Hey there. Shân here.

Welcome to The Census, a weekly newsletter to help you succeed in the behavioral healthcare industry.

Your top stories today:

1. HEADLINES: BRC’s closure, why investors favor in-network providers, the changing definition of sobriety, and virtual ED solutions.

2. Money Moves: $70M to reduce clinician burnout, $128M for biomarker-based psych drugs, and many more.

3. On Our Radar: Interest in at-home ketamine therapy is soaring, and treatment bundles go for $1.4k.

4. Catch Up Quick: This week’s top stories in less than a minute.

Let’s go.

P.S. As always, this mail is designed for you to skim-read. Jumpy brains welcome.

Reading time: ~4.7 minutes.

This Issue Is Sponsored By Treatment Leads.

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🚫 Mom-and-Pop Addiction Treatment Provider Closes 3 Years After PE Takeover

It is — imagine our surprise — yet another example of private equity moving fast and breaking things.

What’s happening: Texas- and Nashville-based addiction treatment provider BRC Healthcare has closed down operations. 

For the curious, a timeline:

📅 April 2020: PE firms Veronis Suhler Stevenson & New Spring Capital buy (the then) BRC Recovery Family of Programs and rebrand it as BRC Healthcare.

📅 July 2021: BRC Healthcare announces the acquisition of four (!) addiction treatment centers in Nashville (see: moving fast).

📅 ~July 2023: BRC’s Nashville locations are exposed for shoddy care and employee experience (see: breaking things).

📅 Jan 2024: BRC shutters its doors.

It appears we’re unlikely to leave the untenable, yet typical, PE playbook of fast growth, high debt, and little caution in 2023 — and patients are paying the price.

Unsurprisingly, no one at BRC is responding to requests for comment. Full story. 

🍄 Young America’s Definition of Sober Is Changing

Americans’ embrace of cannabis and psychedelics while shunning alcohol is changing how people define sobriety.

Sobriety has traditionally meant abstaining from all intoxicating substances, particularly after recovery from severe alcohol or drug addiction. 

But a shift is occurring. Some drugs are now viewed as wellness boosters, and approaches that would have once seemed crazy, like treating OUD with psychedelics, are gaining traction among clinicians.

In addition, research shows that:

• Reduced drug use can be a meaningful treatment outcome 

• Definitions of addiction treatment success need to be expanded beyond abstinence

TL;DR: Expect the meaning of ‘sober’ to continue to evolve — and have a significant impact on the addiction treatment industry. Go deeper here. 

🍔 Virtual Support Surprisingly Effective for Teens With Eating Disorders

The majority of teens had reduced symptoms after ~9 weeks of digital platform use.

Digital mental health platforms can offer accessible and scalable alternatives to traditional ED treatments — but we’ve never really known just how helpful they are.

Until now. A study published last week found virtual mental health support reduced ED symptoms in 61% of teens, including those with comorbid anxiety and depressive symptoms.

Why it matters: ED prevalence is growing, while access to support lags.

• EDs cost the US ~$100B per year

• ED claim lines rose 65% over 2018-2022

• The pandemic more than doubled adolescent ED prevalence

Early intervention is critical for ED treatment, especially if we’re to fight this rising tide.

Digital solutions could get help quickly to those who need it most — and this is the first study showing their efficacy. 

💰 Investors are on board. Virtual ED treatment platform Arise just raised ~$6.5M, per SEC filings. 

The next hurdle, of course, will be better early identification of EDs, which is another story. 

💵 Investors Favor In-Network Behavioral Health Providers 

Despite higher reimbursement rates from private-pay models, investors are shifting their focus to in-network providers who offer more stability.

Specific in-network hurdles remain, but it appears the pros outweigh the cons. 

For example, developing relationships with payers can be sluggish for these providers, and the collections process can be difficult, but investors still say it’s increasingly worthwhile thanks to:

• Faster growth

• Quicker revenue cycles

• Better overall returns

The bigger picture: Behavioral health is experiencing a “flight to quality.” Because fewer deals are closing, investors are focused on finding high-quality providers — and shying away from more volatile private pay models. Go deeper. 

Money Moves

Funding rounds, mergers, & partnerships were on fire this week…

📝 Syra Health lands ~$250k contract with Washington DC Department of Behavioral Health.

🫶 $1.4M grant to implement evidence-based collaborative care in western Washington. 

⛰️ $2.66M donation to expand mental & behavioral health access in 12 mountain communities. 

🧑‍🤝‍🧑$16.5M for employee wellness start-up LifeGuides.

🥽 $6M for virtual reality platform XRHealth.

🧠 $128M in IPO cash for Alto Neuroscience’s biomarker-based psych drugs.

❤️‍🩹 $70M for clinician burnout tech company Ambience Healthcare.

🌀$3.25M for revenue cycle management platform Rivia Health.

🤖 $50M for AI-powered pre-authorization start-up Cohere Health.

⚒️ AI tools for providers will be the fruit of a new collaboration between WellSky and Google Cloud.

💊 OUD patients to get better virtual health care through Talkspace and Bicycle Health’s new partnership. 

👀 Investors are looking for differentiation in 2024, specifically in operations, recruiting, and clinical quality — plus the ability to show outcomes to payers for better rate negotiation. More here.

On Our Radar

What we’re watching this week 

💊 At-Home Ketamine Therapy

Well isn’t this search interest… interesting. 

Perhaps your curiosity, like ours, was piqued by last week’s $4.2k ketamine induction bundles (here if you missed it). 

They got us thinking about supply and demand in the psychedelic-assisted therapy space.

Obviously, this $4k+ price point will be a slight cost barrier for many patients. But at-home ketamine therapy packages can provide more affordable options.  

➡ Startup Nue Life uses sublingual tablets for at-home treatment, effectively slashing one of the biggest costs of ketamine-assisted therapy: medically administered IV infusions.

• Nue Life’s packages are ~$1.4k for six sessions

• They treat 8k+ patients per month

• Their site attracts ~16k visitors/month, per Similarweb

• Almost all website traffic is organic

• They’ve raised $23M+ in funding

Nue Life’s daily support app is also free to use for all people on ketamine therapy in the US, even if they aren’t clients. Talk about a smart expansion strategy. 

Catch Up Quick

This week’s hot headlines. 

🍔 Inner Haven Wellness announced the opening of its first teen eating disorder IOP in Wisconsin. 

😲 Having a friend who is prescribed opioids can increase one’s risk of opioid misuse by ~7%.

🔮 Future-proofing addiction treatment must include tech, leadership, and care continuum, per BH business. 

👀 Some say digital health startups are in for a bit of a reckoning this year. 

🏖️ Florida is suing the Biden administration over a new policy limiting when states can remove children from public health insurance programs.

💸 Low reimbursement rates are now a bigger issue than staffing, per a new survey. 

🆕 Path rebrands to Rula Health amid a refocus on improving mental health clinical outcomes.

💊 More flexibility for methadone treatment is on the way thanks to new OTP rule, effective April 2, 2024.

🇺🇸 Nine states have been selected to participate in the children’s behavioral health policy lab, which aims to promote cross-system alignment and drive outcomes.

👋 Cigna is ditching its Medicare business in a sale to Health Care Service Corporation for ~$3.7B. They’re also honing in on behavioral and physical health integration, per a Q4 earnings call. 

📝 Alleva 3.0 is live to provide better workflows and enhanced data management for behavioral health providers.

💻 Iris Telehealth will expand its Bridge Care Services Program to drive behavioral health integration.

🤖 An AI-powered virtual nurse was unveiled by Emirates Health Services. 

📲 Speaking of AI, Cedars-Sinai launched their AI-powered VR therapy app Xaia (don’t ask us how to pronounce that).  

🧠 Back IRL, the first human has received a Neuralink brain implant. 

⚠️ Perhaps related: The top 10 health tech hazards for 2024, per ECRI.

💡 Risk stratification: Lessons from North Carolina’s value-based initiatives.

🩺 CMS’ new behavioral health model shows an ongoing effort to push value-based care + integration forward.

🥵 A new study found that people with depression tend to have higher body temperatures — opening up potential avenues for novel treatment approaches.

🤔 How AI will affect revenue cycles in 2024. 

That’s it for this week. See you next Wednesday!

- Shân

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