This is virtual therapy’s moment. Can it last?
I open Instagram for the only glimpse I have of my friends in the outside world. As I scroll, ad after ad assures me that support for loneliness is just a click away.
As much of the country shelters in place due to the global pandemic, virtual therapy is having a moment. The inability to visit a therapist in person, paired with the anxiety and isolation caused by mandatory social distancing, seems to have created a perfect storm for therapy apps to provide an umbrella.
There’s a wide variety of options: Some services connect you to an actual human therapist via video chat, some walk you through self-help exercises to do on your own, while others are either a hybrid of those two approaches or meet somewhere in the middle. Over the last few months, companies across the virtual therapy spectrum have not only seen existing users checking in for sessions more often, but an explosion of new sign-ups as well.
What does that mean for the future of this business? Analysts say that this is a crucial moment for these companies to prove their worth, both financially and to their patients. Meanwhile, companies are hustling to meet the increased demand while maintaining a high quality of care, while investors are waiting and hoping to see whether new patients stick around beyond the end of quarantine.
“We don’t know the long-term impact,” said Adam Haim, chief of the treatment and preventive intervention research branch at the National Institute of Mental Health. “There’s been a surge right now. Whether that’s sustainable is an open question.”
“We have to be sure that the care that’s being delivered is high quality and evidence-based. And that’s the thing that worries me a little bit.”
So far, things are looking up for the virtual therapy biz. Industry leaders BetterHelp and Talkspace both said that new sign-ups “doubled” in comparison to the same time period last year. Therapy app AbleTo (which also owns the self-help app Joyable) said that there’s been a 50 percent increase in engagement with the platform, and Ginger, a service known for providing teletherapy through employer programs, also said virtual weekly sessions are up by 50 percent.
“The fact is, everyone’s mental health is being challenged right now with fear, grief, and uncertainty,” said Oren Frank, the co-founder and CEO of Talkspace. “The support that tele-therapy can provide is invaluable at a time like this, which is why we feel it is paramount to be there for as many people as we can.”
Virtual therapy companies are being proactive about getting people help (and sign-up deals) during this time. In their social media advertisements, these companies use language that offers virtual health care as a way to address the challenges of the pandemic. Ousmane Caba, a healthcare analyst at PricewaterhouseCoopers, suspects that marketing budgets for virtual therapy companies have increased. On the other hand, Jeff Crowe, a managing partner at Norwest Venture Partners, which is an investor in Talkspace, thinks the dire need for help in the form of virtual therapy is driving this growth as opposed to merely ad dollars.
“Marketing budgets may have increased, but I think the bigger driver has been organic,” Crowe said.
Making sure these companies have enough therapists providing high quality treatment has been the present challenge. Crowe explained that “if you want to do this at scale and do it well, you have to have a network of thousands of therapists.”
Sam Brasch, senior managing director at Kaiser Permanente’s investment arm, KP Ventures, agreed that scaling, growing, and meeting demand are crucial indicators investors are looking for as they assess the long-term potential of these companies.
“For Talkspace, and any service providing healthcare right now, it’s more important than ever to demonstrate that we can meet the demand while upholding the highest clinical standards,” Frank said.
AbleTo’s chief medical officer, Dr. Reena Pande, said that in a time of increased demand, finding a therapist or service isn’t the only issue consumers and companies should be thinking about.
“It’s fantastic that we’ve opened up telehealth and enabled providers to deliver care from their homes and patients to access that care from their home,” Pande said. “We have to be sure in the mental health community that the care that’s being delivered is high quality and evidence-based. And that’s the thing that worries me a little bit.”
The NIMH’s Haim agreed that the new prominence of mental health apps — both before and during the pandemic — has created a scientifically murky market. Therapy apps that use phone or video calling have proven comparable to in-person therapy, according to Haim. However, few self-help apps out there use evidence-based techniques, and even fewer of those apps have the efficacy of their work backed up by clinical trials. In app stores, talk therapy apps are often placed alongside self-help apps, causing confusion about how to get help that comes with some scientific bona fides. (For more information on the differences between these apps, check out Mashable’s guide).
“We are in very unusual times that drive unprecedented demand, so it makes sense to assume that some of this surge in demand is temporary.”
Haim, however, sees the progression of the market, brought about by the pandemic, as an opportunity that will help “separate the wheat from the chaff.”
“I think that the field will move forward relatively quickly, and it’ll be easier in the future to identify well-established apps,” Haim said.
Quality of care is important for patients as well as business. Crowe and Brasch agreed that user satisfaction, as well as continued engagement, is another thing investors are looking for.
Separating quality services from the superficial and the winners from the losers are some of the big challenges investors are facing. Brasch thinks that the pandemic has shown that the market is potentially much larger than previously thought. But what does that mean for which companies will dominate?
“I don’t think there’s only one winner,” Brasch said. “There are lots of companies playing in the large mental and behavioral health space. That’s for sure. Whether or not there’s room for two or three companies, we’ll wait and see.”
The fact that the pandemic has also caused a down market only raises the stakes. In a bull market, investors are willing to take more chances. But Jeremiah Owyang, an analyst and founding partner at Kaleido Insights, said that it’s in lean years that the real leaders emerge.
It’s not like the boom in virtual therapy has been an overnight phenomenon. The experts I spoke with agreed that interest in these services has been building for a decade. The pandemic just supercharged what was already happening.
“I would say regardless of the pandemic, the groundswell was already there. It just needed a push,” Haim said.
Companies and investors are hoping that what’s happening now isn’t just a fleeting moment. Some companies are already making big bets: Reports surfaced in April that insurer United Health was in “advanced” talks to purchase AbleTo for $470 million (AbleTo declined to comment on the acquisition rumors). What’s more, BetterHelp president Alon Matas pointed out that the reverberations of people who are using virtual therapy during this time, and then recommend it to friends down the road, might impact these companies for years to come.
“We are in very unusual times that drive unprecedented demand, so it makes sense to assume that some of this surge in demand is temporary as a result of the current circumstances,” explained Matas. “That being said, I believe we have also gone through a ‘pivotal’ change which pushed the option of getting counseling online to the mainstream.”
Crowe, an investor in BetterHelp’s chief competitor, TalkSpace, agreed.
“Given that we’re going to be dealing with these challenges for a sustained period of time, the mental health challenges are going to be with us,” he said. “I would expect to see increased sustained demand. The surge may not persist forever. But the elevated level doesn’t go away.”
(Copied from Mashable)
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