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Universal Health CEO talks about behavioral health, bundled payments

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This Modern Healthcare article with Alan Miller, chairman and CEO of the big for-profit hospital chain Universal Health Services, is well worth reading. His comments on behavioral health we found particularly interesting.

“One thing that was very helpful is that three years ago, we managed to buy the second-largest {behavioral-health} company, Psychiatric Solutions, when some of its leaders tried to take the company private and the board said no. …We had about 100 hospitals and they had about 100 hospitals. By putting them together, we got about 200 hospitals, and our company became the dominant entity in the free-standing psych business. We consolidated a good number of the free-standing psychiatric hospitals in the country.”

He was asked if  the political talk about expanding and improving behavioral health and substance-abuse treatment is going to benefit  his company.

He answered:  “Definitely, definitely. We provide excellent care, and there seems to be more of a need now, a better focus. A study just came out on the increase in suicides in the U.S. You have people with bipolar disorders, schizophrenia and depression, which leads to these suicides. These people are not taking their lives lightly. They’re suffering greatly. So there should be more treatment open to them. There are great stresses in our society, and I think sometimes drugs and alcohol are a reaction to that. Families, at one time, used to be ashamed or would hide mental illness. Now we realize that mental ailments are a sickness like physical ailments that can be treated, and there’s nothing to be ashamed of.”

And he said his company is open to new markets. “Since we are pre-eminent in mental healthcare, a number of acute-care people are talking to us about joining them and providing that expertise to build or manage their capability in mental health, which they don’t feel secure in because it’s not their direct business. The future appears to be having a network that can take on financial risk and deal with the whole continuum of care, including mental health.”

Modern Healthcare asked him about the push for bundled payments to replace fee for service.

He answered:  “It’s slow. We’re involved in the demonstrations, but it’s not widespread. There’s a lot of conjecture that this ultimately might be where we’re going, that fee-for-service will go away, there’ll be bundled payments, and providers will take some risk.”


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