Why Anthem’s Beacon Mental Health Buy Makes Sense

June 14, 2019

With Anthem’s announcement that it will acquire Beacon Health Options, analysts say it makes for insurers to get more into mental healthcare.

Anthem, Inc.’s announcement that it will acquire Beacon Health Options (Beacon), the largest independently held behavioral health organization in the country, is a golden opportunity for the insurer to diversify into health services and deliver personalized care.

“This is a sign to healthcare execs that the best care is a collection of physical and mental health,” says David Reid, CEO of Ease, a HR and benefits software solution for SMBs, insurance brokers, and insurance carriers, in San Francisco. “Determining a ‘good’ insurance plan isn’t just about PPO or HMO coverage, copays, and deductibles, but it’s about measuring whether or not people can get the help the mental and wellness assistance they need to be an overall healthy person.”

For example, if a medical plan offers great network coverage, a low deductible, and low copays but offers no behavioral health coverage the plan may not be considered “good,” Reid says.

Additionally, healthcare executives could see a reduction in the cost of overall healthcare. “Investing in behavioral health could reduce the number of procedures and services needed, driving down premiums and deductibles,” Reid says. “Healthier individuals also bring some relief to the United States’ upcoming physician shortage.” 

While behavioral health may be outside the norm of focusing on physical care, wellness encompasses isn’t just physical.

“It’s important to recognize that there has been an increasing body of research focusing on the social determinants of health,” says Reid. “From the CDC to Kaiser Health, thousands of healthcare researchers have focused their recent time and grants on understanding what impacts health-and they’ve found that it’s more than just physical care.”

Social determinants of health are the conditions in which people are born, grow, live, work and age, according to the Kaiser Family Foundation. They include factors like socioeconomic status, education, neighborhood and physical environment, employment, and social support networks, as well as access to healthcare.

“With increasing evidence that one’s health is defined by more than access to medical care, employers and employees are demanding more from their health insurance brokers and insurance companies,” Reid says. “This includes more coverage for psychologists, family and marriage therapists, addiction treatment, and mental health exercises such as meditation and yoga.”

Related: CVS Expands Services to Include Dietitians, Yoga

Keeping the concept of social determinants of health in mind, Anthem’s acquisition of Beacon Health Options can be explained through competition and employee demand, according to Reid.

Competition

Health insurers like Anthem want to increase the number of employers who offer their plans, and the number of employees who enroll in their plans, according to Reid. “Thus, it’s important for insurance companies to expand plans available to include more than the traditional healthcare, especially as the focus on social determinants of health increases,” he says. “If individuals measure ‘health’ as physical health, mental health, wellness, and more-those carriers that offer services like those available through Beacon Health Options will likely win the competition.”

Employee demand

As the scope of health continues to expand beyond physical health, individuals are seeking employers who offer coverage or stipends for mental therapy, meditation, and other wellness services, according to Reid.

“To recruit and retain the best employees, it’s important for businesses to offer health insurance that considers physical and behavioral health,” he says. “By acquiring Beacon Health Options, Anthem is signaling that their plans will include more than medical coverage.”

Reduce costs 

Healthcare costs have been rising for a number of reasons-including an increasing number of individuals neglecting preventative care and waiting until an illness becomes costly to seek medical attention.

“Behavioral health factors, like stress and anxiety, can manifest into serious physical problems later in life such as heart attack, stroke, and hypertension,” Reid says. “All of these can require costly procedures or medications. For a carrier like Anthem, investing in behavioral health services can eventually help reduce the number of expensive medical services necessary.”