From Acceptance to Acceleration – The Next Frontier in Behavioral Health

October 8, 2021

By Billy Deitch, Oak HC/FT

Much has been said – including by us at Oak HC/FT – about the need for increased access for mental health care. Rather than rehash that narrative, we’d like to take the opportunity ahead of World Mental Health Day to commend the progress that’s been made to date and consider what’s next for the ecosystem.

In June 2019, we wrote about The Mental Health Flywheel, where increased access would lower stigmas thereby bolstering engagement, generating more efficacy proof points, and driving increased payer reimbursements, which would expand access even more and further fuel the flywheel.

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Two years later, it’s exciting that we’re seeing this vision play out, both in the broader market and at our own portfolio companies. The most innovative models are increasing access, they are helping people get better, and health plans and employers are paying them for the value they are delivering! There is a long way still to go, but the early progress is encouraging. And it’s no secret that the investor community is diving in as well – billions of venture capital dollars have flowed into startups that serve mental health needs (Rock Health recently took a stab at quantifying this momentum).

We view most of what’s emerged over the past few years as just phase one of an explosion in companies focused on delivering behavioral health services. The preponderance of the venture capital dollars flowing into the market have been aimed towards models serving the commercially insured population – whether distributed by employers, health plans, or direct to consumer – and with a primary focus on treating adults suffering from depression and anxiety. This is a huge target population, but in many ways represents the lowest hanging fruit.

The next frontier, which will be delivered by both existing players in the space and new entrants, will involve increased specialization and more complex care management, serving broader populations. Within our own portfolio, we’re seeing incredible demand for services that expand beyond the phase one focus.

A few prime examples in the Oak portfolio include Brightline (which focuses on care for children and adolescents), Cerebral (a D2C-first business with deep expertise in medication management), Groups (a hybrid virtual/brick-and-mortar approach to tackling opioid addiction), and Eating Recovery Center (focused on treatment of eating disorders).

We see many, many other areas where we expect strong new companies to emerge, increased focus from vendors already in the market, and significant capital from the investment community. We included just a few below, each of which face their own unique challenges that require innovative delivery models:

The need for behavioral health care within these populations isn’t new, but we’re optimistic that innovation and investment will lead to them getting the attention and care they deserve. This reflects our broader belief in the democratization of healthcare: better care, available for more people, delivered how/when/where they need it. And as is the case across healthcare, our fundamental belief at Oak HC/FT is that great entrepreneurs will be the ones to answer the bell and attack these challenges.