New Jersey has made meaningful investments in behavioral health over the past several years. Those investments were necessary. They were strategic. And they were long overdue. The need has not abated.
Since the COVID-19 pandemic, children, youth and adults across our state continue to experience rising rates of anxiety, depression, substance-use disorders, trauma and suicidal ideation. Emergency departments remain overwhelmed.
Families struggle to access timely outpatient care. Schools report unprecedented behavioral health challenges. Communities are navigating the ripple effects of housing instability, food insecurity and workforce shortages. The demand for services hasn’t returned to pre-term pandemic levels — it’s intensified.
At the same time, the delivery system has evolved.
No more silo
Behavioral health is no longer siloed from physical health. In coordinated ways, providers are increasingly expected to deliver integrated care that addresses mental health, substance use, chronic medical conditions and social drivers of health. This model improves outcomes and reduces long-term costs, but it requires modern infrastructure and adequate reimbursement.
The providers delivering these essential services are facing financial strain. Inflation, rising costs tied to social determinants of health, workforce shortages and stagnant reimbursement rates have placed extraordinary pressure on behavioral health organizations. Many operate on razor-thin margins while delivering lifesaving care. When community-based services become financially unsustainable, the consequences are predictable and costly.
Individuals deteriorate without timely outpatient treatment. Emergency rooms back up, hospitalization rates increase, homelessness rises. High-acuity services are used when lower cost prevention and early intervention could have sufficed.
Underfunding behavioral health doesn’t save money. It shifts costs to more expensive systems and ultimately costs the state of New Jersey more. For Fiscal Year 2027, state budget priorities must focus on sustainability, prevention and workforce stabilization.
These aren’t frivolous investments. They’re structural necessities.
New Jersey must invest $54 million in Department of Human Services behavioral health care rates and contracts. Rate stabilization ensures providers can maintain operations and meet community demand without reducing access. The state should invest $30 million in the New Jersey Statewide Initiative and the Substance Abuse Prevention and Treatment Initiative. Prevention, outpatient treatment and recovery lead to fewer overdoses and cut the need for more expensive interventions.
Children and youth
Prevention can’t stop substance abuse alone. A sustainable behavioral health system must also prioritize children and youth, where early intervention has the greatest long-term impact. Children’s services require urgent attention:
- Increasing children’s partial hospital rates to $115 per hour, through a $3.2 million investment, would help stabilize programs serving youth with acute behavioral health needs.
- Boosting the care management organization per child/per month rate to $1,200, through a $16.7 million investment, matched federally, would strengthen care coordination for youth with complex needs and reduce fragmentation.
- Maintaining $43 million in funding is critical for statewide student support services. That’s a prevention-focused, school-based approach that identifies and supports youth before crises escalate. Complementing that, a $3 million investment in school-based youth services programs and linked contracts would ensure that students have accessible, developmentally appropriate care where they spend most of their day.
We must also invest in additional inpatient beds for children with intellectual and developmental disabilities. Too often, these youth remain in emergency rooms or inappropriate placements due to capacity shortages.
A $20 million capital investment is essential for behavioral health providers. Many facilities are aging. Upgrades are necessary to deliver integrated physical and behavioral health care, meet regulatory requirements and provide safe environments for patients and staff.
Invest in the behavioral health care workforce. These investments are interconnected. Sustainability supports access. Workforce stabilization supports quality. Prevention reduces downstream costs. Capital improvements modernize care delivery.
Upstream, downstream
The question before us isn’t whether the need exists. It does. The question is whether we invest upstream or pay downstream.
If we fail to sustain behavioral health services, the costs will surface elsewhere in emergency departments, hospitals, shelters, courts and correctional facilities. Those costs will exceed the price of prevention and coordinated care. A stable behavioral health system isn’t an optional infrastructure. It’s foundational to economic stability, educational attainment, public safety and individuals’ and communities’ well-being.
The fiscal 2027 budget presents an opportunity to reinforce that foundation. By investing in our residents, New Jersey can protect its gains and prevent deeper system strain. Behavioral health isn’t a secondary issue. It’s central to the health of our state and residents.
The choice is clear: Invest now or pay far more later.
Debra L. Wentz, Ph.D., is president and chief executive office of the New Jersey Association of Mental Health and Addiction Agencies.
