When Eric Frieman saw firsthand how difficult it was for people struggling with mental health and substance use disorders to access the care they needed, he knew something had to change. His brother, an Army infantry officer, witnessed more of his soldiers succumb to suicide and behavioral health issues than to combat. And Frieman’s best friend lost his life to a drug overdose. These experiences deeply shaped Frieman’s mission to transform behavioral health care.
With a background in investment banking, where he advised on health care deals, Frieman set out to create a new model for behavioral health care. In 2016, he launched Forge Health, an outpatient provider focused on treating both mental health conditions and substance use disorders (SUDs). Seed funding from Montage Ventures helped get the company off the ground, and in 2022, Forge Health secured $21.5 million in two rounds of venture capital funding led by HC9 Ventures.
A Sustainable and Scalable Business Model
Like many health care providers, Forge Health relies on reimbursements from commercial health insurance. Today, more than 85% of its clients are covered under private health plans, with additional patients receiving care through Medicare and Medicaid. Based in White Plains, New York, Forge Health primarily operates in the Northeast, with locations in Massachusetts, New Hampshire, New Jersey, New York, and Pennsylvania. The company runs 19 physical clinics, offering a hybrid approach that blends in-person and virtual care.
Frieman notes that while Forge Health’s core business is currently profitable, the company is concentrating on sustainable growth and expansion.
What Sets Forge Health Apart?
Forge Health distinguishes itself in two key ways. First, it prioritizes treating co-occurring disorders, particularly cases where SUDs and mental health conditions intersect. Many health care providers treat these conditions separately, a practice that Frieman believes is outdated given the high prevalence of dual diagnoses. To address this gap, Forge Health is committed to hiring clinicians trained to handle both types of disorders.
The second differentiator is its multidisciplinary care model. Rather than assigning patients a single therapist and later adding a medication provider, Forge Health provides a coordinated team. Each patient works with a clinician, a designated nurse practitioner, and an administrative care coordinator to ensure seamless, comprehensive care.
Industry Growth and Changing Trends
The demand for behavioral health services has surged in recent years, driven in part by the opioid crisis and heightened awareness of mental health issues, particularly during the COVID-19 pandemic. This increased demand has also attracted investor interest. Between 2019 and 2021, venture capital investment in behavioral health companies skyrocketed nearly fivefold, according to a report from Rock Health.
Although funding levels have tapered off in 2022 and 2023, interest in the sector remains strong. Forge Health, having successfully raised capital last year, continues to focus on refining its multidisciplinary care approach rather than aggressively scaling for the sake of expansion. Frieman emphasizes that ensuring high-quality clinical care is at the heart of Forge Health’s strategy.
Looking Ahead
While the behavioral health investment landscape is currently experiencing a slowdown, Frieman remains optimistic about future funding opportunities. He acknowledges that many venture capital firms have already made their initial investments in the sector, but he believes that if Forge Health continues demonstrating clinical efficiency and financial sustainability, investor interest will follow.
As Forge Health navigates the evolving landscape of mental health and substance use treatment, its commitment to integrated, patient-centered care remains its guiding principle. Frieman and his team are focused not just on growth, but on delivering a model that ensures long-term, meaningful change in the industry.
