Payer investment in virtual substance abuse treatment grows
Highmark Health has inked a new partnership with virtual alcohol use disorder provider Ria Health, following the growing number of insurers looking to expand telehealth substance abuse benefits as demand rises.
The Pittsburgh-based payer’s more than 6 million members will now have access to virtual care for alcohol use disorder from San Francisco-based Ria Health’s 45 clinicians, who can prescribe medication through telehealth visits. Highmark isn’t the first insurer to ink a deal with the four-year-old startup: Ria Health also counts contracts with Anthem, UnitedHealth Group’s Optum, Beacon Magellan and more.
Approximately 60% of the company’s users come from its payer relationships, which mostly offer the service to its employer customers in the form of worker benefits; the rest come from its direct-to-consumer arm. Ria Health charges consumers about $4,200 per month for a 12-month subscription to its service.
“The pandemic and really just the growing kind of imbalances in the economy as well as the politics of our country are definitely driving increased incidence rates,” said Tom Cassels, president of the Rock Health digital consultancy. “I think the positive takeaway from the growth of these comps is that there has been a greater reduction in stigma and reduction of barriers to entry by having virtual and at-home clinical levels of care versus inpatient rehab.”
The pandemic has accelerated payer interest in the startup, cutting the amount of time it takes to ink a contract with insurers by about 40% between 2020 and 2021, Ria Health CEO Tom Nix said. Nearly one in four adults, or 23%, reported drinking more alcohol to cope with stress during the COVID-19 pandemic, a portion that rises to more than half of all adults with elementary-age school children, or 52%, according to a February report from the American Psychological Association.
For Ria Health, that means 66% of its users are women, more than double the number enrolled in traditional rehabilitation programs, Nix said—he credited the increased amount of privacy that telehealth offers, targeted focus of the startup and ability for users to customize user goals for driving growth. The on-demand nature of the service also helps.
“There’s such a demand increase from people that are looking for treatment we’ve seen residential treatment programs not having any capacity or having a four-week waitlist to put people in,” Nix said.
And Ria Health isn’t the only substance abuse startup payers are investing in.
Anthem announced on Tuesday that it partnered with Portland-based Boulder Care to offer digital opioid addiction treatment to members in Ohio. In June, Pear Therapeutics went public through a $1.6 billion special-purpose acquisition merger, after the digital prescription therapeutics company received investment from the provider venture capital arm Arboretum Ventures and inking partnerships with local health plans in Ohio, Minnesota and Massachusetts. In May, Woburn, Massachusetts-based Groups Recover Together raised a $60 million Series C round for its hybrid approach to opioid addiction, with participation from the venture arms of UnitedHealth Group and Kaiser Permanente along with Greenwich, Connecticut-based Oak HC/FT, a venture capital company where former White House advisor Dr. Ezekiel “Zeke” Emanuel serves as partner.
Payers are adding benefits around substance abuse treatment in an effort to retain employees, as well as interrupt members’ costly visits to the emergency rooms, said Dr. Vikram Bakhru, a practicing physician at the University of California at San Francisco’s Medical Center and chief medical officer at Medicaid managed-care startup Circulo. Relaxation of state laws around the types of drugs that can be prescribed via telehealth, as well as federal rules around payment parity for video visits have also driven growth for these startups, Bakhru said.
“The contracts coming through from the insurers are seven figures and they’re leaps of faith,” he said. “Because if you can actually displace the cost of a handful of ER visits in this particular population, you can more than justify the payment for the substance use disorder program.”