind of situation. Unfortunately, that’s a sobering reality. Community programs are struggling financially, which shrinks access just as demand grows. and the system ends up funneling people into corrections instead of care. Given that, how do you see employers roles evolving in behavioral health care? Are they stepping up to fill some of these gaps? Uh, you know, it’s really not employers role to do that to be honest. Um, employers are in business to do whatever their business is. Um, and that’s, you know, and if people are employed and have, you know, good gainful employment and good kinds of benefits, then they’re very unlikely to be unhoused. they’re very unlikely to hopefully not have be without any kind of insurance coverage that’s helped out with provide being provided by their employer. I see more cost sharing around those kinds of issues because employers want to manage their health care uh spend. Um so they make it more part of a burden if you will on their employees. So maybe there’s higher deductibles, maybe there’s higher co-pays, maybe there’s fewer options, uh less PPOs, more HMOs, those kinds of things. So um it really I think again just the current environment, you know, we’ll see what happens in the next couple of years if things start to change or get back to a certain level of balance, but um I think it’s going to be a very challenging time in the near term. Makes sense. Employers want to offer coverage but also keep costs manageable which often means shifting more expenses onto employees. With all these pressures on payers, providers, and employers, do you think better behavioral health care can actually lead to lower overall medical spending? Oh, yes. Yeah, absolutely. That’s that was the point I was making with the medical cost offset. Um, it does no one any good. It does not do an employer. It does not do a community. I don’t know. probably doesn’t impact an insurance company unless maybe does someone doesn’t get care and they wind up with hospitalization and the insurance company can certainly deny payment of those that kind of care of course or maybe it’s not even part of their benefit package. But um you know those are the these are the kinds of things that um aren’t as as vague and gray and and hard to see nebulous as maybe they were some years ago because we have much better outcome studies. We have much better tools to assess these kinds of things. a lot of clinicians are baking this in with their electronic medical records and um evidence-based practice and treatment guidelines. So, I think we’re in a much better position for these kinds of things. And I think part of it is just sort of honestly just kind of doing a a job of education that um if anybody is looking to um you know have cost savings nowadays that seems to be quite the popular thing. Typically, you think about a cost savings as diminishing a service or um or getting rid of it all altogether, but then it becomes pennywise and pound foolish. You know, it’s sort of the old joke of pay me now or pay me later. So, um that I think there could be also knock-on effects of um you know, more uh absenteeism, more presentism, higher turnover that then results in poor productivity that results in diminished bottom line to whatever the business is. then they’re having to spend more money and resources on recruiting and onboarding. So, you know, if you if you have a high turnover, it usually speaks to other kinds of issues perhaps in your business or your company, but it also certainly can be an aspect depending upon um the nature of health care service provision to your people as well too. If they’re not healthy, if they’re not functioning well, you know, in their personal lives, their personal life comes to work. And um if it’s a problem at home, it’s going to be a problem at work too. Absolutely. That pay me now or pay me later idea really hits home. Investing in behavioral health isn’t just humane. It’s smart business, reducing costly hospitalizations and boosting productivity. Given all this, how do you think the pandemic specifically changed the way behavioral health care is approached by payers and providers? Well, like I mentioned earlier, I think the aspect of being able to uh provide payment parity, reimbursement parity to providers with teleaalth um on par with what it was with traditional face-to-face therapy. I think there has been more of a fullthroated uh voice and expectation from employees that this is a benefit that um needs to be a a standard, not an exception, not a a a frilly uh nice thing to have. it’s a mustave not a nice to have kind of thing. So I think the expectations of that and again as we see more um issues around um medical cost offset that that will just add to um the emphasis of that and then the expectation of that that shift to teleaalth parody really changed the game making behavioral care more accessible and expected as a standard benefit. Do you think this therapy for all approach is sustainable for payers in the long run or will we see limits creeping back in? Oh yeah, I it will um we’ll see limits creeping back in. We’re already seeing that. Um the aspects of that I think are critical uh that we then need to put our advocacy hats back on a as uh providers and you know whoever advocates uh to make sure that we don’t go back to an era in which it’s um a nice to have. It needs to it it is a mustave. It needs to continue to be a mustave and then it’s incumbent upon us to make the business case for it as well as the humane case for it. Absolutely. It sounds like ongoing advocacy is key to keeping behavioral health a priority and preventing roll backs. Before we wrap up, do you have any questions for me? No, thanks. I appreciate uh the thoughtfulness of all of your questions and bringing things all together in this area. Um I think it’s really important. It may not be kind of a a top issue kind of thing, but I think when people take a look at where the marketplace in behavioral healthcare in particular is, visavv um impacts of private equity, impacts of of uh investments, uh impact on employer um uh sustainability and profitability are all key. So, I appreciate your thoughtful questions and for your time today. Thanks so much for your time and insights today. Take care. [Music]
I enjoyed doing this AI generated interview by Seersite on my perspectives as to current Behavioral Healthcare Spending and Payer Trends. I hope you find it of use. If you’d like to book a consultation, please visit https://seersite.com/@drchrisstout today.
Hi, I’m Chris, here’s what I do…
• I’m an angel investor and advisor to startups in healthcare, technology, sciences, and medicine, often as a non-executive director.
• I work with Private Equity firms to assess market opportunities and discuss healthcare and healthcare technology landscapes.
• I help private practices get started and scale (I actually wrote a best selling book on it as well).
• I consult with C-Suite leaders and their boards on growth and strategy, and I deliver tailored keynotes to their teams’ needs.
• I donate all of my fees to the global health nonprofit I founded, and have since 2020.
To learn more about me, please visit:
https://www.DrChrisStout.org/
and
https://linktr.ee/DrChrisStout
Thanks,
Chris
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