Health insurance for mental health is terrible. This $ 4.6 billion start-up is shaking up the status quo.
gIt is difficult to get good mental health care, even with insurance. More than half of those surveyed by the National Alliance on Mental Illness said when finding a psychiatrist that the doctors they called were not accepting new patients or accepting their insurance. A third of people could not find any mental health prescriber who would accept their insurance. Despite federal laws requiring health insurers to reimburse medical and mental health services at the same rates, the sad truth is that many insurance networks have terrible coverage with outdated supplier directories and unintelligible benefits.
Lyra Health, based in Burlingame, Calif., Which just raised $ 200 million for a valuation of $ 4.6 billion, is profiting by filling the void: providing mental health benefits to large employers who actually work. News of the fundraising round was first reported by The Information.
Employers are so fed up with mediocre mental health benefits that they’re willing to pay extra for a network of hand-picked providers who will help their employees. Why? Depression and anxiety disorders cause a loss of productivity of $ 1 trillion worldwide each year, according to the World Health Organization, and that was before the Covid-19 pandemic. Lyra provides clients with access to an organized network of virtual and in-person mental health care providers, as well as a virtual platform that aims to help people get better faster through methods based on evidence such as cognitive behavioral therapy. Lyra is now looking to significantly expand its offerings globally after the pandemic.
“Our feeling is that companies think mental health is an important topic now and in the future,” said Lyra Health co-founder and CEO David Ebersman, who was previously CFO of Facebook and before that of Genentech. “Covid was not the start of the mental health epidemic we are facing. The pandemic has highlighted this need that I think we live in and businesses continue to take it very seriously. “
Today, Lyra’s US network includes more than 5,000 suppliers and its global network, through a partnership with ICAS, includes 85,000 additional suppliers in 180 countries. “We pay great attention to the practices and quality of providers and really aspire to a world where we are comfortable sending a friend or family member to any provider in our network,” says Ebersman. Its customers span a wide range of industries and sizes, including eBay, Genentech, Uber, and VCA Animal Hospitals. Ebersman declined to give specific revenue figures, but said the company “significantly exceeded” an earlier estimate provided to Forbes of $ 100 million in revenue by the end of 2020.
TThe company’s latest capital injection, led by investment firm Coatue Management with participation from Sands Capital and other existing investors, doubles Lyra’s $ 2.3 billion valuation from a cycle of $ 186.7 million funding in January 2021 – and will be the biggest mental health tech deal in 2021. The move comes amid a larger boom in mental health venture capital funding, as investors have donated $ 1.5 billion to businesses to help cope with the psychological fallout from the pandemic. That means Lyra will now hold the first and second spots for the biggest deals in space this year, following its January round, according to private market capital data firm PitchBook. Lyra has raised $ 680 million to date and achieved first unicorn status in 2020.
“Mental health is a global challenge,” said Lucas Swisher, general partner of Coatue, in a statement. “Rates of anxiety, depression and general mental health problems are increasing worldwide, and we believe Lyra has the potential to provide care to a large portion of the population who historically have not. could not access it. ”
Lyra has developed an AI-powered technology platform to connect patients with the providers best suited to address their specific needs. For conditions like anxiety and depression, he uses a mixed-care model that combines virtual visits from therapists with videos and online exercises to reinforce lessons between sessions. The company frequently cites a retrospective study of 385 Lyra patients published in the Journal of Medical Internet Research, which found that its mixed model helped 83% of participants improve their anxiety or depression over a 6-week period. However, this was not a randomized clinical trial, which means the results suggest but cannot directly link Lyra’s platform to the improvement seen.
Lyra also offers mental health coachings which are sessions for patients with mild symptoms that are not clinically diagnosed as a more preventative measure. As coaches become more common in mental health startups, critics worry about variability in training and effectiveness, as these coaches do not take licensing programs like other healthcare providers. mental. By 2022, Lyra plans to offer coaching, therapy and medication on a global platform to all users.
VCA Animal Hospitals, which operates more than 1,000 sites in the United States, Canada and Japan, first engaged Lyra in a pilot program in January 2020, as part of a larger company effort to offer wellness programs to its more than 30,000 employees. . “The veterinary profession as a whole faces some truly unique challenges,” says Johanna Baldwin, director of associate wellness at VCA, including compassion fatigue and burnout. Vets face higher rates of severe psychological distress and up to one in six U.S. veterinarians has considered suicide, according to the CDC.
“The response from employees has been overwhelmingly positive,” says Baldwin, especially as the company strives to mainstream research into mental health services. Employees also like Lyra’s ease of use. “You can easily find information about providers and coaches, then you can quickly plan online,” she says, which is especially important for employees working different shifts in 24-hour hospitals. 24.
Lyra’s total contracted member base is approximately 2.2 million people worldwide, although not all of these people use Lyra’s services. The company said customers can expect around 10% of their employees to see a supplier in the first 12 months and hopes to continue to grow that number. “We are delighted to be in a position where we can invest to leverage the scale we already have” and the knowledge gained from working with hundreds of thousands of patients, “Ebersman said. Lyra will strive “to be the complete solution that I believe this part of the healthcare system deserves.” ”