Report: Physicians Can Expect Future Growth in the Telehealth Behavioral Healthcare Market

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Key Insights

  • Recent studies show that a sharp increase in mental health disorder symptoms in adults across the United States due to COVID-19.
  • Other studies show a sharp increase in the demand for virtual mental health visits.
  • The demand is leading to rapid investments and growth in the telehealth space for mental and behavioral health. This means telehealth is likely not going away.

Mental Wellness in the U.S. Throughout COVID-19 to June 2020

The rate of U.S. adults reporting symptoms of mental health disorders has grown since the Centers for Disease Control and Prevention (CDC) declared COVID-19 a pandemic. In a study by the Johns Hopkins University Bloomberg School of Public Health, there has been a “more-than-threefold increase in the percentage of U.S. adults who reported symptoms of psychological distress—from 3.9 percent in 2018 to 13.6 percent in April 2020.” This jump was especially evident among “adults ages 18–29,” “adults with annual household incomes less than $35,000,” and Hispanic adults, who had a “more than four-fold increase of 13.9 percentage points.”

According to the study, the orders associated with the COVID-19 pandemic, including “social distancing, fear of contracting the disease,  economic uncertainty, including high unemployment—have negatively affected mental health.” With the restrictions in place, COVID-19 has also “disrupted” a patient’s “access to mental health services,” and these rates are expected to increase the longer the pandemic continues.

Demand for Virtual Mental and Behavioral Health Services

In response to the need for behavioral health services, the Centers for Medicare and Medicaid Services (CMS) issued blanket waivers to regulations to expand “the types of health care professionals that can furnish distant site telehealth services to include all those that are eligible to bill Medicare for their professional services,” including behavioral health specialists.

The ability to access additional services virtually has helped strengthen the demand for telehealth. According to a survey by McKinsey & Company, 76 percent of respondents indicated they were “moderately or highly likely to use telehealth going forward.” This is compared to 2019, where only 11 percent of the U.S. population was using the service. In addition to treating patients in rural areas and those who do not have access to reliable transportation or cannot travel to the doctor’s office, telehealth is an especially beneficial tool to treat mental health disorders. 

According to the American Psychiatric Association, telehealth can reduce the stigma of and barriers to obtaining behavioral health care services, reduce delays in care, and can be integrated into the patients’ primary care plan to improve outcomes. Industry leaders have seen an opportunity to merge the two.

The Future for the Market

As reported in Fierce Health Care, “on-demand health care services and disease monitoring received a significant amount of investment in the first half of 2020,” which is not expected to slow down. Despite early forecasts that telehealth spending would decline as states began reopening, telehealth spending is expected to reach a record-breaking $250 billion by December 2020. COVID-19 has also inspired new investors, more startups, and spurred growth of existing companies in the digital behavioral health care market.

However, financial, administrative, and regulatory burdens still exist. Despite demands for CMS to maintain its emergency regulatory waivers after COVID-19, uncertainty remains regarding how these services will be reimbursed. CMS has not yet outlined a distinct framework for reimbursing behavioral health specialists for telehealth visits. In addition, according to a survey by the Congressional Budget Office Analysis, commercial insurers on average paid “13–14 percent less for in-network mental health services in their commercial and Medicare Advantage plans than fee-for-service Medicare paid for identical services.”

What Does This Mean for Physicians?

The growing demand and the projected growth of virtual mental health services, and the calls for CMS to keep its emergency regulation waivers in place mean that telehealth may become the “new normal,” if not a popular service, in behavioral health care. As consumers increasingly demand convenient ways to access healthcare, physicians may need to invest time in creating a long-term strategy for treating patients with behavioral health disorders through telehealth.

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