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How to Sell to Employers and The Future of Mental Healthcare: In Conversation with Naomi Allen
On the latest Vital Signs, Nikhil and I chatted with Naomi Allen, CEO and founder of Brightline, a child and teen focused mental health company that’s raised >$100M from investors like KKR, Google Ventures, Optum and Oak HC/FT. Naomi was also a Castlight/Livongo exec. We hit on the difficulties of balancing employer customers and employee satisfaction at Castlight and how Livongo captured member delight. Naomi also shared her reflections on Teladoc’s acquisition of Livongo. We discussed Brightline’s care model working with parents and caregivers and how the mental health market is evolving for employers.
To kick things off, you’d had a fascinating career from Castlight to Livongo to Brightline, we'd just love to hear a bit more about what motivated the different decisions to join each organization and how you came to each one.
My whole career has been in healthcare. I started in healthcare in the mid nineties. The first phase of my career was in healthcare operations. I was working in back offices of hospitals trying to improve patient flow and doing a bunch of wonky ops work. That led to me working in technology because in order to track operations data, you had to build these real robust databases. I fell in love with how technology could impact healthcare and impact people's lives.
Went to business school at Stanford and then went to McKinsey because McKinsey was building a healthcare tech practice. While I was there I realized I really loved building. I liked operations, I liked getting my hands dirty. I left in '08 to found Castlight Health with Todd Park and Giovanni Colella and Brian Roberts. That was amazing.
In the eight years I was there, I ran strategy, then I ran sales for a couple years. I ran product for a couple years. I had this really wonderful tour of what it means to build a company from startup through IPO. The one piece that was tricky for me at Castlight was it felt like I was really far away from the actual action of rendering care or delivering care. I'm a child of a clinician. I always thought I would go into medicine. I wanted to be in businesses that were closer to actually care delivery.
After Castlight, I bootstrapped a company in mental health because while I was at Castlight we launched a product called Castlight Elevate. I started to see firsthand how mental health delivered virtually can actually really impact people's lives. I built a couple's therapy company. It was really a great experience. I did that for about a year. Dena Bravata, who was the chief medical officer, the founding chief medical officer at Lyra and was with us at Castlight, was an advisor to me. I had a pretty strong team working on that.
My husband went to a seed stage company. It was one of those classic like, "Okay, who's going to do the crazy seed stage company?" I had always promised him after eight years at Castlight that when he was ready to go do his thing, then I would go take a steady job. Ironically, that steady job ended up being Livongo. Jenny Schneider, who was one of my colleagues and peers at Castlight had moved over to Livongo and brought me in. It was just an awesome experience.
Livongo actually was quite close to care delivery. Obviously, we had a big coaching team. While I was there, I was responsible for the integration of our mental health acquisition. I got to work on mental health again. It was really just an awesome company to get to be part of.
While I was at Livongo, one of my kids had a mental health crisis. A number of folks that knew me well personally heard that I was really trying to navigate getting some care for my son and I was hitting a wall. There were just no clinicians that didn't have a nine month waiting list. We were having a really hard time getting him a diagnosis. We were having a hard time figuring out how to navigate the care journey. Annie Lamont over at Oak HC/FT reached out to me and asked if I wanted to start Brightline.
I was inching my way with each career move closer and closer and closer to care delivery. Then I had the opportunity to combine those experiences with a care delivery mission that was super near and dear to me. That's how I ended up here. Didn't think I would leave Livongo that quickly after the IPO. I thought I'd for sure be at Livongo for many years, and then obviously Livongo changed a lot with the whole Teladoc acquisition. I missed all that exciting phase of the Livongo transition, but really happy to found Brightline.
The State of Health Tech Today
Before we get into the nitty gritty of each one of those things, for someone who's been in the healthcare ecosystem now for a while, I'm curious, based on what you've seen in the companies you've been at, one, what makes you optimistic about this, where we are right now? Because I think we talk to a lot of people, and especially on Twitter and all this kind of stuff, there's a lot of doom and gloom. It's like, "Man, healthcare is not getting better. Every idea is some reiteration of an idea we tried in the nineties and this is what happened." From your perspective, do you think things are fundamentally different now? Do you think we're just repackaging old business models and putting them into new, or is it actually something different today?
I think the business model question is worth unpacking in and of itself. I do think there's truth in the truism that things come around again. I'm laughing. When I started in healthcare it was 1996, which is the year that Mental Health Parity Act really got federal funding, HIPAA as well. There was a huge buzz around pay for performance. I swear I feel like I'm still talking about all three of those every year. What progress have we really made? HIPAA, yes, but Mental Health Parity Act and pay for performance not so much. I do think that there is meaningful progress and that there is still things that move much slower than they should if you look, when you add healthcare relative to other industries.
As a serial entrepreneur, I do think we're in a time of tremendous innovation. I do think that it's a meaningfully different step up in terms of the types of technologies that are being used. If I think about, even if you think about the middleware solutions that are selling into the digital health ecosystem so that you can stand up digital health solutions faster... middleware is an antiquated way to call it, but basically the idea that there's the Zuses, the Ribbons and all those service layers in there so that you can drive digital health innovation faster. That's real innovation. I think there's, frankly... This sounds maybe oxymoronic, but I think there's actually innovation in payment structures with health plans where health plans are getting more creative in how to think about case rates and bundles and pay for performance.
You see the evolution of innovation from Medicaid to fully insured to self-insured. There are waves and maybe the world I play in right now at Brightline, which has historically been mostly self-insured, is probably the least innovative frankly with regards to payment. But I do think we are seeing a lot more innovation around true approaches to bundles and payment innovation.
Four or five years ago we weren't seeing the rise of virtual and hybrid care as a modality. That alone is game changing. If I think about in the mental health space, just the deserts that have no clinicians in them, certainly no pediatrician, pediatric trained therapists in them. I think it's 75% of the counties in the US without an adolescent psychiatrist. Literally, without technology, without innovation, you can't support those kids with any quality care. It's basically pediatricians prescribing as best they can with no follow up care. I do think there's really a ton of innovation happening in healthcare. I am super bullish. You probably don't want to bring a serial CEO or serial entrepreneur in healthcare on here. They're probably always going to be bullish. Things just take a long time.
Lessons from Castlight
To that point of things that have been around and maybe tried before and then talked about today, I feel like a lot of what you did at Castlight is really chief among that. I think you guys were so early on some of these themes that you can't go to a healthcare conference today and not hear about care navigation, or patient shopping, and all these things. Obviously, as a business, the company kind of had a rocky time in the public markets. How do you reflect on that whole experience and how you think about what went well there, what you might have done differently if you did it again?
Yeah, first, that's probably the kindest possible description, to say they kind of had a rocky time in the public markets. Thank you Jacob.
I think it's, first of all, super easy to diagnose companies in retrospect. What sometimes folks forget about Castlight is there were no blueprints. When I was running our sales team and you went to go sell a digital health solution into employers, my options were I either go hire a bunch of people who've been selling SAP, or hire a bunch of healthcare people who have been selling to hospitals. The idea of digital health, even a product team, or a sales team, or God forbid a roadmap to an IPO process, literally did not exist. A lot of what we were doing was for the first time.
The other piece that sometimes people lose perspective on is nowadays if you're fundraising and you need to get 50, 80, a hundred million dollars to really think about the next level of growth and opportunity, you can tap that on the private markets and certainly multiple times over. That was not the case back then. When we were faced with a decision pretty early in the company of like, "Okay, we're at this crossroads. We built an interesting product that some customers want, that some health plans want, but how do we really drive to the next level of innovation?" It wasn't really clear that we would get the type of funding from a private market growth pathway. The public markets were a lot more appealing when the private markets were not so robust. I do think that was definitely a part of the equation.
In retrospect, what's interesting from the founding days of Castlight when it was a handful of us, literally first meetings sitting around the Venrock office in 2008, we had two things we were considering. One was transparency and the other was care navigation. We had a lot of, I'd say demand on the transparency piece from a handful of really vocal benefits executives who were trying to drive more aligned behavior with their employees. They wanted their employees to be shopping with costs and quality.
Shawn Leavitt, who was the first customer that I sold to, or one of the first customers I sold to, he was really on this leading edge. Steve Burd and Safeway Health, etc. on this leading edge of market driven behavior change in healthcare.
I think what we frankly missed the boat on, and to our detriment when it came time to actually show year over year value, was talking to members, talking to people. Do you want this thing? What's the engagement going to be around it? Is this solving a problem for you as an individual? The big aha for me, obviously easy to diagnose in retrospect, is you’ve got to have both. There's got to be market demand from customers and from the people who are actually going to go use the darn thing. We were always, frankly, fighting that uphill battle at Castlight, of we built a product that health plans and employers were willing to actually buy. When they buy it, what's the value? What's the downstream ROI?
We figured that out a few years in and then needed to go raise. Post IPO, which was that major capital raise, I think that's when the team started to... And I left, so part of this is outside in, but I think that's when the team started to really scramble to think about what comes next. They did the Jiff acquisition, which I don't think was... We could talk about M&As all day long, but I think that was an M&A that was trickier than people expected. I think it was hard for them to ride this ship for a while after that.
I do think that there's a ton that at least I learned from that experience in terms of the role of really building something that individuals want to interact with, not just that customers are willing to buy.
Yeah, I think this is the issue that most employer focused companies face. You're now engaging three separate people to sell, your TPA or benefits broker, the HR team, and then the employee. And you have to sell to all three, essentially, which is a different sell to each person. I'm curious from your perspective, and it sounds like you're alluding to this a little bit, but do you think that consumer shopability is a real thing in healthcare? This is a debate that we have a lot is, can consumers shop by themselves?
Yeah, it's such a great question. I'll never forget a very critical time about a year and a half into Castlight when I stopped believing that consumers would shop broadly without a very strong set of financial requirements. We were building a product called Reference Based Price, which basically meant that there's a price point where above that price point, the employer is essentially not really going to pay much. They would be willing to give you options as long as you were at or below the reference based price in terms of what the cost was and above it. It's essentially like a narrow network structure.
I do believe that there are ways to drive consumer awareness and shopping, but I don't think it's consumer led. I think it's around constructs like specialty tiers, or value-based networks, or providing incentivization for consumers to get a second opinion, or differential benefit structures around going to high quality providers.
Of course, there are ways to drive consumer behavior. We know that. Even amongst what I would consider to be the more easily shoppable services like labs, or an MRI, or an eye appointment or a dental appointment that some of the stuff. We could provide these graphs where we'd say, okay, if we look at plotting the quality data from Leapfrog and from other quality providers and the cost data, and you would scatter plot the providers on costs and quality, pre Castlight, and then a year after Castlight, you'd see behavior shift. We actually saw a gravitation towards quality at a lower price. Absolutely, it works. What's tricky is most benefits executives and most plans don't really want to take the complexity on to deal with structuring all those network structures and also to deal with the employee experience fall out around narrowing networks. They definitely work.
You see companies, I'm not super familiar with how they work, but you do see some companies that are these next gen insurance companies that are essentially designing a narrow network product and driving member behavior through that for employers. I think it's viable. I just think it's a lot of work.
Selling to Employers
It feels like if you're a benefits buyer, the first commandment is you cannot lower employee NPS. You can do whatever you want, you can do things that increase it, you can try and do stuff on the cost saving side, but it better not come at the expense of... It feels like the most surefire way to get in trouble is to do something that angers people. Far be for me to tell one of the best people at employer sales out there how it works, but that's my impression from the market.
I know a lot better sales people than me, but thank you for that. I also think we can't deny the fact that what sells and what pressures benefits executives are under varies a lot with depending on how the market is. I think frankly the last 10 years have been... We've all been seeing the acquisition of more and more benefits, more and more things to retain employees, more and more things to drive employee delight in a war for talent context and growth markets. It'll be interesting to see if we continue to see this down market, do new things start to bubble up that are interesting for benefits executives to purchase.
Are you seeing a change? You talk to employers all the time. Are you seeing a change on the employer side yet, or is it still TBD?
Well, Brightline's a bit different because we, by design, actually orient more of our commercial channel with health plans. One of the things when we're about a year into the company, when employers started to realize that A, their employees were really struggling with their kids' mental health, and B, the adult focused BH vendors didn't have a solution, I started to get inbound phone calls from employers. That's when we really decided to go after that enterprise market before we were looking at more in-network and going with a local market. Local market, by local market from a member acquisition perspective.
We chose to go after Enterprise pretty heavily. The first quarter that we were starting to move in that direction, I spoke to about 40 jumbo employers. They all said, "Love what you're doing. Nobody else is doing it, but I want it to run through my health plan." It's because of this fragmentation. They don't want to manage another vendor. They already are carving out EAP dollars, their adult BH vendor, they don't want to add another layer of expense on, et cetera.
We've oriented our go-to-market engine really through that health plan channel. We certainly talk to employers all the time, but it's with a different set of conversations because they're not feeling as much pressure around do they renew us or not. It is different.
That notwithstanding, I think we've seen a fundamental shift in terms of what's on the mind of benefit buyers in the past few years. Brightline has been a beneficiary of that because I do think that no longer do employers think about their employee in the context of the individual. They think about them in the context of the broader family unit. It's not surprising to me that we're seeing the rise of fertility benefits, of caregiving for aging adults if the employee is having to do some caregiving for an aging parent, solutions like Brightline that are focused on full family care.
What Made Livongo So Effective At Sales
Maybe just riffing off this a little bit, especially when you think about maybe the sale of Livongo versus the sale of Brightline to an employer. What really helped Livongo stand out in a sale like that versus maybe today when you think about Brightline? Because both categories are... Candidly, they have a lot of players in it, so there's got to be some way to stand out.
Yeah. I will say I wasn't super early at Livongo, so I can't comment on the first couple years when they were selling and there were existing diabetes companies out there. To be candid, when we started selling a pediatric mental health solution to employers, there was nobody. Literally nobody had built it. Even now, although there are companies that are doing pediatric mental health, they're not enterprise grade. They're not 50 states.
We launched 95 customers on Jan 1. We have 3 million employee lives. I don't think anybody is really built for what we've done for enterprise grade pediatric mental health. I think there's a lot of small players that are in a market selling to schools, for example. But that being said, I think the whole experience is very similar, which is when we were selling at Livongo, a lot of it was around a large and growing category of spend that's largely been under tapped.
At Livongo, we figured out something, which was member delight. Going back to the comment I made earlier around at Castlight, I don't think we really tapped into what is it that members want. Livongo did that very early on. It was very much focused on if you serve members, if you delight them, then there's a business to be created from that. The key unlock I think in those early Livongo days was members hated paying for blood glucose strips because they're expensive and annoying to refill, but they didn't have access frequently to their endocrinologist, their doctor. If they actively were trying to manage their diabetes, measure their BG values, this is obviously before there was quite as much ubiquity of continuous glucose meters, but doing a blood prick and measuring your BG value was an important way to monitor your diabetes.
But there was an inherent disincentive for people to do that because the strips are so expensive. If you work backwards from how do we solve these stupid problems. It's a dumb reason for somebody to be sick, because we've made the strips so expensive and so annoying to refill that they're not measuring their blood glucose and they're having adverse events. Then you're like, "Well, let's just solve that. Let's make the strips free. Let's send them out on automatic refill to your house. Oh, by the way, we will give you the BG meter for free. If your blood glucose is out of range, we'll have a support system there for you." That's just like... If you look at that now, you're like, duh. Why did that not exist before?
That was the aha, and then going to employers and saying, "You have a large and growing spend bucket that's largely underserved. It's not being served effectively, candidly, by the health plans who have these care managers that are calling at random times saying manage your diabetes. It's served effectively by being in the moment that matters." The moment that matters is when your employee is measuring their blood glucose and they're seeing a really bad trend, but they don't know what to do. Or even worse, they don't do anything because they're not taking action. You're looking at an adverse event about to happen. Breaking through that stalemate of giving the members something for free, making it easy for them, capturing that data, turning it into signals so that we could take action on the signals proactively.
We would demo that in the sales calls. We would actually have fake blood, true story. We'd have a blood glucose meter handy and we would drop a drop of fake blood onto the strip, which would trigger an adverse event risk. Then we would receive a phone call from one of our coaches and they'd say, "Hey, I just wanted to let you know. This is Naomi. We're seeing that your BG is out range. We wanted to call you immediately and start talking to you about what she should be doing. Do you have access to some orange juice?" We would do that live demo in the sales call.
All of us carried our BG meters around. There are ways to make things visceral. I don't know what the broader theme is to tap into here. Now I'm just talking about Livongo lore. But I think there are ways to emphasize this spend category, the positive member experience that you can create with a differential technology and a differential experience, and then tie that back to... You're going to be the hero benefits executive. You're going to be that person who gets the love letter from your employee because you prevented them from going into a severe acute experience. I think that stuff matters. I think those really personal stories matter.
Overview of Brightline
Maybe this is a good time to transition. For Brightline, what is the version of the ideal... What is the love letter that someone who's a Brightline member writes? Maybe you can tell us a little bit about what Brightline is. What's the care model? Why would people rave about it?
What's remarkable about Brightline is the love letters are so heart-wrenching and heart rendering. Brightline, just to baseline it is, we're the first national pediatric mental health platform. We serve families across the country with kids as young as a year and a half up to age 18. It's a full care model.
We have a digital solution for families that just need light touch things to practice skill attainment behaviors with kids. We have a coaching solution for things that are mild to moderate acuity. I'll talk about what that looks like. And then we have a full therapy and psychiatry team. All the way up through stage three of the Columbia Suicide Rating Scale. We've got clinicians who can support a full care protocol.
It all runs on evidence-based protocols and measurement. We also watch week over week how a child's progressing. We have a really heavy emphasis on coordination of care. We do a lot of work with families because a lot of times if you have kids, you've got more than one thing going on in terms of the health of that child. We do a lot of work to support families if they need communication back to a pediatrician, or if they're also getting services for that child in a school context. It's a pretty different care model than what a traditional more adult focused behavioral health model looks like.
We go to health plans, we get Brightline in network so it's available and affordable for families, which has been one of the big gaps in the country. We have this amazing care team that serves families. The team is national. You get your first appointment within a couple of days, which frankly, as a mom who has sat on list for weeks and weeks, actually for my oldest son, for months, that is just such a game changer.
We actually had a jumbo customer that is now public, Amazon, that we launched. I think within 12 or 13 hours after launching, they got their first love letter. It was, "I have been on wait list for six months to get my son into therapy. I just tried Brightline and I have my appointment tomorrow."
Part of it's access, part of it's just the quality of care. We lean very heavily on what's called a diotic model, which means if we're seeing a child, then we're updating their parent or caregivers so the parents and caregivers know what's going on, that we're helping them to get skills in place to help support their child.
We often get love letters around, "Hey, my kid loves Brightline, but also, I've learned so much about how to support their anxiety, or how to help reduce their depression, or how to deal with their disruptive behavior." That diotic model, we get a lot of love letters around as well.
I will say meaningfully different sales cycle than what we experienced in Livongo because unlike diabetes where I would be in a room of 15 people from an HR team and none of them had diabetes, when you go and start talking about mental health for kids, everyone is like, "Yes, that was me," or, "That's my kid," or, "That's my niece." We often find in our sales conversations, people will well up and start crying, or they'll actually thank us. They'll say, "We're so excited to bring Brightline. Thank you for what you're doing." It is a remarkable experience because I think it's so broadly felt and so broadly needed.
That story from Amazon is incredible. 12, 13 hours after it launched to get feedback like that. I think it probably speaks too, we're all familiar with just the massive access issues that exists for broader behavioral health, specifically, for more acute kid and teen focused behavioral health. One of the thing we often think about is, obviously there's such an access gap. The amount of people that would benefit from therapy, or some sort of care is massive too. It feels like we have both a shortage of clinicians overall to take care of that need, and then also if you think about from a system perspective, if we were to start having everyone we know go to therapy, could we afford that as a system? I'm wondering how you think about five, 10 years down the line, what the future of mental health looks like, given some of those parameters?
Yeah, there's so many things that we could reward and incentivize that would meaningfully change the game. Just starting with the basic stuff, less than 15% of therapists today use measurement. As a result then, it's really hard to think about when is it appropriate for a child to be done with care and to exit care. There's often this challenge where therapists, essentially the capacity is locked up well beyond what makes sense and for the good of the child, and because we, and I say this as a mom of three kids who's gone through this, are not ready to cut the cord with our therapist. I'm like, "No." It's a safety blanket. That's not appropriate in a world where we have a shortage of clinicians.
How can plans help? A, set appropriate rates so the clinicians are willing to be in network. That's job number one is actually get the clinicians in network. Then B, essentially incentivize measurement and incentivize alignment and adherence to measurement-based protocols. I do think that there's a lot that we could just drive better incentives around from a payment reimbursement perspective.
The other piece is around use of new modalities that are proven to be effective. Whether that's groups for teens, which teens really... Often, I find groups more effective than one-on-one care that they don't really love. Whether that's... There's a really interesting lab out of Stony Brook led by a clinician named Jessica Schleider who I really admire. She has done really groundbreaking research on what's called single session interventions for teens, where it's literally one session and can have meaningful change in terms of clinical outcomes. There's also, frankly, a lot that we could do to move much earlier in the identification of needs and get earlier interventions. Half of all severe mental illnesses manifest before the age of 14, but that's where we often have the least services rendered and the least clinicians focused.
How do we do a lot more to fund and to support early interventions so that we can get that much further ahead of the curve from that high severity, high SMI? That, to me, looks like how do we fund preventive care rather than reactive care? Going back to maybe the conversation around Livongo, Livongo, Omada, a bunch of companies have been out there working in the diabetes space, and then lo and behold, they started to crack open the CPT codes that would fund preventive support, diabetes prevention codes.
That hasn't happened in behavioral health. There are codes that exist with Medicaid, but none of the health plans have mental health prevention codes. They just don't exist. That's dumb. We should have mental health, behavioral health prevention. What's great is that the US Preventive Task Force is now recommending screening for anxiety as early as age eight, but nobody's doing it. We should have a lot more support for reimbursement and access to universal screening tools.
There's just so much there. There's certainly the unpacking of the role that coaches and other ancillary folks can provide in the care model that this idea that you have to always see a psychiatrist versus an NP, or a therapist versus a coach. We should just get a lot more evidence-based and thoughtful in terms of what's the right level of care for the right level of acuity.
We wanted to chat a little bit about coaches because Livongo, the model uses coaches a little bit. Brightline, the model uses coaches, obviously very, very different. Indication areas, population types targeted, et cetera. When I talk to companies that use coaches in the care model, one of the hardest parts is that the coaching is one of the highest variants parts of the model. It's not as protocolized, maybe, as the clinical parts, et cetera. I'm curious, especially in an area like teen behavioral health, for example, how do you think about... One, how do you train the coaches? What does quality assurance look like? What is the level of clinical oversight that happens?
Yeah, I think that's a really good point. I'll say there's a couple things that are different. Livongo coaches didn't practice medicine. The coaches were there, essentially, on behavior change just following up on mostly our weight management diabetes prevention program. For us, we do have a PC. We have a clinical structure in place that's overseen by our chief psychiatric officer as the president of our medical associates group. When we started using the protocols that our chief psychiatric officer had used at the Yale Child Study Center, we knew that they had been RCTed, including there was a multi-year study using the same protocols with the NHS with coaches. It's kind of neat because we spent a lot of time talking to that team at the NHS. They rolled out the same protocols and had really great outcomes using non-licensed clinicians.
We're like, "Oh gosh, it's doable." How do you build the construct? What we initially looked at was there are two coaching federations. We thought, "Okay, maybe we will start to work with one of those federations," but none of them had a pediatric trained workforce because we were the first people doing pediatric mental health, which by the way, that was... We had to build so many things for the first time because we defined the category. We invented this category.
What we did was we really spent a lot of time building out Brightline Academy, which is our internal training. We use Brightline Academy. Even though our clinicians are all licensed, we still take them through Brightline Academy. It's a set of protocols. It's a set of checklists for each step. We have a pretty extensive supervision structure in place.
Even with coaches as well as with the licensed clinicians, there's a lot of oversight and guidance and training. We measure, because we've always been measurement based, we measure weekly progress towards improvement, and then we have a set of clinical measures that we do to see if the child's improving against clinical outcomes too. It's pretty easy to see if you've got gaps in terms of quality, or if you've got gaps in terms of training so you can hone back in and double down. But our clinical quality as we've scaled, has stayed really high. We hit the same metrics that we report out to our health plans and our employers since day one, and they've been really high outcomes for us.
It's doable. This whole notion that coaches are misunderstood, or not understood and therefore we shouldn't reimburse it, I think you just put the guardrails in place. If health plans really want to get innovative and really want to drive to improving capacity using coaches as one of the tools and that lever, then health plans certainly could say, "We're willing to fund this and you must show us X, Y, and Z in terms of your process, your escalation pathways, your supervision, your documentation, your training."
That's the work that we've done with our health plan partners is we spend a lot of time educating them and making sure they understand the role that coaching plays in our care model. There's progress here. I'm really optimistic. I actually think that we're starting to see, just the fact that we've got seven really robust help plan contracts. All of our health plan contracts include coaching. We've had to structure the payment structure around that in different ways, but I think we are seeing real progress here.
One thing I'd also be curious about from your time starting Brightline is, I feel like healthcare seems to go through these waves of bundling and unbundling where it's like all these services should exist in one provider, and actually someone is really should specialize and take care of this patient population. The behavioral health world is maybe no different. I'm sure when you were starting, you could imagine one version of the world that's actually the adult players like Lyra, Modern, Spring - maybe they should just do all behavioral health for the employee population. Or another version of the world might say, actually, you really need an ADHD specific player, like an autism specific player, an eating disorder specific player. In employer, there seems to be more and more of these companies popping up every day in different sub-segments. How you think about that bundling versus unbundling?
I think it gets back to the conversation we were having earlier around fatigue in terms of point solutions, which I think is real. There's a belief that for specialty care models, and I put pediatric mental health in this bucket, that you will get differential outcomes and a differential experience by having a specialty provider in the same way that there's a reason why pediatricians exist. Adult primary care clinicians have a different scope of expertise, and a different bedside manner, and different set of priorities for when they're approaching their patients than pediatricians do. There will be, and we'll continue to see specialization of care in companies that are really leaning in on the specializations. And I think that the ways to access those will be through these aggregators, through either the care navigators. I think there's a reason why the Springs and the Lyras of the world are EAP providers because they want to be that front door.
Now, I think that what we're increasingly seeing, we were in an RFP where an employer was selecting a new EAP vendor and they wanted to bring Brightline in as a specialty provider that partnered with that EAP vendor. We were just keeping our eye on how that EAP conversation was going because we think some of them are easier to work with than others. One of the leading EAP providers didn't get the bid. The reason was because they hadn't demonstrated that they would effectively partner outside of their clinicians. They have a very robust clinician network and they hadn't demonstrated a facility in bringing in those specialty programs and figuring out how to refer to them for specialty care. That's what this particular employer was seeking, was we want to have an EAP front door, yes, and we want to know that we're getting the best of that set of innovation partners that have a specialty care model.
That's realistically where things will go. Whether that's an employer saying, "Hey, health plan, you've got to get really good at this internally. I want to drive my volume to you to have you navigate it, or to that health's plan's EAP, or to a third party EAP, or one of the included or Castlight or Accolade or Quantum type of navigators." That's realistically where things will evolve.
Just out of curiosity, what precipitates a conversation from their side of we need to add specialty providers in this area? Clearly, until that point they hadn't had it. Is it it shows up in the claims data? Is it members are asking for it? What is the precipitating event that gets that added?
It's typically I'd say one of a couple of things, or maybe three things. It shows up in the claims data. That's very common. One of the things that benefits executives are always doing with their consultants is looking at trend and what's going on and the consultants are saying there's these new solutions out there that are doing X, Y, and Z. That's a constant driver is spike in claims.
The other one is frankly just awareness of trends going on. Benefits executives, it's actually a pretty small pool of people. There are real trendsetters. There are real leaders who are influencers. There's the 25 people whose names you hear over and over again if you're an employer facing salesperson. If one of them, or two of them, or three of them are talking about your solution, then it creates buzz and that trickles down to a lot of other benefits buyers.
This idea that if you can get into that cohort into how they're thinking about solutions, then it does have a real impact. There's also just macro trends. Brightline, for example, got tapped in from that macro trend first. What's interesting about pediatric mental health is the status quo before Brightline existed was people would go cash pay out of network because there were no networks with the health plans. We weren't showing up at the claims data.
Literally, the week I decided to leave Livongo and start Brightline, I called up Paul Matthews and Steve Bloomfield over at Willis Towers Watson. I'm like, "Hey, I'm starting this company. What do you think?" They're like, "We never see people talk about it. It's not in the claims data." I'm like, "The reason it's not in the claims data, it's because there's no solution."
What was interesting for us is I was like, "Oh, we're going to have this real uphill battle because we don't show up in some big pool of claims because everyone's over there cash paying for it," but what was fascinating was a lot of employers had heard friction from their employees, and then when Covid hit, the pediatric mental health crisis was front page news. We benefited from Pathway two, which is employee frustration. We benefited a lot from Pathway three. We didn't get the benefit from Pathway one of large and growing bucket of claim spend.
The Teladoc/Livongo Acquisition
Just to cap it off before we go into our quickfire round, we talked a little bit about RFPs and employers. It would be remiss to not at least ask a little bit about the Teladoc, Livongo post M & A stuff. Two questions: One, how much do you hate the name Teladongo? But two, obviously now, at this point, everyone has their own opinion about how the merger looks and people are like, it's not a good fit, blah, blah, blah. What do you think actually now happens to these all in one solutions to try to Frankenstein their way into acquiring things and mix matching to be the all in one place for employers? Does that work? What do they have to do going forward to be successful? What was maybe the issue at the outset?
Again, I wasn't there when the acquisition happens, so this is all pure outside-in. Frankly, I think I know when my shelf life is. It's like, "Ooh, I'm going to exit stage left." I really, really love early stage companies. I actually like the IPO process. The things after that I think are tricky.
First of all, I haven't given any thought to the name Teladongo. Thank you for that PTSD flashback. I've gotten that for the last couple years and now I'll be thinking about that all weekend. No comment on that terrible name.
What's interesting about the acquisition when it happened, I was like, "Totally makes sense." The reason it made sense is because when I was... My remit as chief growth officer was a bunch of things that Glen asked me to do, some IPO readiness, helping us think about international expansion, the post M&A integration of myStrength, and then also, we were starting to look at should we stand up a medical practice? When we bought myStrength and we were integrating it in, myStrength only had a coaching solution. They didn't have any therapists and they didn't have a medical group. We were pretty limited in terms of the actual clinical impact we could have with coaches.
We'd had the same experience with Retrofit. We bought Retrofit, we integrated it in as the diabetes prevention company, but it had coaches and not clinicians. We were starting to develop a thesis of if you really want to drive to the next level ROI and impact and changing patients' lives, you've got to have clinicians to do that and you've got to go stand up a medical practice.
With myStrength, we started to have conversations with the leading telehealth providers. We went to Dr On Demand, we went to MD Live, we talked to Teladoc. Initially around whether they had a behavioral health telehealth solution, because we thought that would be the first partnership. Turns out none of them really did. But in that journey, I think it kicked off broader conversations around should we be actually standing up our own clinical practice, or should it be in partnership with one of these broader scaled telehealth solutions?
Anyway, that was all pre IPO. We took the company public. We were really busy with that process. Post IPO, when that acquisition was announced, I was like, "Kind of makes sense." It fell in line with the thesis that we had formulated around what we would want to go do next. that wasn't a big surprise to me. I thought it was a really smart accretive concept.
I think as so often happens in M&A, it's really easy to fall in love with the vision of a shared future. It's really effing hard on the execution to make it work. What it seems like, again outside-in, is that there were just a number of challenges in terms of, cultural integration is probably the best way to put it. Frankly, a lot of what made Livongo special was the people. I will say I think that the Livongo team figured out some smart go-to markets in terms of the channels. I think they figured out how to make their diabetes product and then their blood pressure cuff create a unique asset around data. But a lot of what made Livongo special was the people. It's really easy to forget, post-acquisition, how much money and time you have to invest in retaining top talent. The cultures didn't mesh and things fell apart from there.
Again, obviously I have one side of the story, which is the Livongo, my Livongo colleagues perspective. I have never had that conversation with a Teladoc person. They may probably have an entirely different story.
What you're saying is you'll never acquire someone.
No, we were really happy with myStrength acquisition. In fact, the CFO there is now my CFO at Brightline. He really came in and helped us clean up a lot of stuff pre IPO. No, I definitely wouldn't say that. I think it's possible to do it well. I think it's really easy to do it poorly.
I would definitely acquire companies, but it's tricky. You just got to really think through, is this culturally... It's so easy to fall in love with an idea, and the vision. I'll say this, as a CEO, we're all big, bold, ambitious, and aggressive thinkers of like, "If I buy this company, here's my next TAM and my next growth factor." I think just having a little bit of that reality check of, it's really easy to fall in love with that growth vision and it's really hard to execute.
We always like to start our quickfire round with what's one thing that's over and under hyped of the topics that we all hear at healthcare conferences every day?
Okay, over hyped I think is this idea that telehealth is dead. Telehealth is absolutely not dead. Once you open up a new modality, that new modality is not going to go away. There's this sense of there was a huge rush and probably overvaluation of telehealth companies. We're seeing a lot of really enduring interest in specifically telebehavioral health and certainly telehealth for kids because it's so much more convenient, and because of those mental health deserts that I described. The whole telehealth is dead, long-lived telehealth, I think that's over hyped.
Under hyped, I think it... It goes back to a conversation I think we had earlier, which is I do think we need meaningful payment innovation, not just in Medicaid, but broadly. Under hyped is really shining a light on the models of where is this working? Where are we actually seeing real payment innovation outside of the Medicaid/Medicare context where we see it? How can we make those models more ubiquitous and better understood?
I consider you a go-to-market expert in healthcare. Aside from the companies that you've been involved with, is there a company you think that has really nailed their go-to-market strategy?
I think most companies are struggling right now. There's companies that I probably would've said yes a year or two ago where they really figured out the direct to employer engine. But I think even those companies are starting to see they're hitting walls in terms of employer access. I'd say what I'm starting to see emerge is the go-to market engines that are really focused on health systems and pediatricians, or primary care... My world's pediatricians, but health systems in primary care and cracking open ACO. But I would say those are the companies that I think we'll start to see emerge.
The companies that I think have done the old playbook well, the Omadas, the Hinges, they've cracked some stuff open. I think the Carrots of the world, Mavens, all the classical digital health companies that are emerging have done really nicely in the old playbook. The question is, can they pivot to some of these more complex playbooks as employers start to cut off some of that enrollment access?
Well, Naomi, this has been a fascinating conversation. I feel like we could keep talking to you all day, but I'm sure you have other things to go do. Just to wrap up, I'm sure there's lots of threads folks want to follow up on, learn more about Brightline. What's the best way for them to do that?
They can find us at hellobrightline.com.