The Rise of Venture Capital Investing in Mental Health
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Despite these concerns, VC-backed start-ups may accelerate mental health care innovation. Companies supported by VC rely on the idea of scale—the ability to grow quickly to serve a large population to maximize return on investment. In the traditional mental health care setting, dissemination of evidence-based treatments is a major challenge because treatments take place as one-on-one encounters over several months. Venture capital companies subsidize start-ups to constantly produce new iterations of their models to generate proof of concept and to refine their product or service as it evolves. This market-based, “survival of the fittest” approach means that companies only succeed if patients use and perceive benefit from these products and services. Given their consumerist mindset, VC-backed mental health companies’ strength is their transparency with diagnosis, treatment process, and costs. These are all steps forward for mental health care in the United States.
The mental health care landscape is changing rapidly, and VC-backed for-profit companies represent a significant force driving these changes. Although the value of this trend is yet to be fully realized, the rise in VC investment in mental health care offers an opportunity to scale treatments that work and address mental illness at the population level. However, quality control, privacy concerns, and severe mental illness are major issues that need to be addressed. As the demand for digital solutions to mental health concerns continues to rise, we will have to wrestle with this question: can VC-backed mental health start-ups move fast without breaking anything?
Comment by Don McCanne of PNHP: Mental health has always seemed to be more or less of an orphan-child of medicine. Although for decades many efforts have been made to reduce inequities in mental health care, tremendous voids remain.
In my practice the affluent patients were able to afford the mental health care that they needed, but the majority of my patients were not. Maybe the acutely psychotic would be locked up for 72 hours, but then they were released to followup that frequently did not seem to exist. The Medi-Cal PPO for which I was a network provider had only one psychiatrist in its network, not in our community, though even he was not available after he was arrested on morals charges. Because I already worked extended hours throughout my career and really didn’t feel competent in providing mental health services anyway, my patients got the short shrift. As I fantasized about the nation eventually enacting and implementing a single payer national health program, I had to take satisfaction in the belief that some day soon mental health services would be available for all, though I was clearly wrong about “soon.”
In the meantime, we have witnessed a dramatic growth in the medical-industrial complex. Venture capitalists have become a major player. As this article mentions, mental health has presented the economic mismatch of high demand with inadequate supply, creating the aggressive pursuit of mental health and wellness as an investment opportunity. The article mentions legitimate concerns related to private investment in mental health, but, from a broader perspective, the culture of the business model in health care exists on a much lower ethical plane than does the culture of the professional service model. The authors state that the venture capital model can be advantageous since it can lead to greater innovation (a term that applies primarily to the business of medicine), and grow quickly to “maximize return on investment.” It is difficult to imagine a worse model of expanding mental health services – passing more health care dollars to capitalists.
The bottom line is still the same. We desperately need a single payer model of an improved Medicare for All to make all health care, including mental health services, affordable and accessible for everyone. I don’t understand why we don’t have it. Maybe I need some counseling.
Jesus: Hey, Dad? God: Yes, Son? Jesus: Western civilization followed me home. Can I keep it? God: Certainly not! And put it down this minute--you don't know where it's been! Tom Robbins in Another Roadside Attraction
September 22, 2020 at 6:41 AM #360667snotParticipant
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I’m skeptical that we’ll get the right kind via venture capitalists.
Destruction is easy; creation is hard, but more interesting.
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