State of the Therapeutic Industry
In most ways, 2025 was an extension of the trends that we saw firmly take hold in the behavioral health arena beginning in earnest in 2022 and crescendoing in 2024. Most notably, corporate take-overs further consolidated power, while pushing growth and expansion of traditional, profit-driven, insurance-led models of mental health care delivery within our previously parallel arena of private behavioral health. Meanwhile, the remaining small, owner-operated and consortium-led programs continued to battle to stay relevant in a competitive environment of corporations’ behemoth marketing and sales budgets and profitable insurance partnerships.
The sad news of 2025: the changes to the landscape of mental health care that we at McMillan Education saw coming as much as 10 years ago seem to have now truly consolidated. Who’s the biggest loser in this shift? Kids and families. Insurance has been the shiny object, while the overall quality of care has dramatically declined, pushing kids into longer and longer periods of cycling crises and chronic and worsening daily dysfunction.
To stay alive, the smaller consortium and owner-operated programs pivoted in exceptional ways, figuring out the balance of expanding access while maintaining quality care through innovative partnerships with insurance companies. This has been a huge accomplishment by our partner programs and we couldn’t be more grateful. While these smaller programs integrated some level of insurance coverage to do the right thing for students and families without compromising the quality of care and length of stay, larger corporations leveraged insurance partnerships to enhance profit and “manage” services.
The good news for 2025: some of the premier small programs have won the short-term battle long enough to fight another day in the most hostile of environments to continue to bring life-changing care to more of our students and families.
Have we hit the peak of this devastating trend? Have we reached the point where the private behavioral health industry has now merged with the same failed systems of corporate-driven mental health treatment models, effectively ending the long successful period when private behavioral health offered its only effective alternative?
While we predict that the corporate damage inflicted on this industry is not over, we are heartened by the few fighters who are still standing and are continuing, against great odds and fierce headwinds, to provide the only remaining alternative to profit-driven mental health services. These programs continue to be a beacon of our country’s (and, really, the world’s) premium mental health care for adolescents and young adults. Our McMillan Education crisis, therapeutic, and educational planning experts extend profound thanks to these programs and look forward to another year of fighting the good fight together. And as we all know, this is a battle that is worth fighting for all of us who do the important work of helping students and for the families we are dedicated to serve.
State of Students and Families:
Some small good news? Our practice saw an uptick in families searching for solutions outside of the traditional community-based intensive and outpatient mental health care offerings. For most of these families, outpatient therapy, intensive day programs, and cycling through hospitalizations that are focused on short-term stabilization goals and insurance coverage are not making meaningful change in their children’s lives. Students are still refusing school, repeatedly ending up at the ED or in CBAT, and struggling to find available, consistent and effective psychiatry and therapy. Meanwhile, their daily functioning is either declining or barely hanging on in public school bridge programs that dramatically diminish their learning and attendance standards just to get them to a diploma. Then what?
Indeed, while adolescents in crisis are living the daily challenges of their school and mental health systems triaging their struggles to get them to graduation, young adults are living the long-term consequences of this short-sighted approach. In addition to seeing increasing numbers of children and adolescents with school refusal, clinically significant daily emotional dysregulation, social and executive deficits, and developmental challenges in our practice, the phenomenon of “Failure to Launch” — those young adults who have found “adulting” difficult and retreated into maladaptive coping mechanisms in college — has quickly become the phenomenon of “Failure to Act” by a system that settles for younger students and their families just getting by. Our young adults in crisis, which has been the fastest growing demographic in our practice (along, of course, with young people of all ages on the autism spectrum), are the result of a society that is wired to kick the can down the road … until the road runs into a cliff, dumpsterfire, quagmire … (choose your metaphor!). We have also seen a considerable uptick in acute and severe chronic mental illness in young adults, including co-occurring disorders and the onset of mood and thought disorders.
The good news of 2025 were the glimmers of the return of: “We were thinking of wilderness” … (our reaction: Excuse me? Did you say what I thought you said? Seriously? Fantastic!). “We are looking for a long-term solution ….” (our reaction: same as above!). We’re not getting too excited or calling this a trend, nor are we naive enough to think we are “going back” to any former system. But just maybe we are beginning to see the reckoning of the failure of profit-driven, corporate systems to serve an incredibly needy and deserving population and the consequential push toward an alternative that does actually work and functions ethically to create change and healing.
To our partners in the private behavior health and therapeutic programming community, we look forward to fighting alongside you and continuing in our partnership to help young people and their families find hope and change in 2026.
State of Schools:
As we predicted coming out of 2024, traditional boarding schools saw a heightened demand from families seeking an alternative but “traditional” schooling environment as “the fix” for their child’s mental health or developmental challenges. Meanwhile, enrollment crunched boarding schools would shift admissions practices and work to tweak or continue to develop internal programming better suited to take on students with greater needs. We also predicted that this combination would stretch schools’ resources in unforgiving and high-risk ways. Meanwhile, choosing a “traditional” environment that allowed them to avoid the perceived stigma or myths surrounding therapeutic programs would lead these same families to watch their children needlessly extend their cycle of failure, while also potentially creating greater risk scenarios and more emotional trauma for both the student and school community.
2026 promises more of the same.
For that reason, we were delighted to draw together a panel of therapeutic program experts and school administrators to address schools’ challenge of “Navigating the Fine Line Between Traditional and Therapeutic Schools” at TABS in November of 2025. This fantastic panel consisted of Associate Head of School Allison Letourneau of Berkshire School, Associate Head of School Catherine Pollock of Cushing Academy,
Director of Counseling and therapist Dr. Brian Konik Frederick Gunn School and Pacific Quest, Executive Director Dr. Heather Tracy of New Summit Academy, and moderated by our own Dr. Sarah McMillan of McMillan Education. We took on the twin challenges faced by schools: increasing difficulty meeting enrollment targets and students whose needs exceed traditional school environments. While tackling the practical challenges of building more discerning admissions practices, building stronger and clearer student life policies, and creating more effective, integrative counseling programs, our underlying message was clear for schools:
- Build programs and practices that focus on effective screening and retention over short-term recruitment goals
- Create clear messaging for parents that helps them understand more clearly from admissions to exit what traditional schools can and cannot do for students through honest and reality-based communications that successfully confront parents’ wishful or magical thinking
- Educate admissions and student life staff in the language of therapeutic alternatives for student applicants or students failing in the school environment to debunk the myths of therapeutic schools and help parents understand and accept the reality that therapeutic schools are equipped to meet the student’s needs and build the foundation for a later return to traditional education
- Make sure your counseling department is fully integrated into student life and that there is a culture of transparency and honesty among students and staff around students’ struggles
- Codify practices, break down preconceived notions, and increase community education around taking students from therapeutic programs
- Protect school communities by separating students quickly who drain resources, impact culture negatively, and enhance risk to the school, themselves, and others
As we push into 2026, we are once again on the road working in school Board and governance education, helping leadership understand that the old solutions are not workable in this new world. More tuition, more growth as the primary strategy to confront financial failure is unworkable and unsustainable in the face of a declining demographic that is suffering a continuing mental health crisis. This strategy only pushes admissions offices to accept students schools cannot adequately support and that will continue to put both the school and students at risk. Among the enrollment challenged schools, we predict that smaller schools devoted to creating tighter communities, more targeted programming, and effectively integrated learning and health systems are the future of financially and emotionally healthy schools. More is not better. Colleges and universities, with their proliferation of resources and programming that has not slowed the trend of student crisis and failure, have proven that lesson to be true. Hopefully schools will take notice.
Dr. Sarah McMillan presenting at TABS
