Ginger, the on-demand virtual behavioral health care system with a $1.1 billion valuation, recently raised $100 million in a Series E funding round led by funds managed by Blackstone Growth. But even more notable than the financing itself is what Ginger plans to do with it — from diving deeper into value-based care to building out its health plan partnerships and breaking in the Medicaid space.
Since Ginger’s founding in 2011, the San Francisco-based company has raised more than $220 million and made a name for itself working with employers and other partners to deliver coaching, therapy and psychiatry to members via text and video.
Today, the vast majority of Ginger’s partners are large employers such as Delta Air Lines, Domino’s and Sephora, with most companies paying Ginger on a per-employee-per-month basis for a set amount of access to behavioral health services.
But all that’s starting to change — or, rather, expand with the help of the company’s new funding, according to Ginger CEO Russ Glass. For one, Ginger is leaning into value-based care and plans to increasing its efforts in that realm.
Ginger launched its value-based model for employer clients last year with the goal being to further reduce friction for employees in need of behavioral health services. For a fixed fee, Ginger provides every eligible employee and adult dependent with unlimited access to its entire spectrum of care.
Since the company rolled out the option, Glass says 60% of Ginger’s new clients in 2020 opted for the model, even though it’s on the higher end of the price spectrum compared to the company’s other products, which don’t necessarily provide unlimited access to services.
Glass said the high rate of adoption of the model — and the margins — were somewhat surprising.
“The margins on that product were not as good as we expected them to be because, over this past year, clinical needs were so high,” Glass told Behavioral Health Business. “I would say enterprises got an even better deal than we thought they would by purchasing this value-based model, and that’s great. At the end of the day, we delivered a ton of care, and employees got access to it during the critical timeframe.”
Given the quick and successful uptake of the model, Glass said value-based care will be an important part of Ginger’s future.
“We’re not as far as we want to be yet,” he said. “You’re still paying, as an employer today, based on a flat rate.”
Glass said he’d love to get to a place where employers are paying Ginger based upon outcomes, however, that goal is probably still a few years out.
Medicaid, Acquisition Goals
Ginger is also investing in diversifying its client base, partnering with more health plans and strategic partners, including those in the non-profit and government payer realms.
“Our vision is a world where mental health is never an obstacle,” Glass said “So implied in that vision is that we’re going to be able to care for people that are of lesser means, not only for the employees of companies that can afford high quality health care.”
In fact, Ginger recently scored its first managed Medicaid partner, which Glass said the company plans to announce in late Q2 or early Q3. The goal is to learn what it takes to support vulnerable populations, then continue to improve from there.
“[We’re] heads down on supporting health plans as effectively as we support enterprises,” Glass told Behavioral Health Business. “That’s a relatively new motion for us. We’re just getting our first large health plans launched, and I think this year is largely about both expanding the enterprise [business] … and now getting to the point where we feel great about how we’re supporting health plan members as well.”
Additionally, Ginger is planning to spend some of the money from its recent fundraising round on acquisitions.
Areas of M&A focus include smaller, sub-scale companies that could help Ginger accelerate it’s research, development and technology efforts, as well as those that could help Ginger expand its reach, from the types of conditions it can treat to the number of patients it can support.
“Today, we handle some types of substance abuse, but we are interested in supporting more so [we’re] looking at extensions to our platform into other areas of behavioral health,” Glass said. “Finally, anything that helps us deliver more scale — so online therapy networks [or] groups that have built good quality delivery that we can plug into our platform and allow them to deliver more efficiently and support more members — is also very interesting to us.”