Field Notes I Behavioral & Mental Health I Is Teladoc Immune to HC Labor Market Trends?

Background: Our contact is in private practice on the West Coast and on staff at an academic institution (research related). The practice is generally focused on anxiety, depression, and other typical mental health issues. Volume = ~20 patients per week, short-term patients need anywhere from 4-8 sessions, others vary in length greatly. The practice is nearly 100% virtual, goal-oriented, and evidence-based/empirically supported. Overhead is ~10% and the panel is full (no wait list because there's no point; spots open and are filled immediately). 

Can you share your thoughts on the staffing and labor issues in the behavioral/psych area?

• My practice is always full - demand is very high. There aren't enough therapists – especially psych/PsyDs. I just give referrals and tell people to reach back out in a month if they haven't connected to care.
• There's been an increase in the number of graduates from professional schools, but PsyDs or master's level, licensed professional counselors are harder to come by. The for-profit schools do put therapists out in the market, but they aren't always providing evidence-based medicine.
• Pick your provider - Lyra or any other - if a provider wants to hire evidence-based clinicians, there's a shortage because the people graduating don't necessarily have that ability, yet. So, it's not really a global labor shortage.
• It's worth noting that schools can be very selective. The traditional route into clinical psychology is not paying to go to school. It's an exchange for the degree (research or being a TA in the program). There aren't enough programs out there to put people well-versed in empirically supported treatments out in the market quickly. There are far more for-profits that allow people to get licensed and the training is far more variable (e.g., at the master's level).
• With coaches, there are no legal restrictions - someone can coach from anywhere (across state lines). Platforms that support coaching with an app w/ other tools like built-in triage can provide good support.

How are adoption and engagement rates generally? Can these apps/coaching prevent inpatient admissions?

• Dropout rates are an issue for digital interventions. It's one thing to attract patients/members. It's another to keep them engaged. Coaching is one way to drive retention and keep people in programs. However, if someone is in more significant distress, having a therapist/PsyD available makes a lot of sense.
• On thing that's worth noting - if you can intervene on the sleep side, that does tend to lead to improvements in other psych variables down the road. I think outpatient can forestall a crisis, yes. However, I don't think - my personal opinion - that BetterHelp and some others are recruiting the same type of clinicians. 

If you wanted to expand your practice now – as a consultant – what is the wage inflation or what can you command relative to pre-COVID?

• Wage inflation is a big challenge. In the context of the digital health companies, to have a margin, they've got to cap salaries. If providers spend less on the clinical workforce, you've got to ask if they are as competent as master's level or PsyDs.
• On the West Coast, rates are probably higher than elsewhere in the U.S. - for PhD level in a metropolitan area, the cost per hour can range from $250 - $400. For master's level, it's in the $200-$275/$300 range. That's why it's hard to Lyra and BetterHelp to compete w/ salaries in private practice.
• If a company is looking to build out a platform, they likely need to hire clinicians in other parts of a state where the cost of living is lower. The rates are not currently attractive.
• Any idea of revenue share or impact on P&L? Overhead is about 10%. It's not that significant (office, malpractice, EHR, and maybe some other expenses depending on the patients). You've probably also got time off and health insurance built into the rate.
• What’s capacity? Clinical is usually capped at 20-25 patients per week - that's a pretty full load for one clinician. It's not more because of notes, coordinating care, emails, homework assignments/diaries, etc. There's usually a lot more than just one hour per.
• If you're just starting today, can you get to "full" pretty quickly? Yes, but it's easier for doctor-level. You have to monitor/consider outcomes too. Outcome measures are tracked per patient w/ goals set. Treatment isn't open-ended. Even if it's a year or two, there are active things you're working on with a patient - it's all goal-focused. Lyra tried to emulate that model. Some conditions are short-term (e.g., you usually only need 8 appointments for insomnia, but a more acute issue could need 25+ sessions). So, spots will open up (they fill immediately).
• Colleagues w/ group practices are doing more collaborative care, whether it be with local ACOs or being tracked into primary care models like a One Medical.

How does virtual care compare to in-person?

• I haven’t pooled the data, but my opinion is that virtual care is almost as good as in-person. There are some things that require in-person - to do in-session exposures or simulations, for example. But we can do most things via screen sharing, white board, and video. Scheduling is manageable too... there's no commute.

Are rates lower or how does lower acuity care work?

• Lower acuity issues can readily be handled by "juniors" (post-docs, pre-license, or maybe finished grad school and working under a psychologist, supervised). For all such, the fees are lower - as low as $100.
• OK, so 4 sessions for $320/mo. w/ BetterHelp… It's a very low probably that a highly trained evidence-based clinician is involved there. You have to hire and train carefully. People need good training. No PsyD wants $60/visit. That level is more for coach-types that may live in lower cost of living states.

Do you see anything that could disrupt the demand side or think it'll keep going? 

• It seems like part of this is recession proof, and then with the pandemic and such, I don't see it decreasing, and I'm not worried about apps/D2C interfering [with my practice or detracting from work as a clinician]. Employers are recognizing they have to offer a mental heath benefit. Lots of clinicians joined Lyra initially because it was easy and people knew it was a trend, but now most panels are full, so clinicians are not taking Lyra patients. So even Lyra must find more good clinicians.

What does this mean for the inpatient side or brick-and-mortar side - companies like Lifestance?

• I'm not as familiar with Lifestance, but a lot of these companies are promising big growth and maybe can't find people/staff.
• Clinical outcomes matter. If it's "talk therapy" or low-acuity, or with a Lyra - it's a very crowded market w/ lots of mental health, wellness, etc. apps - you've got to have eye toward a diagnosis and goal. Many try to launch and start D2C and pivot to employer-sponsored. The D2C pathway isn’t easy, but again, are you treating mental health or is it about "betterment?"
• If you're working w/ someone that's depressed or has diagnosed anxiety vs. someone stressed out at work and needs behavioral tools, it matters a lot. Talkspace and others are more about wellness, but I think they can have an impact even if they are more wellness oriented. 
• There's also a risk that the solution can become part of the problem - do you need sleep meditation to sleep sort of thing.

Is your practice all cash pay? Or, how are payment streams generally?

• Almost all private practices are cash in wealthy urban areas. PsyDs don't generally want to be on insurance panels. If a clinician is having trouble filling up with cash clients, that may be a signal.