Venture Capital wants to be your Behavioral Health Provider
A revolution is underway in the delivery of behavioral healthcare in America. The Accountable Care Act’s emphasis on the PCP as care coordinator and a renewed focus on the behavioral needs of the chronic medically ill are moving behavioral care away from Managed Behavioral Health Organizations (MBHOs) and self referral and into PCP directed integrated or collaborative care. Predictably, venture funded companies are eager to cash in on this paradigm shift.
Accountable Care Organizations (ACOs), the narrow networks fostered by the Accountable Care Act, are not paid on volume of services, i.e. fee for service, but on a shared savings basis, so like the MBHOs their incentive is to bring down costs, especially for those with chronic medical conditions. But ACOs have stronger incentives to integrate care. The belief that overall cost of care to medically ill patients can be reduced by attending to their behavioral needs justifies and complements the movement to integrated care.
The principal evidence for this belief—and it is a belief– is articulated in a recent report by the actuarial firm Milliman. Milliman estimated that implementation of integrated behavioral care could result in savings of 5 to 10% of all healthcare costs or 26 to 48 billion dollars per year. These estimates are based on extrapolations from a number of small studies where behavioral clinicians provided services on-site in the PCP’s office.
Milliman has a history of gross overstatements of cost saving estimates (consider Why Nobody Believes the Numbers by Al Lewis). Many experts state that Milliman’s numbers are nonsense and are refuted by decades of studies of population health programs. Nevertheless, the report has been seized upon by venture backed start ups to justify the creation of specialty behavioral health integration companies. They tout integrated behavioral care as the next big thing, healthcare’s new silver bullet.
The behavioral integration/collaborative care studies that Milliman cites are based on the simple idea that behavioral services should be available in the PCPs office where other routine health care services are provided. Studies have shown that PCPs, (due to a variety of factors time constraints, competing demands, lack of training, support staff or interest, etc) do not do a good job at managing mental healthcare delivery on their own. For instance, only a fraction of patients with Major Depression are correctly diagnosed by PCPs, and of those who are diagnosed correctly, most do not receive minimally adequate treatment.
Collaborative care was developed to solve this problem with behavioral care delivered on-site in the PCPs office. This model includes: screening for behavioral conditions; progress tracking; and decision support to guide treatment. Behavioral clinicians also provide patient education and address behavioral issues that impact chronic medical conditions, such as adherence to treatment. Having behavioral clinicians available in the PCP setting was key to the success of collaborative care in the Milliman cited studies. When the patients are introduced by the PCP to the behavioral clinician, a “warm hand off,” the probability of the patient engaging in treatment is about 50%. When the PCP makes a referral without a “warm hand off” the engagement rate drops to about 25%.
Unfortunately it is not practical to employ behavioral specialists in most primary care settings. The expense of behavioral staff is hard to justify when their services are used only episodically.
Solving the patient engagement problem is a major hurdle for collaborative care. Enticed by the cost savings promised by the Milliman review, venture capitalists have started funding behavioral integration companies which seek to apply technology and data analytics solutions to the challenges of collaborative care. Lyra health, Quartet Health Valera Health, and Ginger.io have recently entered this field with total funding of over $100 million.
What the new venture backed starts up are about is creating a virtual collaborative care system. Their model includes:
1) screening tools for PCPs available via internet and mobile devices
2) automated referral systems
3) care managers and clinicians virtually available via telethealth and other technologies
4) smartphone enabled assessments for tracking patient progress
5) predictive analytics which presumably will apply ‘big data’ magic to the problem of identifying patients who will benefit from behavioral care or for tailoring their treatment.
The websites of these companies emphasize treatment of medically ill patients, but it seems likely that once they have their PCP based case identification and referral systems in place they will become the gatekeepers for all behavioral care and replace the MBHOs. For an ACO or healthplan to have a behavioral integration company for chronically medically ill patients and a MBHO for other behavioral referrals would be very cumbersome.
VC backed companies are conducting an experiment to see if they can make virtual collaborative care work. But you wouldn’t know this from their websites which are filled with hype. For example, all VC start ups advertise their use of “predictive analytics” and big data. But it is ludicrous to use predictive analytics until 1) you can prove the concept even works; and 2) that the conditions that are known to be associated with high cost—the low hanging fruit–such as diabetes, can be shown to be successfully managed with virtual collaborative care.
Another astonishing factoid is that there are almost no clinicians who have worked in behavioral integration on the staffs of these companies. If you go to their websites you will see profiles of marketeers, technologists, biostatisticians, the occasional MD, and administrative types. The impression you get from these companies is that all you need to do to save 5 to 10% of the health care dollar is to harness big data and technology. This is a pipe dream.
VC backed virtual collaborative care companies are not necessary. They are part of the problem because they add an unnecessary administrative cost layer that takes away from the funds available for actual patient care. Nor is virtual collaborative a silver bullet that will bend the cost curve. At best it might provide marginal savings, while improving behavioral health outcomes of patients. In other words, a modest but worthy contribution to care.
VC backed companies are a threat to clinicians. Self referral will be replaced by the PCP gatekeeper who in turn will be managed by the VC company. Over time clinicians might find themselves shunted aside in favor of digital apps or clinicians in cubicles providing “evidence based care” via teletherapy. VC backed companies will bring back one of the worst practices of the old MBHOs, where the PCP makes the referral to a behavioral care company rather than to a clinician in the community whom they know and trust.
The cost for the services of these companies will be high because they need to pay back their venture capitalist funders. Many ACOs and Health plans can be expected to look for less expensive ways to achieve behavioral integration. They will be interested in solutions using their existing networks or local provider networks that come together to meet this need.
Telehealth, automated assessment systems for PCP screening and outcomes tracking, and referral systems are available. (The CarePaths EHR includes teletherapy and we will be introducing an upgrade to its assessment system that is more mobile device friendly later this year.)
It will be important for local behavioral provider networks to be prepared to address the needs of the medically ill patients; training is available from behavioral experts who have worked in this area.
Finally, the predictive analytics initiative of the venture backed companies, seems premature at best. Automated screening is very inexpensive and there is no reason not to screen all patients or all patients with potentially expensive conditions. The field has not matured to the point where sophisticated predictive analytics can make a contribution to treatment decision-making.
The big challenges for behavioral integration are: 1) finding ways to engage patients in treatment, 2) identifying local providers with credibility in the primary care community; and 3) testing out strategies to make virtual collaboration effective.
Behavioral integration, to coin a phrase, is not rocket science. It is simply the timely provision of behavioral interventions. You don’t need venture capital for that.