Between Mission and Margin: How Health Systems Balance Behavioral Health
In a new case study series, THMA’s Strategy Catalyst examines how health systems manage behavioral health when mission and margin pull in different directions. Its research with 27 strategy leaders and 40 health system executives found that 38% of executives call behavioral health "core to mission," while 3% call it "core to margin." More than 27% of respondents reported that behavioral health margins declined over the past two to three years, among the highest shares of any service line.
Why It Matters:
Demand for behavioral health typically exceeds available capacity, yet low payment rates keep margins under pressure. That gap calls for different strategic approaches than other service lines. The case study series profiles three health systems whose approaches to behavioral health strategy differ in scale, structure, and market.
Three Case Studies:
Stamford Health sized capacity to community need.
A four-phase planning process aligned behavioral health capacity with community need. The plan covered core outpatient services, inpatient expansion, and integrated behavioral health support across care settings.
The Ohio State University Wexner Medical Center is building whole-person care across levels of acuity.
The academic system is building capacity through collaborative care models and a behavioral health urgent care program. As a result, their one-week post-discharge follow-up rose from approximately 43% to 70%.
Children's Health expanded through partnership, not ownership.
The system funded 92 pediatric beds in a new state hospital it neither staffs nor holds a stake in while growing its own outpatient and primary care capacity.
The Bottom Line:
Our Strategy Catalyst team's research found that behavioral health has the largest gap between mission commitment and financial viability at health systems, which calls for different strategic approaches than other service lines. The three systems profiled show how approaches can differ widely in scale, structure, and market, but all still produce meaningful results.
Strategy Catalyst members can click here to read the full profiles on our website. Curious about Strategy Catalyst? To learn more about membership, contact strategycatalyst@hmacademy.com.