Ginger, Headspace Aim to Revolutionize Employee Mental Health Benefit Market

While it’s frequently cited that one in five U.S. adults has a mental illness, an even greater number of people will experience the symptoms of stress, anxiety or depression at some point in their lifetime.

In response, more employers are stepping up to the plate to help their workers manage those conditions, offering new and expanded mental health benefits. In fact, nearly 90% of U.S. organizations now offer some sort of mental health benefit — up from only 69% in 2014 — according to a recent report from International Foundation of Employee Benefit Plans.

While the trend is good for employees, it’s also promising for behavioral health providers. It’s creating opportunities for innovative behavioral health companies to partner with employers across various fields and fill the need for mental health services.

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Ginger and Headspace are two such providers.

Ginger’s coach approach

When Ginger first launched in 2011, partnering with companies to provide employee mental health benefits wasn’t part of its business plan.

Instead, the San Francisco-based startup — then known as Ginger.io — was focused on research, specifically tracking behaviors through a mobile app to help detect mental health changes.

That work opened the company co-founders’ eyes to an even bigger problem, arguably the most pressing facing behavioral health providers today: Nationwide, the demand for services far outpaces the supply of clinicians.

“Our vision is a world where mental health is never an obstacle,” Karan Singh, co-founder and COO of Ginger, told Behavioral Health Business. “We saw … a broken system that wasn’t going to fundamentally change [with our old model]. We needed to build a fully integrated model to really tackle that.”

So Ginger — which has raised $70.5 million, according to Singh — switched gears. Today, it’s a virtual behavioral health care system that delivers coaching, therapy and psychiatry services to patients via text and video. It directly employs the clinicians who provide those services.

One arm of Ginger’s business relies on offering its services to companies as an employee benefit.

“What we found was that employers played an incredibly outsized role in taking care of and addressing mental health,” Singh said.

The company currently boasts more than 500,000 covered lives through its partnerships with businesses. Today, some of Ginger’s corporate partners include BuzzFeed, Sephora and Pinterest (NYSE: PINS), though Singh could not share a full list.

In partnering with employers, the goal is to help employees manage their mental health before it becomes a problem, benefitting both the workers and the corporation.

“Fundamentally, we believe in preventative care,” Singh said. “This is about moving upstream and catching people early. For most consumers in the general public, that’s still a newer concept. They might seek access to care only when they actually have an acute event.”

Employee-benefit pricing and packages are customizable and depend on a company’s size, Singh said, noting that engagement is also highly variable.

However, most companies opt to purchase Ginger as a subscription — per employee per month — which allows employees unlimited access to that level of care. Coaching — rather than therapy or psychiatry — is appropriate for the majority of Ginger members, according to Singh, but employers can also purchase access to higher levels of care. 

In addition to working with employers, Ginger is in network with a variety of different health plans and has referral relationships with organizations such as health systems to offer them additional wraparound services as needed.

Ginger also partners with traditional behavioral health providers in a few different ways, Singh said.

“The behavioral health and mental health epidemic doesn’t spare clinicians themselves,” Singh said. “Those organizations also experience provider burnout and clinician burnout, so [working] with them as employers is one way we partner with them.”

The company also has referral relationships with behavioral health providers, to whom it will send patients who need services beyond what Ginger’s clinicians can offer.

By catching behavioral health issues upstream, Ginger hopes to reduce the burden on already overworked providers who serve higher acuity patients.

“Those people who are most acute should be using those in-person resources,” Singh said. “But for the vast majority of the population, they can actually get equivalent care available 24-hours a day, seven days a week in our virtual care model.”

Headspace’s meditation model

Like Ginger, Headspace also tweaked its original business model to accommodate the demand it was seeing from employers for mental health benefits.

Santa Monica, California-based Headspace is a direct-to-consumer business that launched in 2010. It offers virtual meditation and mental fitness products and resources to its clients.

A few years ago, it rolled out an additional offering for employers, called Headspace for Work. Doing so was the result of popular demand, according to Megan Jones Bell, chief science officer at Headspace.

“Over time, companies started approaching us, asking if we offered subscription packages for organizations,” Bell told BHB. “That direct feedback from our members made it clear that there was demand for a more customized Headspace for Work program suited for workplace implementation.”

Currently, more than 500 companies offer Headspace to their employees as a mental health benefit. Some of those include Adobe (Nasdaq: ADBE), Hyatt (NYSE: H) and Starbucks (Nasdaq: SBUX).

“Our partners voiced that mental health and wellness are important to them and their families,” a Starbucks spokesperson told BHB in an email. “And as a result, we committed to take a stand, break the stigma around mental health and develop specific benefits that would address those needs.”

While packages and pricing vary based on employer, offerings are pretty universal, Bell explained.

Customers have access to Headspace’s entire library of content, with exercises, tools and guided meditations for everything from stress to movement to sleep. Headspace for Work members also get access to content specially designed for employees and company leaders, including tools to support the creation of an “effective mental health strategy,” according to Bell.

Headspace aims to tackle everyday stressors to help employees lead more productive, happier lives, reducing their risk for mental health conditions down the line. Employers are in a unique place to help achieve that goal, Bell explained, as most people spend the majority of their waking hours at work.

“While stress itself is not innately bad, if left unattended it can develop into overwhelming or chronic stress, which radically increases our risk of debilitating mental and physical ailments,” Bell said. “Businesses can no longer afford to ignore the impact that chronic stress has on their people – or on their bottom lines from lost productivity, health care spend and attrition.”

Headspace — which has raised $75.2 million in funding, according to Crunchbase — has the numbers to back up their claims.

Employees who used Headspace for eight weeks saw a 46% reduction in depression symptoms and 31% reduction in anxiety symptoms, according to a recent Oxford University study highlighted by the startup. To reach the findings, researchers compared 238 healthy employees from tech giant Google (Nasdaq: GOOGL) and pharmaceutical company Roche to a wait-list control.

Additionally, Headspace has been shown to reduce employee stress by more than 30% in 30 days, Bell said.

“By setting organizations up for success and helping them achieve their goals around health and happiness, we can take a step in the right direction to inspire cultural change that has a ripple effect of positive change, not just throughout the company, but across everyone employees interact with on a daily basis,” Bell said.

Headspace also works with a number of payers to get its services reimbursed, in addition to other partnerships.

“Headspace is already integrated into behavioral health care at selected health systems and integrated delivery networks,” Bell said. “We are actively seeking partners interested in offering Headspace as part of behavioral health care.”

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