Yury Yakubchyk, Elemy, on destigmatizing mental health to expand access to pediatric behavioral care

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Yury Yakubchyk, Founder & CEO of Elemy

In this episode, we connected with Yury Yakubchyk, the founder and CEO of Elemy. Elemy is an industry leading tech enabled provider of high quality pediatric behavioral care. Inspired by his own personal journey in overcoming childhood ADHD, Yury co-founded Elemy to repair the flawed model of care for childhood behavioral conditions such as autism. Under Yury’s leadership, Elemy has grown from 109 employees at the time of the company’s seed round to more than 1,000 employees at present. Today, the company is active in 14 states and is expanding its national reach. Yury graduated from Johns Hopkins University as a Woodrow Wilson Fellow.

Elemy raised $219M in their Series B funding round, catapulting the startup to unicorn status with a total valuation of $1.15B. SoftBank Vision Fund 2 led the round, with Goodwater Capital and Premji Invest co-leading. Amity Ventures, Avidity Partners, Chelsea Clinton’s Metrodora Ventures, Ashton Kutcher and Guy Oseary’s Sound Ventures, and Whale Rock Capital also contributed. Investors from earlier rounds, such as Bling Capital, Felicis Ventures, Founders Fund, General Catalyst, Headline, SignalFire, Bill Ackman’s TABLE Management and 8VC, all contributed.

We discussed:

• Inspired by the hustle of the informal economy of Queens, Yury co-founded two startups prior to Elemy. The common thread across all of his companies is solving a complex problem in an industry where consumers face many pain points.
• Elemy’s focus on caring for high acuity pediatric populations through a hybrid model of care run on an integrated software platform that coordinates caregivers physically visiting patients at home.
• The importance of destigmatizing mental health to accelerate the expansion of pediatric behavioral health services to more patients in need.

Start to 10:44: Harnessing influences from early life to drive Yury’s beginning in entrepreneurship

• An unlikely start in entrepreneurship: Yury is American, Canadian, and Belarusian. Born in Belarus, a member of the former Soviet Union, Yury moved to Canada before attending high school in Queens, NY. The dire economic heritage of the Soviet Union along with his parents’ traditional careers as doctors of medicine created a sharp contrast to the examples of entrepreneurship that Yury witnessed in Queens.
• Inspired by Queens, NY: While growing up in Queens, Yury was impressed by the diversity of informal enterprises he encountered. From corner deli shops to jewelers and financial lenders, Yury came to recognize starting his own business as a viable career option. However, he still harbored ideas of training for a career as a physician while at Johns Hopkins. It wasn’t until Yury was introduced to other successfully run family businesses in college that he began to contemplate founding his own business as a viable career path.
• On founding two companies concurrently: Right after graduating from college, Yury started Wing Wireless, a cellular phone service, with high school friends. While fine-tuning Wing’s business model, Yury co-founded Life House, a hotel operation and branding service. The common thesis connecting Yury’s initial startups are consumer-focused businesses targeting industries with historically low NPS scores and large total addressable markets. The pain points in these industries are something Yury and his co-founders have personally experienced. For example, the idea for Wing Wireless was born from a $3,000 bill Yury and his friends received in data roaming charges after a trip to Austria.
• Orienting principles: Three themes connect Yury’s startups: fixing an important experience for consumers, low NPS scores signaling dissatisfied customers, and a degree of complexity that makes the problem intellectually stimulating. Elemy originated from Yury’s own introspection about his experience growing up as a child who benefitted from pediatric behavioral therapy. Yury witnessed his parents struggle at times when navigating healthcare systems for children’s behavioral health treatments across three countries. His personal connection and the lack of major advancements in child behavioral health spurred Yury to develop a better solution.

10:44 to 29:33: Elemy and the push for increasing access in the pediatric behavioral health industry

• Addressing the technology gap to expand access: Before founding Elemy, Yury noticed that pediatric behavioral health solutions were focused on incubating new therapies that could bring higher clinical efficacy to treating childhood autism. However, Yury realized there was a lack of software infrastructure that connected viable therapies already on the market to patients. In addition, there was no accompanying AI that could automate scheduling and optimize pricing and match patients to treatments. Given his familiarity with building software platforms for prior startups, Yury decided to focus on creating an integrated software solution combined with a superior clinical offering to improve patient access and care.
• Developing a hybrid model of care for high acuity populations: Elemy’s care model includes virtually-administered care, but focuses on in-person care with their team of caregivers who physically visit the homes of patients to dispense treatments. Elemy services high acuity patients, and the type of treatment that is most clinically efficacious for this population must be facilitated in person. High acuity populations drive a majority of cost within the healthcare system, and not all of their care can be virtualized given the severity of the conditions being treated and the complexity of the treatments. Yury posits that telehealth is not a magical panacea to fill gaps in the American healthcare system. Instead, a hybrid model of care that provides necessary treatments in person is still an essential, and sometimes neglected, aspect of care innovation.

“I think telehealth is sadly not this wonderful sort of solution to all the healthcare problems in America… What we are really bullish on and excited about is what we call a hybrid approach to care, where you have some of the care that gets administered over telehealth and then actually a lot of the care, perhaps most of the care, still getting administered in person.”

• Alleviating the economic burden of care: Yury partners with payers to disseminate Elemy’s services to various populations. Given the high cost of care, insurance companies need to play a role in subsidizing this care. In addition to working with private insurers, Elemy also contracts with government-funded insurance programs such as Medicaid to ensure their services reach some of the most vulnerable and economically disadvantaged populations. Elemy keeps the cost of care low, from leveraging telehealth models where possible without compromising on clinical outcomes, and adopting software solutions that automate and optimize treatments.
• On measuring efficacy: Elemy tracks reductions in problem behaviors and increased new skills acquisition as key metrics of clinical effectiveness. An example of new skills acquisition is a child using the bathroom unsupervised, or eating a salad without parental assistance. These achievements are critical building blocks for children to progress in their development and are key indicators for more advanced achievements.
• On convincing insurers to cover Elemy’s services: Since Elemy elected to target payers, Yury needed to convince insurance companies that covering this historically neglected area of care was worth it. Part of their success in signing on insurers has been spurred on by the advent of regulation that expanded mandates for mental health parity across adult and child offerings. Within the pediatric behavioral health market, Elemy has positioned itself as the partner of choice for many insurers given its localized market knowledge and superior technology capabilities. Through its hybrid model, Elemy enables insurance companies to not only remain compliant with government regulations, but also lowers overall cost of care and improves long-term outcomes.
• On the pediatric behavioral health movement: Pediatric behavioral health has gained attention in part through the work of advocacy groups such as Autism Speaks, as well as communities and school districts engaged in grassroots mobilization. In addition, employers are increasingly seeking to provide childhood behavioral health services as generous benefits packages, specifically mental health coverage, become table stakes for employers looking to attract top talent. The need for childhood mental health services has been especially critical during COVID, as rates of behavioral health conditions have risen for this younger segment of the population.

Editor’s Note: The U.S. federal government provides insurance for eligible children through the Children’s Health Insurance Program (CHIP). This insurance program is intended to provide lower cost insurance to children whose families do not qualify for Medicaid, but many still find providing unsubsidized medical insurance coverage financially challenging. While ~54% of the American population in 2020 received employer-sponsored health insurance with coverage for children until the age of 26, children whose parents do not have employer-based insurance face a gap in coverage.

U.S. health insurance coverage for children differs from that of other developed Western countries. For example, in Germany, all citizens are covered under some form of health insurance. For the 88% of the population covered under sickness funds — pools of funding with employer and employee contributions — children and other dependents are covered for free. Private insurance covers the remainder of the childhood population. This trend of children accessing free or heavily subsidized healthcare coverage is consistent in France, Sweden, and many other Western countries.

29:33 — End: What’s next for Elemy and advice for entrepreneurs

• On what’s next after the Series B round: The initial goal for Elemy has been to figure out a way to solve the difficult problem of improving childhood behavioral health for a high acuity population. Moving forward, Elemy is working to develop a treatment-agnostic software platform that can support care for a variety of other health conditions. Elemy aims to leverage this platform to tackle other challenges beyond childhood autism.
• Stigma as a persistent challenge: Mental health has been stigmatized across many cultures for generations. Today, stigma against mental health conditions and patients seeking care for mental health remains. Combatting this stigma is a key driver for attracting more talent and funding for companies continuing to improve mental healthcare in the U.S. and other countries.
• On Elemy’s role in combating mental health stigma: Elemy works to reduce mental health stigma through a combination of government advocacy, educating the public, and collaborating with influencers. Elemy helps elected officials understand the importance of treating childhood behavioral health conditions early and the impact early diagnosis and treatment have on lowering overall healthcare costs. Elemy has also developed web-based content that helps families learn more about pediatric behavioral health conditions. Yury also works with celebrities such as Ashton Kutcher and Chelsea Clinton, both important advocates of Elemy, to amplify the importance of childhood mental healthcare to their audiences.
• On a selection criteria for investors: Yury intentionally curates a diverse spectrum of investors with varying opinions to guide Elemy. In shaping their Series B round, Yury and his team deliberately assembled investors from various backgrounds and perspectives. Unlike other startups who may prioritize investors with specific industry expertise, Yury’s main selection criteria aside from diversity is whether the investor is focused on mission over profit.

“If there was a filter for investors, it would be this: this just a thing about you making money as an investor? Or are you trying to change the world with us?”

• Advice for entrepreneurs at the start of their journey: Focus on action. Hypothesizing and conducting desk research has limited usefulness for early businesses. Ultimately, entrepreneurs need to interact with their consumers by testing concepts, products, and services in the market. Most likely, the first version of any idea will change as founders refine their understanding of product-market fit. The only way to find the right fit is to experiment with multiple ideas in a real world environment.
• Lessons from a serial entrepreneur: The key is resilience. Be prepared to face significant financial challenges and slow adoption in the process of finalizing the business model. Near-term success won’t always be clearly discernible, but determination and commitment to the business are necessary for success.

“Action is the main driver of your outcomes. So I would say, just get moving, get testing… there’s only so much you can research and pontificate about — get yourself out in the world!”