Handspring Health offers a virtual mental health clinic for youth and families purpose-built around evidence-based care and ongoing training and support for clinicians.
The startup, which launched four years ago, picked up $19 million in series B funding to grow its clinician workforce, expand value-based care partnerships with payers and broaden its geographic reach.
The company also plans to expand complex care models and invest in its technology platform, Sahil Choudhry, CEO and co-founder of Handspring, told Fierce Healthcare in an exclusive interview about the funding round.
RPS Ventures led the series B round, with participation from new investor Angelini Ventures and continued backing from returning investors Cobalt Ventures, NextView Ventures, nvp capital, Hyde Park Angels (HPA), Cornucopian Capital and other investors. Handspring has raised $37 million to date, including $12 million in a series A funding round a year ago.
Handspring clinicians treat children and teens between the ages of eight to 17 as well as young adults 18 to 26 years old, and clinicians are trained in treating anxiety, depression, OCD, ADHD, trauma and other mental health challenges. The care model also includes ongoing training and support for parents, who are viewed as an essential part of the therapy process. This support encompasses parent training sessions using behavioral parent training (BPT).
Choudhry and co-founder Kwasi Kyei both have healthcare and venture capital backgrounds with stints at Cigna Ventures.
"We'd seen the first wave of mental health companies and almost all of them were focused on getting people access to in-network therapists, but access is only half the story. The harder problem that we saw sitting on the payer side was quality, and our foundational insight that really got us started at Handspring was that well-meaning clinicians in the country rarely receive deep training in evidence-based care," Choudhry said.
They brought on board Amy Kranzler, Ph.D., as chief clinical officer, tapping into her clinical leadership and expertise building CBT training programs and DBT programs at Montefiore Health System.
Handspring's model starts with the clinician, which marks a unique approach. Its therapists are employed rather than contracted, and clinicians are trained in-house in evidence-based modalities including cognitive behavioral therapy (CBT), dialectical behavior therapy (DBT) and exposure therapy.
Some studies have indicated that most practicing therapists do not consistently use or adhere to strict evidence-based care in their sessions, Choudhry noted.
"There's no standardization certification or requirement to learn them. We know CBT works, but as a field we just don't use it consistently. That's the gap that became our thesis, which was if you could genuinely support clinicians in building a deep command of evidence-based care, you could create something rare, which is a model that's win-win-win for families that actually get better while clinicians can grow and not burnout, but also payers can feel good about actually paying for the outcomes they're paying for," he said.
For clinicians, Handspring provides ongoing training, one-on-one clinical support and clinical consultation groups that occur weekly, where clinicians discuss difficult cases with a supervisor, he noted. "At Handspring, those aren't optional perks, they're all required of all our clinicians," he added.
Providing high-quality, effective care that produces good outcomes also can help address challenges with access to care, Choudhry asserted.
"Every time the industry talks about the access problem, we talk about the shortage of therapists. We rarely talk about, is therapy actually working? Because if it worked, you may not need as much of a head count of therapists. I think addressing the shortage should not only be about the number of therapists but really should focus on the care we're providing. Is it working? Are people getting better?" he said. "Our belief was that if you can provide good care, kids will get better and they'll graduate [from therapy]."
Handspring clinicians can treat a broad spectrum of acuity, including more complex cases — patients step up or down without being turned away. Handspring’s complex care program extends this to high-risk youth too often underserved, turned away from traditional outpatient services, or unnecessarily referred to higher levels of care such as emergency departments or intensive outpatient programs.
Handspring matches families to the level of care a child actually needs and not the most intensive, most expensive program available, according to executives.
To date, the company has treated more than 4,000 patients across nine states (New Jersey, New York, Pennsylvania, Connecticut, Georgia, Florida, Washington, California and North Carolina). And the company has grown revenue more than 10x over the last two years, executives said.
"So far we've been adding a few states a year, but that will accelerate with this raise," Choudhry said.
As Handspring has grown, the company has maintained strong clinical outcomes, executives assert. Ninety-three percent of families report improvement in the daily life of their family upon discharge, and 81% of patients in treatment for anxiety and 78% of patients in treatment for depression saw clinically meaningful improvement, as measured by validated clinical scales at the completion of their care, according to the company.
"We're at a point of the company where things are working, we've proven that the care model and the upskilling and the training are working. Families are reporting very high satisfaction, and we want to bring this to more families across the country. We want to invest further in our technology platform, so that we can scale without sacrificing clinical quality. The last two to three years may have been problem solving and figuring out the model, and as we look ahead, it's more getting this to more states, more payers and more families," Choudhry said.
Late last year, Handspring acquired mental health startup Joon Care to expand its services and in-network insurance coverage in Washington State.
"Our belief at this point is that there will be real consolidation in the space. We want to be one of the companies doing the consolidating. Where there's an acquisition that accelerates the model to more families, we'll absolutely do it," Choudhry said. "The core of this investment round is investing in our own platform and clinical model, but we remain opportunistic for more consolidation."
Handspring also plans to continue investing in its AI-enabled technology platform which features custom-built patient and provider portals, a proprietary telehealth experience, an AI-enabled clinical scribe developed in-house and an AI-powered therapist matching engine that pairs families with the right therapist.
"AI hasn't really changed our thesis. The thesis is the same, which is that we support clinicians in delivering evidence-based care, but AI is letting us supercharge that. We're very excited about extending the same idea of superpowering the therapist, but to the parents. So much of the kids' progress happens between sessions at home, and parents are often doing a lot of that work without much support. We already launched parent coaching services, where we're helping parents with those skills, but we think there's a real opportunity to help equip and coach parents asynchronously, providing them more training tools, making the therapy of their child less of a black box for them, so they can be fully involved in care, and so you will see a lot more investment from us in that area," Choudhry said.
Handspring is in-network with most major commercial insurers including BlueCross Blue Shield, Aetna, Cigna, UnitedHealthcare, Oscar and Optum.
The COVID-19 pandemic caused a surge in demand for mental health and behavioral health services, which sparked massive growth and funding for mental health startups. Choudhry refers to this as version 1.0 of virtual mental health where startups focused on improving access to insurance-covered therapy.
"Today most people have a much easier time finding an in-network therapist, and what we predicted would happen is health insurance companies have seen costs start to increase, and they're now saying, 'OK, what are we paying for? Is this care working or is it not working?," he said.
"The shift has happened where insurers are looking for solutions that can show better outcomes, that can show they can engage patients, they can engage riskier patients and more complex patients that cost them more and also get them better and graduated out of care," he added. "That's a shift we built the company for, and I think it's a good shift, really forcing the industry to prove outcomes, and to prove that the investment in mental health that we're asking for is worth it."
"Well over 95% of our sessions are covered by insurance. It's a key avenue of growth for us. As we expand into new states, we want to make sure before we go into those states, we are able to work with insurance companies to bring our model there because affordability ends up being one of the top reasons a family who needs care won't get it," Choudhry said.