While COVID-19 is never far from the minds of most Americans, a parallel public health crisis is brewing that is less visible, but no less dangerous: a behavioral health epidemic. Social isolation, daily doses of panic, widespread unemployment, and the loss of loved ones are exacerbating preexisting behavioral health conditions and creating new ones. As such, nearly half of adult Americans have reported that the pandemic has worsened their mental health. Alongside the hundreds of thousands of COVID-19 deaths, a second wave of loss driven by “deaths of despair” is imminent. As many as 75,000 more lives could be lost due to behavioral health related substance abuse and suicide.

Unfortunately, the crisis has struck a healthcare system already plagued by structural barriers that inhibit access to behavioral health treatment. The industry suffers from a shortage of qualified behavioral health clinicians, who are concentrated in a handful of states and metropolitan areas. As a result, in-network treatment options are scarce and behavioral health services are five times more likely to occur out-of-network. Furthermore, consumers who do receive treatment often face harmful social stigma, making them more likely to miss appointments. For these reasons, behavioral health only accounts for about 3% of health care spending, despite legislative efforts to mandate behavioral and physical health parity and evidence demonstrating that untreated behavioral health conditions strongly correlate with other costly health issues.

Yet while there is certainly cause for concern, there too is reason for hope. Despite exacerbating our country’s existing behavioral health crisis, the pandemic has exposed the true scale of the problem and forced us as a society to confront the issue head-on.

Digital Health Provides Consumers with a Lifeline

As healthcare investors, we at 7wireVentures firmly believe that digital health solutions have an important role to play in responding to the behavioral health crisis. Digital health technologies expand access to care by meeting consumers where they are and enabling 24/7 location-independent access to high quality, lower cost services, often in a confidential and stigma-free way. Technology also enhances the quality of care, as solutions can leverage data to deliver highly personalized treatment, track digital biomarkers, optimize the critical match between provider and patient, and increase the support offered to users.

While digital health companies addressing the spectrum of behavioral health concerns have been in market for some time, consumer utilization has historically been lackluster. Yet the unanticipated stressors caused by COVID-19 have propelled consumer utilization forward, as individuals seek digital lifelines to address their behavioral health needs. It is encouraging to see that consumers trying virtual care for the first time are describing overwhelmingly positive experiences.

As a result, companies in the market are now reporting steep increases in demand and attracting the attention of investors. One example is Mindstrong, a company developing new virtual care models for individuals with severe mental health disorders, securing $100M of funding from venture firms such as General Catalyst and Optum Ventures. In addition to virtual therapy, the company measures digital biomarkers by tracking smartphone inputs to quantitatively assess cognitive function and clinical symptoms, and alerts a remote care team if mental health signals deteriorate. Such biomarkers collected by Mindstrong and other passive emotional monitoring solutions hold the potential to provide insights that may be complementary or even superior to the signals collected in traditional diagnostic settings

Another example is NOCD, a 7wireVentures portfolio company specializing in treating obsessive-compulsive disorder (OCD). The company has reported a near doubling of therapy sessions, partly attributable to COVID-19. NOCD partners with healthcare payers to provide specialty telemedicine visits, as well as always-on support via peer communities and self-help tools. To provide plan members with a full-spectrum of digital behavioral health solutions, payers like Cigna are now partnering with specialty solutions like NOCD for treatment of severe conditions and companies like Talkspace for lower acuity treatment.

“Teletherapy has opened the door to people who never would have had access to a specialist without a very significant investment of time and effort” — Dr. Patrick McGrath, Head of Clinical Services at NOCD

In recognition of the interplay between behavioral and physical health, many established digital health companies have recently expanded into the sector. Teladoc acquired BetterHelp, a direct-to-consumer behavioral health platform, in 2015, and 7wireVentures portfolio company Livongo acquired myStrength in 2019. By offering consumers a product suite that addresses the entirety of their chronic care needs – from diabetes and hypertension to depression and substance abuse – companies like Livongo are ultimately able to drive greater medical cost savings. Such companies have also shown that digital behavioral health is a scalable model, with BetterHelp offering access to more than 10,000 licensed therapists and myStrength offering COVID-19 specific mental health modules to all Livongo members, even as Livongo doubled its membership and added coverage for over five million federal employees.

“The recognition of the relative advantages of the technologies, paired with the opportunity to demystify the perceived complexities, has led providers and patients to deeply – and possibly permanently – reconsider business as usual” – Dr. Julia Hoffman, VP of Behavioral Health Strategy at Livongo

Stakeholders Across the Continuum are Buying In

While digital solutions are scaling rapidly and providing much-needed relief to consumers, they are also aiding clinicians, who have relied on technology to deliver care during the pandemic. Virtual care platforms and remote monitoring solutions allow clinicians to not only treat patients from a safe distance, but also to increase efficiency and access a larger, more geographically dispersed population. Solutions such as MDLIVE’s virtual behavioral health service have reduced the average appointment wait time to two to three days, a meaningful reduction compared to the weeks typically required for an in-person appointment. And because the service is highly convenient, MDLIVE’s behavioral health offering has a no-show rate of 3.5%, far below the industry average of 30-40% for in-person treatment. By offering highly convenient treatment options and useful patient support tools, such solutions can positively influence the supply side of behavioral health treatment and enable more equitable access, while also preserving quality and effectiveness.

“The crisis in behavioral health unmasked by COVID-19 forced the recognition of and rapid conversion to telehealth platforms that now offer a world of possibilities for innovation.  Traditional models of 1:1 care, whether in person or remote via telehealth platforms are both inefficient and inadequate to meet current and future needs.  The recognition of how people interact with their devices allows us to reimagine care and allow for higher quality and lower cost of individualized care…  New, more efficient models of care for behavioral health must and will be among the sequelae post COVID-19 pandemic.” – Rush University Medical Center

This sudden rise in digital behavioral health adoption has been enabled by swift action on the part of regulators, who recognized the need for virtual care given the confines of the new socially distanced world. By removing barriers to receiving care, including the relaxation of cross-state licensure requirements, U.S. regulatory agencies have opened the gates to the plethora of digital health solutions already in market. Alongside CMS, commercial payers eliminated co-payments and extended reimbursement parity for telemedicine visits, including behavioral health sessions. To encourage utilization of digital therapeutics treating psychiatric disorders, the FDA temporarily reduced several barriers to obtaining regulatory clearance, allowing additional products to quickly enter the market to meet the growing demand.

In addition to regulatory tailwinds, employers have also started to play a larger role in supporting the behavioral health of their employees. Many organizations are now adding new behavioral health resources and broadening their view of workplace wellbeing. In a recent survey of over 250 employers, 53% reported offering programs to their workforce to address the emotional impact of the pandemic. Starbucks, for example, has partnered with virtual mental health provider Lyra Health to offer employees and their families access to 20 sessions per year with a mental health clinician at no cost.

In a recent survey of over 250 employers, 53% reported offering programs to their workforce to address the emotional impact of the pandemic.

Looking Forward: Sustainable Democratization of Behavioral Healthcare

With the aforementioned tailwinds of social distancing, regulatory expansion, and increased consumer adoption, there is true opportunity for digital health to move the needle by efficiently delivering widespread care. There is also strong reason to believe that consumer interest in digital solutions will persist, with a recent survey showing that 83% of consumers are likely to turn to telemedicine post pandemic. Maintaining a consistent, superior consumer experience will be critical to sustaining the strong adoption rates. Over time, we expect that robust consumer demand – along with a growing body of evidence demonstrating strong consumer retention, satisfaction, and health outcomes – will shift payers and providers toward a virtual-first or combined virtual/in-person care model that is more equitable, cost-effective, and efficacious.

We know that captivating software has the potential to “democratize” industries: Google brought the world’s information to our fingertips, Uber brought a car to our doorstep, and Khan Academy brought world-class education into our homes. Our belief is that digital behavioral health will finally bring convenient, affordable, high-quality treatment options to a population that has been neglected for far too long.