By Arick Wierson, Observer | April 22, 2019

Heidi Wylie was a beautiful, young 20-something. She had flowing long brown hair, a fit physique and a wholesome, Midwestern look. A recent college graduate, she was already a few years into her career as a choir and music director in Milwaukee, Wisconsin, but there was one glaring problem with Wylie’s life—although she wanted to, she had never been on a date.

And it wasn’t from a lack of suitors; despite having plenty of offers, she was regularly turning down opportunities to go out with an array of promising prospects.

Wylie was suffering from a mild mental health disorder known as social anxiety—a condition that, for her, was particularly acute around any activity involving eating or food. Something as routine as enjoying a meal in public or sitting down to eat with someone she didn’t know was a disturbingly tense and utterly unbearable situation. “I can’t remember a time when I didn’t feel nervous about something,” Wylie said. “But my main anxiety had always focused around food—whether people were monitoring what I was eating, or whether people would judge me for what I ordered… It was so bad that I even started to struggle eating at my own dinner table because it reminded me of the feeling of being in a restaurant and all the formality that goes with that.”

And with eating out being the most common way Americans tend to pass the time on a first date, Wylie’s social anxiety had kept her on the sidelines of the dating scene throughout high school, college and then into her first years as a single career professional.

Despite having received traditional counseling in college, which had dampened some of her more generalized social anxiety, the uneasiness around eating in public persisted; she was worried she might end up as something of a millennial spinster. In fact, she had nearly resigned herself to never being able to meet Mr. Right and get married—until she was referred to a digital mental health therapeutics company called Learn to Live, which empowered Wylie to identify the source of her anxiety and ultimately armed her with a set of tools enabling her to face and conquer her fear of eating out in public.

Three months after beginning Learn to Live’s online prescriptive therapies, Wylie was feeling more confident and even went out to dinner on a first date.

Eventually, she met Mr. Right and got married. Today, she has completely conquered her fear of eating out in public.

“The online program took me through my thinking process and showed me how to negate my automatic negative thoughts,” recalled Wylie. “The homework really helped, but it was tough—no one wants to go into their most anxious places on purpose; it was truly worth it though, as my life is totally different now that I’ve completed the Learn to Live program.”

Learn to Live is one company that that is bringing what is known as Cognitive Behavioral Therapy, or CBT, to the masses via a digital platform. It’s one of the hottest sectors in all of health care, with over a billion dollars of investment capital flowing into the space over the past few years.

CBT: The Sharpest Arrow in a Psychologist’s Quiver

In the world of psychology, CBT is known as the workhorse, an effective yeoman’s tool useful not only for anyone combatting stressful life situations, but also a proven anodyne for treating a wide range of mental health problems—from serious life-threatening conditions, such as clinical depression and post-traumatic stress disorder (PTSD), to cumbersome social anxieties and dangerous behavioral afflictions, such as substance abuse and eating disorders.

The tenets of CBT, as opposed to other post-Freudian forms of psychoanalysis, share the same basic premise that mental disorders and psychological distress are maintained by cognitive factors. Think of CBT as a tool kit of practical, down-to-earth techniques. It’s not focused on some distant memory from one’s childhood nor on an individual’s mysterious “inner spirits.” CBT posits that human beings have the power to substantially alter their mental state of mind by adjusting the maladaptive thought patterns behind negative emotions.

CBT, of course, is not without its critics.

Oliver Burkeman, writing for The Guardian in his seminal review entitled “Therapy wars: the revenge of Freud,” describes the CBT practitioner’s philosophy: “Depression is a bit like a cancerous tumor: sure, it might be useful to figure out where it came from—but it’s far more important to get rid of it.” But critics of CBT, posits Burkeman, would argue that “psychological pain needs first not to be eliminated, but understood. From this perspective, depression is less like a tumor and more like a stabbing pain in your abdomen: it’s telling you something, and you need to find out what.”

Despite these rumbling criticisms, the preeminence of CBT in Western culture is well established and defended by that most unassailable of Western precepts: evidence. Observer spoke with Dr. Jonathan S. Abramowitz, a clinical psychologist and professor of psychology at the University of North Carolina at Chapel Hill. He summed up CBT as follows: “True cognitive behavioral therapy is, in its essence, evidenced-based; there is lots of science and research behind it. It’s the one that works.”

And with an estimated 20 percent of Americans suffering from some mental health disorder, finding (and funding) a solution that keep people healthy and working is of paramount concern for both policy makers and employers—a dynamic that is playing out just as the mental health sector as a whole is undergoing rapid and sweeping transformation.

New Market Forces Are Bringing Sweeping Changes in the Delivery of CBT

From a cultural perspective, the stigma surrounding mental health treatment—thanks in part to popular television shows like The Sopranos which intimated that even mob bosses might have issues—has been steadily decreasing, making mental health therapy increasingly palliative to everyday Americans.

But it’s not just the destigmatization of psychological intervention that is unlocking pent-up demand for mental health disorders; myriad other factors are becoming powerful vectors driving heightened interest in the field.

Already it is estimated that one in four adults will struggle with mental illness at some point in their lives. The National Institute of Mental Health estimates that nearly one in five U.S. adults presently lives with a mental illness—that’s nearly 50 million Americans—yet less than half have ever received any form of treatment.

One of the major drivers impacting the national mental health mise-en-scène is the rising rate of military veterans seeking behavioral health services. Pair that with the fact that 55 percent of U.S. counties do not have any practicing behavioral health workers and a full 77 percent have reported unmet behavioral health needs, and we have what many in the sector refer to as a “mental health care access crisis” that has nearly all of America within its grasp.

At the same time, over the past decade or so, the health care sector has come to recognize the interconnectedness between generalized physical medical conditions and mental health—a change that has promoted treatment prescriptions in which behavioral health is increasingly integrated with primary care. Insurance carriers have followed suit, having expanded the parameters of mental health coverage independent of whether there are adequate human resources available to meet the rising need—a dynamic which is constantly shifting the point of equilibrium along the supply and demand curves within the entire mental health sector.

Complicating matters is the fact that surging demand for mental health services is being met by a downward sloping supply curve of behavioral health professionals; estimates vary considerably, but nearly all industry insiders agree that as many as 40 percent of all active licensed psychologists in the workplace today expect to retire within the next five years—an aging cohort with no adequate pipeline of graduates in waiting, ready to take their place. Technology, it would appear, in some form, will be forced to pick up the slack.

Russell Glass, the CEO of Silicon Valley based Ginger, an end-to-end player in the delivery of digital mental health solutions for companies such as Sephora, CBS Corporation and Buzzfeed, sees no way around this huge imbalance between supply and demand other than for technology and artificial intelligence to step up to the plate and provide patients with viable tech-driven alternatives. “The mental health crisis in America will be worse than smoking in terms of its long-run health care impact,” predicts Glass. “And you will never solve this issue with people; there simply are not enough of them to go around.”

Venture Capital Is Betting on a Psychologist in Every Pocket

With the gulf between supply and demand for mental health services, short of some ‘miracle pill,’ many leaders in technology and health care have come to believe that the modern-day mobile device that we carry around might be the missing link; and with nearly 80 percent of adult Americans owning a smartphone, it’s easy to see why industry insiders often refer to it as the ‘psychologist in your pocket.’

Health care and technology venture capitalists, flush with capital and always looking for the New New Thing, have been watching the mental health delivery sector open up and have begun pouring in money, backing companies that look to deliver scalable mental health solutions through digital means. But all this cash has created a muddied marketplace, where sound, well-researched and clinically-tested digital mental health platforms cohabitate a confusing landscape populated with literally thousands of apps and programs, many of which are based in pseudo-science and medically spurious claims of efficacy.

As is generally the case in any hot digital sector, where the money is flowing as freely as the champagne in the locker room of an MLB team that just won the World Series, a lot of people want in on the action—and nowhere is this more apparent than in the online mental health space. A recent academic study published in Nature identified nearly 1,500 unique apps available on Google Play and the Apple App Store that were marketing themselves around treating or improving mental health and well-being; unsurprisingly, only a handful were found to be rooted in clinical evidence-based research or scientifically backed studies.

Observer spoke to Dr. Adam Haim, branch chief of services and intervention research at the National Institute of Mental Health (NIMH), the lead federal agency for research on mental disorders. While Haim admits that it is exciting to see a lot activity and investment around digital mental health therapy, he cautions that of the thousands of mental health apps available, very few have evidence-based solutions. “The field is constantly expanding, but unfortunately the vast majority of ‘solutions’ out there have no real clinical or research base, which really becomes a challenge for both patients and providers to know what works and what doesn’t,” remarked Haim. “We here at the NIMH expect that strong evidence-based solutions will ultimately become the standard and that more rigorous testing needs to be done to better inform all stakeholders in the marketplace.”

For Corporate America, the Economics of Mental Health Are Real

According to a recent Penn State University Study, poor mental health may cost businesses nearly as much as physical health problems. According to the researchers, mental health was directly responsible for $53 billion less in total annual U.S. GDP, and that might be a conservative figure. Some companies in the online mental health delivery space, such as New York City-based Spring Health, which serves clients such as GAP, Whole Foods and Equinox, claim that depression alone accounts for over a $100 billion in annual lost private-sector revenue.

Either way, these are all big numbers, which puts the real cost of mental health on par with physical disability, which explains why venture capital has been eager to back entrepreneurs in a new, vibrant sector comprised of digital CBT-delivery platforms—sometimes referred to as iCBT (internet-delivered Cognitive Behavioral Therapy)—that not only aim to fill the mounting gap in the therapeutic workforce, but also to do so more cheaply, effectively and at scale.

Echoing Haim’s take on the industry is Marty Felsenthal, a partner at San Francisco-based Health Velocity Capital, which has been a major investor in telehealth companies, such as Teledoc and Aperio, and is currently invested in MDLIVE. His firm has yet to place any bets in the digital CBT space, but he sees the intense interest in online mental health delivery as just another spoke in the wheel of telehealth—the remote delivery of a wide variety of health care solutions. “Today we make this big distinction between telehealth and traditional health care, but 10 years from now, it will all just be health care,” mused Felsenthal, who has been active in the sector for over two decades. “In the payer/employer-focused digital CBT space, ultimately, the winners will be those innovators who can quickly execute against the holy trinity of digital health care delivery: reimbursement, distribution and utilization. Either way, I expect there to be considerable consolidation in the coming year or two; there just isn’t enough room for dozens of online CBT delivery platforms.”

As opposed to the Nature study, which examined thousands of consumer-focused apps, which included some very well-known and well-funded products such as Calm and Headspace, Felsenthal suggested that the ultimate heavyweights in the sector will be culled from those who are not necessarily selling directly to the consumer (the so-called ‘B2C’ players) but those who have staked their future as solutions for health plans or self-insured employers—companies like Learn to Live, which was so successful in treating Heidi Wylie’s social anxiety about food and eating.

Engagement Is the Key to Successful Delivery of Online CBT

While having clinical research data to back one’s claims may be the hall pass that lets digital mental health companies roam around the benefits departments of major employers and health plans, that data does no good without equally impressive engagement metrics: people have to enjoy or be compelled to actually use a product for it to be effective, and that is where the rubber hits the road in the digital CBT space.

Typically, corporate employee assistant programs (EAPs)—those corporate 911 numbers offered to employees allowing them to set up phone or in-person therapy sessions—claim engagement rates for mental health services are in the one to five percent range. In contrast, the upper tier of online CBT companies, such as Learn to Live and its closest competitors Big Health and MyStrength, have been able to achieve engagement rates above 30 percent. And for employers and health plans looking to head off more serious issues down the road, these high engagement rates are extremely enticing.

“The challenge for major health plans and large employers alike is that you need solutions that demonstrate both high levels of engagement that are also steeped in evidenced-based CBT,” said Dr. Russ Morfitt, a psychologist with over 20 years of experience administrating CBT in primarily under-served communities, who is also a co-founder of Learn to Live. “Not every company out there is able to take the principles of traditionally-delivered in-person CBT and transform that experience into an equally engaging experience for the sufferer in a mainly digital environment. It’s tough—you need a great clinical team, best-in-class technology, an easy-to-navigate user experience, and a knack for storytelling and teaching.”

Learn to Live: Leading With Results

Learn to Live—which sells primarily into large health carriers, such as the statewide Blue Cross Blue Shield plans, as well as top-tier employers, colleges and universities—has rolled out four major products to date addressing generalized anxiety, social anxiety, sleep disorders and depression. Company CEO Dale Cook told Observer that his product roadmap has at least half a dozen new products in development, including a substance use product that it plans to release early next year. Also in the company’s product development pipeline is a CBT program addressing the fear of flying which would be the first digital CBT aerophobia product to come to market with tactics based upon clinical evidenced-based research. “This is a big and overlooked issue in the phobia and anxiety space—yet we are resisting the pressure to release it before we feel 100 percent comfortable with the evidence before bringing it to market,” explained Cook.

Unlike some of its frenemies in the digital CBT sandbox, Learn to Live’s leadership has left the blustering and braggadocio for others. “We trust that our results will do most of the talking,” said Cook. “We’re from the Midwest, and I suppose it’s not in our nature to jump up and down and say ‘look at us’—even though that means that sometimes people in other parts of the country aren’t as familiar with what we’re doing. But, thankfully, that’s changing.”

And it’s changing fast.

This past January, at the annual JP Morgan Health Conference in San Francisco—the ‘Super Bowl’ of the health care investment industry—Learn to Live was the digital mental health company on many venture capitalists’ ‘must-see’ lists. As one Silicon Valley investor told me, “[Learn to Live CEO Dale] Cook’s dance card was full from the moment he touched down at SFO. We had to fly to Minneapolis to go see him.”

Learn to Live uses techniques like videos, animations and interactive engagements powered by a combination of artificial intelligence and live human coaching that bring to life the teachings of CBT in ways that not even traditional in-person therapy sessions can achieve.

One of Learn to Live’s myriad tools for demonstrating the benefits of social anxiety is its Fear-o-Meter™, a tool designed to show that you can move closer to the things you fear; rather than giving in to the instinct to avoid anxiety-ridden situations, by training one’s impulses, the fear will eventually subside. With time and practice, one’s mental strength hardens—a bit like a mental Pilates pose.

This digital tool comes straight out of traditional CBT.

One of the final steps in a typical CBT course focusing on social anxiety is to purposely put the patient in the exact circumstances they most dread, starting with an initial context that is moderately anxiety-provoking and then progressively increasing the difficulty until they face their most feared situations.

For example, if someone is highly anxious about how they might be viewed in public or they worry about being embarrassed in a demanding social situation, a CBT therapist might ask that the patient initially go to multiple restaurants and order items that are not on the menu—to face the fear of rejection and judgement from others—until that feared activity becomes less scary.  Eventually, that patient may advance to facing fears at a crowded fast food restaurant by purposely dropping a tray of food onto floor, in effect creating a situation which will draw the attention and scrutiny of others. By creating this real yet controlled situation, the therapist is helping the sufferer experience the feared outcome; the patient comes to realize that both the outcome and the fear itself are not nearly as bad as he or she originally believed.

Experts cite innovations like the Fear-o-Meter™ as one of the reasons that Learn to Live enjoys industry-high engagement levels among its covered populations.

Meet the Prof: Is a Scottish Accent the Key to Getting Americans to Pay Attention?

Another firm that is making waves in the digital delivery of cognitive behavioral therapeutics is UK-import Big Health, which has taken the view that sleep is the best vector—the tip of the spear of sorts—for piercing into a whole constellation of sub-clinical mental health conditions. CEO Peter Hames was drawn into the business because of a personal bout with insomnia, for which he turned to a CBT how-to book for curing his own personal sleep disorder. A technologist, fascinated by his own rapid recovery and the underlying methodologies of CBT, Hames contacted the book’s author, Colin Espie, a professor of sleep medicine at Oxford University.

The two hit it off and formed a company that would couple Espie’s expertise in sleep disorders with Hames’ background in technology to create Sleepio, the UK’s first ever digital sleep disorder product. Today, the sleep disorder product is available for free to all eight million Londoners through a contract the company has with Britain’s National Health System (NHS).

The Sleepio product is perhaps one of the best branded CBT products in the space due to its famous animated cartoon figure which guides patients through the multi-step therapeutic process. The stout Scottish-accented avatar nicknamed ‘The Prof,’ has a genuinely cheery disposition which has disarmed skeptics and has now helped tens of thousands of Brits and, more recently, Americans get back to sleep.

The move to America came a few years after Sleepio came to market in the UK. Sensing a much bigger opportunity in the United States, the company set up shop in San Francisco and began taking its Craig Ferguson-sounding ‘Prof’ on a nationwide tour, landing corporate clients in retail, Silicon Valley and even in the airline sector—where sleep and attentiveness are a big deal.

“Sleep has always been the mental health disorder that people are willing to talk about,” observed Hames in an interview with Observer. “Ask a room full of people if they didn’t get a good night’s rest and maybe half of the hands will go up. Ask them ‘who in this room is depressed?’ and you won’t see a single hand in the air, although statistics would indicate otherwise. Think of sleep as the side door into overall mental health that people are willing to open.”

And with the high degree of comorbidity between sleep and other mental disorders like depression, the Big Health team is betting that its Sleepio product will lead to a host of further applications that focus on an array of other mental health conditions. Their first spin-off, a product called Daylight, is focused on addressing worry and anxiety.

Big Health is not the only British import that has attempted to test their chops on the other side of the pond; UK-based Big White Wall washed up on American shores a few years ago, but later pulled out following the election of Donald Trump and his promises to ‘repeal and replace’ Obamacare. Silvercloud Health is another British import that has gained some modest traction in the U.S. marketplace.

MyStrength: Too Much of a Good Thing?

Now part of digital health platform Livongo, Denver-based MyStrength is widely regarded as another platform that has enjoyed success effectively delivering CBT tools for addressing a broad range of conditions in the corporate marketplace, albeit with a starkly different interface from that of Learn to Live or Big Health.

The company was the brainchild of CEO Scott Cousino, a former executive at the now shuttered for-profit and online university company Alta Colleges (which owned Westwood College, Westwood College Online, and Redstone College), one of many such institutions of higher learning forced to close down near the end of the Obama administration.

While at Alta, Cousino, who had suffered from depression decades earlier, was surprised to see that his insurer offered very little in the way of behavioral health support. That realization led him and a fellow Alta colleague to start MyStrength. Today, nearly a decade later, that DNA from online education and e-learning is readily apparent to anyone logging on to the company’s portal.

“We think it’s critically important to offer a broad range of conditions,” observed Cousino. “We probably have the broadest array of condition-specific resources in the market.”

Cousino is probably right; after nearly a decade in the space, the company has amassed a dauntingly vast library of videos, tutorials and resources aimed at guiding sufferers through countless numbers of exercises and coursework. However, as much as the dizzying number of choices on MyStrength might be a good selling point, some in the industry have said that it comes at the expense of user experience and engagement. Now under new ownership, it’s likely that the MyStrength user experience will improve and become more streamlined, but for now, for a person suffering from acute anxiety or depression, the MyStrength interface seems a bit like giving a starving man a menu.

One of the more unique features of the MyStrength platform is that it seeks to customize the user experience based on personal preferences and characteristics. If someone self-identifies as Jewish, for example, the MyStrength experience will calibrate the coursework to account for those personal spiritual characteristics.

Operating Beyond the Reach of Regulation

Much of the online mental health industry operates in a regulatory grey zone, which is one of the reasons that industry experts expect that the eventual winner will not be those going straight to the consumer, but those solutions forced to undergo the rigorous due diligence that only the chief medical officer at a Fortune 500 company or a major health insurer would demand.

One company in the space that has been on the receiving end of the industry’s firing squad is Silicon Valley-based BetterHelp. The online counseling site was accused, in a stinging exposé by Taylor Lorenz in The Atlantic, of paying off internet influencers for endorsing the company’s mental health counseling chops—essentially a payola scheme for mental health therapy. BetterHelp has since apologized and has promised to behave better, but the whole scandal cast a shadow over the entire sector and speaks to the larger issue of transparency and regulation.

The Digital Mental Health Landscape Is Still in Its Infancy

Neatly packaging the current roster of digital mental health solutions into a cohort of direct competitors is not easy, as there is nearly an infinite number of combinations of products, buyers and clinical approaches that companies in the space can choose to focus on—mirroring, in effect, the complexity of the analog health care system that they are looking to complement or indeed replace.

The degree of clinical severity of the cases companies are prepared to address is one axis of differentiation; Chicago-based Regroup Health, which provides a telepsychiatry platform to support mental health clinicians and health care facilities sits at one extreme of that continuum. Firms like Learn to Live, Big Health and MyStrength would be positioned adjacent to telepsychiatry as they operate more in the space of clinical psychology, but adhere to a rigorous implementation of CBT.

Popular apps like Calm—which has raised over $100 million in venture financing—as well as other solutions for low-acuity issues like self-esteem, stress and worry, such as HeadspacePacifica and Talkspace, occupy the other extreme end of the spectrum.

Where the sector gets really muddled is in the middle, as some firms in the space cherry-pick solutions based on rigorous evidenced-based CBT, but complement them with an eclectic mix of other trendy consumer-driven approaches borrowed from America’s $11 billion self-help industry, Eastern medicine and religion, spirituality and pop science.

Companies like Boston-based MeQuilibrium and New York City-based Happifyfall into this middle ground. While both make some claims about evidence-based scientific research, much of the programming seems more Tony Robbins than Dr. Jennifer Melfi.

MeQuilibrium CEO Jan Bruce came out of a career in holistic health, mind/body medicine and personal growth. The core mission of the company is to help corporate America better grapple with the uncertainties of a modern transformational economy, where technology and business are evolving and changing at a much faster clip than ever before. “Years ago, large companies often viewed stress as a cost-control, but now, increasingly, companies are focused on giving their employees skills to adapt to ever-changing business requirements. That’s where we come in,” explained Bruce.

Happify, on the other hand, is focused simply on that uniquely American right to the “pursuit of happiness.” Its platform neatly integrates with social media and serves up a battery of engaging lessons and exercises that aim to get its users to that ‘happy place’—but some in the digital mental space question the platform’s strict adherence to the principles of CBT. The CEO of one provider of digital mental health services offered the following assessment of the Happify platform: “Happify is a nice application, but it focuses on ‘happiness’ and doesn’t necessarily address the underlying symptoms associated with conditions like depression, anxiety or stress.”

Perhaps in an effort to counter these criticisms, Happify has begun publishing research to validate its claims, but in some corners of academia, the jury is still out. Dr. John Torous, the director of digital psychiatry at Beth Israel Deaconess Medical Center, a Harvard Medical School affiliated teaching hospital, observed that “[i]t’s great that companies like Happify are starting to publish their research, and its early days, but I am still quite skeptical of their methodologies and results.”

The University of North Carolina’s Dr. Abramowitz believes that these differences among the various digital CBT offerings are not just nuances. In this abundantly populated marketplace, he believes that the name of the game for health plans and self-insured employers looking to add digital CBT to their product mix is ‘buyer beware.’ For every company like Learn to Live, Big Health and MyStrength, which are rooted in clinical, evidenced-based research, there are dozens of other players in the space—sometime very well-capitalized ones—that throw around pseudo-scientific terms like ‘mindfulness,’ ‘resilience’ and ‘mental well-being’ which sound great but have no real discernible medical meaning. “If you are a major health plan or employer, and you find that a digital mental health company is sharing compelling anecdotal evidence of success, you should look deeper,” said Abramowitz. “Show me the data; prove to me that your solution works.”

While the mainstreaming of digitally delivered mental health seems all but certain, it’s still the Wild West in many ways, which is why some companies like lifestyle and fitness behemoth Life Time, which operates 143 clubs across North America and generates $1.5 billion in annual revenue, has decided to take matters into their own hands.

Company founder and CEO Bahram Akradi sees health through a holistic lens, which includes not only physical fitness, but also performance coaching, sleep and mental performance. He tapped Jen Elmquist, a longtime company veteran and licensed marriage and family therapist, to shepherd the creation and roll-out of Life Time Mind, an internal coaching platform to get people “from good to great.”

“At Life Time, our challenge is to have people take care of their minds the same way they take care of their bodies,” Elmquist told Observer.

Life Time is initially rolling out Life Time Mind only to some of its estimated 38,000 employees, but future plans could call for offering the product to the company’s 1.7 million (and growing) club members—a move that could potentially put Life Time on a collision course with a number of venture-backed digital CBT platforms looking to occupy the same space.

Collisions such as these are not uncommon in new and quickly developing markets, and as it is with almost any evolving sector, new players and products tend to arise from the most unlikely of places. And for the tens of millions of Americans suffering from mental disorders, more options—and more competition—is probably a good thing.