Behavioral Health Care Software and Services Market Size, Share & Trends Analysis Report By Component (Software, Support Services), By Delivery Model (Ownership, Subscription), By Function (Clinical, Administrative, Financial), By End-User (Providers, Payers, Patients) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global Behavioral Health Care Software and Services Market size was valued at USD 3,122.31 million in 2022. It is estimated to reach USD 9,682.63 million by 2031, growing at a CAGR of 13.4% during the forecast period (2023–2031).

Behavioral healthcare software and service is a sophisticated and advanced custom-built solution that enables psychiatrists to communicate and monitor patient behavior trends to gather insights and monitor their condition. It can collect laboratory, radiology, and pharmacy-related data observations to generate comprehensive reports that evaluate an individual's needs. Behavioral healthcare software and service also facilitates acquiring electronic health records (EHR), health management practices, clinical decisions, e-prescribing, and various administrative duties.

It also provides clinical decision support, enables online appointment scheduling via telehealth platforms, and maintains patient information confidentiality, particularly in cases of severe drug abuse. As a result, community clinics and hospitals utilize behavioral healthcare software and services to increase the efficiency of service providers by reducing treatment costs, providing value-based medicine programs, and diagnosing various mental illnesses. Behavioral healthcare software and service is currently deployable via the cloud or software-based models.

Market Dynamics

Global behavioral health care software and services market drivers

Rising awareness about substance abuse management

The National Survey on Drug Use and Health from the Substance Misuse and Mental Health Services Administration (SAMHSA) estimates that the yearly cost of substance misuse in the United States is USD 600 billion. According to the administration, substance abuse leads to decreased productivity and increases the cost of public healthcare. Substance addiction treatment facilities that implement value-based medicine initiatives to reduce hospital readmissions are able to save money.

In the U.S., around 21.5 million people suffered from substance abuse disorders in 2014. Out of the total, barely 2.5 million individuals underwent the treatment. Therefore, there is much room for improvement in how behavioral health care is delivered, which will fuel market expansion.

Emerging technologies in behavioral health care and management

The real-time monitoring system simplifies communication between patients and care providers. Such improved technologies can overcome confidentiality and information-sharing barriers, especially in substance use and mental health information cases. It is crucial to integrate new technologies with other available treatment approaches to improve the productivity and effectiveness of the provided care. Tele-mental health or telepsychiatry involves video conferencing, which helps care providers coordinate with patients from any location.

Additionally, telehealth provides several advantages in managing behavioral health, like efficient delivery of care, expanded service offerings, optimal training opportunities, and cost-effective solutions. Cognitive computing solutions help identify patients at a higher risk, which aids in properly planning their treatment regimes. Netsmart Technologies and IBM Watson are working to collect data beneficial for population health. This boosts the market expansion.

Global behavioral health care software and services market restraint

Lack of skilled clinicians

The lack of properly trained clinicians is one of the barriers to mental health treatment. The available workforce often lacks the experience to offer evidence-based integrated care. The gap between the demand and supply of mental health treatment is widening, especially in developing and underdeveloped countries, where the prevalence of mental health issues and substance abuse is constantly rising. Such factors restrict market growth.

Global behavioral health care software and services market opportunities

Expanding reimbursement coverage in developed countries

The growing reimbursement coverage in developed countries such as the U.S., U.K., and Germany has increased the interest of investors in the market. The Medicaid and CHIP Managed Care Final Rule of 2016 increased available reimbursement coverage for patients and led to market growth. In the second quarter of 2017, the Affordable Care Act in the U.S. mandated an increase in Medicaid coverage and reimbursement. The new rules increase reimbursement coverage to care providers that treat Medicaid patients.

Value-based reimbursement and other innovative care models will enhance patient access to quality mental health care. The Cures Act will facilitate interoperability between mental and overall healthcare providers. The Cures Act will allow market players to integrate and enable care coordination between the two sides. This cooperation will eliminate the obstacles to reimbursement, simplifying the explanation of benefits and insurance claim submissions for faster returns. Such factors create opportunities for market growth.

Regional Analysis

North America Dominates the Global Market

Based on region, the global Behavioral Health Care Software and Services Market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

North America is the most significant global Behavioral Health Care Software and Services Market shareholder and is anticipated to exhibit a CAGR of 12.9% during the forecast period. In North America, publicly managed healthcare systems manage mental health conditions and substance abuse. The presence of private as well as public insurance coverage increases access to care in this region. The region's surging prevalence of mental illness drives the growth of the Behavioral Health Care Software and Services Market. For instance, around 18.5% of adults in the U.S., nearly 43.8 million, suffer from mental illnesses. Serious mental diseases are responsible for losses worth USD 193.2 billion every year.

Additionally, the reimbursement scenario in the U.S. for behavioral health software is promising, fueling the North American regional market expansion. In 2012, Medicare introduced diagnostic codes for reimbursement of tele-mental health services. In the U.S., around 39 states have established guidelines related to telehealth reimbursements. The total expenditure by the Centers for Medicare and Medicaid Services on mental health services was estimated to be approximately USD 130 billion in 2015 and is likely to cross USD 200 by 2025. Likewise, according to the Mental Health & Addiction Equity Act of 2008, employer plans must have parity while offering mental health or substance abuse benefits.

Europe is predicted to exhibit a CAGR of 14.2% over the forecast period. Approximately 40% of the overall population residing in Europe experiences mental diseases. Out of the total population, 30% of individuals pursue therapy and therapeutic interventions. Mental health conditions impose a substantial societal and economic impact. According to the WHO, mental disorders affect every fourth citizen once in their lifetime. The European government has acknowledged the need to place mental health among the top health objectives. It is due to the evidence related to the mental health issues in the European nations. In addition, Germany dominated the overall European market in terms of revenue share. In Germany, mental health patients receive financial support, access to care, awareness campaigns, and outreach programs. Likewise, roughly 17% of German students experience mental illness, opening up a wide range of potential for the major market players.

In Asia-Pacific, the number of mental health issues is increasing due to the region's rapidly growing population. Mental or behavioral health issues affect more than 500,000 persons throughout Asia. Difficulties in implementing mental health management programs due to inadequate funding and lack of a trained workforce are responsible for the slower market growth in this region. However, several initiatives offered by the government in this region are expected to spur market growth, especially in emerging nations.

For instance, in India, the Mental Health Care Act was passed in 2017 by the government. According to the law, every insurance provider must provide insurance for mental health treatment. However, the actual insurance scenario fails to match the expectations. This is due to the market's predominant focus on inpatient care, which prevents insurance companies from providing coverage for mental health therapy. The evolving nature of mental health treatment in India can be attributed to the growing awareness surrounding this field. Moreover, there is significant potential for integrating technology to effectively address escalating mental health concerns.

In Latin America, mental health conditions and neurological disorders account for around 25% of the disease burden. More than 5% of the total population in Latin America suffers from some form of mental health problem, thereby propelling the market growth. Similarly, the prevalence of mental and behavioral health issues in the Middle Eastern region is rising continuously. However, social stigma and fear of rejection are associated with mental health conditions. Hence, the number of people seeking treatment in this region is very low compared to other countries. Awareness campaigns regarding mental health problems and available therapies are needed to boost treatment rates in the area.

Segmental Analysis

The global Behavioral Health Care Software and Services Market is segmented by component, delivery model, function, and end-user.

Based on components, the global Behavioral Health Care Software and Services Market is divided into software and support services. 

The software segment owns the largest market share and is estimated to grow at a CAGR of 13.8% during the forecast period. Behavioral health care software provides solutions and services to facilitate smooth clinical workflow. The software enables mental health professionals to design and select the optimal treatment plan for a patient with mental health issues such as depression, stress, anxiety, substance misuse, and addiction. The software for mental health creates treatment programs based on clinical evidence and patient records.

In addition, there are a variety of applications of software in the management of behavioral health care. The users can schedule and manage appointments online with the help of mobile devices such as smartphones and laptops. Medical bill payments can also be facilitated using mental health software to improve billing and claims procedures.

Based on the delivery model, the global Behavioral Health Care Software and Services Market is bifurcated into ownership and subscription segments. 

The subscription segment dominates the global market and is estimated to exhibit a CAGR of 13.71% over the forecast period. The majority of small-scale mental healthcare providers have less money to invest in technological solutions, unlike big medical offices or institutions. These practitioners do not qualify for incentives for meaningful use of EHRs because of the size of their tiny practice. As a result, the limited availability of payment prevents small-scale mental health practices from using EHRs. Professionals in the mental health field are also hesitant to invest thousands of dollars in software. Therefore, smaller practices favor subscription-based software because they have tighter financial constraints. Various options are available in the market that are affordable for mental health professionals and can provide optimal return on investment.

Based on function, the global Behavioral Health Care Software and Services Market is segmented into clinical, administrative, and financial. 

The clinical function segment owns the highest market share and is estimated to exhibit a CAGR of 13.1% during the forecast period. Behavioral health software offers clinical services like claim filing, documentation, invoicing, appointment scheduling, and coding. Some market participants provide stand-alone solutions. On the other hand, some companies offer all-inclusive solutions. Small-scale healthcare facilities opt for stand-alone solutions as these solutions target a specific area that needs improvement and are cost-effective.

In addition, large-scale mental health facilities have a wide pool of potential users. Hence, the integration of software systems and their coordination is required. The clinical function segment is further sub-segmented into EHR, E-prescribing, telehealth, clinical decision support, and care plan functions.

Based on end-users, the global Behavioral Health Care Software and Services Market is segmented into providers, payers, and patients. 

The providers' segment is the largest revenue contributor to the market and is expected to exhibit a CAGR of 12.5% over the forecast period. The limited number of EHR providers specific to mental health care increases the bargaining power of suppliers. Buyers in this market often lack knowledge about EHR systems. This ultimately proves positive for the suppliers as buyers become dependent on them. The provider's segment is further bifurcated into hospitals and clinics, and community centers. The hospitals and clinics sub-segment dominance within the providers' sector may be attributed to the expansion of behavioral health coverage and increased government expenditure. Therefore, the adoption of management software solutions is expected to witness growth in hospitals and private practice clinics in the foreseeable future.

Additionally, healthcare providers are implementing digital solutions to improve the efficiency of their services as software usage is becoming more widely known. For instance, in June 2020, North Central Health Care (NCHC) opted to implement Cerner Corporation's Electronic Health Record (EHR) at its three behavioral healthcare facilities across Wisconsin. The technology is expected to provide NCHC nurses, therapists, and physicians with near-real-time patient data to help improve care quality.

Recent Developments

• May 2023- NeuroFlow, a software provider for behavioral health integration, formed a new partnership with Atlantic Health System, which will use NeuroFlow's technology at 16 ACO sites. The goals of the partnership for the health system are to increase access to behavioral health professionals, reduce administrative burden among primary care practices, and enhance the performance of its ACO's value-based contracts.
• April 2023- NextGen Healthcare, Inc., a leading supplier of innovative cloud-based healthcare technology solutions, announced that Mindful Care, the first same-day mental health company focused on providing urgent psychiatric care, has chosen NextGen® Behavioral Health Suite to support its short- and long-term goals.