Hospices Likely to Ramp Up Behavioral Health Investments

Behavioral health care is a rising star in health care in terms of growth and demand, and the trend is leading some hospices to invest in the space.

Several considerations are driving their growing interest. For one, addressing the psychosocial and emotional aspects of dying and bereavement has been an intergral part of the hospice mission since the beginning. Moreover, the COVID-19 pandemic jumpstarted demand for mental health services, contributing to substantial market growth and attracting new investors.

For hospices, behavioral health investments present an opportunity to extend their mission, diversify revenue streams, and capitalize on the swelling demand, according to Ken Albert, CEO of Androscoggin Home Health Care + Hospice.


“There’s lots of conversation about how the behavioral health and physical-medical models need to be more integrated, and we need to merge them if we’re going to manage chronic disease more effectively,” Albert told Hospice News. “This year, behavioral health was the number-one gap in every single county in our state. As we’re looking at continuing health care needs, and looking at our skill set, it makes sense that we would be looking also at our need to diversify our revenue streams for sustainability.”

Maine-based Androscoggin in January acquired the behavioral health care company Care & Comfort for an undisclosed sum. The deal followed a community health needs assessment that the Internal Revenue Service requires nonprofit hospitals to perform every two years, which showed that more Maine residents needed mental health care than were receiving them, Albert said.

Longstanding social stigma around mental health care is largely dissipating globally, according to a 2020 survey by the HealthPartners Institute. This has benefited behavioral health providers, as well as many of the patients seeking their services. 


But — as with many health care trends during the past three years — one cannot ignore the effects of the pandemic.

Globally, depression and anxiety disorders have proliferated during the outbreak, reaching 53.2 million and 76.2 million respectively in 2020 alone, according to a study published in The Lancet.

In addition to the human toll, the uptick in demand brought a flood of investors to the behavioral health space. This included a sizable contingent of private equity firms as well as strategic buyers, according to Dexter Braff, president of M&A firm The Braff Group, who recently spoke at the Behavioral Health Business INVEST conference in Chicago.

“The expectations of the investment community when COVID began to really put folks into the market. They really said, ‘We need to get into the space,’” Braff said at INVEST. “There are lots of developments that began to elevate behavioral health, but COVID jumpstarted that because more money was coming in, and the need for services was definitely going to go up.”

Deal volume for behavioral health increased 33% in 2021, Hospice News’ sister site Behavioral Health Business reported.

But acquisitions are not the only pathway for hospices to enter the space. Some, including the home health and hospice provider Visiting Nurse Association Health Group, Inc., are building their programs internally.

“I cannot pinpoint exactly how people will do it, but I do expect more attention and program- and service-line development in mental and behavioral health within the home health and hospice sectors,” Landers told Hospice News. “Basically, there are gaps in need, and that both presents an opportunity for entrepreneurship and social entrepreneurship. I think that’s going to be a continuing area of focus.”

VNA Health’s behavioral services were seeded in the organization’s memory and dementia care services, according to Landers.

The provider enhanced its training programs for its social work and nursing staff, with an emphasis on its home health patients. This included education on how to identify cognitive impairment and when it’s appropriate to connect patients with community resources or other providers.  

VNS Health is also exploring the possible addition of psychiatric advanced practice nurses into their clinical teams. This initiative is in its early stages.

Looking ahead, the continued trajectory toward an intersection of behavioral health and hospice will be shaped to a large degree by the economic and regulatory infrastructure that supports it, Albert told Hospice News.

“It’s going to depend on whether or not we can leverage that cohort of that population and behavioral health across all of our other service lines from a revenue perspective, delivery infrastructure, and how can we decrease the overall costs in all of the service lines at a shared services level,” Albert said. “So we can be more effective in all the services in moving more to scale.”

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