In recent years, investment in serious mental illness care has become an area of growing focus within the venture capital world. Historically, this sector was overlooked, with many investors shifting their attention toward other sectors in healthcare. However, as the need for innovative solutions to treat serious mental illnesses (SMI) grows, venture capitalists are beginning to recognize the potential of this underserved market.
One of the driving forces behind this shift is the rising cost of healthcare, particularly in the treatment of SMI. As payers move away from behavioral health carve-outs, there’s an increasing interest in investment in serious mental illness care as a means to address both the financial and healthcare burdens faced by these individuals. Dr. Ben Robbins, a psychiatrist and general partner at GV, notes that the lack of accessible treatment options outside major urban centers makes SMI care an area ripe for innovation.
The Opportunity for Venture Capitalists in SMI
Venture capital firms like GV (formerly Google Ventures), with over $8 billion in assets under management, have already made significant strides by investing in healthcare startups that focus on mental health. According to Robbins, investment mental illness care is not just about financial returns—it’s about creating meaningful change in the healthcare system. “Serious mental illness has the potential to change a person’s life trajectory so dramatically, making it a key focus for our firm,” he explains.
Robbins highlights that traditional models of care for SMI often fail to address the complex needs of patients, particularly those living with conditions like schizophrenia. With the integration of novel approaches, investment in serious mental illness care has the potential to revolutionize how we treat individuals facing these challenges.
The Importance of Integrated Care for SMI
One of the critical points that Robbins emphasizes is the importance of combining medical and behavioral health services in the treatment of SMI. For investment in serious mental illness care to succeed, it must involve integrated models that look at both the physical and mental health aspects of a patient’s well-being. While value-based care models can be effective, they present challenges due to the complexity of the patients and the potential for increased costs when individuals begin to seek proper care.
Yet, as Robbins notes, there’s a unique opportunity here: “What’s not intuitive about SMI is that the costs for the most complex patients are driven almost entirely by medical costs.” This is where investment in serious mental illness care becomes critical in addressing the full spectrum of needs—from medical treatment to ongoing behavioral health support.
Alternative Models of Care: A Key to Lowering Costs
An exciting development in the field of SMI care is the emergence of alternative models that could lower the costs associated with behavioral health services. Robbins points to middle acuity care models, such as partial hospitalization programs (PHPs) and intensive outpatient programs (IOPs), as viable alternatives to inpatient care. These models offer more flexibility, lower costs, and greater engagement among patients, making them a perfect fit for investment in serious mental illness care.
Robbins also highlights the potential for virtual group-based models, particularly for demographics such as teenagers and seniors. These models not only help address stigma but also have shown increased engagement and effectiveness, which is key to reducing overall healthcare costs in the long run.
The Role of Peer Support in SMI Care
One of the most promising areas for investment in serious mental illness care is the development of peer support models. By integrating peers from the same community into care teams, patients feel more connected and are often more motivated to engage in treatment. Robbins notes that peer support is particularly effective for complex populations, as the engagement rate with peers tends to be much higher than with clinicians alone.
In early 2023, GV made a notable investment in a startup focused on peer support for individuals with serious mental illness. This startup aims to build trust and engagement by connecting patients with peers who have lived experience. This approach not only reduces costs but also improves outcomes for individuals with SMI.
The Future of Investment in Serious Mental Illness Care
As the venture capital world continues to turn its attention to mental health, investment in serious mental illness care will play a pivotal role in shaping the future of the healthcare system. With the potential to address both the financial and human costs of SMI, this sector is positioned for growth and innovation. Through thoughtful, targeted investments, there is an opportunity to transform care for millions of people living with serious mental illnesses, improving outcomes and reducing overall healthcare expenses.
By embracing innovation, integrated care models, and peer support, the future of SMI care looks brighter than ever. For venture capitalists, investment in serious mental illness care is not only an opportunity for financial return but also a chance to make a lasting, positive impact on the lives of individuals who need it most.
