Beyond a Culture of Scarcity

When we talk about mental health, we inevitably talk about mental healthcare. And when we talk about mental healthcare, much of the focus is on scarcity: a limited workforce, too little investment, a lack of access. For each of these claims of scarcity, there are counterfactuals. On workforce: there are nearly 800,000 mental health providers in this country, nearly three times the number of primary care providers or dentists. On investment: the federal commitment to the nation’s mental health agency, SAMHSA, has more than doubled since 2015 (although the agency may be gutted in 2026) and venture capital funding, essentially non-existent a decade ago, surpassed $12B over the past five years. In terms of access, finding brick-and-mortar care continues to be a problem in many parts of the country, but digital services have made mental health care readily available on a 24/7 basis across the country to anyone with an internet connection.

But there is one aspect of scarcity that resists the counterfactuals. We continue to view mental healthcare as a non-profit endeavor supported by philanthropy, not a vital part of healthcare supported by for-profit companies. Of course, this is a rational and moral choice. People with serious mental illness deserve care that is mission-driven not margin-driven. But it is a choice that contrasts with the choice we have made in other areas of medicine, particularly areas that focus on chronic illness. The care of people with chronic renal failure or rehabilitation following orthopedic surgery belongs to for-profit companies with deep resources and high levels of professional standards. Indeed, there is a unique entitlement for end-stage-renal disease in Medicare to ensure support. And the physical therapy market, roughly $60B in 2024, is projected to double in the next decade.

While we might assume that the margin-driven companies providing medical services for people with chronic disease are exploiting or short-changing their patients, there is little data to support this claim. In fact, they have the resources to provide comprehensive and continuing care because their services are sustainable with a business model that is not contingent on donations or grants. It is difficult to imagine a dialysis service or physical rehabilitation center managing on philanthropic dollars. Yet, that is the world of mental healthcare for people with serious mental illness. We seem to have a double standard: expecting for-profit investment for physical rehabilitation but suspecting for-profit investment for psychosocial rehabilitation.

The irony of this double standard is that there is a reasonable business case for supporting psychosocial rehabilitation. People with SMI are among the most costly patients in our healthcare system, due to high utilization of emergency rooms and hospital care mostly for preventable medical conditions (pulmonary disease, cardiovascular disease, and diabetes). In one claims study of the highest cost patients in commercial insurance, 40% had SMI, yet fewer than 40% of these people with SMI were actually receiving treatment for their mental illness. In addition to the moral imperative to treat people for their mental illness, the business case is clear: psychosocial rehabilitation reduces the total cost of care. Both public and private payors save money by providing effective mental health care. But they have generally chosen to carve out behavioral health, obscuring the value of investing in mental health care because they don’t see its impact on the total cost of care.

New models of paying for healthcare are changing this narrative by focusing on the total cost of care (both physical health and behavioral health costs). Relatively small investments in outreach services with community health workers and peer-led recovery services like clubhouses are beginning to be seen as savvy investments by health systems.

This new interest from the private sector raises two important questions. First, does the shift from non-profit to for-profit mean a shift from being mission-driven to margin-driven? The experience with private equity taking over many parts of healthcare has been a cautionary tale. Healthcare providers feel they have less time with patients, less autonomy, and less satisfaction in their work. In the world of mental healthcare, private equity has begun to buy up Intensive Outpatient (IOP) services and Partial Hospitalization services, but there seems to be less interest in recovery-based services. Fortunately, there are other kinds of investments that appear better matched to support recovery-based services. New models, like public benefit corporations and B corporations, are ways of balancing the margin and the mission, ensuring that the “greed is good” mentality does not drive a private sector investment.

The second question is whether our non-profit culture is ready for the for-profit approach that may require higher standards of accountability and performance. Non-profits are accountable to their boards and their donors; for-profits also need to deal with investors who can make demands for data and outcomes. For-profits and non-profits work in different time domains – for-profits focus on velocity. The mental healthcare system has been chronically under-resourced. The infusion of capital will come at a cost of higher expectations. It will also require a shift from the scarcity culture which may have mixed effects on the delivery of services to people who are the most marginalized in our communities.

The current moment calls for a reconsideration of the culture of scarcity. Federal funding for mental healthcare will likely be shrinking, philanthropy may be hesitant in a chaotic economy, and the costs of delivering care are continuing to increase. For recovery services to become sustainable, we need to diversify their financial support. In the current moment, for-profit companies that are constructed to be both mission-driven and margin-driven may be essential for the growth and sustainability of the services that are vital for recovery but thus far have not been deemed as reimbursable parts of healthcare.