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On April 4, Vator is partnering with UCSF Health Hub for our first salon of 2019, called The Future of Mental and Behavioral Health. Topics of discussion will include how behavioral health startups are creating solutions to help those suffering from mental illness, what these new technologies are, and how effective they are. Among those debating these questions will be numerous venture capitalists and entrepreneurs in this space, including Alon Matas, the founder and President of online counseling company BetterHelp.
Founded in 2013, BetterHelp is a provider of direct to consumer access to behavioral and mental health services, which patients can be access in a number of different ways, including text, video or phone.
The idea for the company came from when Matas was running one of his previous startups, and got so stressed that he decided he needed to take advantage of mental health services. What he found was that doing so was more difficult than he had expected.
"On my previous startup I had, as all startups do, go ups and down and highs and lows. It got to a point where I thought professional counseling could be useful to me, not from a professional point of view, but a personal point of view, from all the stress and drama sometimes even depression that this life, and the lack of work-life balance, can create," he told me in an interview.
On top of that personal experience, Matas also came across statistics on just how wide and broad the mental health problem is, with about 25 percent of people needing mental health support, but half of them not getting it thanks to such as the cost, the stigma, the inconvenience, and the stress that’s involved.
"I’m not coming from a health background or a counseling background, so, just as a consumer, it surprised me how difficult, inaccessible, expensive, inconvenient, opaque, almost antiquated this experience was of finding a counselor was. That's also true even when you think about how counseling is being delivered. When that startup got sold and I left the company, this problem kept bugging me as something that needed to be done. It’s a huge market, one with a lot of need, and people who need help. Technology is not doing anything to help them, it’s the same old system, with tons of barriers," he said.
"I thought that, with technology, we can solve some of these problems and lower these barriers."
How BetterHelp works
When a consumer decides to use BetterHelp, they are first give a questionnaire of around 30 questions, which will help break them down demographically, such as age and marital status. They are also asked about their specific needs, such as if they are fighting depression or if they have stress or anxiety. They can also say if they have more specific problems, such as eating disorders or LBGT related issues. The third part of the on-boarding process is their preference for their therapist; for example they can say they want someone who is older and female, or they want a gay counselor or they want someone of color.
Once BetterHelp gets this info from the patient, it will match that person to a therapist based on their preferences, as well as previous success rates; if the patient is not happy they are free to switch as many times as they want until they find someone who works for them.
The patient can connect with their counselor in a number of different ways: by exchanging messages, through live chat, by speaking over the phone or by video conferencing. The big breakthrough that BetterHelp had, Matas told me, was realizing how many people would want to communicate through text, even though some doubted that counseling would be able to work this way.
"When we started, and we went to talk to people, some were very surprised. ‘Why would anyone want to do text-based counseling, and not video? Video is so much closer to the real life experience.’ I would always ask them the same question: ‘How many text messages did you send today and how many FaceTime calls did you have over the last month?’ I discovered that most people don’t even know how to use FaceTime. Text is definitely one of the things that made us popular," he said.
One of the other important things that BetterHelp did, Matas noted, was not try to reinvent therapy itself, just the delivery system.
"The surprisingly unconventional approach we took is to be conventional, which means we were not trying, and are still not trying, to disrupt therapy. We’re not a chatbot, we’re a not a self help tool. We’re not trying to say we’re inventing something new to replace therapy," he explained.
"What we’re saying is that therapy and counseling are tried and true and researched and studied over 100 years. It’s a profession and it’s something that definitely works. What we need to do is not to reinvent it, or replace it, with technology, we need to make it accessible through technology. That means it’s more convenient, more affordable and it doesn’t have the hurdles of going to a therapist. This was the theme of what we’re trying to do."
Right now there are 4,000 therapists on the platform who are independent contractors, meaning they are not employed by BetterHelp, and often have their own practices or counseling jobs outside of the platform. There have also been half a million patients who have receivied what Matas calls, "meaningful counseling."
"That means they didn’t sign up, get connected to a therapist, talk with them a day and leave. These are people who actually got real therapy, made some progress and are engaged in the process. We have had half a million people do that to date. On a monthly basis, we’ll have close to two million sessions, whether it's messages, phone calls, video sessions or real time chats. We are, by far, the largest platform of this kind."
Going direct to consumer
While BetterHelp does have a B2B platform as well, it is still primarily a direct-to-consumer service, where consumers pay $200 a month to get unlimited messaging with their counselor.
Matas believes that going direct to consumer first is the right way to go for apps to succeed, rather than going for enterprise first.
"Companies that start with a direct-to-consumer model have an excellent understanding of the consumer's need. The reason is that when you make a product for consumers, consumers are really the best critics and the best people to say, and sometimes saying is by swiping or not swiping their credit card, whether the product is resonating with them and also useful for them long term, because it’s a subscription service," he told me.
"Once you’ve proved your model and product and service on the consumer, expanding to B2B is almost obvious. You can confidently go to payers and say, ‘I have this thing that can help your population and therefore help you.’ All companies want to create positive value and ROI to both consumers and payers, the question is where you put the initial focus"
Right now, consumers pay BetterHelp directly and, though they can try to charge their insurance, and the company provides them them with the tools to do that, insurance companies will often turn down the claim because, as Matas put it, "They’re not yet set up for supporting remote services, and definitely not text-based services."
While the lack of insurance support was something that the company worried about at first, he said, it actually proved to be not that big of a problem in the long run.
"Insurance coverage, in general, is problematic. I would say, generally, if you ask therapists who are traditionally in-office, most of the people who go to private practice are not using their insurance. There are several reasons for that: co-pays and deductibles are definitely two of them, but also the limited coverage that you get from insurance, especially if you are not diagnosed with something that is clinically severe, and the fact that most therapists don’t want to work with insurance."
Becoming a part of Teladoc
In January of 2015, BetterHelp was acquired by telehealth service Teladoc; the reason that he decided to sell, Matas said, was that Teladoc is the dominant player in the space and it was BetterHelp's best option for succeeding in the market.
"Teladoc had somewhere between 70 to 80 percent of the market, and it’s the only public telehealth company. It has the widest portfolio of products and services, some grown organically, some through acquisition. It is number one in a world where number two is far, far away. So, if you’re thinking about joining forces with a telehealth company, you obviously want to do that with the one that dominates the market and there’s only one," he said.
"It’s kind of a no-brainer that if you see yourself as a telehealth company, you want to be part of the company that sort of invented telehealth and is the market leader."
While Teladoc has certainly helped BetterHelp in the four years since the acquisition, Matas says that the relationship goes both ways.
"We’re definitely doing some things that are separate and different because of the type of product we have, and because we’re also going to the consumer, but there’s also a lot to learn and collaborate with Teladoc, especially on the B2B side given their access and their breadth of clients. Also, as you can imagine, there’s a lot of legal and regulatory issues that come with this space. As someone who is not coming from a health background, I get shocked when you go into this and you say, ‘This regulation is daunting.’ When you have a company that is dealing with the landscape of regulation around telehealth for 17 years now, that’s a lot less daunting. Also, on the operational side, you learn a lot and you can path to doing things because you have this know how and expertise behind you."
As of 2018, BetterHelp has over $60 million in annual revenue.
The effectiveness of mental health on telehealth
As Matas said earlier, the company had to do some convincing to get people to believe that mental health treatments could be effective without having a traditional in-office visit. The company's beliefs were validated in a study that came out in January, confirming that the platform does, in fact, help patients overcome symptoms of depression.
"Up until January of this year, when we were asked about ROI we would say, ‘Look at how many great and happy clients we have. Look at 75,000 reviews and detailed testimonials from people who got service from us and look at our retention level and look at our internal satisfaction surveys. Look at what our counselors say.’ That is all still very, very true but what changed in January is a very comprehensive study made by Berkeley, UCSF and San Francisco General Hospital, which looked at hundreds of BetterHelp members and actually checked, objectively, the reduction of their depression symptoms based on PHQ-9, which is the industry standard for measuring depression," he told me.
What the study found was that, when compared to in-office visits, patients on BetterHelp, in each and every category of depression, had either comparable or better results.
"This reinforced what we already knew just from the feedback we got from clients and therapists. This is a peer reviewed study that looked at it from a more objective point of view. Some people had said, ‘Sure, people feel better, it’s a placebo effect, they just like to talk to someone, but they’re not getting actual counseling and therapy,’ and we said what our counselors said: ‘No, this is actually therapy. This is actually what you’d find in on-office counseling.’ And now we have the academic stamp of approval."
The future of the space
BetterHelp straddles two different growing verticals in the healthtech space: telehealth and mental health.
In terms of the telehealth market, Matas sees this what is happening right now an inflection point, and he believes that consumers will start demanding more of these types of services going forward.
"Maybe it’s because I’m coming from a consumer background and not from health, but, to me, everything will follow where the end consumers want them to go. You’ve seen that with e-commerce and with travel, with a lot of industries that had very, very strong players. People said, ‘No, travel will always be through an agent because the travel agency industry is so strong and it’s controlled.’ You’ve seen the same with commerce. At the end of the day, if consumers want something eventually, in some industries it will be faster and in others it will be slower, eventually the industry will follow, it will have to adapt. Those who do not adapt will probably not be here for very long. When consumers decided that telehealth makes a lot of sense for them, and they don’t need to make an appointment with a doctor and sit in a waiting room with a bunch of people and get sicker, but they can do most things through a telehealth visit, then everything else follows or will follow," he said.
"Everybody else, the employers and the health plans, also government programs, everybody else will follow. Maybe in heath it took a little bit longer because you have strong players and it’s a very regulated environment and things move slower in general, because you want to make sure that quality of care is top notch, but it moved there because this is what consumers want. I don’t think any industry can for a long time resist what the consumer wants."
When it comes to the mental health space, Matas doesn't see BetterHelp's platform as replacing traditional therapy, but actually adding to an already large pie by giving more people access.
"Our biggest opportunity and growth potential is with the literally tens of millions of people who understand they need care, also know that the right care for them is professional counseling ad therapy, but did not, and would not, go to a traditional in-office counseling. To me, the potential is still huge, because we’re barely scratching the surface, but also it’s with a market that already understands the need and doesn’t have the solutions that fit them," he told me.
"We’re not necessarily trying to split the counseling pie; we’re additive to this pie by getting care to people who don’t have care and, without BetterHelp, would not get any type of care. That’s why I’m super bullish because it’s a very big market as it is, and there are all these numbers about the huge cost of annual cost of mental health just in the U.S. I’m not even talking about the industry and the market as it is, but the big potential of people who have the need and are not part of the market because it’s not accessible to them."
(This article previously stated that Teladoc purchased BetterHelp for $4.5 million, but we have been informed that that number is incorrect)
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