Behavioral Health Programs Tailored to Niche Populations Gain Traction

March 1, 2013

// By Nancy Vessell //

Nancy VessellBehavioral health services have come and gone in the halls of hospitals as reimbursements have waxed and waned, often losing in the competition for hospital space to more profitable service lines. But a growing number of psychiat­ric programs catering to targeted population segments—the elderly, college students, and war veterans, for example—are staking claims to hospital space.

Better reimbursements or private pay opportunities make certain niche programs more financially viable than general psychiatric programs. And, clinicians claim more treatment success when patients with similar lifestyles and experiences are treated together.


Geriatric psychiatric programs exhibit significant promise, according to Howard Gershon, principal with the health care consulting firm New Heights Group in Santa Fe, NM.

A geriatric psychiatric program represents a “high-growth area because of the … baby boomers,” Gershon says, adding that the area has always been un­derserved. “For hospitals, it turns out to be attractive from a reimbursement perspective,” he notes. “We’re seeing a number of hospitals starting gero­psychiatric programs because of the reasonable payment.”

Psychiatric units can be reimbursed on a per-diem basis rather than with fixed case rates under Medicare. The opportunity can be even more attrac­tive for small rural hospitals, where the population generally is even older, Gershon says. For these critical access hospitals, the reimbursements are based on actual costs.

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