Stephen Smith, NOCD, on creating a world where anyone can access effective OCD therapy

Alex Wess
The Pulse by Wharton Digital Health
7 min readFeb 28, 2022

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Stephen Smith, founder & CEO of NOCD

Our guest on this episode is Stephen Smith, CEO & Founder of NOCD, a digital health company delivering high-quality virtual care for patients with obsessive compulsive disorder, or OCD. NOCD performs over 140,000 virtual therapy sessions annually, and has established a community-driven model that connects patients around the world to peers and licensed therapists. Last year, NOCD raised a $33 million Series B round of funding led by F-Prime Capital and received their initial backing from 7wireVentures.

In this episode, Stephen and I discussed:

  • His own experience searching for diagnosis and treatment for obsessive compulsive disorder and how this led him to founding NOCD.
  • How NOCD cares for patients with OCD and connects to patients who have not yet been diagnosed.
  • Why focusing on the OCD population positions NOCD well to attract top therapists and move to value-based care.

Beginning to 11:17: Personal experience drives entrepreneurship

I wasn’t really looking to start a business…I was just really focused on solving a problem I personally faced, and that was obsessive compulsive disorder.

  • Obsessive compulsive disorder affects 1 in 40 people globally, is crippling in nature and, when untreated, makes patients 10 times more likely to commit suicide. Despite the disease’s severity and prevalence, societal stigma slows the rate of diagnosis.
  • While attending and playing football in college, Stephen began experiencing the taboo, intrusive thoughts that are characteristic in some forms of OCD. Before he was correctly diagnosed, he received treatment that worsened his symptoms and exacerbated his depression, eventually leading to him being housebound. After searching the internet for others experiencing his symptoms, he found a community of peers on Reddit describing a similar experience. This is where he learned that he may be suffering from OCD and could benefit from Exposure and Response Prevention therapy.

I didn’t feel comfortable describing [the thoughts] to people…but into Google, I would search about what was really going on.

  • With the financial support of a family member, Stephen began his therapy, gradually improved and returned to college to finish his degree. He reflected on the gaps in his diagnosis, the difficulties he still faced between therapy sessions and the potential for virtual care to address these issues, which promoted his founding of NOCD.

It’s not really a clinical issue, it’s an operational issue…if you could better identify people and manage them online, you could probably solve this issue…and bring that ERP clinic to them…and then between sessions they can get support in that same platform.

  • NOCD today covers 105M individuals who can access ERP therapy covered by commercial insurance, has decreased the time to clinical impact from 25 hours to 14 hours of therapy on average, and has developed an online community of patients with OCD to build connections and encourage newly-diagnosed patients to seek evidence-based treatment.

11:17 to 16:25: How NOCD pulls in undiagnosed patients and leverages partnerships to deliver the right treatment to the right patients

In many cases, this OCD community is considered the most treatable…given ERP’s efficacy…we’re focusing deeply on that treatable cohort so we can make a big impact.

  • Patients with OCD make up a significant percentage of the broader severe mental illness (SMI) community and often suffer from anxiety, depression and other behavioral health conditions that stem from the root cause.
  • By creating an online community of patients who generate content related to OCD, and by including content from opinion leaders in the behavioral health space, undiagnosed patients can find NOCD when they search the internet for answers to their symptoms. This virtual front door helps NOCD find the “OCD unaware” individuals.
  • NOCD partners with payers and managed behavioral health organizations, serving as the therapist network for those entities. They also partner with life sciences researchers to conduct recruitment for clinical trials for patients who are not eligible for ERP treatment.

16:25 to 24:52: On NOCD’s business model, their singular focus on virtual therapy for OCD and transition to value-based care.

It’s actually a very large impact on society we can make just by being focused and doing one thing exceptionally well, and our team rallies behind that mission.

  • NOCD’s virtual care platform has been effective in treating patients’ OCD and resulting comorbidities, and with so many patients who still need treatment around the world, the company has remained focused on the OCD community.
  • NOCD is currently a provider group billing utilization-based rates through their payer partners, but is in the process of building a risk-based revenue model.

If you treat OCD, the root problem, you often see anxiety, depression, stress [become less severe] as well….you then have people have transformations in their life that they never thought were possible.

  • They are bullish on a value-based care model because the OCD population is prevalent (1 in 40 people) and severe, but manageable. Their research has shown that for every 1M-person commercial population, $100M is spent on behavioral health costs due to untreated OCD.
  • While specialty care companies can have difficulty attributing medical cost reductions to the specific care they have delivered, the nature of OCD acting as a root cause for broader behavioral health costs positions NOCD well to assume risk for this population

Companies are going to take risk on behavioral health utilization in the behavioral health market. Even though there’s more cost associated with the medical side, it’s harder to attribute.

  • Stephen expects that companies will be more likely to take risk on behavioral health populations, because even though there are greater costs on the medical side, it may be easier to attribute cost savings for behavioral health patients with a clear root cause.

We could consider a behavioral therapy like ERP sometimes more effectively virtual than in-person…you can actually deliver the treatment in the environments where people are often most triggered.

  • NOCD’s model is entirely virtual. For some behavioral health conditions, virtual care can be even more effective than in-person care, because patients can receive treatment in the environments where their symptoms are most triggered. This builds on the difficulties Stephen initially had where his symptoms would be triggered between therapy sessions in environments outside of those he had received treatment.

24:52 to 29:56: Building a global provider network during a healthcare worker shortage and plans for growth

The therapists are going to go to the population that are the most severe when untreated and the most manageable when they can access evidence-based care….OCD is one of those verticals.

  • As the healthcare industry faces historic provider shortages in the workforce, NOCD predicts that therapists will go to the populations that are the most severe, yet manageable when treated. Therapists can have an immediate impact on these patients’ lives, which drives retention. Stephen expects that this impact will draw more clinicians to the behavioral health space and eventually solve the global mental health crisis.
  • NOCD’s virtual front door naturally reaches people all over the world. Growing internationally has been a methodical process as the company addresses specific compliance and regulatory challenges in each market, but NOCD is primarily focused on gaining further traction domestically.
  • NOCD raised a $33M Series B round in September 2021, and plans to use the funding to expand their community-driven model. They are also building out additional services, including telepsychiatry services and “NOCD intensive therapy” for members requiring higher-acuity care.

We’ll know we’ve solved this problem when people everywhere not only recognize OCD but understand it as well, and when anyone can access licensed therapists that specialize in ERP no matter where they live or how much money they make…we’re focused on using the capital to reach that end point.

  • They are also launching the KnowOCD campaign, which hopes to leverage the awareness of the term “OCD” to change society’s understanding of the condition.

22:52 to end: What Stephen and NOCD value when looking for talent.

We look for people who are member-first. There are many different stakeholders in healthcare…but the goal of those organizations is to serve people…we’re all in health care not only to do well and grow our careers but to help people…that’s a really important factor for our company.

  • Joining early-stage companies as an operator can help MBAs build valuable skills, solve complex problems, and build managerial skills in an intellectually and emotionally stimulating environment.
  • There are four things Stephen and NOCD look for when hiring MBAs:
  1. A sense of urgency: given the scale of the problem NOCD is trying to solve, this hustle is key and energizes the rest of the team.
  2. Egoless questioning: can you challenge the status quo in a way that helps the rest of the company learn more about an issue?
  3. Ownership: are you willing to take the autonomy to lead in the direction you see fit?
  4. Member-first: there are many different stakeholders in healthcare, but NOCD is hiring for those who do whatever possible to offer members an A+ experience.
  • To see roles NOCD is hiring for, check out their careers site here.

We are so appreciative to Stephen for joining us on this episode of The Pulse Podcast! Subscribe for our new releases on Twitter, Spotify or Apple podcasts.

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Alex Wess
The Pulse by Wharton Digital Health

Founding team member at Aligned Marketplace. Former co-host, Pulse Podcast by Wharton Digital Health. he/him.