How Behavioral Health Startups and Payers Can Partner Successfully
Over the last five years, a plethora of mental health and substance abuse startups has skyrocketed. And rightly so- many of these solutions are finding ways to reduce the cost of care delivery, improve quality of care, reduce inappropriate healthcare service utilization, increase PCP usage, and increase staff capacity in an area where qualified professionals are few and far between.
However, digital health startups looking to partner with health plans and integrated health systems are notorious for experiencing long sales cycles, misaligned incentives, stiff competition and siloed solutions. Making matters worse, many payers still aren’t very sophisticated about implementing digital behavioral health tools yet. Behavioral health innovators must be prepared to offer considerable education for payers to adopt such offerings. Payers are complex organizations to navigate, and launching a new solution of any kind isn’t easy. This post is intended to equip both innovators and incumbents to partner in addressing our society’s most pressing behavioral health issues.
Now, payers have moved from “it matters” to “now what do we do?!” with many still struggling with the best course of action. Payers are recognizing the value that frontier technologies and startups with new care delivery models can make on their businesses, such as:
· The ability to improve patient outcomes via tech-enabled delivery of evidence-based practices
· Access to local and regional mental health care professionals and delivery networks employed by the behavioral health startups
· Reduced cost of care delivery through AI, machine learning, chatbots and other automation tools
· The right solutions to continue adding value to members at any acuity or stage of care
· Enhanced data, analytics and care coordination from their existing health IT tools
· Overall more consumer-friendly experiences
Too much of what payers are adopting today are made up of one-size-fits-all models. Especially when it comes to behavioral health, payers need to offer condition-specific solutions and provider networks for a wide variety of mental health and substance use issues. Today, you can find a huge list of professionals listed on their provider network portals, most of whom appear as experts in many or all behavioral health conditions. Adding more specialty areas to their profiles will get them more referrals, after all. But this comes with several issues:
· Of course, not all behavioral health professionals are experts in each and every behavioral health condition. Behavioral health is an umbrella term for many specific conditions, each with their own evidence-based treatment modalities. Providers with such experience in certain specialty areas may be few and far between in many parts of the country
· Payers have very little ability to actually determine who’s really good at treating what types of members
· Payers cannot verify whether or not these providers are using evidence-based practices
· Historically, these networks have been built to meet employer/Medicaid geography and credentialing requirements, and as a result, keeps them stuck in the old ways of doing things
Instead of treating behavioral health as one homogenous disease state, payers need the tools to support the many diverse subsets of behavioral health. There is an opportunity for payers to adopt new tools which more accurately look at behavioral health as the wide umbrella that it is, offering condition-specific solutions that match up with condition-specific provider networks. One such solution is NOCD, a startup aimed at helping people treat obsessive-compulsive disorder. NOCD has developed a platform that helps people with OCD get evidence-based care and community support. In 2019, it will release a service integrating in-app, OCD-specific telecoaching and an OCD-specific provider network.
Tech startups can enable a future where payer networks can transform from local, multi-specialty providers to national, tech-enabled providers with the ability to deploy local, high-touch clinicians within their own specialized delivery systems. With better technology and analytics, payers will also be in a position to operate their own provider clinics. The opportunity is further supported by new payment models offered through CMS, including new Remote Patient Monitoring (RPM) codes and proposed expansion on current substance use telehealth coverage.
To capitalize on these opportunities, it is critical for internal and external stakeholders to navigate complex payer organizations, especially as it relates to partnering with startups.
Clearly, both parties want to go to the dance, but will they ever connect?! Below, I’ll outline three key areas to keep in mind when partnering with an integrated health system: the Prep, the Pitch and the Plan, and accompanying tips for each.
How does one start a conversation with a payer? Early-stage entrepreneurs can get a head start navigating their prospective payer partners through these steps:
1. Where to look: When it comes to partnering with certain departments within a payer organization, you may be tempted to focus on the Innovation department exclusively. Innovation departments are important partners for startups, oftentimes greatly helping the startup navigate to the correct department internally. But beware, they don’t typically have their own P&L, so you may find yourself in Free Pilot Land indefinitely. If they’re a tech-enabled provider, plan to approach clinical and provider network leadership. Expect to contract with behavioral health specialty companies, or the behavioral health specialty business units within the integrated payer systems. Sometimes a connection through non-traditional paths will get you to the right department, e.g. sales team members who are sympathetic to your cause. But sooner than later, identify the right person who can make decisions and write checks.
2. Understand your market, solution and impact better than anyone else. This includes the ability to communicate each of these clearly and succinctly to the person in leadership who actually has your pain point. What motivation does this specific payer department leader have to pick up the phone? Just because you are saving dollars in the overall healthcare system doesn’t necessarily mean it hits this individual’s bottom line.
3. Consider smaller organizations first. These smaller payers want to offer competitive offerings and may not already have a solution in place. The smaller organizations with smaller executive teams may be far more nimble than an organization like Kaiser or Mt Sinai. Consider starting with one of these first and get your proof of concept up and running there initially.
4. Consider getting outside support. Remember, payers are complex organizations. There are a number of healthcare accelerators who have existing relationships with many healthcare organizations. These organizations can provide seed funding, coaching and connections to health systems to shorten the sales cycle. There are also consultants focused on this very activity to help startups partner with large healthcare organizations, so you may consider adding one to your list of resources to leverage. While advisors, board members, and other entrepreneurs can make a huge difference, someone like a dedicated, vetted consultant with a strong track record can help save startups months if not years by making outside connections very quickly. Make sure to do your research and get plenty of references if you decide to bring someone in from the outside. A great consultant can make a huge positive difference, while a bad consultant can shave months or years off your runway with no results. That being said, start-ups that want to partner with payers need to budget for consultants that understand the payer space and can open doors, help align business models, and help a start-up prepare to meet managed care compliance, revenue cycle management, credentialing, contracting, and other operational requirements. One recommendation I would like to make in this category includes my co-author of the ReThink Behavioral Health Innovation newsletter, Dr. Steve Ramsland of Catalyst Health Resources.
5. Identify the key person who will drive your startup forward internally. It is best practice to identify an internal champion at your payer prospect to help move your startup forward within their organization. If your champion isn’t willing to give you what you need to be successful (e.g. certain claims data, information for integration, etc), then they aren’t your champion. How do you find a champion? Leverage advisors, board members and other digital health entrepreneurs in your network to introduce you to payers of interest.
6. Know how decisions get made. Ask your champion what their typical process is for working with organizations like yours. This will allow you to be in a better position to keep the conversation moving while foreseeing what roadblocks down the road should be addressed quickly. Sometimes the smallest hiccup can kill an entire deal, so be sure to stay close to the process all throughout.
7. Engage decision makers and influential non-decision makers alike through the entire process. Make sure there is alignment among executive, clinical, or any other type of leadership critical to the implementation and adoption of your solution throughout the procurement and implementation process. This is one area of many I learned the hard way when launching my own mental health tech startup. While staying focused on the checkwriter is critical, it’s also important to know who else may propel or block your deal.
Once various preparations have been made about your specific solution and what payer may be a good fit, it’s time to dig into how you’ll position your offering with the payer and where your each parties’ assets and gaps are in the partnership.
Taking the time for internal evaluation while assessing fit on both sides is time-consuming, but will save tons of time and resources down the road. Here is a high-level list for what startups should review before charging forth with a partnership with a payer organization:
1. Know what specialty offerings the payer already offers their member base. Most health plans and employers have some sort of patient engagement and/or behavioral health solution in place. Many aren’t great. They may keep these subpar solutions in their portfolio for unseen reasons. Know what they are and where you stand in relation to these existing solutions.
2. Understand where behavioral health sits in the payer’s ecosystem. While we are slowly but surely moving to a world of integrated care, behavioral and physical health are still commonly on different legacy claims engines within a payer system. Visibility between the two (or three, if you consider in Medicaid, which is typically on different claims platforms than commercial), integration is difficult, and P&L incentives are not always aligned. So, a behavioral health start-up that wants to market to managed care (payers) needs to understand what entity is managing what behavioral health benefits, for what membership types, and how. More opportunities tend to exist in more fully integrated payers than with payers who manage only the behavioral health benefit dollars.
3. Think through your approach to data. How will the appropriate data flow to and from your partner? This could include anything from sharing a basic CSV file all the way to building a custom interface. Many large organizations have their own analysts and epidemiologists on staff and want to slice and dice the data they receive from your tool themselves. This requires their access to said data, and in a format which they can receive it. Make sure you think through what gets sent and received from whom.
4. Evaluate your strengths vs what the payer can bring for the most fruitful partnership. Can you bring a large audience of members that are already engaged on your platform? Do you have a trusting relationship with complex patients already that the payer was struggling to connect with? Can you engage patients that are further upstream the acuity level than where the payer is currently focused AND build a business case for doing so? Determine the highest impact you can make for your partners through early discovery conversations while also getting a sense of the capabilities and resources they can bring to the table. Payers have subject matter expertise, access to members, access to data, and can help you navigate their organizations. Part of the initial evaluation also means becoming acquainted with what they cannot or will not do for you. Early stage startups pitching a pilot that includes access to all of a payer’s proprietary claims data are in for an upstream battle.
5. Know your outcomes, now and in the future. Payers are becoming more and more sophisticated in seeking out solutions with the most evidence-based underlying science. Discuss any initial outcomes from earlier studies you may have, but also talk through your plans about continued validation. If you only have one study with a population size of X that you conducted early on in your startup’s life and have no plans to repeat those studies with a broader audience or after evolving your solution, others will take notice. For first-time pilots, some payers may be more inclined to see how well you will integrate with them as opposed to putting a heavy emphasis on your solution’s outcomes thus far. Regardless, it’s important to know what your plans are to get to a place of validity and credibility.
6. Be realistic about what your capabilities truly are, especially with the most complex patients. For certain audiences, sometimes tech isn’t the answer. Oftentimes, some individuals want and need a high-touch solution, (read: real people, often face-to-face. Always expensive). Many people are looking for a tech solution for an adaptive issue, and one that can seamlessly address everything: access, cost, outcomes, etc. It’s about funneling the right care, to the right patient, at the right time. Sometimes that means taking it one step at a time and honing in on one behavioral health issue and acuity level specifically before boiling the ocean.
Once you have a solid understanding of your existing capabilities and those of your prospective partner, it’s time to start exploring an actual partnership. While there are many ways structure a partnership and this post won’t cover various deal arrangements, we will cover some common themes which impact behavioral health and human service startups in particular.
After speaking with many early and late-stage behavioral health startups and payers alike, I’ve come to the conclusion that the most successful partnerships happen when both parties can co-develop the ultimate solutions together, early on in the relationship.
When it comes to payers moving toward a world of more evidence-based, tech-enabled behavioral health solutions, oftentimes they are tasked with building the plane while they’re flying it. They are still committed to the old case management and utilization approaches to payment models and analytics while at the same time, trying to research and implement new models and supporting technologies. This also poses an opportunity for startups to discover and develop meaningful models together while being sensitive to the existing constraints payers face.
1. Business models should align with incentives. It sounds simple, but it’s worth saying again: healthcare is unlike any other industry, and at the end of the day, the economics of the behavioral health startup needs to make sense for all parties in the value chain. Startups which familiarize themselves with the current state of reimbursement for their solutions broadly, as well as the payment paradigms their specific payer prospect is working within, will gain an edge for when they start thinking through their contract model. If you can help determine where the payer needs specific cost reduction and containment, together you can support a shift in the organization’s view, priorities and resource allocation.
2. Thoughtfulness required for integration: technically, operationally, and clinically. When it comes to siloed mental health solutions, they may offer a cutting-edge, evidence-based tool with an excellent UI, but they’ll likely die a slow death if they are not integrated within care delivery of the payer partner. Tools are only as good as they are integrated into the right systems, and that means entrepreneurs ought to think carefully about how their solutions will fit in seamlessly within the payer’s existing systems and workflows. As mentioned earlier, some payers will place a heavier emphasis on the thoughtfulness around integration than on initial outcomes, especially for first-time pilots.
3. Implementation as a process. Once again, it’s critical to have the commitment from leadership and bottom-up champions alike. This will make the implementation of the new solution all the more seamless. Plan to start small, think through the internal marketing that will need to take place and include sufficient onsite-training. Incorporate feedback into timely customizations and allow flexibility throughout the process. Do not underestimate the necessary training and ongoing support for all levels of staff and users. Think creatively about which staff are best positioned to engage patients and champion the intervention in the pilot/early implementation. Hint: it’s not physicians. When it comes to engaging patients and/or members, consider how you will gain their trust and adoption together with your partner. Oftentimes this can be the most challenging part.
In conclusion, all of the simple, low-hanging fruit tools and technologies have been tried. Payers desire novel, evidence-based solutions that can address our growing behavioral health crises, and they need it now more than ever. At the same time, working with payers requires endless navigation of matrix settings to get the right people at the table. Once there, behavioral health startups and payers need to bring their combined knowledge, sponsorship and resources to develop and progress new projects together. While the prospect of getting a new behavioral health solution up and running may seem like a herculean effort, the impact that the end result can make on each and every community in the country is momentous. With the right people at the table and a laser-focus on the clinical and financial impacts the partnership will make, there is a lot of promise for novel behavioral health solutions to transform care delivery and patient outcomes in the near future.
Solome Tibebu is a healthcare investor and former mental health tech startup founder who is passionate about frontier technologies transforming digital health, integrated care, behavioral health and more. She’s excited about new innovations creating an equitable environment for mental wellness, care coordination, and creating material change for some of our world’s most challenging healthcare issues. Her work as an investor, entrepreneur and health and human service technology expert has been featured in The Huffington Post, Forbes, TEDx, Inc Magazine, Upworthy, Psychology Today and more.
Contributors: Thank you to all of the mentors and friends for your many coffees and phone calls to make this post possible: Devan Cross, President, MHN (Centene); Moses Ike, Director, Investments and Corporate Development, Blue Shield of California; Dr. Reena Pande, M.D., Chief Medical Officer, AbleTo; Dr. Clare Purvis, PsyD, Healthcare Design Fellow at Stanford Clinical Excellence Research Center and Founder of WELL; Dr. Steve Ramsland, Ed.D., CEO, Catalyst Health Resources; Dr. Dylan Ross, Ph.D., Director of Behavioral Health Clinical Products, Optum Behavioral Health; Stephen Smith, CEO, NOCD; Jeremiah Stone, Chief Technology Officer, Catasys; Lisa Suennen, Founder, Venture Valkyrie ; Matt Wallaert, Chief Behavioral Officer, Clover Health.