Lessons from Christopher Molaro, CEO and co-founder of NeuroFlow on enhancing integrated behavioral healthcare

Christopher Molaro, CEO and co-founder of NeuroFlow, an organization that promotes behavioral health access and engagement in all care settings to improve outcomes and wellness

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Welcome back to the Pear Healthcare Playbook! Every week, we’ll be getting to know trailblazing healthcare leaders and dive into building a digital health business from 0 to 1.

Today, we’re excited to get to know Christopher Molaro. Chris is a West Point graduate who served in the U.S. Army for five years, including a tour in Iraq as a platoon leader. Coming back home, he experienced firsthand the gaps in the behavioral health system and how veterans and civilians alike face too many barriers when it comes to receiving appropriate, timely care.

While pursuing his MBA at Wharton, Chris met his future co-founder Adam Pardes, and the two agreed–even the most engaging digital mental health apps in the world wouldn’t truly change the problem until the care providers were a part of the solution in a meaningful way. And so they created NeuroFlow.

In this episode, Chris and I discuss his journey from a military background to enrolling in Wharton’s MBA program. We dive into the inception of NeuroFlow, its go-to-market strategy, partnerships, fundraising insights, the future of NeuroFlow, and the valuable advice he has for aspiring founders.

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From Serving the Nation To Chris’s Wharton Education

• Chris didn’t grow up in a military family, but certain pivotal moments steered him towards a military career. One of these moments occurred when he was just 13 years old, witnessing the tragic events of 9/11.
• Living in close proximity to the site and having classmates who lost parents in the towers, this experience ignited a deep sense of patriotism and a profound desire to contribute to a greater cause. It marked the genesis of his belief that life had a higher purpose beyond mere job pursuits and financial gains.
• Coming from a humble background where paying for college was financially challenging, the military offered Chris a way to obtain higher education without incurring debt while gaining valuable experiences in leadership, problem-solving, and camaraderie.
• Despite his deep appreciation for the military, Chris and his fiancée decided it was time to write the next chapter of their lives.

“The advice I received from my general officers was, ‘Don’t run away from something, always run towards something.’”

• He took this advice to heart, committing himself wholeheartedly to the U.S. Army, ensuring that he gave his very best to the soldiers under his command — soldiers who undoubtedly deserved nothing less.
• However, when the opportunity to attend Wharton presented itself, it was an exciting prospect that he eagerly ran toward. The transition out of the military, although rewarding, was one of the most challenging experiences he had ever faced. Even to this day, Chris admits to missing the sense of belonging to something greater than oneself, surrounded by comrades who would willingly lay down their lives for one another.
• This profound military experience significantly influenced Chris’s aspirations during and after business school. He was steadfast in his desire to continue serving in some capacity, which led Chris to starting NeuroFlow.

“At NeuroFlow, we are a for-profit company that aims to build a successful business. But, we also strongly believe in making a positive impact and helping people, which is why it is truly amazing to be here.”

Starting NeuroFlow

• In a “Business of Healthcare” class, Chris met Adam Pardes, a PhD engineering student, and they decided to enter a business plan competition. They got energized about the idea of creating something from nothing and they also identified a significant gap in addressing mental health, particularly in the context of veterans’ needs. In 2016, an alarming statistic of 22 veterans committing suicide daily underscored the urgency of the issue (source).
• Chris and Adam’s journey in mental health started with more questions than answers. They approached problem-solving with an innate curiosity, determined to address the pervasive issue in the gaps of mental healthcare. Their anchor point was always the vast number of people suffering from anxiety and depression.
• While anxiety and depression affect a significant number of individuals, the availability of clinicians often falls short of meeting the demand. This inherent supply-demand imbalance is precisely why NeuroFlow positioned themselves as a technology-driven company, aiming to provide software support for clinicians.

“The initial version of the product primarily focused on measuring the physiological aspects that correlated with depression and anxiety. This was achieved by monitoring sweat levels, brainwaves, and heart rate. It worked exceptionally well, and we even published our findings and had clinicians using it. However, we encountered the challenge of not having a scalable business model for this approach.”

• NeuroFlow adapted and began to utilize data and AI to stratify individuals by risk, matching the acuity of the individual to the appropriate level of care. This approach aimed to maximize the efficiency of existing resources, flagging the most critical cases to psychiatrists, high-risk individuals to therapists, and milder cases to self-service applications and tools.

• Their innovative approach gained traction, leading to partnerships with therapy providers like Brightside Health, Marvin, Bicycle Health, AbleTo, and others and adoption from major health systems (Jefferson Health, Emory Healthcare, Atlantic Health) plans and payors (Magellan Health, Prudential) and the Military (The VA, USNA, and Air Force).
• Initially, they relied on data generated within their system, including patient-reported outcomes and engagement platform interactions. As they expanded to work with major health systems, integration into existing workflows and systems including EHRs became paramount.

NeuroFlow’s Go to Market Strategy

• NeuroFlow pursued a dual-track approach in its go-to-market strategy to ensure that neither research nor adoption acted as obstacles to each other. The company’s workflow tools aimed to leverage existing evidence-based practices, enhancing scalability and measurability within healthcare workflows.
• While some aspects, such as the integration of physical attributes like heart rate and brainwaves, required new studies, others, like standard PHQ-9 or GAD-7 assessments, were digitized without the need for fresh research, given their established effectiveness.
• The company’s initial target audience was not the larger health systems and hospitals. Instead, they directed their efforts towards smaller, independent private practices, where they could engage directly with leadership, including chief medical officers, chief financial officers, and practice owners. This approach allowed for quick decision-making and rapid adoption.
• A significant turning point occurred in 2018 when CMS unbundled collaborative, integrated care codes, enabling reimbursement for medical doctors, including those not specializing in mental health, to integrate mental health services into their clinics.

Source

• NeuroFlow seized this opportunity by approaching pain clinics and highlighting the high prevalence of mental health issues among their patients. The promise of better patient care, holistic treatment, and potential reimbursements ranging from $70 to $80 per patient per month piqued the interest of healthcare providers and resonated with their patients.
• Consequently, NeuroFlow embarked on a three-month trial with a pain clinic to demonstrate the effectiveness of their solution and its reimbursement capabilities. This trial culminated in the signing of their first contract, worth $100,000 annually, a remarkable improvement compared to their previous per month subscriptions.
• This success paved the way for NeuroFlow to focus on integrating mental health into all medical settings, using data and outcomes from these collaborations to approach larger institutions.
• Jefferson Health, in particular, expressed interest after reading about NeuroFlow’s accomplishments in the Philadelphia Inquirer and became the organization’s first hospital client.

“The opportunity lies in the fact that mental health affects every other medical specialty. Our journey began by focusing on pain clinics and OB-GYN practices, and from there, we extended our reach to encompass primary care, oncology, and various other fields. Our presence extends to supporting healthcare practices wherever there is a need. NeuroFlow’s overarching mission now revolves around bridging the divide between physical and mental health.”

How NeuroFlow Helps Providers and Patients

• In the conventional healthcare approach, when a patient visits their primary care office for their annual wellness visit, the provider typically asks questions about the patient’s well-being. These questions may revolve around the patient’s sleep patterns, alcohol consumption, feelings of depression, or loneliness.
• Depending on the practice, these inquiries might be posed verbally or provided in paper-and-pen format. These are known as validated assessments, such as the PHQ-9 for depression, the GAD-7 for anxiety, or the AUDIT for alcohol consumption, among others. The responses to these assessments are then recorded in the patient’s electronic health record (EHR).
• However, in many cases, not much further action is taken with this information. Sometimes, the provider merely notes the data in the patient’s record and may inform them that they could benefit from therapy based on binary categorizations like “positive” or “negative” on the PHQ-9.
• They might give the patient a referral card with therapist contact information, and the patient leaves the office. Subsequently, the provider often remains unaware of whether the patient actually follows through with the referral.

“We know that, just by looking at claims data, a significant percentage of individuals referred to mental health services never actually follow through. A lot of these assessments are collected manually, which can be time-consuming and only reflect the individual’s emotional state at the moment of their in-office visit.”

• This is where NeuroFlow steps in, transforming and digitizing the entire assessment process. Instead of gathering these assessments solely during office visits, NeuroFlow enables providers to collect them outside of appointments, offering a more comprehensive, longitudinal perspective on the patient’s mental health.
• Whether it’s freeform text from patient notes, journal entries within NeuroFlow , or cognitive behavioral therapy exercises, the clinical platform employs natural language processing algorithms to identify individuals at risk of self-harm or suicide, among other concerns. This comprehensive approach extends to wearables, which monitor exercise and activity levels, an essential aspect of mental health assessment.
• All of this data feeds into a triage engine to enhance care management
• Beyond assessments, NeuroFlow also gathers additional data to help risk-stratify patients who may require support. This support could range from digital tools for those who don’t need therapy to referrals to psychiatrists for those who do. Importantly, NeuroFlow ensures follow-up to confirm that patients actually engage with the recommended services, effectively bridging the gap in care.

• All this valuable data seamlessly integrates back into the EHR, allowing primary care providers to bill for these services in a fee-for-service model or enhance value-based care by reducing overall healthcare costs.
• NeuroFlow’s approach is highly flexible and adaptable to patient preferences. They recognize that not every patient prefers using apps. Instead, they term their offering as an “engagement platform” available as an app, web-based tool, or even through SMS texts.
• This multi-channel engagement approach ensures that NeuroFlow meets patients where they are comfortable.
• Additionally, they have incorporated insights from Penn’s Nudge Unit, leveraging behavioral economics to encourage positive behavior changes. Patients are incentivized through rewards, such as gift cards, for engaging in health-related activities, further enhancing NeuroFlow’s algorithms and driving positive outcomes.

Link

• https://youtu.be/k98DpfwqbHY?si=51ea6PqS3Q7_HNd8
• NeuroFlow offers Response Services, a team staffed by coordinators experienced and trained in crisis response. They contact individuals at the first signs of crisis, providing compassionate support and referring them to the appropriate level of care. This video shares one patient’s life-saving experience with Response Services, provided through Atlantic Health System.

Success of NeuroFlow

• Building upon established practices rather than reinventing them, NeuroFlow optimizes clinical processes from a workflow perspective, making them more manageable for providers and easily scalable.
• The resulting outcomes have been nothing short of remarkable. A study conducted in partnership with Jefferson demonstrated a 34% reduction in emergency department utilization among clinics employing NeuroFlow compared to those that did not (source).
• Similarly, in a case study with Prudential, NeuroFlow identified previously unidentified mental wellness needs in 19% of claimants on disability (source).
• These achievements underscore the potency of effectively implementing evidence-based practices in a scalable manner.
• Presently, NeuroFlow serves a national audience spanning all 50 states, partnering with organizations with 16 million individuals who have access to the platform. Partnerships with health systems, health insurance companies, and the federal government, including the VA health system, further illustrate NeuroFlow’s expansive reach and commitment to enhancing mental healthcare delivery.

Partnering with the VA and the Department of Defense

• When it comes to forming partnerships with the VA (Department of Veterans Affairs) and the Department of Defense (DoD), it’s essential to recognize that these two entities, although serving similar populations, operate as distinct entities with their unique systems, leadership structures, budgets, and cultures. They essentially represent separate customers within the federal government.
• The key to understanding and successfully navigating these partnerships lies in simplifying the process. Both the VA and DoD can be viewed as integrated delivery networks, with the VA functioning as both payer and provider on a large scale.
• While the emphasis on mental health needs may be higher within these organizations due to their patient demographics, the fundamental workflow challenges remain largely similar to those in civilian healthcare settings. Comorbid physical conditions, chronic illnesses, and an aging population all contribute to a shared set of clinical challenges.
• The primary divergence arises in how they handle payment and contracting. Unlocking the ability to work effectively with these organizations involves understanding the nuances of their financial and contractual procedures.
• Having a background within this world, Chris felt comfortable engaging with the leadership of these entities, including high-ranking military officials.
• Their approach to partnering and selling into these organizations has been a combination of top-down and bottom-up strategies.

“We initially engaged with individual bases within the DoD and sold into those bases. Eventually we built critical mass, and this caught the attention of leadership within these military organizations.”

• In essence, the path to partnering with the VA and DoD involves both grassroots efforts, targeting specific bases and clinics, and a later-stage engagement with leadership once critical mass and success have been achieved at the ground level. This approach has been instrumental in establishing and expanding NeuroFlow’s presence within these significant government entities, leading to multiple partnerships across various branches and institutions.

Raising Early Funds for NeuroFlow

• In the early stages of fundraising for NeuroFlow, Chris and Adam sought non-dilutive funding sources. Building momentum and validation before diving into equity or debt fundraising can be a game-changer.
• As students, they leveraged numerous free resources available to them, including participating in business plan competitions such as the Wharton Startup Challenge and the Inquirer Stellar StartUp. These efforts yielded approximately $150,000 in cash, which covered everything from building prototypes to attending crucial conferences for customer discovery.
• NeuroFlow also secured a $250,000 grant from the National Science Foundation. With this foundation in place, Chris and Adam embarked on the fundraising journey during the second year of business school.

“I remember this vividly. It was me, Adam, and three interns working with us. As their graduation approached, we asked them not to get traditional jobs but instead offered them full-time positions within our company. However — we wouldn’t have the means to compensate them until the end of the summer, which is when we planned to close our round. Thankfully it all worked out.”

• For the fundraising process, NeuroFlow engaged with a total of 141 investors, each with their unique reasons for declining the pitch. Some believed it was too early, while others questioned customer traction or the approach. Through each rejection, they learned and adapted the pitch accordingly.
• Finally, NeuroFlow secured an anchor investor who not only believed in their vision but also led the seed round. Interestingly, some of the investors who initially said no eventually came on board. NeuroFlow successfully raised $1.25 million, put forth by Ben Franklin Technology Partners, Safeguard Scientifics and IBX’s parent company, IHG.

“What we really wanted to show with our seed funding was if we could effectively execute on the plan we had and gain the traction we did, which bought us enough time to make that pivot to the pain clinic. We secured a $100,000 contract, and another one was in the pipeline, providing us with the momentum to approach series A investors.”

• Series A investors added fuel to the growth, enabling NeuroFlow to expand into other health care clinics. Throughout their fundraising journey, from seed to Series C, they realized that investors often have varying expectations for a company’s maturity. This aligns with the company’s growth trajectory, from a small team with an idea to a scaled organization with hundreds of clients and dedicated departments.
• Investors also bring diverse support based on their expertise and networks. While the seed round comprised angel investors who offered invaluable support, the Series B and C investors, such as HLM Venture Partners, Concord Health Partners, and SEMCAP, brought extensive healthcare expertise. Their involvement transcended mere capital injection; they became true partners, offering guidance, networks, and industry insights. This symbiotic relationship played a pivotal role in NeuroFlow’s journey to success.

Future of NeuroFlow

• NeuroFlow’s future vision involves a strong emphasis on deepening data analytics and integration capabilities. The company has already integrated into major EHR systems such as athenahealth and Epic, as well as claims data, but recognizes the challenge of scaling these integrations efficiently.
• NeuroFlow aims to explore various strategies, including partnerships and the standardization of open APIs, to streamline integration processes and reduce adoption barriers.
• Additionally, the company plans to enhance its data science capabilities, with ongoing research focusing on natural language processing algorithms for identifying suicide risk.
• NeuroFlow’s growth mindset drives a constant learning and evolution process, necessitating the hiring of more experienced professionals to navigate the evolving landscape of healthcare technology..
• NeuroFlow seeks to address the challenge of improving access to care and ensuring the right individuals receive appropriate treatment. While teletherapy and telepsychiatry companies play crucial roles, NeuroFlow’s unique focus lies in enabling people to access behavioral health services and identifying those who would benefit from them.

Advice for Founders

1. Maintain an Unwavering Curiosity: Never lose your sense of curiosity. Entrepreneurship can be challenging, and you might face long days, even longer weeks, and contend with the occasional bout of impostor syndrome. However, if you stay curious and keep asking questions, you’ll eventually uncover the solution. The key is to persevere and keep searching for that “soft spot.”
2. Embrace the Rollercoaster Ride: Understand that the entrepreneurial journey doesn’t get easier; it evolves. The challenges a founder faces change as the company grows. Back in the day, it might have been all about landing the first customer, but now, with more customers comes more complex problems and higher stakes. Don’t embark on this journey seeking a quick path to wealth; do it because you’re passionate about solving a problem and building something meaningful. Prepare yourself mentally for the highs and lows.
3. Be a continuous learner: Cultivate a mindset of constant improvement and adaptability. A book that has been instrumental in Chris’s entrepreneurial journey is “The Hard Thing About Hard Things” by Ben Horowitz. It offers valuable insights and resonates deeply with the challenges of entrepreneurship. Remember, everyone has ideas, but the ability to execute sets you apart. Stay anchored in the quest for growth, learning, and adaptation.

Interested in NeuroFlow or joining their team? Learn more on their website, Twitter, and LinkedIn

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