San Francisco-based hybrid mental health provider Two Chairs is leveraging a recently acquired national contract with Aetna to expand its footprint in Florida, one of the largest states in the nation and its first East Coast market.
Two Chairs CEO Alex Katz told Behavioral Health Business that the expansion to the third-largest state in the U.S. uses several lessons learned in the company’s history. He also hopes the Florida expansion will provide additional insights as it expands methodically.
“We have national aspirations and so this is a big next step for us toward that ultimate vision,” Katz said.
The company employs about 400 mental health providers who see patients in-office and via telehealth in California and Washington. Two chairs expanded to Washington in 2022.
Two Chairs went live in Aetna’s network in Washington and California at the beginning of the year. Its contract with Aetna to serve Florida members became effective last week.
In an apparent effort to bolster its expansion, Two Chairs hired and promoted three top-level leaders to hiring, marketing and commercialization roles.
Two Chairs will open a new office in Miami, Florida, in May. Telehealth services for adults 18 and older are available now. The new office will bring its facility count to nine.
The company selected Florida for several reasons. On top of being a major market, it is a state with a worse-than-average mental health provider shortage. Federal data presented by the Kaiser Family Foundation finds that 21% of Florida’s need for mental health services is met with the present workforce compared to the national average of 28%.
Florida is also one of Aetna’s largest markets, Katz said. Two Chairs’ model focuses on expanding evidence-backed and affordable access on an in-network basis with payers.
The company hopes to bring what it has tested to its expansion in Florida. It also plans to use the expansion as a learning experience to inform other state expansions.
Part of the playbook Two Chairs will bring to Florida expansion is establishing a referral network with area primary care providers. Especially in Washington, the company found success in providing a diverse team of mental health providers — in terms of background and clinical expertise — that was in-network with their patients’ insurance was a winning formula. Katz also said that as many as two-thirds of primary care providers struggle to get mental health services for their patients.
The company plans to cross-license some of its other states’ providers to work with Florida patients. Katz said the plan is to find and hire local mental health providers to ensure local know-how is brought to the forefront in treating Florida patients.
“We’re going to be looking to mental health clinical leaders and individual therapists on the ground to help teach us the unique needs of this population and how we can serve folks in a super tailored way,” Katz said.
On top of learning more about how to expand into a new state in a new region of the country, Two Chairs hopes to refine its systems and processes for operating a company that focuses heavily on the local needs of patients and clinicians at a national level.
Two Chairs’ methodic approach to growth
Two Chairs was founded and launched in 2017. It has so far raised $28 million including, a $21 million Series B funding round led by the firm Amplo in 2019. While Two Chairs’ contracts with payers such as Aetna allow it to see patients nationwide, the company has purposefully held back on its national rollout to focus on a handful of states to maximize quality and impact.
“It means that we can build the best talent brand, provide the best clinician experience, deeply understand the unique demographics and client profiles of a specific market — and we found that our health plan partners really appreciate that approach,” Katz said.
This approach gives Two Chairs “the ability to go deep and serve at scale and create outsized value in each market,” he added.
This approach has hedged against many regulatory headaches that other companies that sought to expand quickly, often opting to go telehealth only and use providers in different markets to see patients.
Two Chairs also seeks to differentiate itself from other hybrid or telehealth-only providers by hiring providers as employees — as opposed to contractors — and using technology as a means, not as the end for its care. For example, the company uses patient-matching technology that assesses hundreds of factors to pair providers and patients. But that match is used in conjunction with a 45-minute matching consultation with a licensed therapist.
Unlike consumer settings, many patients don’t truly know their needs or what interventions might best serve their needs, Katz said. Two Chair’s matching effort results in 90% of patients attending at least a fourth session and 98% reporting a good match with their therapist, he added.
“What comes out of that room is a therapist who has expert intuition and a clinical conceptualization of the case and they take all that data and put it into our platform,” Katz said. “Then an algorithm does its work. But the algorithm isn’t very effective if you don’t have the intuition of the therapist.”
Eventually, Two Chairs hopes to expand its service offering to include psychiatry, allowing it to handle a wider range and deeper offering of mental health needs in-house. The company today is coordinating with primary care providers on medication management or referring to other providers.