QLER Telehealth raises $7.4 million to grow out its telepsychiatry platform

The company works with hospitals and health systems to provide 24/7, on-demand psych consults

Over the last 18 months or so, the idea of getting mental health care without seeing a doctor in person has gone from fairly niche to pretty much mainstream, with companies like BetterHelp, 98point6, Amwell, Ginger, and BetterUp all seeing increases in usage and engagement. A major driver of that change was, of course, COVID, as the patients were forced to change the way they access care, but there are other shifts that were happening even before the pandemic hit, including how we talk about mental health

"You can sense it when you talk to anybody younger than us; I have a bunch of kids and a couple still at home and it's fascinating the discussions around therapy and emotional health and wellness and all that. So, culturally something's changing," said Frank Johnson, President and CEO of on-demand telepsychiatry company QLER Telehealth, which announced a $7.4 million Series B funding round on Monday.

The other is that the rise of virtual care forced us to change the way we look at the ROI from mental health; previously, our society hadn't taken advantage of the ROI of it "because we can't figure out what we owe each other as a society." 

"What's held telepsychiatry back is a lack of realization. So, what happened with tele is it pushed us into this place to look at it differently."

Founded in 2017 as qlēr Solutions, QLER (pronounced "clear") has been on the frontlines of this shift for the past four years, offering what it calls "psychiatry as a service," or "PaaS." That means it works with hospitals and regional health systems to provide real-time, on-demand psych consults to their patient populations when they need it.

The company originally puts focus on rural hospitals, as rural populations in America were "incredibly underserved when it came to psychiatry," which resulted in long wait times, due to a lack of psychiatrists in the community. What the company quickly realized, however, is that the issues of offering psych consults in hospitals existed everywhere, not just in rural areas. So, the company decided to scale up to cover additional markets in major cities around the country.

QLER is now in over 120 facilities across 28 states, including 10 at the Henry Ford Health System in Detroit and six at Erlanger Health system in Chattanooga. It also works with Baptist Memorial Healthcare in Memphis, LifePoint Health in Nashville, and it's now starting to work with with MedStar Health in Maryland.

A patient costs $150 per hour on average in the ER, so by getting patients seen earlier, the company is able to by reduce the length of stay of psych patients, thereby saving hospitals money.

"We now take every ER psych consult 24/7, 365, that goes in any one of the 10 Henry Ford hospitals; they don't even attempt to do it with their own psychiatrists. They push the button and QLER is there, and they are thrilled because they're spending about 25% of what they would spend on staffing and we've reduced their boarding time by 80%," said Johnson.

The new funding round was led by MedEquity Capital and completed by Relevance Ventures, which added to its Series A investment in the company; this brings QLER's total funding to date to $11 million. Part of it will be used for building out the team at QLER, including its employed psychiatrists, which currently stands at 30, up from eight just a year ago. The plan is to have 50 psychiatrists on the platform by the end of 2022.

"One of the biggest hypotheses we had to try over the last year was, do lots of physicians of different types, in different geographies, want to work in our model? And the answer is resoundingly, overwhelmingly, 'Yes.' It's not for every psychiatrist; some of them want to wear a lab coat and go to an office, but others really love what we're doing and they get the vision," said Johnson.

Mostly, though, the money will really be going toward telling QLER's story through expanded marketing efforts, which is why it will be growing its sales team by about 250%. 

Along with the funding, it was also announced that Jeff Ward, founding partner at MedEquity Capital, will be joining the company as a member of its board of directors. 

"Jeff brings an operator's perspective, but he is also going to open us up to some of the bigger circles of capital. How do we compare to the the Ginger.ios and Amwells and where's our lane? The strategic acquirers, or people that have gone through IPOs and other things, how do they see us and our focus? There's always a question about when value-based care comes, what’s your business model?" said Johnson.

"So, Jeff’s role is to be an external scout and to make sure the people funding those markets that look like they might be part of our future, whether it's strategic acquisition or IPO, we want to make sure that we understand how they perceive us. So, he's got a big role in that also."

Now that telebehavioral health has caught on, Johnson unequivically believes it's here to stay, and that means potentially big things for QLER going forward, including expanding beyond the emergency room and into other parts of the healthcare system.

Specifically, the company has been experimenting with offering its services in primary care, partnering with existing primary care clinics to create virtual outpatient clinics, to help prevent people from needing to go into the ER in the first place. This is something QLER has been already doing for the past few years, including with a Federally Qualified Health Center in California.

"Our strategy is to host these virtual outpatient clinics in conjunction with their primary care resources, and then, at the same time, have some protocols to manage them before they get to the ER. There's some interesting technology in place that can indicate some kind of early warning signs, so those are very much in the works," Johnson told me.

"We're going to integrate with the primary care clinics that are already there. Grady Health in Atlanta, for example, has got its own network of clinics; they're not even worried about the payment back on that. They're just trying to see people before they get to the ER, so we will empower those clinics with our psychiatrists."

(Image source: qlersolutions.com)