COVID-19 – The Catalyst for Investing in Mental Health
May 5, 2020
Prompted by Pandemic, the Mental Health Conversation Goes Viral
Five non-communicable diseases (NCDs) on the World Health Organization’s most-wanted list result in 71 percent of deaths globally each year. The five killer conditions – cancer, cardiovascular disease, diabetes, mental-health disorders and respiratory disease tend to be long in duration and result from a combination of genetic, physiological, environmental, and personal-care behaviors. Unlike COVID-19, they aren’t infectious.
We know that chronic conditions like cancer, diabetes, respiratory illness and cardiovascular disease are well known to put those who have them, especially older people, at higher risk for severe illness or death from COVID-19, but what about the mental-health condition impact? COVID-19 seems as if it might be the straw that breaks the camel’s back when it comes to mental health awareness and action.
People facing COVID-19 are subject to stress from a variety of multiple causes, including the emotional difficulty caused by social distancing, not having access to healthy food, job insecurity, and fear of facing the unknown. Healthcare workers on the frontlines of COVID-19 response are facing anxiety, the impact of crushing responsibility, and the likelihood of post-traumatic stress syndrome one day when the pandemic passes – or sooner.
Those with mental health conditions – addiction, bipolar disorder, chronic depression, eating disorders, obsessive-compulsive disorder, anxiety syndromes, and schizophrenia – urgently need attention. Yet the stigma of having a mental illness often delays or prevents patients from seeking care and getting necessary treatment. This isn’t helped by the families and friends of those grappling with mental health challenges, who try to keep a lid on their conditions, contributing to the deadly silence.
Mental health disorders have long held the lowest priority among non-communicable diseases for investors, but that’s changing fast. The unlikely force for good that’s causing money to flow into mental health investment may, in fact, be COVID-19.
A shift in the conversation began just a couple of years ago. Celebrity spokespersons from MTV’s Artist of the Year Miley Cyrus and Academy Award winning actress Emma Stone to action superstar Dwayne Johnson and Olympian Michael Phelps joined the ranks of other powerful and popular advocates, stepping forward with personal stories. People are self-identifying on social media as mental health warriors living with depression or bipolar disorder. And now, they have found a new, unexpected, and powerful ally in private equity.
Mental-health pioneer investor Stephen Hays , founder of What If Ventures, a venture-capital fund investing primarily in early-stage tech startups focused on mental health and addiction recovery, writes:
“Stigma, shame and fear have kept people quiet about their suffering for a long time when it comes to addiction and mental health. Recently, celebrities, politicians, business leaders have stepped forward to talk about their struggles openly. Now, the increasing openness to discuss anxiety and depression during social isolation is contributing to stigma reduction and a willingness to talk, seek help, and advance health/tech solutions around a very personal problem.”
According to Hays and his investment team, COVID-19 response is driving a major regulatory shift that creates a better climate for mental health innovators. For all of 2019, $750 million was invested in mental-health start-ups, but during the first quarter of 2020 alone, funding reached $462 million, invested through 30 transactions.
Now, with the change in public health priorities, the investment window has been opened for new funds to enter. The behavioral-health software market is projected to reach $2.31 billion by 2022, growing 14.8 percent annually. In “Mental Wellness, and Technology: Rethinking the Relationship,” published by the Global Wellness Summit 2020 Trends Report and sponsored by Finn Partners, researchers ask key due diligence questions.
What’s driving this acceleration, and what has changed?
Rina Raphael, author of the mental wellness and technology trend report section, writes:
“Tech is first and foremost redesigning traditional care by improving access and customizing the experience. Virtual therapy apps such as TalkSpace, BetterHelp and Amwell give patients the ability to call, text and video teleconference with professional counselors on their schedule and in the comfort of their own home. These frictionless options, often a fraction of the price of clinic appointments, serve individuals with time-constraints or those in rural areas who lack access to care.”
In addition, in the shadow of COVID-19, the Food and Drug Administration has reset its bar for mental health digital applications and provider groups are advancing new behavioral health services. At the same time, the Centers for Medicare and Medicaid Beneficiary Services and private payers have given a greenlight to telehealth therapy options so that clinically licensed psychologists and social workers can continue seeing their patients, and see new patients who need help.
The new mental-health investment mindset is not confined to the US. London-based anesthesiologist and intensive-care doctor by training James Somauroo, MD, writes in Forbes:
“It is encouraging that investors are increasingly recognizing the potential of technology to tackle the mental health crisis. One in four people in the UK will suffer a mental health problem each year, costing the UK economy millions–yet the prevalence of the issue is still not reflected in the amounts invested. While increase in investment is welcome, we hope investors do more in helping to address one of the foremost public health issues not only in the UK, but across the globe.”
The sudden jump in the number of mental health challenges corresponds to COVID-19 sweeping around the globe, and is impacting both patients and mental-health professionals, alike. However, the mental health issues coming to light aren’t caused by the virus, they have, rather, been too long in the shadows and are exacerbated by it. At a time when our primary-care system is at it most vulnerable in terms of bandwidth and access, and the patchwork of laws for mental health providers from state to state have kept qualified psychologists from entering the telehealth market, COVID-19 has caused a major reset. Venture capitalists are taking note, responding with serious investment in digital/health, telemedicine and programs and services that support therapy adherence.
If national rates of depression and suicide continue to increase, and the number of people diagnosed with serious mental illness keeps climbing, costs will continue to skyrocket as they have for the past two decades. Investors see this and are putting their money to work. They know that funding that has been directed to warehouse the problem is, in market terms, a bad use of active societal capital. Band-aiding the mental health problem has been throwing good money after bad. For investors, it’s time to rip that band aid off!
The need to improve and accelerate access to care can only occur when investors enter the sector encouraged by a health ecosystem that brings together patient needs, payer readiness to reimburse for therapy and services, product innovators, forward thinking policymakers, and providers who are steadfast in the dedication to improve patient care. COVID-19 might be the stone thrown into the pond that creates enough waves to drive long-needed, essential changes in how we address mental health.
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