Behavioral Health Programs Losing Money

Our behavioral health consulting team has been working with behavioral health programs losing money. Uncompensated care, Medicaid reimbursement rates, and high patient complexity make it difficult for many behavioral health programs to break even. Still, given this backdrop, some mental health programs generate a profit.

Over the next month or so we will take at look at what makes some psychiatric programs financially stronger while others lose money. Operating assessments for hospital behavioral health inpatient and outpatient services point to some consistent and fundamental issues that contribute to net operating losses.

In the same market one psychiatric service line has a positive contribution margin but another shows a significant loss. Why is this?

Our starting list:

1. Organizational Culture & Leadership

2. Business Thinking

3. Market Strategy

4. Management Tools

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