The American healthcare system has long operated under a volume-based reimbursement model — one where providers are paid for the number of services they deliver rather than the impact those services have. In behavioral health, this model often fails to capture the nuances of progress, healing, and preventative care. That’s why the growing shift toward Value-Based Behavioral Health Care is not just timely — it’s transformative.
Value-Based Behavioral Health Care seeks to tie reimbursement to actual improvements in patient well-being, rather than to the number of appointments scheduled or prescriptions written. But defining “value” in this context is far more complicated than it sounds. Behavioral health outcomes are rarely linear, and the system itself is fragmented across various acuity levels, provider types, payer structures, and social support systems.
So, what does it really mean to measure value in behavioral health? And how do we fairly compensate providers who are often working with complex, long-term, and deeply human conditions?
The Challenge of Defining Impact in Behavioral Health
At its core, Value-Based Behavioral Health Care asks: How much did this service improve the patient’s health? That question is deceptively simple — especially in behavioral health, where patient outcomes can be subjective, nonlinear, and influenced by social determinants of health (SDOH) that lie far beyond the clinic walls.
Some providers have an easier time answering that question than others. For example, high-acuity behavioral health services — like inpatient psychiatric hospitalization or crisis stabilization — can be directly tied to measurable cost savings. If an ER visit is avoided or a patient stabilizes after a psychotic episode and doesn’t return to the hospital within 30 days, the impact is both clinically meaningful and financially quantifiable.
“Attribution is easy to do when you’re attributing to a particular high-cost episode — an ER visit, an inpatient visit,” said Hui Cheng, vice president at Town Hall Ventures, during a Behavioral Health Business VALUE panel. “You can then say, because I have avoided this particular high-cost episode, I’ve saved you X amount, and I want to be rewarded for that.”
But lower-acuity care — the kind that takes place in outpatient therapy offices, community clinics, peer support groups, or school-based mental health programs — presents a more complicated picture. The outcomes of this care are just as important, but they’re harder to quantify.
Prevention is Priceless — and Difficult to Bill For
A major tenet of Value-Based Behavioral Health Care is prevention. But proving that you prevented something that didn’t happen is a hard sell.
A weekly outpatient therapy session may keep a person with anxiety or depression stable, employed, and out of the ER. But because the patient never enters a crisis, there’s no dramatic “before and after” data point to lean on. What’s more, those therapy sessions might involve wrap-around support like case management, family therapy, or community resource referrals — all of which are often not reimbursed under traditional fee-for-service models.
This is the paradox that many behavioral health providers find themselves in: they are doing the very work that prevents costly care, yet they’re not reimbursed in a way that reflects the true value of that work.
“Where our companies have succeeded is — if you are doing things that result in value and the one-to-one connection is not clear — be maniacal about measuring care along the way,” Cheng emphasized. This includes tracking patient progress, measuring engagement, capturing patient-reported outcomes, and aligning clinical practices with standardized care pathways that payers can recognize and trust.
Aligning Incentives: Where Providers and Payers Can Meet
Payers are naturally focused on reducing unnecessary or high-cost care. That’s a built-in incentive that supports value-based conversations, especially in high-acuity settings. “It’s easier to get on the same page with payers when it comes to questions about reducing high-cost care,” said Ned Carlson, CEO in residence at Varsity Healthcare Partners.
However, Carlson also noted the challenges inherent in lower-acuity care models. “In some of the lower acuity models, it’s just much harder to track: it’s much harder to gauge the quality of the clinical intervention and the impact it’s having,” he explained.
Still, there are several metrics beyond ER visits or hospitalizations that can help define value, including:
- Access to care: How quickly can patients get an appointment?
- Engagement: Are patients showing up, following through, and actively participating in treatment?
- Patient outcomes: Are symptoms improving? Are patients achieving their goals?
- Experience of care: How do patients feel about the services they’re receiving?
- Post-discharge support: Are there mechanisms in place to keep patients connected to care after a crisis?
By focusing on these elements, payers and providers can build shared frameworks for Value-Based Behavioral Health Care — even when cost savings are less direct.
The Role of Non-Clinical Interventions
One of the most powerful and often overlooked contributors to mental wellness isn’t medical at all. It’s housing. Or transportation. Or employment support. Or simply having someone to talk to who’s walked a similar path.
These non-clinical interventions — often referred to as addressing SDOH — can make or break a person’s mental health journey. But under the current reimbursement models, these services rarely generate revenue. Instead, they often rely on grant funding or provider generosity, making them difficult to sustain.
“For behavioral health operators to invest in quality providers that are going to be giving that better quality service… you need to be able to get reimbursements that are a bit more of a premium than what we’ve seen in the past,” said Joshua Baker, SVP of Strategy at Hightop Health.
Launched in 2023 by JLL Partners and SV Health Investors, Hightop Health represents a new model for Value-Based Behavioral Health Care. By acquiring Psych Atlanta — a forward-thinking psychiatric practice — Hightop is setting the stage for outcome-driven, tech-enabled care that centers on both clinical effectiveness and patient experience.
This evolution in care delivery aligns directly with the future of Value-Based Behavioral Health Care, highlighting how technology, compassion, and innovation intersect to improve patient lives.
Is It Really a Premium — or Just What It’s Worth?
There’s an emerging debate in Value-Based Behavioral Health Care around how we think about paying more for higher quality care. Is it a premium — or simply fair compensation for services that generate true value?
Carlson pushes back on the idea that better pay equals a bonus. “I don’t think it’s a question of premium,” he said. “I think it’s a question of determining what value is preferential or advantageous and then making sure that providers are receiving enough reimbursement to invest in creating value.”
He also points out that different payers may approach the concept of value differently. Government plans — such as Medicaid or Medicare — are often more attuned to care coordination and wrap-around services than commercial insurers, who may have less exposure to behavioral health’s full spectrum of care.
With continued investment and policy support, Value-Based Behavioral Health Care may ultimately shift payer mindsets toward rewarding comprehensive, long-term outcomes rather than short-term savings.
Building the Infrastructure to Support Value-Based Success
One of the biggest barriers to Value-Based Behavioral Health Care is operational. To measure outcomes, track progress, and demonstrate value, providers need robust infrastructure. That means:
- Electronic health records that integrate across providers
- Data teams that can translate metrics into insights
- Clinical staff trained in outcomes-based care
- Flexible billing and reimbursement systems
- Partnerships with community organizations
None of this is simple or cheap. But with the right investments and incentives, it’s possible. And it’s essential.
The Road Ahead
Value-Based Behavioral Health Care is not just a payment model — it’s a philosophy. It asks us to rethink what we prioritize, how we define success, and where we invest our resources. It’s about rewarding what works — not just what’s billable.
We still have a long way to go. But the momentum is growing. From high-acuity interventions to everyday therapy, from non-clinical services to outcome tracking systems, the future of behavioral health lies in partnerships, flexibility, and a shared commitment to value — in every sense of the word.
If we can get it right, Value-Based Behavioral Health Care will not only save money. It will change lives.
