For many behavioral health organizations, margin is no longer a constraint on mission — it’s essential to it. Four leaders shared with Becker’s how their organizations view the two as interconnected and essential to maintaining operations.
Balancing mission and margin is one of the toughest challenges in behavioral health today. What does that balance look like in your organization, and how do you define success beyond just financial performance?
Editor’s note: Responses have been lightly edited for clarity and length.
Tom Fuller. Chief of Staff and Director of Corporate Development for Connections Health Solutions (Phoenix): Core to our model is the ability to be available and to provide care for anyone who comes in regardless of acuity, diagnosis, psychiatric state or substance use. To be able to do that we have to make sure that we can contract with any payer to support any patient who comes in. Because of that model, we are specifically diversionary. It is a uniquely diversionary model for folks who otherwise would be in the emergency department and because of that, it is value based in its creation. We engage in value based contracting with the primary payers who we are contracting with to ensure that we staff for anyone who may come in. We want to make sure that we have a fully staffed model at all times, so if any crisis comes in, we are able to see it, treat it and be available.
Stephen Merz. Vice President and COO for Sheppard Pratt Solutions (Baltimore): Sheppard Pratt is pretty interesting because it is exclusively funded through behavioral healthcare revenues. So for us, financial sustainability and margin is essential to maintaining operations. So like most organizations, we have to operate with a cost structure, a reimbursement pattern. So for us, running services to make a margin is absolutely essential. We wouldn’t exist without it. I have the real, unique and very cool opportunity to go around the country and talk to health system leaders. My observation is that most health system leaders of integrated health systems look at behavioral healthcare as a financial loser. Frankly, in their system, that’s a loser financially; not saying that the services are bad or that they’re not needed, simply that the reimbursement doesn’t align with the cost structure or the payer mix. A lot of health systems, I think, believe that behavioral healthcare is their mission, that in a strange way, those are the services that lose money. So there’s another part of their system, say, cardiology or oncology, where they’re expected to make money, and therefore they don’t try to make behavioral healthcare break even or better.
Christin Ray. Executive Director Behavioral Health for AdventHealth (Altamonte Springs, Fla.): At Advent, we view mission and margin as interdependent — not competing. Our mission is to extend the healing ministry of Christ, and we use that to drive our care, and our margin allows us to deliver that. So success, to me, means improving lives and outcomes in measurable ways for our patients.
Jim Serratt. CEO for Parkside Psychiatric Hospital & Clinic (Tulsa, Okla.): I got to Tulsa three and a half years ago, and about six months in, there’s no services in Oklahoma and very little for children’s acute care. I go to a 65-year-old institution with a board that’s been there almost that long. I say, “Hey, what if we completely changed everything we do, and let’s bring in the littles, because nobody wants them.” And so it was. It’s an evolution that’s still happening. But here’s the statement in children’s behavioral health — the margin isn’t the enemy of mission. I think I always saw it as the enemy. “Come on, CFO, give me some money so I can do this.” It’s the guardian of it.
So that margin that we try to reach for is not my enemy. It’s that protective measure that lets you know somebody like me can go crazy with this stuff and do something really cool that maybe nobody else is doing. And so that’s the marriage for me between margin and mission. So sustainability is one of the things that we strive for, and sometimes when you set your core values and your goals, you have to put something on there that’s not easy. Sustainability is really hard for a small nonprofit, private children’s psychiatric hospital in Oklahoma, and so we’ve got to push for sustainability. I think all that really means is our budget and our mission have to work so closely together. Everything has to be very intentional now.
