Patients with a behavioral health condition cost 2.8 to 6.2 times more to treat than those without a behavioral health condition in 2017, according to a 2020 Milliman report. cost behavioral health care averaged $45,782, half of that group spent less than $95 per year on behavioral health care.
“Payers could come to the table to work more closely with providers and pay for some of these technologies because they’re getting the economic value,” Vaezy said. “We have not discovered a model that works because there is not enough cross-sector trust here, it is the biggest obstacle.”
Startups must be independent of payers if they are to grow, Providence’s Dowdy said.
“From a primary care provider’s perspective, they can’t be thinking about insurance coverage,” he said.
If a mental health startup loses money on every encounter, it’s not sustainable, said Jeff Goldsmith, president and founder of health consultancy Health Futures.
“Billions are going to be wasted. It is not clear that you are buying a sustainable market advantage,” he said. “There is not going to be an ‘Amazon’ in this space.”
Even amid these challenges, health systems continue to increase investment in their innovation divisions with a renewed focus on behavioral health.
Novant Health, based in Winston-Salem, North Carolina, recently launched an incubator that aims to develop new devices and emerging digital technologies. Novant Health Enterprises, which will operate as a separate entity within the 15-hospital system, is looking to partner with other health care organizations and diversify its revenue, executives said.
Mass General Brigham created a $30 million venture fund in 2019 to invest in solutions based on artificial intelligence and digital health.
Bon Secours Mercy Health, a system of 50 hospitals spread across the Midwest and East Coast, has spun off a subsidiary that will develop and invest in digital health products, services and technologies. Accrete Health Partners is one of four private equity-backed companies in Bon Secours Mercy, whose goal is to create a “world-leading digital health ecosystem.”
Providence is kicking off a mental health innovation accelerator program, where it hopes to incubate ideas from its frontline caregivers on how to address the growing need for behavioral health services.
“They are better positioned to understand these challenges and we need to find ways we can support them,” said Dr. Arpan Waghray, medical director of behavioral medicine at Providence.
