According to digital-health-only venture fund Rock Health, startups attracted a whopping $3.3 billion in investment during Q3 2018. That upped the full-year sum to $6.8 billion through September — or more than a billion dollars more than was invested during the entirety of 2017, which itself exceeded the previous full-year record of $5.8 billion set in 2015.
So it’s a pretty OK time to be a health tech entrepreneur. Here, four of the companies that attracted large sums of venture cash during 2018, specifically in the behavioral health area, share their thoughts on the state of health tech innovation and the benefits — and perils — of partnership.
2018 investment: $45 million in May
What it does: Tackles a problem that seems tailor-made for the health tech era — matching individuals with the type of mental health professional best suited to their needs. Patients can choose between therapists and coaching programs, or between live video telemedicine or in-person sessions. Plus the company reduces the administrative burden by handling insurance and co-pay claims through the individual’s employer.
Why it matters: Asked why treatment of mental health issues lags treatment of physical ones, Lyra’s head of partnerships Sean McBride responds with a single word — stigma — and a caveat. “The stigma might make it so you don’t talk about something publicly or share it with friends, but it’s misleading that stigma prevents people from seeking help,” he explains. “Our idea is if you make the process easy and confidential, people will step up and seek care.”
Clearly there’s a need. A BlueCross BlueShield report released during the summer looked at mental health claims between 2013 and 2016, which revealed depression claims had risen across every age demographic — and by 47% among millennials. But even before that, Lyra had already started making a case with its employer client base there could be real economic returns if this problem was addressed. Its payment model is based on outcomes, not flat fees.
Lyra strives to address both stubborn stereotypes about mental health treatment (“there’s this conception you’re going to sit on a chaise lounge and talk about your childhood, but it’s more about building a skill set to handle life’s challenges,” McBride says) as well as the inherent inconveniences associated with ongoing treatment. “For all health, convenience matters more than anyone gives it credit for,” he continues. “We’ve integrated our tech with therapists’ calendar systems. “
2018 investment: $6 million in July
What it does: Serves as a digital mental health clinic for businesses. Users complete a dynamic questionnaire, from which the company’s proprietary AI offers a plan that personalizes wellness recommendations based on data from clinical trials and EHRs.
Why it matters: Spring Health represents cofounder and CEO April Koh’s first venture into the world of health, following stints in e-commerce and entertainment. Despite what she heard about the industry’s traditional resistance to innovation, Koh and Spring Health have found ripe ground in their AI-infused efforts to remedy the trial-and-error nature of mental health treatment. “I’m glad I ignored all those cautionary tales,” she says.
While Koh believes many areas in and around healthcare are overdue for disruption, she says mental health was an obvious place to start.
“A person can take a digital assessment and, from 25 or so questions, it can make a highly accurate diagnosis, down to a specific dosage, of what will work,” she explains. Which isn’t to say there hasn’t been some pushback. “The idea may be foreign to some people because they expect their providers to have such authority and aren’t used to [having] big data inform decision-making.”
Koh says Spring Health’s approach is likely translatable across other health specialties. “Personalization, tech-enablement, and digitization of experience — people may still be focused on an in-person health experience, but virtual is coming.”
2018 investment: $2.4 million in June
What it does: Supplies at-home behavioral health for kids. Spun out from Boston Children’s Hospital, Mightier’s Mighty Band heart rate monitor is worn by children aged six to 14 while they play what the company calls “bioresponsive video games.” The games increase in difficulty as their heart rates accelerate. Thus, the calmer the kids remain, the more success they enjoy.
Why it matters: Mightier cofounder and CEO Craig Lund believes the behavioral health system isn’t serving children as well as it could. “Nobody is completely satisfied with the current options to reach them,” he says. To that end, Mightier’s device and games are designed to confront the challenge of engagement outside the usual healthcare environment — specifically, at home. “Most kids don’t want to go to a therapist’s office, and that creates a lot of tension between parent and child,” Lund explains. “This was built from the kid’s perspective. It gives them agency and ownership and lets them learn a skill on their own. The idea is to reshape the family dynamic around these [behavioral] challenges.”
Up next is tackling challenges related to access, which will likely involve partnering with other healthcare organizations. “As opposed to traditional drugs or therapeutics, we are awash in data,” Lund notes. “What data do parents get when they take their child to the therapist? Having access to data in a field where it is nonexistent [presents] a huge opportunity to learn and improve.”
2018 investment: $40 million in January
What it does: Integrates physical and mental health by facilitating provider collaboration. The company’s algorithm crunches data to identify health issues and the psychological conditions with which they’re often correlated, then links primary care physicians with their mental health counterparts.
Why it matters: Quartet Health’s 2018 has been wildly successful on the investment side and somewhat tumultuous on the personnel front: In October, the company confirmed it had parted ways with president and COO David Liu and chief product officer Rajesh Mihda, both of whom were considered integral cogs in the Quartet machine.
That said, the company’s data-rich, integration-minded platform receives rave reviews from the eight or so payer and system types with which it has partnered, among them Horizon in New Jersey and Sutter Health in California. Plus its central operating premise — that mental health-related stigma can and should be addressed in the primary care setting — has resonated with patients.
“A long time ago, the world was essentially divided into physical and mental healthcare,” Mihda said in an interview in August. “We’re trying to return to the notion there’s only one type of health, which is total health.”