New Cerebral CEO Focusing on Serious Mental Illness, Putting Some ‘Exploratory’ Expansion Plans on Hold

Cerebral is doubling down on mental health and focusing on treating patients with serious mental illness. In turn, some of the company’s more “exploratory” efforts, such as expanding into primary care, are now on hold.

The digital mental health company’s newly minted CEO, David Mou, told Behavioral Health Business that under his direction the company will have an emphasis on value-based care and treating serious mental illness, including substance use disorder.

The strategy refresh comes as the company enters a transition stage, after facing a wave of public scrutiny and an ongoing federal investigation regarding its prescribing practice.


Additionally, the San Francisco-based Cerebral recently announced that it would begin layoffs in July. Mou said that the layoffs are reflective of the company’s priorities to keep behavioral health front and center while moving into value-based care.

“We’re going to deprioritize some of these more exploratory and peripheral service lines that we were considering,” Mou said. “We were looking at primary care beforehand. That’s on pause for now. So efforts such as that, like international expansion, we’re going to put that on pause, but let’s really focus on getting mental health right. And then focusing on value-based care is one major effort.”

Providing value to the SMI population

According to the CDC, 1 in 25 people in the U.S. will have a serious mental illness such as schizophrenia, bipolar disorder or major depression in their lifetime.


Treating serious mental illnesses and incorporating value-based care go hand and hand, according to Mou, who previously served as Cerebral’s CMO before taking the helm as CEO last month. Currently, the digital health company offers care for a number of serious mental illnesses including bipolar disorder, substance use disorder and depression. 

“It’s not the mild to moderate depression, anxiety, patients who use an app for meditation and want to see a health coach every once in a while. That’s not where value-based care is really going to take hold,” Mou said. “It’s going to take hold for the patients who are in and out of hospitals, suicidal, in and out of emergency rooms, losing jobs, and because of this they can either be disconnected from care or can’t find care. So that’s where we want to focus.”

Dual-diagnosis patients with mental health conditions such as depression and anxiety as well as a condition like substance use disorder are where Mou sees value-based care having the biggest impact.

However, the bulk of digital mental health companies focus on the lower-acuity side of mental health care.

“If you only treat mild and moderate depression, anxiety, which I would argue [is] the majority of other companies … in a weird way, they’re skimming the patients,” Mou said.

Indeed, patients with a history of a serious mental illness are often dropped by other digital health companies. Cerebral, in contrast, will continue to provide care for patients with bipolar disorder, major depressive disorder and substance use disorder.

In fact, earlier this year, Cerebral announced a new opioid use disorder program, which uses medication assisted treatment (MAT) and behavioral therapy.

Mou said he plans to continue to grow this program.  

“We get a lot of those patients. When they come to us, they say, ‘As soon as I said history of bipolar disorder, they said goodbye. They read a script, and they hung up the phone,’” Mou said. “That’s what the vast majority of patients who really, really need help [are] dealing with today. So we will lean into serious mental illness.”

Cerebral was founded in 2019. Since then, it has raised $462 million in venture capital funding, bringing its total valuation to roughly $4.8 billion.

The company offers virtual visits and counseling, as well as medications for a number of conditions.

What value-based care means to Cerebral

Cerebral is in a prime spot for value-based care because of its troves of data on patient outcomes, according to Mou.

“You first have to just demonstrate that you’re really creating better value for the insurance companies, for the employers, for these large health care stakeholders,” he said.

Value-based care can look a few different ways for Cerebral. Payers can partner with the company to ensure quality measures are met and that patients are seen by a clinician within a certain time frame.

In the future, Cerebral could also look at a risk-based approach, where it subcapitates an at-risk population and takes on the care for patients and also the cost, for an agreed upon amount.   There are also avenues in between with a shared-risk and shared-savings model.  

Cerebral has walked a rocky road over the last few months. Following a wave of negative media attention and a Department of Justice investigation, the company announced in May that it would no longer prescribe ADHD medications to new patients and end prescribing to existing patients in the fall.

Mou previously stated that this was to prepare patients for the expiration of the Ryan Haight Act.

Cerebral has also had issues with major pharmacy retailers. In May, ​​CVS Health (NYSE: CVS) and Walmart (NYSE: WMT) announced that they would no longer fill controlled substances from Cerebral prescribers – including ADHD medication as well as its medication assisted treatments for substance use disorder.

However, Mou said that the company is engaging with pharmacies on its OUD treatment program.

“We’ve had good engagements with the pharmacies,” Mou said. “Suboxone is also treated differently than the other types of controlled substances. So we’re optimistic that … it won’t be a roadblock going forward.”

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