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Category: Health Tech

Mental Health’s Unfinished Digital Revolution

By TREVOR VAN MIERLO

In 2021, digital mental health and substance use startups attracted a record-breaking $5.1 billion in funding. Despite the surge, the promise of scalable, transformative digital health platforms remains unfulfilled.

Following the surge, investment plummeted. Unlike other industries that have been revolutionized by digital-first solutions, digital health struggles with models that fail to address cost, complexity, and access.

What we’re left with entering into 2025 are a smorgasbord of solutions clamoring to attach themselves to traditional enterprise incumbents (Health Insurance Providers, Electronic Health Records, Hospital Systems). These incumbents have achieved scale – but not the type of scale that digital health needs to flourish.

Investment in Digital Mental Health (2010-2023)
Digital Mental Health Investment (2010-2023)

Incumbents Build Deep, Startups Go Wide

Incumbent scale is infrastructure-heavy, slow, and linear, and focuses on deep integration within their established markets.

In contrast, startups aim for technology-driven, exponential, and global scale, leveraging digital platforms to serve millions of users quickly. While startups have the speed advantage, achieving scale similar to incumbents requires win-win partnerships and fundamental shifts away from established business models.

Incubent Scale vs. Startup Scale
Incumbent Scale vs. Startup Scale

The investment market does see the tremendous opportunity: a massive, growing global customer-base proactively demanding help as social stigma decreases. And as time passes, this customer-base grows exponentially with technology pervasiveness.

What investors see is unmet demand for mental health and substance use treatment, and a historic opportunity for digital health to step up and deliver solutions that are scalable, accessible, and affordable.

However, the delivery mechanism to these populations, though digital, is obfuscated through the blurred lens of incumbent purchasing power. We can’t get past incumbents’ size, their reach, and their connection to patients. In this common view, incumbents are the customer. This view is promoted by both industry and academia.

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Shama Rathi, Co-Founder, LunaJoy

Shama Rathi MD is the co-founder of LunaJoy, a mental health company that works exclusively for women. It started with pregnancy (pre- and post- partum) and now is working with women in midlife for nearly a third of its cases. Shama believes that women have been ignored and LunaJoy has built out specific care pathways for women. They are moving into the market starting with Medicaid, the payer responsible for a large number of births, mostly doing it in conjunction with OBGYN clinics. It’s an interesting and necessary niche play for a large underserved group–Matthew Holt

THCB Gang Episode 147, Thursday December 5

Joining Matthew Holt (@boltyboy) on #THCBGang on Thursday December 5 at 1pm PST 4pm EST are patient safety expert Michael Millenson, patient advocate & entrepreneur Robin Farmanfarmaian; futurist Jeff Goldsmith; and employer & care consultant Brian Klepper.

You can see the video below live (and later archived) & if you’d rather listen than watch, the audio is preserved as a weekly podcast available on our iTunes & Spotify channels.

You Can’t Spell Fair Pay Without AI

By KIM BELLARD

Everything’s about AI these days. Everything is going to be about AI for a while. Everyone’s talking about it, and most of them know more about it than I do. But there is one thing about AI that I don’t think is getting enough attention. I’m old enough that the mantra “follow the money” resonates, and, when it comes to AI, I don’t like where I think the money is ending up.

I’ll talk about this both at a macro level and also specifically for healthcare.

On the macro side, one trend that I have become increasingly radicalized about over the past few year is income/wealth inequality.  I wrote a couple weeks ago about how the economy is not working for many workers: executive to worker compensation ratios have skyrocketed over the past few decades, resulting in wage stagnation for many workers; income and wealthy inequality are at levels that make the Gilded Age look positively progressive; intergenerational mobility in the United States is moribund.

That’s not the American Dream many of us grew up believing in.

We’ve got a winner-take-all economy, and it’s leaving behind more and more people. If you are a tech CEO, a hedge fund manager, or a highly skilled knowledge worker, things are looking pretty good. If you don’t have a college degree, or even if you have a college degree but with the wrong major or have the wrong skills, not so much.  

All that was happening before AI, and the question for us is whether AI will exacerbate those trends, or ameliorate them. If you are in doubt about the answer to that question, follow the money. Who is funding AI research, and what might they be expecting in return?

It seems like every day I read about how AI is impacting white collar jobs. It can help traders! It can help lawyers! It can help coders! It can help doctors! For many white collar workers, AI may be a valuable tool that will enhance their productivity and make their jobs easier – in the short term. In the long term, of course, AI may simply come for their jobs, as it is starting to do for blue collar workers.

Automation has already cost more blue collar jobs than outsourcing, and that was before anything we’d now consider AI. With AI, that trend is going to happen on steroids; jobs will disappear in droves. That’s great if you are an executive looking to cut costs, but terrible if you are one of those costs.

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Lyle Berkowitz, Keycare

Lyle Berkowitz is an old friend and these days is CEO of Keycare, which provides a virtual care workforce, primarily for major health systems. It’s based on Epic taking advantage of Telehealth Everywhere, which means that patients can get to them from within their MyChart accounts and it can easily integrate its EMR data with its health system clients. It’s being used primarily for out of hours care, but increasingly primary care expansion for population health and patient outreach. I call Keycare dinosaur preservation, but Lyle tells me it’s expanding the balloon from within!–Matthew Holt

Sean Bell, Spring Health

Sean Bell is head of new ventures at Spring Health, a very well-funded mental health company. They’ve built a tech platform that its providers (both contractors and FT employees) are on, and spend a lot of time using machine learning to match patients to therapists, to augment the care and also measure the impact of that care. Sean told me about both how Spring Health works and how much its grown, and what new specialized care is being introduced in 2025. He talks quick and we covered a lot of ground including the business of being a highly-valued private mental health company when there are some lower priced public companies out there. Interesting interview — Matthew Holt

THCB Gang Episode 146, Tuesday November 26

Joining Matthew Holt (@boltyboy) on #THCBGang on Tuesday November 26 at 1PM PT 4PM ET are THCB regular writer and ponderer of odd juxtapositions Kim Bellard (@kimbbellard); medical historian Mike Magee (@drmikemagee); and a new guest from Marsh McLennan, Employee Benefits Consultant Ryan Koo (@RyanKoo).

You can see the video below & if you’d rather listen than watch, the audio is preserved as a weekly podcast available on our iTunes & Spotify channels.

Remembering Thomas E. Kurtz

By MIKE MAGEE

This has been a challenging week for me, but not for the reasons you might think. Compartmentalization skills have allowed me to push the 2024 Presidential election into the back reaches of my mind as I worked to complete teaching a course on “AI and Medicine” at the Presidents College at the University of Hartford. The complexity of AI, its risks and potential benefits, are staggering. So it was comforting for me to remember how far we have come with data and information in my own lifetime. That reminder came wrapped in the loss of one of the great pioneers in the field.

The week of my final AI lecture began with the announcement of the death of 94 year old Thomas E. Kurtz. You may not have heard of him, but you likely recall his seminal invention, the first computer programming language for the masses–BASIC (Beginners’ All-purpose Symbolic Instruction Code). As Bill Gates himself reflected this week, “The approachability of BASIC and time-sharing began what the PC and the internet took to a whole new level.”

Bill would know. His high school had a teletype connection to the original time-sharing main frame computer at Dartmouth. But Gates was not alone or first in line. As Kurtz remembered, “I once estimated that even before Bill Gates got into the action at all, five million people in the world knew how to write programs in BASIC. There was something like 80 time-sharing systems in the U.S. that offered BASIC as one of their languages. And it was all over the world. I even got a letter from somebody in Siberia.”

It wasn’t until 1978 that Gates teamed up with Microsoft founder, Paul Allen, and received permission to install BASIC in the first customizable personal microcomputer, the MITS Altair 8800.

Kurtz was the son of German immigrants, and displayed high aptitude in mathematics early in life. He graduated from a local college in Illinois in 1950, and by 1956 had earned a PhD in statistics at Princeton. He was recruited to Dartmouth that same year by the chairman of Mathematics, John Kemeny, who had previously been a research assistant at Princeton himself under none other than Albert Einstein. Kurtz launched a new field at Dartmouth that year – computer science.

He was starting at ground level – or more accurately, below ground level since the solitary computer the university possessed was housed in the basement of College Hall where it filled an entire room. Training students in computer science required hands on engagement. As Kurtz explained some years later, “Lecturing about computing doesn’t make any sense, any more than lecturing on how to drive a car makes sense.”

In later interviews, Kurtz make it clear that his idea didn’t meet with applause at the outset. He admitted, “The target (in computing) was research, whereas here at Dartmouth we had the crazy idea that our undergraduate students who are not going to be technically employed later on should learn how to use the computer. Completely nutty idea.”

Two barriers at the time were computer language and computer time. The main frame on campus ran on complex FORTRAN and COBOL which only a few experts had mastered. And if you wanted access, you had to wait in line.

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Tatiana Fofanova demos Koda Health

Tatiana Fofanova is the CEO of Koda Health. She is dealing with one of the most difficult parts of health care. How do you get patients wishes in the case of end of life or other critical illness made in advance and delivered to medical professionals? Koda Health has not only figured out how to get this option to patients but also include the responses into Epic and other EMRs so that clinicians can see advanced directives and much more. She gave me a full demonstration of what is a very important and necessary tool — Matthew Holt

THCB Gang Episode 145, Thursday November 21

Joining Matthew Holt (@boltyboy) on #THCBGang on Thursday November 21 at 1PM PT 4PM ET are regulars delivery & platform expert Vince Kuraitis (@VinceKuraitis) &  JL Neptune MD, now at Memora Health, digital health investment banker Steven Wardell (@StevenWardell); and longtime startup and corporate digital health exec Adam Kaufman (@adkaufman) who also writes the Bearing.on Health newsletter.

You can see the video below & if you’d rather listen than watch, the audio is preserved as a weekly podcast available on our iTunes & Spotify channels.

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