Venture capital could play a critical role in the future of value-based behavioral health care.

Specifically, investors could help connect the various stakeholders and data points to facilitate value-based care in behavioral health.

“When you think about the role that investors or startups can play when it comes to value-based care, you have to think about the tactics behind, what does value-based care mean, what is its purpose, and what do you need to believe to pull it off successfully?” Caitlin Donovan, a partner at General Catalyst, said at Behavioral Health Business’ VALUE event.

General Catalyst is a venture firm with over $33.6+ billion in assets under management and 800 portfolio companies. Its behavioral health portfolio includes Elemy, Equipy, InStride Health, Ophelia Health, SonderMind and Spring Health. 

Behavioral health’s siloed nature has made moving to value-based arrangements complicated. Specifically, a successful value arrangement must include a positive feedback loop mechanism between the payer who owns that risk of a population and the provider who is delivering care, according to Donovan.

Today, health care tends to have a lot of point solutions; even within the behavioral health community, there are a number of quality platforms that offer a very specific type of care. For example, some services solely offer addiction care or therapy for depression or OCD treatment. Yet, they rarely connect.

For a true value-based care arrangement to work, various stakeholders need to share their data and interact. Additionally, there needs to be solid communication about how behavioral health impacts the overall medical spend and a way to track that.

“Where venture capital can come in is in helping to sort of connect some of those dots and figure out what is the right company that can be the glue that solves some of those, realistically, data problems, to be able to execute on that vision,” she said.

Data connectivity is only one piece in the puzzle of creating meaningful connections across the health care ecosystem.

Behavioral health companies, especially those pitching a value-based arrangement, walk a fine line between providing a top-notch patient experience and deeply understanding payer regulations.

Donovan noted that companies that are new to health care often build for the patient. However, the patient is seldom the buyer.

“So understanding the needs and the highly regulated ecosystem of buyers is something you have to do to be able to grow quickly and develop a large enough patient base to really achieve success,” she said. “Often companies skew too much in either direction, where they either are really good patient services companies and effectively build outside of the ecosystem. You see that with companies that only accept cash-pay. But then they hit a ceiling … On the other hand, you see companies that really understand the regulations and almost forget about the patient.”

Companies that fall in the second bucket often have really clunky processes, and even though the payer may give them a contract, they can’t attract patients; therefore, they can’t deliver the same value in care.

“What I encourage folks to think about is remembering that you need to hold both of those things in your head as you’re building your process and experience,” Donovan said. “Patient experience and consumer experience should be table stakes, and there should be a minimum viable product there as you’re thinking about how to serve patients, but if you don’t think about how to fold yourself back into the ecosystem, that creates a major problem.”

Employers are another part of the ecosystem. Many patients initially access behavioral health services through their EAP. However, these services have a cap. Providers need to be cognizant of connecting all the benefits for the patient experience and, at the end of the day, to get paid.

“Thinking through how to connect those worlds in a patient-first way, while still honoring the regulations and buying patterns of payers, I think can create a really compelling outcome, both for patients and for sort of the underlying cost of the system,” she said.