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Understanding Mergers and Acquisitions in Behavioral Healthcare Part 2

By February 1, 2019November 24th, 2025No Comments6 min read

Michelle Davis, DBH, Assistant Director of the DBH Program, Cummings Graduate Institute for Behavioral Health Studies

Since 2017 the trend toward acquisitions of behavioral health organizations by private equity (PE) firms in behavioral health has continued to grow, with 77% of transactions of behavioral health facilities being purchased by PE in 2017 and strategic buyers accounting for about 23% of the M&A activity (Meindl and Smart, 2018). While the 2018 overall deal value was below that of 2017, the volume of M&A deals in the healthcare sector broke records. It is reported that quarterly deal volumes were above 300 per quarter for two quarters of last year. While Long-Term Care was the largest sub-sector there was high growth reported in Behavioral Care deal volume as well (PwC, 2019).

The demand for behavioral health services will remain high for the foreseeable future as nearly 20% of adults struggle with mental illness according to the National Institute of Mental health (Nimh.nih.gov, 2018). This need is driving the demand for behavioral health services in treating not only mental illness, but also addiction, alcoholism, and many other behavioral disorders in the adult population. Much of the 2018 M&A activity in the behavioral health space is found in substance abuse (Mertz Taggart, 2019) the 2018 M&A activity also showed a rise in activity around those organizations that provide child and youth oriented services, such as autism, as well (Mertz Taggart, 2019). The child and youth market accounted for 24.3% of the M&A activity in the 2018 behavioral health arena, this is an increase of over 15% since 2016 (Capstoneheadwaters.com, 2018).

The factors that are propelling current M&A activity include the regulatory environment, high costs of inpatient care, the push toward vertical integration, technology growth, delivery models that disrupt the market, and the consumer/patient focused approach (PwC, 2019). Deals that create a competitive advantage in patient retention and outcomes, cost savings, or disrupt ineffective delivery will be sought after. The future market insight report predicts a revenue growth in behavioral health globally from 2018-2028 with outpatient counseling services projected to be the most profitable service (Reportlinker.com, 2018). This information can be useful to individuals interested in identifying market opportunities for behavioral health service delivery.

Vertically integrated mergers in health care would be those that enable a company to offer a broader range of patient care services, thus ideally, lending itself to better patient care and reduction in costs via integrated health models. It should be noted, that vertical integration is more challenging in the healthcare than a horizontal integration. The example given of a hospital acquiring another hospital would not pose the same integration challenges as an insurance company purchasing a medical provider network (Wyse, 2018). To successfully manage a vertical integration requires health executives who have a broad vision and can understand both the delivery of services to patients, and also understand the regulatory environment. The CEO of a giant insurance company and the CEO of a hospital system may have challenges if the skillset they have used to be successful in their current position is not as effective in a different setting. It is suggested that executives that have less aversion to risk and have tried and failed at new initiatives may be best suited to create successful vertical integration in the current M&A landscape (Wyse, 2018).

As I read the contemporary literature on the current landscape of M&A activity in the behavioral health space to inform the composition of newsletter article, the examples of the very few health organizations that have managed to get vertical integrations “right” really jumped out at me; particularly, that of Kaiser Permanente (Wyse, 2018). It was not lost on me that Dr. Nicholas Cummings’s vision had a lot to do with the success of integration at Kaiser having held a prominent position in integration there, steering behavioral intervention efforts there, for many years. The fact that it is currently touted as one of the best examples of this type of integration really speaks for itself with regard to the efficacy of the model.

I couldn’t help but see how closely aligned to the needs of the current marketplace are to the mission, vision, and values of our organization and the DBH degree. Our mission at Cummings Graduate Institute of Behavioral Health Studies is dedicated to disrupting healthcare by preparing entrepreneurial integrated care professionals through innovative & affordable quality distance education programs, grounded in the Biodyne Model, and focused on delivering human-centered care, population health improvements, and medical cost savings. The vision is to improve how the world experiences healthcare, and our values include collaboration, engaging stakeholders, across disciplines, to find solutions, people (patient, student) first, and teamwork. Much like a successful integration, at CGI, we believe our major accomplishments are a result of synergy (Cummings Institute, 2016). When reviewing the market trends for 2018 (Miller, 2017) it was clear that the strategies and competencies outlined as important in the current marketplace are what are also addressed in our DBH curriculum.

References:

Capstoneheadwaters.com. (2018). M&A Executive Summary Q4 2018. [online] Available at: http://bit.ly/2Sdm52h

Cummings Institute. (2016). Mission, Vision and Values for Integrated Health | Cummings Institute. [online] Available at: https://cummings.wpengine.com/mission-vision-values/ 

Marks, M., Mirvis, P. and Ashkenas, R. (2017). Surviving M&A. [online] Hbr.org. Available at: https://hbr.org/product/surviving-ma/R1702M-PDF-ENG

Meindl, J. and Smart, W. (2018). Behavioral Health: Sector Report. [online] Vmghealth.com. Available at: https://vmghealth.com/wp-content/uploads/2018/05/VMG-Healthcare-MA-Report-2018-2.pdf 

Mertz Taggart. (2019). Behavioral Health Composite – Year in Review 2018 – Mertz Taggart. [online] Available at: https://mertztaggart.com/behavioral-health-composite-year-in-review-2018/ 

Miller, J. (2017). [online] Behavioral.net. Available at: https://www.behavioral.net/article/marketing/8-behavioral-health-trends-2018

Nimh.nih.gov. (2018). NIMH » Mental Illness. [online] Available at: https://www.nimh.nih.gov/health/statistics/mental-illness.shtml 

PwC. (2019). US health services deals insights: Year-end 2018. [online] Available at: https://www.pwc.com/us/en/industries/health-industries/library/health-services-quarterly-deals-insights.html

Reportlinker.com. (2018). Behavioural Health Market: Outpatient Counselling Projected to be the Most Lucrative Service Type: Global Industry Analysis 2013 – 2017 and Opportunity Assessment 2018 – 2028. [online] Available at: https://www.reportlinker.com/p05503669/Behavioural-Health-Market-Outpatient-Counselling-Projected-to-be-the-Most-Lucrative-Service-Type-Global-Industry-Analysis-and-Opportunity-Assessment.html 

https://healthcare.levinassociates.com/2019/01/04/acquisition-of-civitas-tops-2018-behavioral-health-care-deals/ 

Wyse, R. (2018). Successful vertical integration in healthcare requires past failure – MedCity News. [online] MedCity News. Available at: HTTPS://MEDCITYNEWS.COM/2018/09/VERTICAL-INTEGRATION-IN-HEALTHCARE/

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“As a member of the AAPI community, I’m very familiar with the barriers to mental health services and the need to break through the glass wall of cultural stigma that prevents many from receiving potentially life–saving treatment. I was the only Asian American person in my master’s cohort, the only Asian American person in many of my clinical work settings, the only Asian American person to walk into many of the professional settings that I pushed myself to show up to. In my current practice, I’m constantly reminded by my patients of how difficult it is to find an Asian American mental health provider, though this reminder constantly informs me that more needs to be done for my community. Day after day, I read stories of Asian American people who die by suicide as a consequence of our culture’s avoidance of mental health topics. As a DBH, my biggest goal is to use my expertise in whole–person care to amplify the conversation around mental health and help my community understand that mental healthcare is not a privilege that we are not entitled to, it is a crucial part of our healthcare that will manifest differently in us than what many Western psychology or psychiatry textbooks will describe, and that our unique experience of mental health issues are valid, important, and is time to be part of the larger conversation.”

Willam Chum, LMHCDBH Candidate, Cummings Graduate Institute for Behavioral Health Studies - September 16, 2022

“The Doctor in Behavioral Health (DBH) program has changed my understanding of the subject and career path. Before this academic journey, my knowledge of behavioral health was primarily theoretical, including essential ideas and methods. However, the DBH curriculum combined intense academic research with practical application, helping me understand behavioral health from multiple angles. Recognizing mental health as part of total health changed my perspective. The biopsychosocial model, which showed how biological, psychological, and social variables affect mental health, was stressed in the DBH curriculum. This comprehensive approach made me realize how complex human behavior is and how important it is to address mental health issues. Effective interventions must target the individual’s surroundings, relationships, and life experiences, not just symptoms. The curriculum also gave me enhanced evidence-based practice training to execute successful solutions. Studies methods and data analysis classes improved my critical thinking and allowed me to evaluate and apply behavioral health studies. This gave me the confidence to contribute to the field’s knowledge base through practice and research.”

Dr. Rhea Hill, DBH, LPCDBH Alumna, Cummings Graduate Institute for Behavioral Health Studies - February 17, 2025

“This program will change how you present to the world, not just as a professional but as an individual. Understand this is work but the work is worth it and the journey is undeniably transformative. If you are seeking a doctorate for the title, this is not the program for you. If you are seeking a doctorate to interrupt and disrupt the course of healthcare, then this is the program for you. You won’t find a more supportive program with professors who are dedicated to your success and your education. This program is not about the regurgitation of information. It is about the appropriate applied application of knowledge and information to push forward and become an advocate for equitable and quality care for all.”

Brandy K. Biglow LMHC, CCTP, QSDBH Candidate, Cummings Graduate Institute for Behavioral Health Studies - February 5, 2024

“The Doctor of Behavioral Health (DBH) program has definitely transformed my understanding of behavioral health. Understanding the links between physical and mental health has taught how to make better treatment decisions. The DBH program has also given me insights that otherwise would not be possible and allows me to view individuals through a lens that I was previously ignorant of. This program has helped me grow into a more confident individual, provider, and parent.”

Cory H. Cannady, BCBA, LBADBH Candidate, Cummings Graduate Institute for Behavioral Health Studies - March 13, 2024

“The DBH program has reinforced my vision of viewing behavioral health (BH) as an integrated component of the healthcare system rather than a siloed service. As a practitioner in the focused BH realm of substance use disorder (SUD) treatment, I observe on a regular basis how identifying and serving SUD patients is often missed, ignored and stigmatized in primary healthcare, despite the fact that early intervention at these check-points often has the potential to intervene earlier and lessen the negative SUD outcomes frequently seen by the time a patient reaches specialty SUD services. Reinforcement received in my DBH program has motivated me to promote integration as a leader in my workplace and is a primary factor in considering the long-term trajectory of my individual career path.”

Kenneth L. Roberts, MPS, LPCC, LADCDBH Candidate, Cummings Graduate Institute for Behavioral Health Studies - November 5, 2024

“Graduating from the DBH program has influenced and enhanced my approach to addressing behavioral health challenges and making a difference in the field by preparing me to become a serious business owner. Through the DBH program, I understand now that becoming a business owner not only assists me in reaping the financial benefits of working for myself, but the program also offers me a sense of freedom to make a difference in an individual’s life.”

Dr. Rebecca K. Wright, DBH, LBA, BCBA, QBADBH Alumna, Cummings Graduate Institute for Behavioral Health Studies - December 18, 2024

“I have always wanted to pursue a higher degree but never found a program that met my needs. When I investigated the DBH program, I can honestly say I was excited. It was a program that would expand my knowledge in behavioral health but also how it relates to physical health. The philosophy of treating the whole person was exactly what I was looking for.”

Elizabeth Nekoloff, M.Ed., LPCC-S, NCCDBH Candidate, Cummings Graduate Institute for Behavioral Health Studies - January 16, 2025

“Prior to obtaining my DBH, I practiced behavioral health within the boundaries of behavior analysis. The DBH degree has given me the ability to broaden my scope of competence allowing me to provide a higher quality of care to my clients through a person-centered approach, while still staying within my scope of practice. I was in the beginning stages of opening my business when I enrolled in the DBH program which set my trajectory towards being a stronger leader. The program equipped me with essential healthcare leadership and entrepreneurial skills, allowing me to ensure high-quality services for my clients and foster a supportive work environment for our staff. It has also given me the confidence to expand my business and pursue other healthcare ventures, reaching a broader range of patients in need.”

Dr. Pauline Tolentino Pablo, DBH, BCBA, IBADBH Alumna, Cummings Graduate Institute for Behavioral Health Studies - January 21, 2025

“Although I have worked with many patients who have mental health diagnoses, or behaviors which make managing their medical diagnoses and day to day life difficult, the DBH program at CGI is broadening that knowledge and providing a deeper understanding of behavioral health and how best to help these individuals manage their health and improve their quality of life. This will allow me to provide and advocate for more meaningful and seamless integrated care, providing new tools for my intervention toolbox, and the confidence and skills to collaborate within and lead whole person focused interdisciplinary teams. I also anticipate building upon my knowledge as a nurse case manager and long time caregiver, as well as my personal passions and professional vision, learning about processes and operations, to be in position to start up and lead my own company one day, offering the services and care I know every person should have access to.”

Hollie Wilson, MSN, RN, CCMDBH Candidate, Cummings Graduate Institute for Behavioral Health Studies - February 11, 2025

“The DBH program will open opportunities for me to contribute to healthcare system innovation, particularly through trauma-informed care and integrated behavioral health settings. I will be better positioned to advocate for and implement holistic care models that improve health outcomes for underserved populations. Ultimately, this program will help me transition into higher-level roles, such as a director or consultant in behavioral health, where I can influence broader system changes and contribute to the future of healthcare delivery.”

DeKyn Rashad Peters, MPH-CHES,BSW/BA,APCDBH Candidate, Cummings Graduate Institute for Behavioral Health Studies - March 4, 2025

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