American Well expands into mental health with Aligned Telehealth acquisition

Aligned will remain an independent platform within American Well going forward

Expanding access to mental health services, and the emergence of telehealth, are two of the biggest trends happening in healthtech right. Perhaps it's not surprising, then, that the two spaces are also converging, with some of the biggest telehealth providers having begun expanding access to these services in recent years. For example, there's Teladoc, which acquired BetterHelp, a provider of direct-to-consumer access to behavioral and mental health services.

On Thursday, another telehealth provider took a step in that direction when American Well announced that it signed a definitive agreement to acquire Aligned Telehealth, a provider of behavioral telehealth and telepsychiatry services. No financial terms of the deal were disclosed.

Founded in 2012, the Los Angeles-based Aligned provides telepsychiatry services to hospitals, long-term care facilities, outpatient clinics and correctional programs. In addition to its telehealth services, the company also provides on-site, facility-based behavioral health services, as well as ED and outpatient facility consultations.

"We became aware of Aligned Telehealth through deep diligence across the behavioral telehealth and telepsychiatry space. We identified Aligned as the clear leader in serving the acute care market and started partnering with them in 2018," Ido Schoenberg, M.D., Chairman and CEO of American Well, told VatorNews. 

"Aligned offers a differentiated software platform for managing the telepsychiatry workflow, with charts, time and quality, and it brings industry leading response times delivering telepsychiatrists to where they’re needed quickly. It has a proven track record in working with large enterprise health systems and health plans."

Aligned Telehealth, he said, will complement American Well’s presence in the hospital, broader acute care and health plan market, and told me that the company "will accelerate the development of future solutions, including differentiated behavioral health services, growth and scale of clinical expertise, and finally a strong customer base with high levels of client satisfaction."

Going forward, Aligned will continue to function as an independent entity within American Well. In addition, Aligned full staff will be coming to work at American Well, which will be adding Woodland, California to its list of locations. Schoenberg would not say, however, in what ways Aligned's technology might be incorporated into American Well's platform.

The mental health crisis

Mental health is a growing problem across the country, with nearly 1 in 5 U.S. adults experience mental illness in a given year. In the emergency department, behavioral health conditions account for 1 out of every 8 visits, or about 12 million visits annually. 

"The needs of the industry and the country call for mental health services. Behavioral health is one of the most capacity constrained areas of healthcare. There are mental healthcare shortages in every state: by 2030, there is expected to be a shortage of around 21,000 psychiatrists, and in the emergency department alone, behavioral health issues account for one out of every eight visits," said Schoenberg.

"Telehealth offers an affordable and accessible solution that will positively impact patients, their families, and the treatment teams providing their care, while advancing clinical outcomes and reducing overall costs."

This is American Well's second acquisition, after it purchased acute care telehealth company Avizia in April of last year.

"Avizia was our first acquisition, broadening our business within the hospital/health system space and enhancing the value we can deliver to this segment. Aligned Telehealth is our second, which will allow us to further help hospitals, health plans, and the industry at large, address the mounting challenges of clinician shortages by leveraging digital care as a high quality alternative," said Schoenberg.

"Many telehealth companies are working to address the behavioral health clinician shortage and access the issue through direct to consumer apps and efforts, however, American Well is uniquely working to bolster the preparedness and resources of hospitals and health plans, channels overwhelmed by individuals suffering from mental illness and channels that represent the largest cost burden to our health system."

Aligned Telehealth had raised $12.9 million in venture funding from investors such as SV Health Investors, Deepak Chopra and Hector Sulaiman. The Boston-based American Well, which was founded in 2006, has raised $517 million funding, including a $290 million round last year.