Mapping Mental Health Space

Current problems, solutions, and startups in the space

Why mental health matters

This year has undoubtedly been challenging for everyone in the world. In honor of National Suicide Prevention Awareness Month, I thought that I’d explore some of the trends that are happening in the mental health space.

With younger generations taking the reign on social media, mental health is less taboo than ever. In fact, opening up about one’s mental health journey is praised as a show of vulnerability and relatability. On the flip side, it’s made into mainstream memes and padded by a massive consumer wellness industry.

According to NIMH, one in five Americans live with a mental illness in varying degrees from mild to severe. That’s ~47 million Americans. The most common disorder is anxiety (18% of the population) followed by depression (7%). Younger adults aged 18–25 years had the highest prevalence of any mental illness (26%) compared to adults aged 26–49 years (22%). This is a highly troubling trend; it’s no wonder Gen-Z is increasingly more interested in mental health against a backdrop of tech and social media, climate change, coronavirus, and geopolitical tensions.

Mental health trickles into every aspect of our economy and social conscience. Depression is the leading cause of disability worldwide. Serious mental illness costs America $193 billion in lost earnings every year due to employees missing work or healthcare costs. Left unaddressed, we will continue to feel its impact from all economic and social aspects like education and incarceration.

Over half of adults aren’t receiving the help they need

There are plenty of challenges towards accessible, affordable, and quality care. Over half of adults that needed access to services did not receive mental health services in the previous year. This can be attributed to a mix of reasons:

1) Shortage of therapists, particularly in non-urban areas

The greatest growth in the workforce has come from mental health counselors, marriage/family therapists, as well as counseling psychologists. Meanwhile, psychiatrists and substance abuse social workers have declined. According to the BLS in 2017, there were ~577,000 mental health professionals practicing in the US whose main focus is the treatment of a mental health or substance abuse. However, the professional workforce has only grown in single digits while the population similarly grows~3.5%. This shortage is further exacerbated in rural areas because most mental health professionals tend to cluster in urban areas.

2) Lack of insurance coverage = expensive sessions for consumers

Over 60% of therapists don’t take insurance for a variety of reasons. Insurance companies have a low rate of reimbursement, require a lot of administrative work to file claims, and implement policies regarding the amount and type of therapy sessions that are even reimbursable. This leaves many therapists, particularly the more experienced ones, to open their own practices or join some of the newer startups in the space for a salary. Out of network therapists often charge upwards of $150 per hourly session! This leaves the majority of customers who can afford therapy to be wealthier individuals in urban areas — which is why we’re seeing a lot of companies targeted towards working millennials.

3) Mental health has been excluded from general practitioner screening practices

In the traditional healthcare space, there has been little emphasis on integrating mental health into general practitioner and screening practices. Additionally, given the difficulty of finding in-network therapists, 2/3 of primary care physicians report difficulty referring patients for mental health care — twice the number reported for any other specialty, according to Health Affairs.

Trends addressing these challenges

1) Adoption of telehealth

Telehealth is no longer viewed as a secondary option over a traditional visit, but one that is at times more effective and preferred. Before the pandemic, physicians were generally not paid for telehealth visits at the same level as they would typically be compensated for in-office visits. Yet now, medicare has waived all restrictions and expanded coverage.One study found that the net cost savings for a telehealth visit ranged from $19 to $121. Continued technological advancements will also make teletherapy more user friendly and efficient.

2) Pressure for health insurance plans to increase mental health reimbursements and provider networks

Pushing insurance companies to reward providers for their care could further open up the market for wider treatment. There are a couple of ways in which insurance companies will be pressured. Newer startups entering the market for direct therapy services partner with insurance companies after demonstrating effective care and value. Employer customers may also begin to put pressure on insurance companies expanding their coverage. Regulators may also continue to pass laws to expand reimbursable therapy to include teletherapy. According to Global Med, 42 states and Washington, D.C., have some type of telehealth commercial payer statute in place — but only 10 states offer true parity for in-person and telehealth services of the same rate. Other states have similar bills under development.

3) Measuring effectiveness and quality of care

Historically there has been a lack of research and rigor towards assessing and alleviating mental health. Many companies in the consumer behavioral therapy space using technology to gather and measure a patient’s diagnosis, symptoms over time, quality of visits, relationship with therapist, and progress. This outcome-based measurement will help define what quality mental health looks like, best practices, and build a positive feedback loop of consumers, employers, and insurance companies getting on board.

4) Approaching mental health holistically

There isn’t a one size fits all solution that will last through a lifetime. The customer lifecycle might transition from needing personal one-on-one therapy sessions, to group therapy, to independent check-ins through wellness trackers and apps. Expanding the toolset for tackling mental health through a blended approach, from talk therapy to coaching to mindfulness, will be crucial in evaluating what works and what doesn’t.

Creative solutions and startups

Mental health includes our overall behavioral, emotional, social, and cognitive wellbeing, spanning every stage of life from childhood through adulthood. It is a complex, multifaceted problem that involves a variety of approaches. The most popular type of psychotherapy with considerable scientific support has been Cognitive Behavioral Therapy, which explores reevaluating thought and belief patterns. Perhaps the newest and most surprising spaces below include wearables and psychedelics. Startups like oxfordvr hope to use virtual reality to help patients combat social anxiety. Others like mindbloom and field trip use a low dose of ketamine medication to treat depression. Venture funding towards mental health and wellness companies reached a record high in Q2’20 and the landscape continues to evolve rapidly.

Personally, I believe that a market leader will have the following attributes:

• A blended, holistic approach to tackling mental health. Simply focusing on in-person therapy through clinics may not be enough to further penetrate the mental health market. Add-ons like virtual therapy, and longer-term solutions that allow users to roll off from 1x1 therapy to casual approaches like workshops and self-serve programs, will be effective.
• Ability to scale and reach customers. While trendy and urban therapy providers like Octave and Two Chairs focus on in-person therapy, targeting millennials at $180 to $205 per session is a highly selective price point. Lowering the cost of providing therapy to have a sustainable and long-term relationship with customers as they evolve through the lifecycle will be important moving forward.
• Use research-backed approaches and effectively measure outcomes. Traditional therapy has lacked rigor in testing, measuring, and assessing the effectiveness of symptom relief over time. Providers that can point to data demonstrating their value will win over consumers, employers, therapists, and even potentially insurance companies.

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