This is an exclusive BHB+ story
Several larger behavioral health providers have inked partnerships with public entities as a way to expand access to care and seal valuable deals.
These partnerships, worth tens of millions of dollars a year, are highly competitive, sources told Behavioral Health Business. While mutually beneficial, signing a high-profile deal with a public entity can also bring any potential criticisms to the fore, creating a high-risk, high-reward situation for behavioral health providers.
“The benefit of a company like Talkspace (Nasdaq: TALK) coming in is to just extend [digital mental health] resources and bring scalable solutions, in particular to vulnerable populations or populations who might not otherwise be taking advantage of those services,” Dr. Nikole Benders-Hadi, chief medical officer at Talkspace, told BHB. “We remain in the midst of a mental health crisis, especially for our teens and young adults who report symptoms of depression, increases in things like suicidal thinking, and we really want to be able to meet these teens and young adults where they are: on their phones.”
In November 2023, New York City-based digital mental health provider Talkspace announced a deal with the New York City Department of Health and Mental Hygiene worth $24 million. The next month, Talkspace announced a partnership with Baltimore County Public Schools, giving more than 32,000 students access to Talkspace services. In December 2024, the provider partnered with Seattle’s Department of Education and Early Learning (DEEL), giving more than 55,000 teens and young adults access to Talkspace’s mental health tools.
The deals include different Talkspace resources but generally include live video sessions or asynchronous messaging with a licensed therapist. The tools give users a “therapist in your pocket,” allowing them to reach out for mental health support as needed rather than necessarily engaging in a long-term care plan, Benders-Hadi said.
The low-barrier, immediate nature of the Talkspace partnership is a key benefit of the program, Dwane Chappelle, director of the City of Seattle’s Department of Education & Early Learning (DEEL), told BHB.
“What was very important for us was to make sure that each and every kid here in Seattle knew about a resource out there, that regardless of who they are, would be responsive to their needs,” Chappelle said. “What we like to see is organizations that are able to meet the diverse needs of the community that we’re serving and Talkspace just happens to be one of those that we’re able to partner with.”
In addition to expanding access to care, these partnerships can also decrease the stigma associated with mental health care, Benders-Hadi said. They also offer substantial business benefits.
Talkspace has directly linked its public partnerships to increased revenue.
“In the Direct to Enterprise category, second-quarter revenue was $9.6 million, up 20% from last year, driven by our teens contracts such as New York City and Baltimore County schools,” Talkspace Chief Financial Officer Ian Harris said in the company’s Q2 2024 earnings call.
Other behavioral health organizations have also forged high-valued partnerships.
Palo Alto, California-based pediatric behavioral health provider Brightline and London-based virtual mental health provider Kooth signed a deal with the California Department of Health Care Services (DHCS) in January 2024 valued at $680 million. As part of the deal, Brightline created a tool called BrightLife Kids for parents or caregivers and young children from 0-12 and Kooth developed Soluna, their version of a mental health tool for teens and young people ages 13 to 25.
Before launching the mental health services, the California Department of Health Care Services surveyed thousands of Californians and found frustrations regarding long wait times, expensive copays, and language barriers. The launch of Brightlife Kids and Soluna was designed to address these frustrations and provide high-quality digital mental health services to more than 12.6 million Californians.
The nuts and bolts
Forging partnerships with public entities is no small feat. It can take years as public organizations send out requests for proposals (RFP) and evaluate potential vendors.
They are also “absolutely” competitive, Benders-Hadi said.
“We’re talking about very large populations,” she said. “They are really competitive, and the larger the contract, the more competitive it’s going to be.”
The details, including payment, for public contracts differ on a case-by-case basis.
Talkspace receives flat fees for its partnership, Benders-Hadi said.
“We want to make sure it includes things like unlimited messaging therapy, so it’s not around utilization,” she said.
Talkspace provides its partners quarterly reports, including de-identified information on utilization levels, clinical improvements, and demographic and geographic data. Seattle’s DEEL also tracks data for continuous quality improvement (CQI). Chappelle said the organization is regularly assessing where there may be a need for increased support.
Kooth and Brightline, meanwhile, have reimbursement tied to key performance indicators (KPIs), including timeliness of appointments.
Privacy concerns
It hasn’t been all smooth sailing for these partnerships. Both Kooth and Talkspace have experienced negative attention related to their high-profile partnerships.
Several advocacy organizations penned letters addressed to the New York City Department of Health and Mental Hygiene attesting that Talkspace’s Teenspace offering automatically shares user data with companies including Facebook, TikTok, Amazon, Meta and Google.
“It is apparent to us that Talkspace has already collected and disclosed a large amount of personal student data for its own commercial benefit,” one letter read. “This collection and disclosure is contrary to the NYC Identifying Information Law and has absolutely nothing to do with the delivery of mental health telehealth services to NYC students.”
Talkspace denied sharing teens’ identifiable information or health information.
“The privacy and security of patient data has always been at the forefront of all Talkspace initiatives, and we are fully compliant with all HIPAA privacy and security provisions, as well as relevant state and federal regulatory requirements,” Talkspace told BHB in a statement. “Under no circumstances do we share or sell teens’ personally identifiable information or protected health information.”
The Teenspace privacy policy states that the company will not sell or give personally identifying user information or use it for marketing, commercial or advertising purposes.
The company’s general privacy policy does state that the Talkspace website uses third-party advertising and analytics tools that could constitute a “sale” or “sharing” of personal information. Talkspace has also been accused of violating California laws for its data-sharing practices.
Talkspace executives have previously stated that the company tracks analytics including ad clicks, but that it does not share personal information.
Questions for Kooth
Kooth’s public partnerships have also come under fire for different reasons.
In March 2023, Kooth announced a partnership with the Pennsylvania Department of Human Services (DHS) valued at $3 million, set to expire on June 30, 2025.
In October 2024, Pennsylvania DHS informed Kooth that it was terminating its contract with the company early, saying the termination was in the state’s best interest.
Pennsylvania state representative Stephenie Scialabba described Kooth as a “predatory platform” on her website, saying she was “thrilled” that the contract had been terminated.
“A major concern Scialabba has cited is the fact that alleged mental health counselors on the platform do not provide their real names, instead going by names such as “pigeon” or “sparrow” with associated pronouns, and thereby preventing anyone from checking their credentials,” her website read. “Scialabba added there is no age or identity verification required for access to the platform, and there are documented instances where middle-aged adults could speak to children who are 14 years of age, unbeknownst to parents and guardians.”
Kooth refuted the point.
“No concerns about safety, counselors’ certifications or identities, or parental consent were cited in the termination letter or follow-up inquiries,” Kooth told BHB in a statement. “At no point during the two-year contract did DHS raise any concerns with Kooth regarding safety, counselors’ identification, or parental consent.”
Over 10% of the population who had access to Kooth’s services through the Pennsylvania deal took advantage of the offerings, Kooth said, and 75% of school administrators called Kooth a positive addition to student wellbeing initiatives.
Kooth’s partnership with California DHCS has also been questioned for low usership and business practices.
A KFF article reported that a proposed $140 million budget cut was due to low usership of Kooth’s Soluna app. As of May 16, 2024, roughly 20,000 children and young adults had registered for the app out of a potential 12.6 million people, according to KFF. Only 2,800 coaching sessions had been completed.
In 2024, Soluna provided services and support to more than 40,000 youth and young adults, and delivered more than 11,000 coaching sessions, California DHCS told BHB. BrightLife Kids provided services to more than 89,000 families.
A Kooth representative told BHB that one of the key challenges for Soluna was the lack of brand awareness at its launch and that building brand awareness is difficult. Additionally, Kooth noted that attracting teens to its platform was challenging because young people are likelier to try an app if their peers are on it. In contrast, Brightline worked with a younger profile, which means adoption is parent-led.
In a statement to BHB, California DHCS said it “disagrees that the rollout was slow.”
“The initial growth of the program aligned with usual industry standards for this type of digital behavioral health tool,” the statement read. “In fact, the applications exceeded standards on some marks. Since the launch of Soluna on Jan. 1, 2024, the application has seen a steady increase in the number of users across the state.”
Both Soluna and BrightLife Kids are experiencing an average month-over-month growth of about 20%, according to DHCS, and are expected to continue to grow in 2025.
The KFF article also called Kooth’s business practices into question, suggesting that the company spent $15,000 for California officials to fly to London, ostensibly to encourage DHCS to maintain the contract.
Kooth responded to the KFF article on its site, saying that the paid-for trip was common practice.
“We have seen a recent article published by KFF regarding California’s digital mental health strategy and our work in support of it,” the statement read. “We believe it fails to raise any legitimate concerns regarding Kooth, its partners or third parties, and simply seeks to undermine the work done by multiple parties within the State to implement a digital mental health strategy to address the youth mental health crisis in California.”
While public partnerships can elevate potential criticisms, it seems that behavioral health companies will continue to seek out these deals.
Benders-Hadi said Talkspace will “absolutely” pursue more public partnerships.
“We have worked, or are working with, other school districts as well, in California, Arizona, various other colleges and universities, the city of Memphis to support their city employees,” Benders-Hadi said. “There’s a number of other municipalities that we’re working with, and our goal is just to continue to expand on those partnerships as well since we see that it’s going so well.”
