Seven financial trends behavioral health providers follow

Newfound attention and pressure are placed on financial leaders at behavioural health organisations as finances and financial reporting take centre stage

All this focus on behavioural health has fueled interest from private equity funds, Management Services Organisations (MSOs), and grant-funding organisations that are offering new sources of money, creating new ownership structures, and introducing non-clinical services to healthcare entities. In addition, policy initiatives such as the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law in March 2020, brought with it $425 million to the Substance Abuse and Mental Health Services Administration (SAMHSA) to address mental health needs. Advocacy groups and other funding programs, such as block grants, are pouring more funds into providers who can help solve the problems.

These new complexities are forcing behavioural health practices to rethink their financial strategies and reporting requirements and making the need for a modern financial management system that much more important.

Changes bring new financial challenges

Historically, these organisations have managed their businesses with simple solutions like QuickBooks and Excel spreadsheets, but the rapidly evolving market is putting tremendous pressure on financial leaders. Some of the industry’s forward-looking financial leaders have already made the move to modern financial management systems and are reaping the rewards of greater visibility and flexibility while also benefiting from extreme efficiencies. 

For example, Walden Behavioral Care, a 15-location practice switched from QuickBooks to Sage Intacct and was able to reduce month-end close cycle times by 47% and make better decisions with a more dynamic and detailed budget planning model. Banyon Treatment Centers leveraged Sage Intacct to support its aggressive growth plans, which involved seamlessly integrating financials from nine different acquisitions in a short period of time.

7 trends healthcare finance leaders should immediately consider

1. Improve financial transparency

To attract and sustain new funding sources, financial leaders must be prepared to address greater complexities and advanced reporting requirements. Greater visibility into real-time financial, operational, and clinical data from across the organisation can be time-consuming and even impossible for behavioural health practices that are on outdated, legacy financial systems. Modern systems give leaders the ability to quickly adapt, monitor the business in real-time, and easily report financial information to remain compliant and transparent with new owners and funding sources. 

Sample of Success: Tri-County Mental Health Services in Missouri had funding coming in from a county mental health levy, state funding, Medicaid, other insurers, and grants, which required its back-office staff to manage highly-complex financial processes. The team chose to switch to Sage Intacct to provide operational transparency for individual managers and the grant development team, so they can adjust their individual budgets based on how they’re performing. 

Grant budgets are now built into the system versus only being maintained in Excel. Additionally, rather than tracking metrics like patient visits and FTEs in Excel and the necessity to manipulate the data to provide useful information to the management team, key performance indicators are built right into their Sage Intacct dashboards and reports.

2. Simplify financial reporting efforts

As mergers and acquisitions reach an all-time high and new funding sources take hold, financial leaders must look for easier ways to present consolidated financials and identify new economies of scale. Those providers with outdated, single-entity systems will struggle to keep pace with the expansion of their organisations. Using a financial management system that accommodates multi-entity organisations is a good first step. 

Sample of Success: Banyan Treatment Center is a leading provider of substance abuse and mental health treatment offering inpatient and outpatient services in seven states, and quickly grew through acquisition from five to 14 facilities in only three years. According to Sean Mintz, CFO, “We were looking for consolidation capabilities and better visibility into our cash balances since money was moving in and out of the business very, very fast. We considered Oracle NetSuite, but ultimately felt Sage Intacct was the right solution to support a future-proof transition and quickly get our metrics out of Excel.”

The finance team’s accomplishments include shortening the monthly close by 40%, increasing financial analysis by more than 300%, and saving $1 million annually via better spend analysis. With the upgrade to Sage Intacct, Banyan’s finance operations were completely overhauled, allowing the team to support business growth more proactively instead of reactively catching up with each new acquisition. With a robust software foundation in place, the centre was able to adopt mature financial practices, such as commercial banking, a single, multi-dimensional general ledger across all 14 entities, automated allocations, and streamlined global consolidations.

3. Prepare for the shift toward value-based payment models 

As more physician practices, hospitals, and payers adopt new value-based care payment models, financial leaders are required to have greater insight into clinical data helping them to secure reimbursement rates and negotiate contracts. Accessing and reporting on that data falls 

on the shoulders of financial leaders and the financial management systems they use. Those behavioural health practices that are not able to report on their quality measures risk missing out on the opportunity to treat the wave of patients who need assistance.

According to an HFMA report, “Behavioural comorbidities can lead to medical costs for physical conditions that are two to three times higher than those without behavioural health conditions, supporting the need for integrated care.” When it comes to consolidating data from multiple systems and creating reports that demonstrate the Triple Aim of value-based care—positive clinical outcomes, cost effective delivery of services, and a positive patient experience—modern financial systems can give financial leaders confidence to participate in new risk-sharing arrangements with providers and payers.

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Contact us at Akuna Solutions and explore with a Sage Intacct implementation specialist how to leverage the most modern technology available today to support your organisation’s mission. 

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