Telehealth wasn’t supposed to be 2020’s breakthrough story for behavioral health. Yet the pandemic forced rapid adoption of virtual care that had resisted mainstream acceptance for years. Now, as the industry absorbs lessons from telehealth’s sudden prevalence, another technology waits in the wings with potentially transformative applications: virtual reality.
VR in behavioral health isn’t science fiction anymore. Companies are deploying immersive experiences across hundreds of clinics, treating conditions from chronic pain to addiction. Patients are wearing headsets in treatment centers and their own homes, engaging with therapeutic content that would be impossible, dangerous, or prohibitively expensive to replicate in the real world.
The question isn’t whether VR can work clinically—early evidence suggests it can. The question is whether payers will embrace the technology with the reimbursement support needed to move from niche application to standard practice. If telehealth’s 2020 trajectory offers any indication, payer attitudes can shift quickly when technology demonstrates clear value.
Why Payers Are Starting to Pay Attention
Sarah Ahmad, senior vice president of product innovation at Magellan Health and head of Magellan Health Studio, expressed particular enthusiasm about VR’s potential during a recent webinar hosted by law firm Foley & Lardner. Her bullishness reflects growing payer interest in technologies that could bend the cost curve while improving outcomes.
Ahmad specifically highlighted exposure therapy as a use case where VR shows promise for both diagnosis and treatment. Traditional exposure therapy for phobias and anxiety disorders requires carefully controlled real-world exposures that can be logistically complex, expensive, and sometimes risky to orchestrate.
“Virtual reality allows you to [face fears] in a way that’s much cheaper, much safer and in a controlled environment,” Ahmad explained. “When I think about that type of treatment for fears and anxiety, that to me, in five years, [seems like it] will be something commonplace.”
Magellan Health Studio represents the managed care company’s effort to test innovative care delivery models and products. Launched earlier in 2020, the initiative signals that major payers are actively exploring next-generation technologies rather than waiting for market proof before engagement.
For behavioral health providers watching payer signals, Ahmad’s comments matter. When senior innovation executives at national managed care companies describe a technology as potentially “commonplace” within five years, it suggests institutional commitment beyond pilot programs and press releases.
BehaVR: Building VR Experiences Purpose-Built for Behavioral Health
Aaron Gani spent more than twelve years at Humana, ultimately serving as chief technology officer, before founding BehaVR in 2016. During his tenure at the health insurance giant, he observed behavioral health’s outsized impact on overall healthcare costs and outcomes. He also recognized the persistent supply-demand mismatch that leaves patients waiting weeks or months for appointments with overstretched providers.
When consumer-grade VR technology finally reached the market at accessible price points, Gani saw an opportunity to address multiple problems simultaneously. VR could supplement the thin behavioral health workforce, extend therapeutic interventions beyond clinical settings, and provide cost-effective alternatives to resource-intensive traditional treatments.
“With my payer hat on, I realized that this is going to be kind of a game-changer,” Gani explained, noting that VR can help supplement the behavioral workforce while solving numerous other industry challenges.
BehaVR develops immersive VR experiences specifically designed for behavioral health patients. The company currently offers four distinct programs: chronic pain management, chronic stress management, a perinatal program, and an addiction recovery augmentation program. These experiences were co-developed with partners including Johns Hopkins and Hoag Hospital, lending clinical credibility to the content.
The delivery model works through provider partnerships. Clinicians can deploy BehaVR’s programs in clinical settings or patients’ homes. All VR experiences connect to a cloud platform that allows clinicians to monitor and guide patient progress remotely. Providers access a portal and dashboard while patients use a companion smartphone app to control their experiences.
The home-based model illustrates how far VR deployment has evolved. Clinicians can enroll patients, and BehaVR drop-ships pre-configured headsets directly to homes. Patients simply unbox the device, turn it on, and begin their therapeutic experience—all while remaining connected to their clinical sponsor through the cloud.
“We now have the ability to make it very turnkey,” Gani said, describing the streamlined process that removes technical barriers that might otherwise prevent adoption.
More than 300 clinics currently deploy BehaVR’s programs, including several facilities within the Acadia Healthcare network. This represents meaningful scale for an emerging technology in behavioral health, suggesting the model works operationally and clinically across diverse treatment settings.
Real-World Results: Bradford Health Services’ Experience
Bradford Health Services, an Alabama-based substance use disorder provider, began working with BehaVR approximately eighteen months ago. According to Adam Downs, who served as chief clinical officer during the VR implementation, the technology delivered immediate clinical benefits and unexpected business value.
Patients used VR experiences to manage cravings, fear, and anxiety in real-time. The immersive nature of VR provided immediate distraction and regulation techniques during vulnerable moments when patients might otherwise struggle or disengage from treatment. The technology also taught meditation and provided psychoeducation about addiction in formats more engaging than traditional didactic approaches.
But the most significant impact came through improved patient retention and engagement. Behavioral health treatment notoriously struggles with dropout rates. Patients leave treatment prematurely for numerous reasons—boredom, lack of engagement, feeling the program isn’t helping, or simply losing motivation during difficult recovery processes.
“One of the reasons the margins are so slim in behavioral health is because of dropout,” Downs explained. “If you can look at VR as playing a role in keeping that patient engaged and keeping him there, then that’s a massive return on investment. And that’s what we saw.”
This retention benefit matters enormously for treatment economics. Behavioral health providers operate on thin margins partly because incomplete treatment episodes generate revenue well below the cost of admission, assessment, and initial treatment delivery. When patients complete treatment, the economics improve dramatically. If VR helps even modestly improve retention rates, it can pay for itself through better census management and completion rates.
Downs noted that despite VR technology costs, the investment “all but paid for itself” through these retention and engagement improvements. For providers evaluating whether to invest in VR, Bradford Health’s experience suggests the business case may be stronger than it initially appears.
Foretell Reality: Customized Therapeutic Environments
While BehaVR focuses on pre-developed programs deployed across multiple sites, Foretell Reality takes a more customized approach. The company, a subsidiary of The Glimpse Group—a VR and augmented reality platform company—works with clients to develop tailored VR therapies meeting specific patient population needs.
Foretell Reality maintains a library of VR environments but adapts them for individual client applications. Notable customers include Yale Children’s Hospital and XRHealth, a VR company using Foretell Reality for support groups and therapy sessions.
Dror Goldberg, general manager of Foretell Reality, highlighted how VR can elicit more genuine patient responses compared to traditional therapy formats. The immersive nature of VR environments seems to reduce self-consciousness and performance anxiety some patients experience during face-to-face sessions or video calls.
“We can record and measure outcomes, and users can reflect back and look at them,” Goldberg explained. “Virtual reality has a lot of interesting features that people seem more comfortable with, instead of standing in front of the camera thinking about how they look.”
This comfort factor has important clinical implications. Therapy effectiveness depends partly on patients’ willingness to be vulnerable, honest, and fully engaged. Technologies that reduce barriers to authentic participation could meaningfully improve therapeutic outcomes.
Foretell Reality has found VR particularly useful for treating patients with phobias and facilitating group therapy sessions. Group sessions in VR offer unique advantages: participants can interact in shared virtual spaces regardless of physical location, environments can be designed specifically to support therapeutic goals, and the technology naturally equalizes participation in ways that physical group settings sometimes don’t.
Strategic advisor Jonathan Collins emphasized that VR’s behavioral health applications extend far beyond current implementations. “It’s not to say any type of therapy is going to be better in VR; that’s not the case,” Collins acknowledged. “But I do think almost any type of existing behavioral therapy can be explored in VR, and there is the potential to do things in those environments that you just can’t do in the real world.”
That last point captures VR’s unique value proposition. The technology doesn’t just replicate existing therapies in new formats—it enables interventions impossible in physical reality. Patients can practice social situations repeatedly without real-world consequences. They can experience graduated exposure to feared stimuli with perfect control over intensity and duration. They can visualize abstract concepts like emotional regulation or practice skills in simulated environments matching their real-world challenges.
The Clinical Use Cases Taking Shape
Several specific behavioral health applications are emerging as particularly promising for VR technology.
Exposure therapy for anxiety disorders and phobias represents perhaps the most obvious fit. Traditional exposure therapy requires careful construction of feared situations—for fear of flying, this might mean trips to airports, sitting in parked planes, or eventually taking flights. VR can simulate these experiences with perfect fidelity while maintaining complete safety and control. Therapists can adjust intensity in real-time and repeat exposures as needed without logistical complications.
Pain management programs use VR for distraction and relaxation techniques. Immersive experiences can reduce pain perception and teach coping strategies patients can apply during pain episodes. For chronic pain patients, this represents a non-pharmaceutical intervention that could reduce opioid dependence.
Addiction treatment applications include craving management, relapse prevention, and skills training. VR can simulate high-risk situations where patients practice refusal skills and coping strategies. It can provide immediate intervention during cravings by creating immersive distraction experiences. And it can teach mindfulness and stress management techniques in engaging formats.
Social skills training for various conditions benefits from VR’s ability to create repeatable, controlled social situations. Patients can practice conversations, job interviews, conflict resolution, or other social interactions without the anxiety and unpredictability of real-world practice.
Group therapy in virtual spaces offers geographic flexibility, unique engagement features, and potentially reduced self-consciousness for participants who struggle with in-person groups.
The Business Model and Adoption Barriers
Despite promising clinical applications and growing provider adoption, VR in behavioral health faces significant barriers to mainstream implementation. The most critical is reimbursement.
Currently, most VR programs in behavioral health operate outside traditional fee-for-service reimbursement models. Providers either absorb costs as part of overall treatment programs or, in some cases, charge patients supplemental fees. This limits adoption to organizations with capital to invest in technology without guaranteed reimbursement and restricts access for patients without resources to pay out-of-pocket.
“What we need is reimbursement,” Gani stated bluntly. “We’re going to get that because we’re driving value.”
The confidence reflects belief that demonstrable outcomes improvements and cost reductions will eventually compel payer coverage. If VR reduces treatment dropout, shortens length of stay while maintaining outcomes, or prevents costly relapses, the return on investment becomes clear.
But establishing that evidence base takes time. Payers want rigorous data demonstrating clinical effectiveness and cost-effectiveness before adding new technologies to coverage policies. Companies like BehaVR and Foretell Reality are working to generate that evidence through partnerships with academic medical centers and outcomes tracking built into their platforms.
The telehealth precedent offers both encouragement and caution. Telehealth struggled for years to gain widespread reimbursement despite clear value propositions. The pandemic forced rapid policy changes that many advocates had sought unsuccessfully for decades. While COVID-19 created unique circumstances, it demonstrated that payer coverage policies can shift dramatically when value becomes undeniable.
VR advocates hope to achieve similar policy momentum without requiring a crisis to catalyze change. The decreasing cost of VR hardware helps—consumer-grade headsets are now accessible enough for home deployment. And the technology’s novelty actually supports adoption in some ways, as providers compete to offer cutting-edge treatment experiences that differentiate them in crowded markets.
What Providers Should Consider
For behavioral health providers evaluating whether to explore VR, several factors warrant consideration.
The technology works best as a supplement to traditional therapy rather than a replacement. VR enhances clinical interventions but doesn’t eliminate the need for skilled clinicians. Providers should view it as a tool that extends therapist capabilities rather than a way to reduce staffing.
Implementation requires initial investment in hardware, software licensing, and staff training. However, companies like BehaVR have worked to minimize technical barriers through turnkey solutions. The question is whether providers have budget flexibility to invest in technology without guaranteed reimbursement.
Patient populations and treatment models matter. VR appears particularly effective for certain conditions and demographics. Providers treating anxiety disorders, phobias, addiction, chronic pain, or serving younger populations comfortable with technology may see stronger results than those serving different patient groups.
Starting small with pilot programs allows providers to evaluate effectiveness in their specific contexts before broader rollout. Partnerships with VR companies often facilitate these pilots with reduced costs or revenue-sharing arrangements.
The Five-Year Horizon
Sarah Ahmad’s prediction that VR for anxiety and phobias could be “commonplace” within five years represents an aggressive timeline but not an implausible one. Telehealth went from niche to ubiquitous in months once barriers lifted. While VR faces different challenges, the trajectory could surprise skeptics if key obstacles fall.
Reimbursement changes would accelerate adoption dramatically. If major payers begin covering VR-based interventions for specific conditions, provider adoption would follow quickly. Magellan’s interest suggests some managed care companies are seriously exploring this possibility.
Continued hardware cost reductions make VR increasingly accessible. As consumer VR markets mature, prices decline and capabilities improve, reducing barriers to clinical deployment.
Growing evidence bases from academic medical centers and provider networks will strengthen clinical credibility. Publications demonstrating outcomes improvements in peer-reviewed journals will influence both provider and payer attitudes.
The behavioral health workforce shortage shows no signs of resolving. Technologies that extend clinician productivity and supplement scarce professional resources will continue attracting interest as demand growth outpaces supply.
Dr. Peter Buecker, chief medical officer at BehaVR, framed VR as a solution to multiple converging challenges: “We see digital, generally, but VR, specifically, as a way to use powerful technology to improve access to care, to lower the cost of that care and to also unburden health providers who are already strained and overwhelmed.”
If VR can deliver on that promise—better access, lower costs, reduced provider burden, and improved outcomes—reimbursement and mainstream adoption become inevitable questions of when rather than if. The technology exists, clinical applications are being refined, and early adopters are demonstrating feasibility.
What remains is scaling from hundreds of clinics to thousands, from pilot programs to standard practice, and from innovator enthusiasm to payer support. The next five years will determine whether virtual reality follows telehealth’s path from future promise to present reality in behavioral health care.
