Behavioral Health: Unmet Demand Highlights Growth Opportunity

Key Takeaways 

  • Behavioral health conditions are becoming more common with a rising number of people living without treatment. 
  • There is a growing need to better support this underserved patient population through best-in-class behavioral health services. 
  • Recent clients Monte Nido and Bradford Health Services are prime examples of top-performing companies in the space. 

With more people continuing to require behavioral health services, there is a growing opportunity for companies to provide greater access to high-quality care. Two recent Harris Williams clients, Monte Nido and Bradford Health Services, showcase the key traits necessary to serve a patient population in need.  

Here, our senior bankers share the trends attracting investors to the behavioral health space, and essential characteristics to look for in winning assets. 

Expanding Need, Low Availability

Behavioral health conditions, including substance use disorders (SUDs), eating disorders (EDs), and mental health disorders, are a significant issue across age groups that continues to worsen. This trend has only been exacerbated by the COVID-19 pandemic causing increasing isolation, anxiety, and health issues for individuals and their loved ones. 

For example, an estimated 47.6 million individuals report having a mental health disorder, with 45% of people experiencing a negative mental health impact due to COVID-19.1 

Meanwhile, the availability of care throughout the U.S. for behavioral health conditions still isn’t enough. 24.7% of adults with a mental health disorder report an unmet need for treatment, which hasn’t declined since 2011. And even in states with great access, nearly 1 in 3 of youth with major depression are living without mental health treatment.

“These statistics spotlight the widening gap between those who require behavioral health services and those able to get it,” says Knier. 

Further magnifying unmet demand is an inadequate supply of service providers and beds for patients, as well as an increasing volume of hospital referrals to outpatient providers. 

“Many hospital systems currently lack the infrastructure, accommodations, and staff to support incoming patients with acute behavioral conditions,” notes Clark. “This inability to properly serve patients is supporting assets specializing in outpatient services and groups treating disorders such as SUDs, EDs, and mental health disorders.” 

Due to the expanding need for care and low levels of availability for patients, behavioral health services continue to be strongly supported by both government and commercial payors. Will explains that this means stable reimbursement rates and many payors going in-network for these services. “These factors contribute to a growing space with ample opportunities for behavioral health companies to expand their operations, capture rising demand, and take market share,” he says. 

Exemplifying the Opportunity: Monte Nido and Bradford Health Services

Monte Nido 

Harris Williams advised Monte Nido & Affiliates, one of the leading eating disorder platforms in the U.S. 

Monte Nido is a powerful player in the sector with a long history of operation and strong clinical reputation. Its industry status drives referrals to its clinical channel from a wide range of medical practitioners, including child psychologists and primary care physicians. Many practices partner with Monte Nido for years to treat patients across their care journeys, which is a testament to its program, dependability, and patient outcomes. 

“A key component of Monte Nido’s success is its full continuum of care. This enables it to provide best-in-class treatment to eating disorder patients while staying engaged with them throughout their recoveries,” says Knier. 

“Monte Nido is also capitalizing on the sector’s unmet demand. It continues to grow at an accelerated pace thanks to its unique ability to open new facilities and fill them quickly by leveraging its reputation in the space,” adds Clark. 

Bradford Health Services 

Bradford Health Services, another recent Harris Williams client, is a leading provider of alcohol and drug-addiction treatment services. 

Like Monte Nido, it offers a wide breadth of services and complete continuum of care including residential detox, residential treatment, and outpatient treatment. 

“Bradford is also a pioneer in value-based care, with a novel approach to revenue and compensation models that are linked to patient outcomes,” says Will. “By adopting these risk-based contracts with payors, it takes on the risk of patients relapsing or needing further treatment after their initial length of stay.” 

“This approach is only possible because of Bradford’s market density of locations and services, geographic strategy, relationships with key payors, and track record of successful patient outcomes,” points out Knier. 

Extensive Capabilities, Broad Reach, and Effective M&A

As seen with Monte Nido and Bradford, offering an extensive suite of treatment services is an important differentiator of top behavioral health platforms. “Companies that provide high-quality outpatient services, such as telehealth, can drive lasting engagements with patients and create long-term value,” says Clark. “We've already seen increasing interest and activity within outpatient services, and we believe it will continue to grow in importance,” he adds. 

In addition, winning platforms will often have enough scale to establish a national footprint, or a strong regional presence with good brand awareness and payor relationships. Whether focused nationally or regionally, building the capacity necessary to better serve unmet demand is a substantial opportunity for growth. 

Knier says that broader geographic reach, combined with an effective patient acquisition strategy, is a recipe for success. “The best providers will capture patients through a variety of channels, including referral and internal marketing, target patient demographics with growing demand like adolescents and young adults, and serve them with nearby practices,” he explains. 

Another sought-after characteristic is the ability to identify and integrate acquisition targets in a highly fragmented provider landscape that is primed for continued consolidation. 

For example, building a multi-service platform encompassing both residential and outpatient capabilities can be an effective strategy to take market share. “This can be accomplished through add-on acquisitions to establish a well-rounded offering, or by devoting attention to building those services organically,” says Will. 

Supporting an Underserved Population

The gap between people with behavioral health conditions and their ability to receive treatment continues to expand, creating a growing need to provide high-quality care. Companies best positioned to capture this unmet demand will feature a complete range of inpatient and outpatient services across their geographic footprints, while establishing high-value relationships with both patients and payors. 

To learn more, please contact our senior bankers. 


Driven by strong demographic tailwinds, the healthcare industry combines fast-paced innovation with steadily growing demand, offering investors a wide array of opportunities. With deep industry knowledge, our Healthcare & Life Sciences Group helps investors and company leaders turn their ambitious goals into reality through M&A. Our global clients rely on our trusted advice to uncover opportunities in the healthcare market and help unlock value in their businesses. 

We partner with clients across key sectors such as providers, outsourced provider services, payor & payor services, medical products and devices, healthcare IT, and more.   

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1. EDGEMONT: Accelerating Investor Interest in Mental Health (July 2020)
2. Mental Health America: 2022 The State of Mental Health in America

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