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Our Mental Health Care System Needs a Value-Based Care Approach

BLOG | May 31, 2024

Mental Health Care Needs a VBC ApproachIn the U.S. we have a looming public health threat. Almost everyone is aware of the problem, but we have made little progress toward solving it (or even addressing it in a meaningful way), and the toll continues to mount year after year. This public health crisis affects every aspect of our lives, from our physical health to our workplace productivity, and even our economic success nationally.

It’s a mental and behavioral health crisis, and the longer we put off dealing with it, the more difficult it will be to fix it.

This public health crisis affects everyone, but is acutely evident in younger populations. A U.S. Surgeon General report on Youth Mental Health highlights the increase in conditions like anxiety, depression, and substance abuse among young people. These were already a growing challenge among teens and young adults before 2020, but the COVID-19 pandemic only exacerbated the issue. Workers under age 30 were the most likely to report “fair” or “poor” mental health, according to a Gallup survey.

A recent analysis of Cedar Gate’s Healthcare Benchmark Database found that per-member-per-month (PMPM) spending on mental health was highest for teens ages 15 to 19. In the analysis of 2022 commercial payer data, the top four age groups for PMPM mental health spending are all age 30 and under. Across diagnoses, nine of the top 10 highest-cost cohorts were patients under 30 (anxiety treatment for patients ages 30-34 ranked eighth).

The challenges in addressing the mental health care crisis are numerous:

  • There are too few mental health providers to address the growing need for these services
  • Physical access to care is often limited, with as many as 1 in 3 people living in areas with mental health worker shortages
  • Access to care is often limited for patients with commercial health insurance – two out of every three people with commercial health insurance don’t have access to individual therapy or psychiatric medication management
  • Patients covered by Medicare and Medicaid often struggle to find providers who will accept their insurance due to lower reimbursement rates
  • Mental health care adds complexity to treatment plans, but primary care providers have limited time and resources to address those needs
  • The mental health system has developed completely separate from our traditional healthcare system (often with separate electronic health records that make information sharing difficult), leading to poor alignment of what should be interrelated services


While much of our traditional healthcare system has shifted toward value-based care (VBC) – a system that incentivizes and rewards outcomes over volume – mental health and behavioral health care have been slow to change. Some key reasons for the lag are a lack of adequate evidence on appropriate care, which makes it difficult to define specific quality metrics or standards to measure intervention.

Despite these challenges, it’s critical that mental health care advance toward a value-based care future. Not only will it benefit patients who need mental health help, it is also better for payers and employers who are covering the rising costs of mental health treatment. In a study by Evernorth Health Services revealed that even basic behavioral health treatment can significantly lower future medical costs.

For patients newly diagnosed with behavioral health conditions, such as depression, anxiety, or substance abuse, receiving outpatient care lowers total medical and pharmacy costs by up to $2,565 within 15 months and up to $3,321 within 27 months of diagnosis.

By refocusing our mental health and behavioral health care on outcomes, we can dramatically improve treatment for a healthier population, while reducing healthcare costs for payers and employers, and lowering healthcare spending in the long run.


There is no single answer or action we can take today to solve all the challenges with mental health care in the U.S. today. But there are immediate steps we can take to move to a VBC system that rewards outcomes and ensures optimal care at the lowest cost. Here are four recommendations from Ginger Pape, PharmD and VP of Product Management at Cedar Gate.

1: Develop Consistent and Repeatable Measures 

The success of a value-based care system relies on consistent, evidence-based metrics that are shown to improve health. These metrics must be repeatable and standardized so providers can measure performance against benchmarks and identify areas for improvement. With the definition of consistent and repeatable measures also comes the ability to tie payments and incentives to outcomes based on those metrics.

A common argument against developing these metrics is the need to individualize mental health treatment for each patient. This is no different from medical care, which should be personalized depending on the diagnoses, family history, and personal health habits of each individual patient. Personalizing mental health treatment doesn’t mean we cannot have standard metrics to measure against that we know will improve outcomes.

2: Align Mental and Physical Health Services 

Making access to mental health and behavioral health services simpler and more accessible is another critical step. For many patients, mental health providers are in a different location than their other medical care providers. Accessing mental health services thus requires a separate appointment and a trip to another clinic or office location. Some mental health providers may not accept the same insurance plans as a patient’s primary care provider, adding another hurdle to care.

Researchers at Intermountain Healthcare conducted a 10-year study of more than 113,000 patients on the benefits of team-based providers in an integrated delivery system where mental health providers were located in the same place as primary care providers. The results, published in JAMA, revealed that patients in an integrated system:

  • Were far more likely to receive depression screenings, leading to earlier intervention
  • Were more likely to adhere to recommended diabetes care
  • Had a higher rate of documented self-care plans to manage health conditions
  • Used fewer healthcare services, and had 3.3% lower overall medical costs
  • Had a 23% reduction in ER visits, and a 10.6% reduction in hospital admissions

An integrated system also helps solve the challenge of interoperability and information sharing, since these providers operate out of a single EHR and can quickly access relevant medical and mental health information about a patient.

Further, it streamlines payments for patients who can provide insurance information once and have all their services billed through a single clinic (for patients with mental health care coverage).

3: Implement Payment Models that Reward Outcomes Over Volume

The Centers for Medicare and Medicaid Services (CMS) has successfully moved much of our medical care system away from fee-for-service models that only reward volume, into value-based models that reward patient outcomes. It’s time to do the same for mental health care.

CMS has taken notice of the rising mental health crisis and created a fact sheet and a Roadmap for Behavioral Health Integration. Both are great steps to move behavioral and mental health care into VBC systems. CMS has also integrated behavioral health care into newer models, such as ACO REACH and ACO Primary Care Flex. By adding it to capitated payment models and aligning payment to outcomes, ACOs and providers within these organizations have the incentive to provide care and reimbursements to account for the time they spend on it.

But it’s also necessary for commercial payers to create their own pathways for incentivizing outcomes over fee-for-service payment models. Payers are spending billions on mental health care, and there is clear evidence that adequate and timely treatment can reduce short- and long-term healthcare costs. Developing better outcomes-based payment incentives should be a top priority in the coming years.

4: Break Down Barriers to Access

To make a value-based care approach work, patients need access to adequate and timely care. As of March 2023, more than 160 million people lived in areas without enough mental health providers, and the Health Resources & Services Administration (HRSA) predicts we will need an additional 8,000 providers in the coming years to meet the demand.

There are a few steps we can take to bridge the gap between existing providers and patients, starting with expanding telehealth options. Rural counties have only about one-third the supply of psychiatrists and half the number of psychologists compared to urban counties. Telehealth can make it easier for people with physical distance from qualified behavioral health professionals to access care.

Another important step is expanding access to therapists who specialize in care for certain populations. For example, helping LGBTQ patients find therapists with experience in mental health for the unique challenges they face, or matching provider and patient demographics for more culturally aligned therapy.


There are challenges to implementing a VBC model in mental health care, including:

  • Developing the appropriate, evidence-based, objective metrics for measurement will take work and time, and require a committed effort from payers and providers
  • Transitioning from fee-for-service to value-based payment models requires a significant shift in mindset and priorities for providers and payers alike
  • Sharing information among medical and behavioral health providers requires EHRs and other interoperability tools designed specifically for collaborative care
  • Identifying and acting on urgent mental health needs requires software designed with mental health providers and patients in mind, including clinical decision support to provide advice at the point of care, workflow pathways to translate data into actionable tasks for clinical teams, and the ability to customize quality metrics and HEDIS measures for behavioral health in analytics applications

Fortunately, these are all things we can do if we are committed to the ultimate goals of improving care quality, reducing costs, and creating better patient experiences.


As we embrace these trends, a healthcare system where patients are at the center emerges. It empowers providers, measures outcomes, rewards quality, and uses technology as the connective tissue to facilitate better care. With the right tools, behavioral health professionals can ensure that VBC models work for them and, most importantly, their patients. The ultimate goal is quality, affordable, and accessible mental health care for everyone who needs it.

There is a Value Revolution underway. Cedar Gate is leading the charge to improve care and outcomes with industry-leading technology specifically designed for the needs of VBC organizations. Join us. 

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