How should behavioral health organizations prepare for a recession?
As the economy struggles, organizations across all industries are preparing for a serious downturn. The National Bureau of Economic Research traditionally defines a recession as “a significant decline in economic activity that is spread across the economy and that lasts more than a few months.” This can threaten many businesses, prompting an interest in making an organization “recession-proof.”
Is healthcare recession-proof?
Healthcare has long been considered “recession-proof” because demand for healthcare services persists, even during tough economic times. This is especially the case when insurance covers most of the costs of care for consumers.
After all, hospitals weathered the Great Recession of 2007-2009 fairly well. An ongoing shortage of behavioral health providers, coupled with increasing need for healthcare services, means that clinicians remain in high demand and probably won’t have trouble finding jobs.
However, the economic situation for healthcare providers, including those in mental health and addiction treatment, may be more complex than that. Before getting too comfortable, behavioral health providers should take note of certain trends and risks that could threaten their organizations in a recession.
What should behavioral health organizations look out for?
While behavioral healthcare may be better able to survive a recession than other types of businesses, there are still things to prepare for. Consider how the following may affect your practice:
- Job loss during a recession may lead to shifts in health coverage from private to public options, which may lead to lower reimbursement for behavioral health providers.
- Lack of parity for mental health coverage may prompt clients to forego behavioral health services due to inability to pay out-of-pocket.
- At the same time, economic and personal difficulties during a recession can increase symptoms of depression, anxiety, and substance misuse. This could lead to an increased demand for mental health services.
- If clients decline health services due to high costs, that could lead to an increase in otherwise preventable serious mental health incidents. This can further drive up costs and strain resources.
- Increasing costs of business overall could put more financial pressure on a behavioral health organization.
What steps can your behavioral health organization take now?
Even if your practice operates in a high-demand, economically strong location, chances are you will still feel the effects of a nationwide recession. Taking steps to prepare as soon as possible can help your practice become stronger and more resilient.
- Start strengthening your balance sheet now—reduce any debt, consider postponing any big projects, and cut costs where possible.
- Avoid cutting back on sales and marketing costs. You should maintain a growth mindset—attracting more clients, payers, and partnerships—to weather a recession, and even grow during it.
- Review your payment and reimbursement options; consider offering alternative payment options for financially struggling clients.
- If your business structure allows, consider taking on new partners to handle an increased workload.
- Focus on making your practice’s operations more efficient. Consider outsourcing or investing in new technology that will streamline your workflow, save time, and reduce long-term costs.
Using the best tools can help your behavioral health practice not only endure, but thrive, during economic challenges. BestNotes EHR and CRM solutions help you save time and money by making your clinical and administrative tasks more efficient. To learn how, request a free demo today!