A Teletherapy Startup Works to Remove Barriers to Mental Health Care

Xconomy San Francisco — 

Is the digital age sending the old therapist’s couch the way of the reference librarian, the CD, and the travel agent? Could be: several recent studies have found that therapy via the Internet is just as effective as face-to-face treatment. In 2012, a Veterans Affairs study found that teletherapy reduced patients’ psychiatric hospital admissions by about 25 percent, which means it could produce cost savings as well.

But to get online therapy startup Breakthrough off the ground, CEO and co-founder Mark Goldenson had to overcome two major obstacles. One, convince venture capitalists to invest in healthcare IT. And two, find insurance companies who would be willing to partner with the service and cover their members’ mental healthcare costs.

When he founded the company in 2009, Goldenson knew that convincing insurance companies and VCs about the startup’s prospects would be tough. Connecting psychiatrists and therapists with patients via webcam was still pretty out there for both parties.

Goldenson’s first job would be to find investors who could see past the failures in the sector. “Healthcare IT is a bit of a graveyard for Silicon Valley investors,” Goldenson says. “They see it as slow; it requires behavioral change. It’s the opposite of the darling social media companies.” And not all investors are interested in “social good” companies. “They see it as a turnoff. Are you going to have to compete with non-profits? Will you be maximizing profits?” he says.

Provider profiles on Breakthrough include a video introduction and data on the provider's specialties, training, education, and hourly rates.

Provider profiles on Breakthrough include a video introduction and data on the provider’s specialties, training, education, and hourly rates.

It took time, but Goldenson and cofounder Julian Cohen, former CEO of MCC Behavioral, raised a $1 million seed round from Charles River Ventures, Keith Rabois, and other angel investors. They also recently announced another $5 million in Series A funding from investors including Social+Capital Partnership, First Round Capital, Great Oaks VC, and others.

The second hurdle was partnering with insurance companies. “They have rational reasons for being careful,” Goldenson says. “Their patients give them a lot of trust. They want to make sure they’re going to partner with an innovative company.” To convince insurers, Goldenson had to make the case that there would be a return on their investment, and in some case, go through a security audit (the company also goes through an annual HIPAA audit). The first contract, took two years to negotiate, but since then, two other insurers have approached Breakthrough about partnerships, and they recently signed a contract within six months, a feat Goldenson calls “really fast.” By the end of this year, the company expects to partner with an insurer to cover their Medicaid patients, and by the end of 2014, they hope to extend coverage to 10 million people.

Expanding the number of insurers is particularly important to Goldenson, who started the company in part because he wanted to lower the barrier to entry for mental health care. “Eighty-eight percent of mental health money goes through a public or private insurer,” he says. “A lot of people go for that 12 percent who pay out of pocket. We’re trying to make it cost-neutral for people. Our patients—if they have an insurer we accept—they’re looking at paying a $25 copay if anything.”

Goldenson, a former Stanford psychology researcher and PayPal product manager, believes that online therapy can remove a lot of the road blocks to … Next Page »

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3 responses to “A Teletherapy Startup Works to Remove Barriers to Mental Health Care”

  1. joan justice says:

    Hello Elise,
    I am the manager of HealthWorksCollective[dot]com I would love to repost some of your posts. Is that possible? Let me know! Of course, we would credit you as the author, link to the original source, etc.

  2. JackPine says:

    Teletherapy is a complete misnomer!!! The word teletherapy refers to radiation treatments from an external radioactive source, such as a clinical linear accelerator, also known as external beam radiation.

  3. toiya black says:

    I would love to know what insurance companies are partnering with breakthrough.