Margins at long-term care facilities are tighter than ever. Operators face reimbursement rates that don’t keep up with increased expenses, and residents are becoming increasingly complex from a medical and psychiatric standpoint every year.
Behavioral health is often the missing piece, as treatment of depression in later stages of life transforms the economics quickly. This is where outsourced behavioral health, especially via telepsychiatry, can greatly enhance your margins for long-term care operations.
Let’s learn why it’s become one of the most intelligent decisions an administrator can make today.
Key Takeaways
- Operating margins don’t support unpredictable expenses like overtime, travel nurses, or agency replacements that usually result from chronic behavioral health crises
- Behavioral symptoms are one of the most common causes for transport to the ER
- Faster behavioral health response equals fewer complaints, fewer state survey deficiencies, and better word-of-mouth
- Building a better reputation is what ultimately fuels admissions, and admissions fuel everything else
Long-term care residents experience depression at rates that dwarf the general elderly population.
A meta-analysis published in 2024, which included 48 studies, showed that approximately 27% of residents experience major depressive disorder, and depressive symptoms in any form occur in over 50% of nursing home populations.
That is a massive clinical reality… and it has serious financial consequences.
Untreated late-life depression treatment gaps drive:
The majority of facilities have always utilized a consultant psychiatrist who comes in once or twice a month.
That model is showing its age. Wait times are weeks long as residents decompensate, and direct care staff are left to deal with the symptoms they aren’t trained to treat.
Enter FasPsych virtual geriatric psychiatry. Through telepsychiatry, board-certified geriatric experts get INTO THE BUILDING within days — not weeks — so treatment for late-life depression occurs at the pace residents truly require.
Pretty powerful, right?
And here is the piece most administrators miss: Delayed behavioral health care is not an “abdicated” cost. It lands squarely on the P&L every month.
Margin Impact is best understood by analyzing how much untreated psychiatric symptoms cost a facility per day.
Here’s what happens in the average building:
Someone living in your facility experiences depression. It goes unnoticed. They stop eating. They decline therapy. They fall. They’re rushed to the ER. Back they come with a hospital-acquired infection and a medication that doesn’t align with their current medications.
That one waterfall can equal thousands of dollars in lost census days, deficiencies, and rehospitalisation penalties.
There’s also the labor side of the equation. Operating margins don’t support unpredictable expenses like overtime, travel nurses, or agency replacements that usually result from chronic behavioral health crises. Median operating margins of 1.8% was the reality in 2024.
Add to that, the readmission penalty is severe. 23.5% of patients who leave acute care and go to a skilled nursing facility get readmitted within 30 days — and a large majority of those cases are avoidable with proper behavioral health support.
Math doesn’t lie. A few missed avoidable transfers per quarter can erase a month’s worth of margin.
Okay, now for the most important part–how this positively affects your bottom line.
Behavioral symptoms are one of the most common causes for transport to the ER. If telepsychiatry is on-demand staffed, the facility can easily decrease the symptoms without needing to transport the resident away from home.
Every avoided transfer = thousands in retained revenue and a stronger star rating.
CMS continues to target the decrease in inappropriate antipsychotic use. A physician-directed behavioral health program utilizes evidence-based alternatives like counseling, sleep management, and focused pharmacologic intervention that improve outcomes for residents and facility survey ratings.
Fewer citations means fewer fines, easier surveys, and a cleaner Five-Star rating.
Fun Fact
Proactive behavioral health care and therapy do more than just improve mood. They significantly reduce physical health claims, cutting overall healthcare costs.
Hospitals/ACOs really like referring patients to providers who can successfully manage complex psychiatric patients without bouncing them back. A robust behavioral health program helps attract referrals.
Higher Medicare census = stronger margins.
Nurses become burned out quickly if they are working with unrecognized/untreated psychiatric symptoms without clinical support. Access to outsourced behavioral health provides a safety net, which correlates to LOWERED turnover and travel nurse usage.
Approximately 774 skilled nursing facilities closed between February and July of 2024. Staffing pressure was cited as the number one reason for closures. Anything that reduces turnover of direct care staff–keeping them out of agency cycles–is good for the bottom line.
Families can tell when their loved one is well cared for. Faster behavioral health response equals fewer complaints, fewer state survey deficiencies, and better word-of-mouth.
The last factor gets overlooked often, but building a better reputation is what ultimately fuels admissions, and admissions fuel everything else.
Alt text: Telepsychiatry Partner
Not all outsourced behavioral health providers are created equal. Here’s what matters most:
The ideal partner doesn’t just provide visits. They integrate with the facility’s clinical team.
Bonus: today, there are approximately 1,700 board-certified geriatric psychiatrists in the entire United States.
Telepsychiatry allows long-term care operators access to that expertise and is often the only realistic way to get reliable psychiatric coverage.
Margins at long-term care facilities don’t suffer gladly. Reimbursement growth is stagnant while labour costs continue to rise. Every decision must be justified.
Few organizational moves help on multiple fronts simultaneously. Outsourced behavioral health is one of them. It can:
And it accomplishes all of that while treating residents for the late-life depression they’ve been unknowingly suffering from.
That is how you protect margins without cutting care.
Choose the right partner, train employees, measure results — and watch the dollars roll in.
