Is the digital age sending the old therapist’s couch the way of the reference librarian, the CD, and the travel agent? Could be: several recent studies have found that therapy via the Internet is just as effective as face-to-face treatment. In 2012, a Veterans Affairs study found that teletherapy reduced patients’ psychiatric hospital admissions by about 25 percent, which means it could produce cost savings as well.
But to get online therapy startup Breakthrough off the ground, CEO and co-founder Mark Goldenson had to overcome two major obstacles. One, convince venture capitalists to invest in healthcare IT. And two, find insurance companies who would be willing to partner with the service and cover their members’ mental healthcare costs.
When he founded the company in 2009, Goldenson knew that convincing insurance companies and VCs about the startup’s prospects would be tough. Connecting psychiatrists and therapists with patients via webcam was still pretty out there for both parties.
Goldenson’s first job would be to find investors who could see past the failures in the sector. “Healthcare IT is a bit of a graveyard for Silicon Valley investors,” Goldenson says. “They see it as slow; it requires behavioral change. It’s the opposite of the darling social media companies.” And not all investors are interested in “social good” companies. “They see it as a turnoff. Are you going to have to compete with non-profits? Will you be maximizing profits?” he says.
It took time, but Goldenson and cofounder Julian Cohen, former CEO of MCC Behavioral, raised a $1 million seed round from Charles River Ventures, Keith Rabois, and other angel investors. They also recently announced another $5 million in Series A funding from investors including Social+Capital Partnership, First Round Capital, Great Oaks VC, and others.
The second hurdle was partnering with insurance companies. “They have rational reasons for being careful,” Goldenson says. “Their patients give them a lot of trust. They want to make sure they’re going to partner with an innovative company.” To convince insurers, Goldenson had to make the case that there would be a return on their investment, and in some case, go through a security audit (the company also goes through an annual HIPAA audit). The first contract, took two years to negotiate, but since then, two other insurers have approached Breakthrough about partnerships, and they recently signed a contract within six months, a feat Goldenson calls “really fast.” By the end of this year, the company expects to partner with an insurer to cover their Medicaid patients, and by the end of 2014, they hope to extend coverage to 10 million people.
Expanding the number of insurers is particularly important to Goldenson, who started the company in part because he wanted to lower the barrier to entry for mental health care. “Eighty-eight percent of mental health money goes through a public or private insurer,” he says. “A lot of people go for that 12 percent who pay out of pocket. We’re trying to make it cost-neutral for people. Our patients—if they have an insurer we accept—they’re looking at paying a $25 copay if anything.”
Goldenson, a former Stanford psychology researcher and PayPal product manager, believes that online therapy can remove a lot of the road blocks to mental health care, including the high cost, the stigma around it, and the difficulty of access. He thinks it will be particularly helpful to those on Medicaid, who might face other hurdles to getting care, like a lack of childcare, time away from work, or transportation.
He also hopes it will cut down on the difficulties of finding a good therapist. Every provider on the site has a profile, and about a third have welcome videos that allow potential clients to evaluate them before they even talk online. [Updated 10/11/13; a previous version of this incorrectly stated that all Breakthrough providers have videos on their profiles.]
So far, the start-up has partnered with 100 licensed psychiatrists and psychologists in four different states: Texas, California, Virginia, and Maryland, as well as the District of Columbia. Because regulations are set both by individual states and the federal government, Breakthrough makes sure that patients only meet with health care professionals who are licensed in their states. All 50 states do allow telemedicine, however.
Redwood City, CA-based Breakthrough used to do its own background and licensing checks, but now that so many insurers have signed on, they can focus on providers who have already passed insurers’ checks.
The company doesn’t charge therapists anything to join their network, and works to get them rates that are the same, or at least close to the same, as an in-person visit. Insurers pay the company a per-session fee; it’s a better model than a subscription service, Goldenson says, because the insurers only pay when their members get care, which makes it easier for them to see the return on investment. And Breakthrough purposely makes it easy on the insurance companies. “We’re not saying, ‘Here’s this cool technology and you have to go implement it and recruit providers, and make it secure behind your firewall,’” he says. “We have the network. We’ve already trained them on the technology, you don’t have to put it behind your firewall, just sign us up like an in-person practice group.” He compares the service to Uber’s car-sharing service: instead of hiring therapists and starting a new practice, Breakthrough has leveraged technology to connect users to an already available service in a more efficient way.
So far, patients seem to be happy with it. The two-way sessions last up to 50 minutes, just like in-office therapy. Every few sessions, Breakthrough gives its patients a quick, four-question survey to see how it worked for them. So far, 64 percent of their patients have reported that they would not have been able to get care if it wasn’t available through Breakthrough, Goldenson says.
A lot of the company’s success so far, Goldenson says, has been about timing. Before he started the company, he talked to other founders who had tried to make similar models work. And he realized that two big pieces had finally fallen into place that could make teletherapy a reality: “Now we have greater research supporting telemedicine, and people are more comfortable digitally,” he says. “I think the market is ready for it.”
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