Virtual pediatric behavioral health company Brightline has transformed its go-to-market strategy.
The shift involves shutting down the company’s operations in 45 states, nixing its enterprise commercial functions and planning to create hybrid care models in five states.
The change was also accompanied by significant layoffs announced on Tuesday.
“It’s been a hard week for Brightline,” read a blog post by co-founder and CEO Naomi Allen. “We made the decision over the last couple of weeks to restructure our national virtual-care employer-focused business to focus on a new go-to-market strategy that we believe will allow us to serve our mission in a more effective way.”
Palo Alto, California-based Brightline currently operates virtually in 50 states. As part of its transformation, the company will stop new patient intake in November, an executive told Behavioral Health Business. It will continue treating all patients through the end of the year, then relaunch virtual services in only the five states selected for the hybrid model.
The company’s treatment pathways are largely 10-14 weeklong processes. Care for the “vast majority” of patients will therefore be wound down by the end of the year, but the Brightline executive told BHB the company will work to connect patients still in need of care to other clinicians.
Laid-off Brightline clinicians will be financially compensated through the end of the year to continue treating patients.
Brightline declined to provide a specific number of employees laid off, but said that all enterprise function employees, including sales, marketing and client success teams, were impacted. Clinicians in any state other than the five selected to switch to hybrid operations were also laid off.
The company has no plans for further layoffs, and will hire teams for its new brick-and-mortar presences, its continued public sector business, and marketing leaders who are familiar with direct-to-consumer marketing to help the company pivot away from selling to employers.
Growing a business when selling to employers is difficult, the Brightline executive told BHB.
“Families that find out about Brightline through their employer have great clinical outcomes,” Allen’s blog post read. “But simply put, they are having too hard of a time finding us. Because we don’t sell directly to employers in our model, but rather through their health plans and partners, we aren’t top of mind enough for benefits leaders and therefore we don’t see enough of the types of marketing campaigns that really drive awareness amongst members.”
The provider previously laid off a significant portion of its staff in 2022 and again in 2023, but the Brightline executive said this most recent round caused by a change in overall strategy is significantly different from previous layoffs, which represented “appropriate belt-tightening.”
Employees supporting the company’s public sector business were not impacted by the restructuring.
In January, Brightline and virtual pediatric mental health provider Kooth signed a deal with the state of California valued at $680 million. Brightline will maintain this virtual contract and will seek out other public sector opportunities in the future.
The restructuring isn’t expected to create a major decline in revenue projections, the executive said. It also puts the company on a course to becoming profitable in the next few years, the source noted.
Brightline has raised a total of about $212 million in funding. The company is backed by KKR, GV (formerly Google Ventures), Oak HC/FT and Threshold. It provides therapy, counseling and psychiatry for children through telehealth.
The company, founded in 2019 and then called Emilio Health, was originally conceived as a hybrid model, with brick-and-mortar facilities and a virtual offering.
Brightline shifted its care model when the COVID-19 pandemic hit and became virtual-only.
While demand for virtual services has not declined, the company has identified increased demand for in-person services. Patients in the five states selected for hybrid care can opt for either virtual or in-person services, and get “the best of both worlds,” the Brightline executive said.
A hybrid model will also allow Brightline to treat high-acuity patients for whom virtual care is insufficient, and to offer medication-assisted ADHD treatment.
Brightline is considering both M&A and new builds to establish its brick-and-mortar presence. It expects to open clinics in mid-2025.
Narrowing the company’s geographic focus will allow the company to go deeper in key markets. Brightline plans to partner with local providers, schools and health systems to drive awareness of its services.
Brightline will continue its focus on creating affordable care pathways for families, the executive said, including by developing its Medicaid contracts and relationships with small, local health plans.
Becoming profitable requires sound unit economics at the individual clinic level, the executive told BHB, which Brightline will focus on in 2025.
Profitability also requires the company to enhance member acquisition through direct channels and referrals. In this pursuit, Brightline is therefore in “active conversations” with large potential partners in its five selected states.
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