LifeStance says Hybrid Model is the Future, Building Integrated Care Model for Growth

LifeStance Health (Nasdaq: LFST) Founder and CEO Michael Lester said a hybrid approach of telehealth and in-person care is the future and this approach will drive continued growth after its first year as a publicly-traded company.

“Our ability to support our patients both at home and in our physical locations has solidified our position as a mental health care leader providing high-quality care across multiple care settings,” Lester said Thursday during the company’s fourth-quarter and full year earnings call for 2021.

Founded in 2017, LifeStance is one of the nation’s largest pure-play providers of outpatient mental health services and has over 500 centers across 32 states. The company saw its clinician base increase 55% during 2021 to 4,790, adding 415 net in the fourth quarter and 1,693 for the full year.


Lester said that LifeStance’s ability to successfully negotiate with over 250 national and regional payors is one area that sets the company apart from its peers, and puts LifeStance in a prime position to grow through its hybrid approach.

“Combined with the fact that we’ve negotiated telehealth rate parity for the majority of our payor contracts, LifeStance has an unparalleled ability to seamlessly transition both the business and individual patient care back and forth between in-person and virtual settings,” he said.

Currently, the company services 80% of patient visits through telehealth, but Lester sees LifeStance’s care delivery being split 50/50 between telehealth and in-person services in the future.


“We have found that our clinicians having a personal and meaningful connection with our patients makes a tremendous difference,” he said. “We’re confident that our hybrid model is the future of mental health care delivery. And we’re well-positioned to win in this space.”

More health care providers have been leaning into telehealth since 2020, the usage of which has increased 3,800%, according to McKinsey & Company.

First full year earnings as a public company

LifeStance saw growth in 2021 as it registered full-year revenue of $667.5 million, up 77% from 2020. The company had a net loss of $108 million during the year, which it attributed primarily to stock and unit-based compensation.  

LifeStance last June made its debut on the Nasdaq and said it expects its stock-based compensation to continue decreasing as its pre-IPO awards vest. LifeStance also cited “a shift in labor market dynamics” as well as investments in company infrastructure as having affected its 2021 EBITDA, which adjusted was positive $11.4 million in the fourth quarter and positive $49.2 million for the full year.

With regards to a labor market shift, the company attributed those dynamics to the so-called Great Resignation that has been occurring in a number of industries since last year, including health care.

“Even in this environment, we have demonstrated that LifeStance is positioned as a best in class employer with the culture, value proposition and technology to attract and retain clinicians,” Lester said.

LifeStance’s unique patient volume grew last year by approximately 60% to over 570,000. The company opened 100 de novos in 2021 and this year expects to open between 80 and 90 more as part of its hybrid care commitment.

“We’ve deepened our focus on the patient, working to expand access and improve the end-to-end experience through tech-enabled services and creating future growth options through integrated care model programs,” Lester said.

Lester noted those integrated care services are part of 10 partnership programs LifeStance has in place, which include Medicare Advantage plans and a dialysis provider that he described as being large in size.

“While we expect it will take several years for the market to build the capabilities to fully support integrated care, we believe it is critical to maximizing the impact that mental health care can have in improving outcomes and reducing overall medical costs for Americans,” Lester added.

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