Burrell Behavioral Health announced early Friday that leaders of the Springfield-based mental wellness system signed merger paperwork with a like-minded care center located in eastern Jackson County, responding to vast consolidation trends among U.S. mental health providers.
The move will combine 44-year-old Burrell’s 1,800-person labor force with the much smaller 200-employee crew at Comprehensive Mental Health Services, Inc., a nonprofit headquartered in Independence. The 52-year-old Comprehensive reported gross revenues of $16.7 million to the IRS last year. While Comprehensive will retain its name brand as Burrell’s fourth regional hub across Missouri and neighboring states, it’s being acquired by a partner with eight-and-a-half times the revenue heft, Burrell’s latest IRS return shows.
Along with eight Arkansas counties, Burrell currently serves a seven-county southwest Missouri region centered on Springfield, plus 10 more counties around Columbia. Burrell president and CEO C.J. Davis said Burrell’s Missouri service footprint covers roughly 1 million people, with several hundred thousand more to be added in eastern Jackson County as Comprehensive joins the fold.
Burrell said Friday that the two state-designated community mental health centers both serve clients with a range of needs including mental health, addiction care and prevention, crisis support and developmental support services. The merger is expected to increase resources available to Comprehensive, which provides substance abuse programs in central Kansas City as well as its main bundle of services in eastern Jackson County.
Burrell said it is setting up a 24-hour crisis center in Independence, for which Comprehensive and Burrell have already hired four new psychiatrists, one of them specializing in children’s and adolescent care.
What’s more, Davis said in an interview with the News-Leader on Thursday, Burrell will soon announce the completion of a partnership deal with Preferred Family Healthcare in Kirksville. That deal was announced back in March.
Davis said Burrell and Preferred are expected to become sister entities employing some 5,000 people. They’ll all work under the banner of a yet-to-be-revealed parent company.
“That’ll make us likely the largest behavioral health system in the nation,” Davis said.
Davis said there are many factors driving mergers like the one Burrell and Comprehensive announced Friday.
COVID-19 has prompted a 25- to 30-percent increase in demand for mental wellness services, Davis said. Fortune Business Insights estimated the U.S. market for mental health services grew 11.3 percent in 2020, making the total sector worth roughly $69 billion and poised to get bigger through 2028. Part of the consensus reasoning behind that estimate is that two-thirds of U.S. consumers are willing to give telehealth services a try, Fortune reported.
Parallel to market pressures, Davis said that Burrell looked at the history of pandemics and found a pattern: Following the 2003-2004 SARS outbreak in Toronto as well as the global flu pandemic in 1918-1919, demand surged for mental health services due to trauma. Whole populations were traumatized by anxiety, depression and increased substance abuse — and the effects were directly felt for at least three to five years after each pandemic.
“Sixty percent of organizations like Burrell right now across the country are experiencing an increase in demand to the point in time that waiting lists are now starting to form,” Davis said.
Another aspect of the pandemic’s effects is the idea that mental health is an ordinary part of healthcare has become more popular in U.S. culture in general.
“One of the important byproducts is that people have become more interested in engaging with care,” Davis said. Stigmas are breaking down and a “transformation” is happening, he added: “I have found that there are way more people open to services than ever before, when it comes to mental health.”
If the demand for mental health care is way up, the supply has lagged behind. For Burrell and its peers around the country, staff recruitment remains a challenge, as in so many other parts of the 2021 economy.
“There are a lot of people out there who believe that whoever wins the arms race on recruitment is really the organization that’s going to be left standing,” Davis said.
Davis said the gradually upsized Burrell expects to face fewer recruiting issues, whether potential therapists, psychiatrists or the like want to live in any of Missouri’s major markets. Telehealth technology will allow newly-minted Burrell professionals to work with patients around Missouri and nearby states, he said.
The mental health sector as a whole has been facing consolidation pressures in the past couple of years, echoing a decade or more of similar pressures in the wider realm of health services, Davis said.
Data collected by Boston-based Provident Healthcare Partners show that since 2018, the United States has seen at least 171 mental health mergers and acquisitions worth some $7 billion.
“Small centers are having a hard time staying in business,” Davis said. “Just from a business point of view, it makes a lot of sense for consolidation.”
He added, “it takes money to grow and meet the needs of the community, and when you’re operating on small margins, those strategies are really different.”
The bigger the system, the better it’s able to exercise influence on government bodies, including the legislative branch, Davis said. As examples, the Burrell CEO cited a federal mental wellness delivery model championed by retiring U.S. Sen. Roy Blunt that first implemented in Missouri, and the importance of maintaining funding for care over the long term.
In a written statement, Comprehensive’s CEO, Julie Pratt, said, “This is a wonderful moment for behavioral health care in eastern Jackson County and the greater Kansas City area, and just a taste of what is to come.”
Reach News-Leader reporter Gregory Holman by emailing [email protected] Please consider subscribing to support vital local journalism.
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