There is an increasing demand for behavioral health services amid the pandemic (see When The Pandemic Ends, Then What? and U.N. Warns Of Global Mental Health Crisis Due To COVID-19 Pandemic). The Centers for Medicare and Medicaid Services responded by changing the rules for telehealth services (see CMS Expands Access To Telehealth Services During COVID-19, Raises Audio-Only Rates and Medicare COVID-19 Telehealth Rules, Regulations & Rates: An OPEN MINDS Market Intelligence Report). And the U.S. Food and Drug Administration responded by changing the requirements for getting behavioral health apps on the market (see FDA Guidelines Temporarily Expand Access To Low-Risk mHealth & Telemental Health Devices).
The results—investment in digital health overall, but digital behavioral health in particular, are off the charts (see 2020 Midyear Digital Health Market Update: Unprecedented Funding In An Unprecedented Time). In the first half of 2020, $588 million in funding was distributed to behavioral health tech companies, up from $539 million in 2019 (comparatively in 2017, $273 million was distributed). Interestingly, much of the funding was allocated to behavioral health organizations that provide either virtual platforms that facilitate remote treatment for acute care and chronic conditions, or “digital therapeutics” that provide consumers with clinical interventions.
Headspace, Mindstrong, and Lyra Health were top three in raising funding—which totaled 54% of the entire funding round. Headspace raised $140 million through two rounds of funding for its mental training and meditation app (see Meditation App Headspace Secures $47.7M More In Funding, Filing Shows). Mindstrong raised $100 million in Series C funding to expand its digital mental health platform for individuals with serious mental illness (see With An Ex-Uber Exec As Its New CEO, Digital Mental Health Service Mindstrong Raises $100 Million). And, Lyra Health raised $75 million in Series C funding for its virtual behavioral and mental health platform that connects employees to clinical professionals (see Mental Health Benefits Startup Lyra Health Raises $75M).
This continued high level of investment happened at the same time of several announcements of new arrangements between health plans and digital health companies. Topping the list was the announced purchase of AbleTo by Optum (see UnitedHealth’s Optum Is In Advanced Talks To Acquire Remote Mental Health Provider AbleTo For About $470 Million). Other new relationships announced in the first half of this year include:
- CVS Health Adds Five Digital Health Services To Point Solutions Management Platform
- Starbucks Selects Lyra To Provide Mental Health Services For Its Employees
- Cigna Adds Talkspace To Its Rapidly-Expanding Virtual Network
- Walgreens Teams Up With Microsoft To Launch ‘Health Corners’
- Kaiser Permanente Offers Members Free Access To Livongo’s Mental Health App
In case you missed it, these are some of the developments over the past few months in digital health care for consumers with chronic conditions.
- FDA Approves First Game-Based Prescription Digital Therapeutic For Children With ADHD
- Pear Therapeutics To Release PEAR-004 To Help Individuals With Schizophrenia During COVID-19 Crisis
- Pear Therapeutics Obtains FDA Authorization For Its Insomnia Therapeutic
- Health Management App Hello Heart Secures $12M Funding Round
- Hinge Health Closes $90 Million In Series C Funding
- Livongo & Dexcom Partner To Integrate Dexcom’s G6 Continuous Glucose Monitoring System Into Livongo’s Applied Health Signals Platform
- Livongo Integrates Access To Telehealth In Support Of People Living With Chronic Conditions
- Torchlight Offers ‘Caregiving In Times Of Crisis Toolkit’ For Businesses & Individuals Grappling With COVID-19
- Lyra Health Raises $75 Million In Latest Funding Round
- Meditation App Headspace Adds $48 Million In Funding
- Mindstrong Announces $100 Million Funding Round To Scale Its Virtual Mental Health Care & Digital Symptom Measurement Offering
What are the implications of more digital therapeutics entering the market? I think the widespread availability of digital behavioral health therapies will “remove” a whole group of consumers who have mild behavioral health and chronic medical conditions from face-to-face services. Those consumers can be effectively served with “digital packaging” of evidence-based practices. Provider organization management teams need to look at these digital technologies not just as a threat to their fee-for-service revenue. Instead, they should consider digital tools as a means for offering more competitive case rate and capitation rate services (like health homes, readmission prevention programs, bundled rates for a therapy, etc.). This means developing new service lines—new “hybrid” consumer service packages that integrate digital and face-to-face service delivery programs.
For more on digital, hybrid services, and new service line development, check out these resources in The OPEN MINDS Industry Library:
- Fire Up Your Hybrid For The Recovery Race
- Blended Virtual & Onsite Services For Continuity Of Care
- The Amazons Of Health Care
- When Chased By A Bear In The Woods…
- Moving & Improving Your Services To The Consumer In The Community
- Service Line Portfolio Management In Crisis Recovery Planning – Making The Tough Decisions
- Building A Value-Based Sustainability Strategy: How To Develop Innovative Programs & Manage Your Service Line Portfolio
- A Digital Leader Living In A Digital World
- Digital Transformations Demand Digital Dexterity
- Using Virtual Care To Improve Your Value Proposition: Best Practices In Integrating Technology Into Your Community-Based Program
And for more on virtual care, join us on August 26 at The 2020 OPEN MINDS Management Best Practices Institute for the session, Moving To Virtual Health: New Approaches For Consumer Scheduling To Accommodate Rapid Access For Care, led by OPEN MINDS Senior Associate Paul M. Duck.