Serious mental illness (SMI) startup Vanna Health has raised $29 million ahead of its official launch.
The company, which is centered around connecting patients with SMI to community resources with a value-based care approach, plans to use the new funding to help it grow out its partnerships and launch in a small number of states. Among its leaders: former National Institutes of Health (NIH) Mental Health Director Dr. Thomas Insel, who serves as Vanna’s co-founder and executive chair.
“We’re just starting to launch. We’re in deep conversations and getting our toe in the water in Massachusetts, in Pennsylvania and in Arizona,” Insel told Behavioral Health Business. “In each of those markets, we’re just beginning to create the partnerships and figure out the plan for engagement in those communities. Funding gives us the opportunity to go at-risk to actually figure out what the ultimate services and product line will look like.”
The new capital will also allow Vanna to hire coaches, clinicians and mental health providers to build out its clinical team.
Recently, the company has made deals with major insurers including Blue Cross Blue Shield of Massachusetts and Blue Cross Blue Shield of Arizona.
“I think what Blue Cross Blue Shield of Massachusetts and Arizona are interested in is what a value-based model could look like in the behavioral health space,” Insel said. “We’ve done this pretty well as a field in a few areas. We’ve got really good bundled payments for knee replacements, or maternity care. … But in behavioral health, it’s been really hard to move from fee-for-service [models] to any of the at-risk or value-based models.”
Moving to a value-based payment model in behavioral health will take a lot of community partnerships. It could even take form in some public-private partnerships, according to Insel.
“This gets done through partnership,” he said. “There’s no one entity, whether it’s a medical home, or inpatient unit, or crisis service – nobody’s got all the cards in the deck. You’re going to have to bring them all together.”
Founded in 2021, the company is led by Insel and serial entrepreneur and Vanna CEO Dr. Giovanni Colella. Vanna’s goal is to help individuals living with SMI connect to the community ecosystem for care and resources.
“I talked a lot about what I call the three Ps: providing people, place and purpose for those with serious mental illness,” Insel previously told BHB. “And that if we did that well, and we did it comprehensively, continuously, compassionately, we could really help a lot of people who today end up incarcerated or homeless or just really struggling. We can help them to have a much better life to help them to thrive.”
The startup plans to use a for-profit model approach. Insel said that there is a business case for caring for individuals with SMI through a community-support model. Specifically, this model could drive down costs of care and scale, Insel said in a previous interview.
“We’re quite convinced that there’s a business case to be made, because these are the most expensive patients in many health plans, including in Medicaid,” Insel said. “And we’ve seen this in the markets that we’ve looked at – these are very expensive patients. But importantly, the expense is not on the behavioral health side; it’s on the medical side.”
The estimated lifetime burden of SMI is $3 million per patient, according to research from the Substance Abuse and Mental Health Services Administration.
The traditional fee-for-service model is missing some key points, Insel noted. For example, many wrap-around services don’t have a CPT code.
“Think about this: If a patient is costing you $45,000 a year, that’s what we’re paying for the current system with terrible results. Absolutely dire outcomes. For $45,000 a year, you could do a lot for that person,” Insel said. “They can have a concierge social worker, they can have a pretty nice place to live. I mean, there’s really a lot of opportunity to serve them in a different way, if you really focus on people, place and purpose, not just on making sure that they’re getting another ER visit or making sure that they got a hospital stay.”
Vanna Health isn’t the only startup looking to care for patients with SMI. California-based Amae is working to unify behavioral health, primary care and community support for patients with serious mental illness.
Additionally, New York-based firsthand is looking to help patients with SMI make the first step into care. It is doing this by using peer support networks to help patients with SMI into community-based care.
This year, those who follow the behavioral health industry can expect to see Vanna testing out its model, seeing what works and what doesn’t work.
“2023 is really about proving out the model and really developing what we think is going to be a new model for the way that we manage populations with serious mental illness,” Insel said. “And it’s going to take us at least a year to figure out how to do this in a way that could scale.”
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