Mental health startup Headway nabs $26M backed by Google Ventures, Thrive Capital

There is growing demand for mental health care in the U.S., but many people fail to find care because they can't afford to pay for services out of pocket.

Andrew Adams faced these barriers five years ago after he moved to New York City and tried to find a therapist.

"I couldn’t find a therapist that I could afford because 70% of therapists don’t accept insurance," Adams told Fierce Healthcare. "The reality is that therapists would accept insurance if it weren’t so hard."

Health insurance was built for huge hospital systems that employ whole departments to deal with the administrative burdens of insurance, and most therapists are individual practitioners that don’t have the administrative bandwidth to support taking insurance, Adams said.

An estimated 26% of Americans ages 18 and older—about 1 in 4 adults—suffer from a diagnosable mental disorder in a given year, according to Johns Hopkins Medicine. And many experts say the need for mental health support appears to be growing as patients confront the stress of the pandemic and social crises.

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Adams co-founded New York City-based Headway to address accessibility and affordability issues and to make it easier for patients to find a therapist.

Headway is developing a full-stack therapy marketplace that deals with the messiness of insurance, building out a first-of-its-kind behavioral health network of therapists who accept insurance. The company's platform lets its users find therapists, check their insurance benefits and file reimbursements online, enabling patients to access insurance coverage and premiums while being able to find and connect to therapists and avail medical consultation at any time and at any place.

"We’ve made it easy to accept insurance by removing the typical burdens through our free software platform. With our platform, anyone can freely search and find a provider accepted by their specific plan, whether it's a high-end platinum plan or a cost-sensitive plan," Adams wrote in a blog post.

For patients, through insurance, the cost to see a therapist will be closer to between $15 and $50 rather than $200 and $300.

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The company, which launched in 2019, closed a $26 million series A funding round, bringing its total funding to $32 million. The new round was led by Thrive and GV (formerly Google Ventures) with participation from existing investors at Accel, which led its seed round, GFC and IA Ventures.

Headway received angel investment support from founders of some of the most influential new healthcare companies like One Medical, Flatiron Health and Clover Health.

Adams said the company plans to use the funding to scale its network across the country.

To date, the company has served tens of thousands of patients and facilitated hundreds of thousands of visits. The most popular employers of Headway patients are the Metropolitan Transportation Authority, NYC's public transportation agency, and the City of New York, and many of the patients served aren’t employed and rely upon government-subsidized insurance, the company said.

All of Headway's therapists and psychiatrists are offering virtual sessions, which are covered by Aetna, United, Oxford, Oscar or Cigna at in-network rates, the company said.

Recent laws aimed at bringing parity between physical and mental health care coverage provide an important first step in fixing a broken system but ignore the simple fact that most therapists still don’t accept insurance, Adams said in the blog post.

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Further complicating the matter, provider directories are so error-prone that if a patient does manage to track down a therapist, it’s not uncommon for the practitioner to have moved, retired or even passed away.

"We believe Headway will fill an important gap in fixing the system, and this is just the beginning for us as we expand our network and reach new geographies," Adams said.

Employers are showing an increased interest in expanding employees' access to mental health services, and that is incentivizing insurers to invest in mental health care, he said.

"It's a top-five employer concern. We are excited to partner with more insurance partners who are looking to address what their customers want, which is access to affordable healthcare," he said. "We see ourselves as helping to build a new healthcare system that genuinely address access and affordability for patients."