- Strategic Analysis Part 1
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Feb 20, 2024
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Running head: STRATEGIC ANALYSIS
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Inspire Behavioral Health
Inspire Behavioral Health (IBH) is a private psychiatry practice with two locations in Southeastern Pennsylvania. Its primary location is in King of Prussia, Montgomery County with a second location in Boyertown, Berks County. The practice is owned and operated by a doctorally-prepared, advanced practice nurse with 15 years of training in psychiatric medicine. IBH began seeing patients on a part-time basis in January of 2019. At that time, the owner began the process of contracting with a few select insurance companies. With limited budgetary resources, the practice initially operated 5 hours weekly in sublet space within the offices of a psychotherapy group. Since its inception, IBH has also offered services, 9 hours monthly, in the Boyertown office of a psychotherapy colleague – a relationship that was not only
convenient but also mutually beneficial. Growth for IBH was almost immediate, followed by the
need for expansion. By June of 2019, IBH was seeking full-time office space and by October of the same year, moved into their main King of Prussia location. While their January 2019 census was only four, their January 2020 census is now more than 250. The limited hours offered by IBH in the first 6 months allowed time for the protracted process of insurance contracting. On the advice of colleagues, IBH’s owner submitted applications to Highmark Blue Cross, Aetna, Cigna, United Behavioral Health, and Independence Blue Cross (wherein mental health coverage is managed by Magellan). Contracts were awarded by all 5 programs between 1 and 7 months, respectively. The advice offered to IBH’s owner, with respect to insurance contracting, came from psychotherapists in private practice. Nurse practitioner-owned practices are scarce in the immediate geographic radius of IBH, none of which willing to offer professional consultation to IBH at the time. Services
Inspire Behavioral Health offers psychiatric services, specifically diagnostic evaluation and medication management, to patients between the ages of 13 and 65. Disorders treated most typically include those related to mood, anxiety, thought, sleeping, eating, trauma, attention, personality, and substance abuse. Medication services are offered in-office and include consultation with the client and any pertinent collateral sources. The practice also offers pharmacogenomic testing involving a mouth swab collected in the office, then lab-analyzed for individual enzymatic activity predicting likely responses to common psychotropics. Psychotropic prescribing at IBH is comprehensive and includes those medication-assisted
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STRATEGIC ANALYSIS
treatments indicated for substance use disorders including, but not limited to, those for opioid dependency. The mission of IBH is to offer accessible and affordable psychiatric services to the community of Southeastern Pennsylvania with an emphasis on compassionate care. In understanding the contextual experiences of each client, IBH’s vision is to intricately understand the biopsychosocial factors that have contributed to each client’s development, while aligning with them on their journey towards meeting future goals and aspirations. This mission sets IBH apart from industry competition in its interpersonal approach to client care, allowing patients to experience a warmer clinical relationship intended to foster a nurturing and safe treatment environment. The vision of IBH is to avail psychiatric services to a greater portion of the population, with less financial barriers, in a manner that is comfortable and inviting to the patient. Geographic Area and Competition
Heun-Johnson, Menchine, Goldman, and Seabury (2017) reported more than one million Pennsylvania adults suffer with serious psychological distress each year. This means 1 in 10 Pennsylvanians are in need of mental health care given the United States Census Bureau (2018) reported a total state population of approximately 10 million adults. Because the five counties (Chester, Berks, Delaware, Montgomery, and Lehigh) served by IBH comprise more than 20% of the state’s overall population, estimates suggest approximately 200,000 (or more) local residents are in need of treatment (World Population Review, 2019).
Online directories report there are only 79 private psychiatry practices across these five counties (Psychology Today, 2020). This breaks down to more than 2,500 patients per practice. The recommended patient caseload, however, is actually around 1,000 or less (Schimpff, 2014). Further analysis of the data found that only 29 of the 79 providers accepted insurance, exacerbating access to care concerns. These startling statistics show promising opportunities for IBH to not only improve care opportunities for local residents, but also suggest the likelihood of practice financial stability (and profitability) over time. Strategic Analysis and Learning Goals
The learning goal for this assignment is to strengthen the business analytical skills of the practice’s owner who, to date, has more clinical experience than corporate. In reaching this goal,
IBH would like to consider two areas for strategic analyses.
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STRATEGIC ANALYSIS
First, the practice would like to reevaluate insurance contracts, targeting one in particular for reconsideration. Because the insurance contracting process was blind, without access to fee schedules until months into the process, IBH was not allowed the opportunity to properly financially plan. As result, one of the five contracts has been identified to reimburse at approximately one third the rate as compared with the others. Given this vastly disproportionate payment schedule, many local providers have terminated their contracts with this payer, leaving large number of subscribers seeking new psychiatric care. This, in turn, has created unequal representation of these subscribers in the IBH schedule. While the mission of IBH is to provide accessible and affordable care, this shift in payer representation may threaten the practice’s long-
term viability. Strategic analysis will be aimed to determine the business’s financial sustainability should payer mix trends persist, or worsen with respect to heavier representation of
this lowest-paying insurance company. A sub-analysis will explore impacts on local population health, as well as the practice’s financial outlook in the event this particular contract is terminated.
Secondly, IBH intends to strategically analyze opportunities related to out-of-state telemedicine practices. Specifically, the owner of IBH holds a license to practice in an underserved area, namely West Virginia. While this license was required for past employment, it remains active at this time, yet unused. The owner of IBH plans to consider opportunities to expand local practices to include telepsychiatry work with the residents of West Virginia. To start, this would involve understanding local insurance contracts as they relate to out-of-state residents, as well as the financial health of local community members in considering private pay rates. Additional considerations would include necessary resources such as state law governing telemedicine practices, HIPAA-compliant telemedicine software, marketing approaches, as well as other methods for creating a client base. With strategic analyses in these two areas, IBH is poised to evaluate how to best meet different elements of their mission, including increased patient access to affordable psychiatric care, as well as financial stability for the practice.
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References
Heun-Johnson, H., Menchine, M., Goldman, D., & Seabury, S. (2017). The cost of mental illness: Pennsylvania facts and figures.
Retrieved from https://healthpolicy.usc.edu/wp-
content/uploads/2018/07/PA-Facts-and-Figures.pdf
Psychology Today. (2020). Psychiatrists in Pennsylvania.
Retrieved from https://www.psychologytoday.com/us/psychiatrists/pennsylvania Schimpff, S. (2014). How many patients should a primary care physician care for?
Retrieved from https://medcitynews.com/2014/02/many-patients-primary-care-physician-
care/
United States Census Bureau. (2018). Quick facts: Pennsylvania.
Retrieved from https://www.census.gov/quickfacts/pa
World Population Review. (2019). Pennsylvania population 2019.
Retrieved from http://worldpopulationreview.com/states/pennsylvania-population/