Day 67 — Behavioral Health Landscape

My goal for today was to map out the behavioral health market.

Side note: I tried using a Pomodoro Timer to work in small, focused intervals. Working in short intervals is something I do at the gym and I was tired of distractions while trying to work throughout the day. I noticed a huge difference in productivity and will continue the mini-experiment tomorrow.

I started the day with 3 broad questions.

Question 1: How do adolescents access mental health care today?

Answer: Many don’t.

Most of mental health care is delivered like the rest of our healthcare: in person, with a provider. I’m sure COVID has made an impact toward moving these sessions remote, but generally these visits come through a referral to a specialist (i.e., a therapist or psychologist).

The key challenge is that the number of kids with a diagnosed mental health issue is staggering! There are 7.7M kids, or 1 in 6 kids, living with a diagnosed mental health issue today.

Of these kids, only 50% actually get treatment.

There a number of factors driving this figure, including a shortage of providers, lack of reimbursement for services, financial challenges, and a growing population further constraining the supply challenge.

As a result, there is a wave of digital health technology working to address the challenge. Massive amounts of capital are flowing to behavioral health, which hopefully will improve these numbers.

Question 2: How will adolescents access mental health care tomorrow?

Answer: App-based telehealth, where kids can have access to an engaging mobile app that’s always available while maintaining the benefits of a provider interaction, mostly through text-based chat and telehealth visits.

There are a ton of up-and-coming companies in this space. I decided to break down the market based on go-to-market (direct to consumer or employer-based or payer models) and approach:

  1. App-Based Telehealth: These solutions offer a hybrid mobile/therapist model, generally through cognitive behavioral therapy. Each of these companies has a fairly similar approach of offering a mobile app for interactive self-care activities, progress tracking, and connection to a live therapist — either through chat or video. Some also offer medication support. These solutions seem to all offer the best of both worlds with modern technology and someone to speak to. One of the main challenges they face is scale: it’s expensive to deploy therapists and reach scale.
  2. CBT Apps: These are all apps that provide CBT — similar to #1 except without a live therapist. These are all pretty interesting because they provide scalable solutions that don’t require a person. The challenge with each of these is generally efficacy and reimbursement: it’s just really hard to replace a person and even harder to get paid when you do that.
  3. Wellness Apps: These are pure consumer apps that promote mindfulness. While they don’t have the studied health benefits of cognitive behavioral therapy, they have massive scale and are generally great apps for a broad audience. Things like meditation seem like a generally good idea for anyone but it will be hard to replace psychotherapy for those that need it.
  4. Telemedicine: These are all focused on connecting users to therapists via a phone or video call. Most likely these have boomed during the pandemic, though the ability to connect to a provider remotely is quickly becoming table stakes for this space.

Interestingly, Brightline and Talkspace are the only companies that actually market toward kids and adolescents. The rest are aimed at adults (or employees in the case of the employer-based offerings).

Question 3: How is behavioral health reimbursed?

Answer: Not well.

I didn’t have time to dive into this too much, though I did find evidence of low reimbursement rates for mental health services. It’s likely a contributing factor for well-funded startups to pursue employers vs. health plans (in addition to time to scale).

What’s Next?

I feel much better equipped to think about this market after today’s activity. Tomorrow I want to do some work into outcomes measures for behavioral health and start thinking about the value we might be able to provide here.




Startup founder surviving in his parent’s basement.

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Bob Weishar

Bob Weishar

Startup founder surviving in his parent’s basement.

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