Behavioral health may not be known as the moneymaker in healthcare, but the specialty significantly impacts patients throughout their care journey, including their physical health. In light of anticipated Medicaid cuts, behavioral health leaders are developing sustainable care models to maintain access during financially uncertain times.
Kenneth Esser Jr. Executive Vice President of Behavioral Health at Hackensack Meridian Health (Edison, N.J.): Our foremost commitment is to ensure the continuity and quality of behavioral health services for the communities we serve. At an enterprise level, our preparation is not focused on a single solution but on a multi-faceted strategy centered on operational excellence, the adoption of innovative care models and building greater financial resilience. This involves a proactive redesign of care delivery to be more efficient and effective, ensuring we can sustain these vital services for our patients now and in the future.
Our strategy involves several key initiatives. We are accelerating the integration of behavioral and physical health services, a “no wrong door” approach that improves outcomes and creates efficiencies. This includes leaning into collaborative care models in primary care settings, such as embedding social workers in primary care offices. The social workers perform assessments and present cases remotely to our psychiatrists across the network. This model is part of the primary care model we will have at our new MetroPark facility opening later this year. We are also expanding our services to include peer recovery specialists and screening in primary care to further assist providers in identifying and addressing issues before they become more acute and require higher and more costly levels of care.
To further align priorities, we are also transitioning from traditional fee-for-service models to value-based care arrangements, which align payments with positive patient outcomes and the total cost of care, rather than the volume of services provided. Operationally, we are leveraging technology, such as telehealth and AI-driven analytics, to enhance care coordination, automate administrative tasks and optimize resource allocation. Furthermore, we are actively diversifying our revenue streams and forging strategic partnerships with other community organizations to build a more robust, sustainable financial foundation for our behavioral health programs.
Ultimately, our goal is to build a more resilient and effective behavioral health system. By focusing on integrated, person-centered care and aligning our financial models with quality outcomes, we aim to create a system that is less susceptible to fluctuations in any single funding source. This strategic repositioning is about more than just navigating the current fiscal environment; it is about fundamentally improving how we deliver care to enhance our patients’ well-being and ensure sustainable access to essential behavioral health services for years to come.
Matt Ehler. CEO of Prosperity Wellness Center (Tacoma, Wash.), owned by Discovery Behavioral Health (Irvine, Calif.): Prosperity Wellness Center, in alignment with Discovery Behavioral Health’s overall strategy, is taking a multi-pronged approach to sustaining access to high-quality behavioral health services amid anticipated reductions in Medicaid funding. We are actively seeking to diversify revenue streams through community partnerships, grant funding and alternative payer sources, while deepening our partnerships with local health systems and social-service agencies. These partnerships will allow us to stabilize referral pipelines, improve continuity of care, and ensure that individuals with the highest clinical and social needs can continue to access treatment, even as public funding becomes more constrained.
At the same time, we are tightening operational excellence and compliance across all levels of care. This includes strengthening documentation, utilization management and audit readiness to ensure every reimbursable service is fully supported, ethically delivered and aligned with regulatory and payer standards. We are also streamlining workflows and staffing models to reduce inefficiencies, minimize unnecessary administrative burden, and ensure clinical and support staff are focused on direct patient care and engagement.
Finally, we are investing heavily in measurement-based care and patient engagement, consistent with Discovery Behavioral Health standards. By tracking outcomes, attendance, length of stay, discharge readiness, and post-discharge follow-up, we are working to maximize the effectiveness of each treatment episode while reducing avoidable readmissions. This data-driven approach allows us to demonstrate treatment efficacy to payers and regulators, justify continued funding, and continuously improve care delivery—ensuring that even in a tight funding environment, Prosperity remains both clinically excellent and financially sustainable.
