Hi friends,

Newsletter #38 is a little late. So late, that you’re going to get two this week instead. What a joy!

I’m in the US right now, hanging out in New York where it’s beautiful but bloody freezing. I miss Australian summer already.

Today I want to address something that’s been on my mind for a long time. It’s a challenge that lies at the core of our ability to create a meaningful impact on our mental health crisis.

Here it is;

There are multiple factors proven to impact mental health that no one will pay you to deliver. 

We know that a wide range of biological, psychological and social factors impact an individual’s mental health. Factors like childhood trauma, social isolation, poor sleep, lack of exercise, bad nutrition, domestic violence and a lack of purpose in life are all significant risk factors for mental disorders. There are many more. Not only are they important in prevention, they are also incredibly important in treatment. Most of these factors are deeply interconnected and mutually reinforcing.

However, there are no CPT codes for addressing these challenges. The problem isn’t that these interventions don’t work—it’s that our systems weren’t built to pay for them.

Now, I believe in private enterprise as a powerful vehicle for solutions in mental healthcare.

But, so far, the factors listed above have remained mostly outside the scope of private businesses. While this remains true, we’re trying to fight our mental health crisis with one hand tied behind our back.

If we want to move the needle on mental health outcomes, we need to get comfortable with this messy world of biological, social and environmental determinants. We need to drive behaviour change to improve mental health outcomes. And if we want to do this as a business, we need to figure out how to get paid for it.

This is what we explore in today’s article.

Let’s get into it.

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The nature of the challenge

First, let’s define exactly what we are talking about here.

There are a large number of mental health interventions that are;

1. Proven to improve mental health

2. Not reimbursable

I call them Non-Reimbursable Mental Health Interventions (NRMHIs). Catchy, I know. Perhaps there’s a better industry term I’m not aware of…

It includes biological interventions like improving someone’s sleep, improving their nutrition or helping them to exercise more. It also includes social factors helping someone to join community groups and build better social networks. It even includes things like helping an individual find a meaningful job, preventing trauma, reducing the financial strain on an individual, or finding purpose in their life. All of these things are proven to positively impact mental health

Many of you will be highly familiar with this category of interventions. You’ll have wanted to prescribe them or build products that deliver them, but have likely come up against some barriers that prevented you from doing so.

Of course, mental health is not alone in this predicament. It’s one of the core system issues of our healthcare system. But why is that the case?

Why is it so hard to actually deliver these interventions?

The first reason is in the name. They are “non-reimbursable”.

We live in healthcare systems that are primarily fee-for-service. And in that system insurers or employers won’t pay for you to help an individual with these non-medical interventions.

It’s easy to blame payers for this, but I can also understand their hesitation. Assigning impact to any one of these interventions is incredibly challenging. The time horizons are long and the ROI is unclear. Simply put, the system is just not set up to reimburse these kinds of interventions and the complex nature of mental health makes their impact hard to define.

Unfortunately, individuals won’t use their own cash for it either. In general, getting consumers to spend on preventative healthcare is challenging and mental healthcare is no exception. So without someone to pay, it’s hard to build anything at scale (or at all).

But the lack of a willing payer is not the only challenge. Many of these interventions rely on the messy world of human behaviour change. Behaviour change is pretty much one of the hardest things you can attempt. Have you ever tried to help a friend or family member change a habit? You know them better than anyone, are committed to helping them and are often physically present with them. And yet still, it is so hard to get them to change their behaviour. How good are you at changing your own behaviours? Since getting to the US, every day I’ve told myself I won’t get caramel in my coffee… and how do you think that;’s going for me?

While it’s clear that the main barrier is a system that won’t pay for these interventions, I’m not in favour of waiting around for our system to adjust. While we wait, people who could benefit from these interventions will go without them.

So what could we do instead?

What could we do instead?

So if we want to deliver these kinds of interventions, what can we do? I have a couple of ideas.

1. Reposition your service into something people will pay for

For a moment, let’s just accept that reimbursement is off the table. Instead, let’s see if we can get consumers to pay for it.

Now, we know consumers won’t pay for preventative mental healthcare. So the first step is simple; stop trying to get them to.

There are a bunch of things people will pay money for, and there are plenty of ways you might be able to position your solution in a way that fits into that category in people’s minds.

Your local gym understands this better than anyone. Working out is one of the best things you can do for your physical and mental health. But the primary motivator for most people is something different… to look more attractive. It doesn’t really matter whether this is a “good” or “bad” thing. It’s the reality. Your gym understands that this is your reality and markets to you accordingly.

8 Sleep might be doing more for population mental health than many mental health organisations. If they help people to sleep longer and sleep better, they will reduce mental health risk. But that’s obviously not how they position themselves with consumers. Look at their homepage below.

It’s leaning into the real and powerful desire for people to perform well during the day.

Whoop do something very similar.

Mettle is a men’s mental health solution largely focused on consumers. Despite being a mental health product with partnerships with the NHS, they position their product in a way that taps into men’s desire for fitness, control and performance.

Can’t figure out how to position your non-reimbursable intervention? Take out Maslow’s hierarchy of needs, start at the bottom and figure out which human need your solution fulfils for its user, then position it accordingly.

For example, I’ve recently been thinking about getting a “Cognitive Coach”. Something that could help improve my cognitive performance so I can do better work. I’m sure some of the methods a cognitive coach might teach me could also be used as psychological skills that could be protective of my mental health. I’d also bet that the market for “cognitive coaching” is quite large. People would buy the service to improve their performance at work, make more money etc., but while they’re doing so, they could be reducing their risk of developing a mental disorder. Positioning matters.

The final option here is to be creative about finding the right buyer. This is an exercise every mental health founder will go through, but it’s worth revisiting with a fresh and creative mind. Ask yourself, who benefits from my solution? Then ask, would they pay for it? Ninety-nine times out of one hundred this won’t generate anything new, but that one time it does, might unlock a new payment model for you.

2. Use it for client acquisition and retention

One of the biggest challenges for mental health businesses is acquiring and retaining clients. In fact, increasing capture rate is one of the biggest challenges I see in the industry right now, even for large, publicly listed businesses like Talkspace.

So why not use NRMHIs as a way to acquire more clients for your business?

Look, it’s a pretty basic marketing strategy that many other industries have figured out. Why can’t we do the same in Mental Health and land ourselves a Win-Win for a change?

Run clubs have been one of the major trends of the past few years. Every sneaker brand recognised this and leaned into it. They host run clubs, sponsor them and have even built physical spaces to house the after-parties. Run clubs are fantastic for an individual’s physical and mental health. And by running them (sorry, bad pun), the sneaker brands are selling more shoes. They are monetising the initiative through sales of their core product. Could you do the same?

Could you run a local breathwork class? Could you host an alcohol-free social evening? Or a parenting class? Maybe even a sleep hygiene workshop? This is an opportunity to use your marketing budget to do something meaningful and still hit your commercial targets. People will pay for many of these too. Sure, it won’t be a money maker, but it can help improve the economics of your marketing efforts. I’ll put it this way, no one is going to pay you to run Meta ads!

Be creative here. What can you come up with?

I’m not naive enough to think that simply repositioning our products and finding ways to use them for client acquisition will allow us to get paid for every single mental health intervention that works. I know that’s not the case. But if, on the margin, we can use these tactics to get an evidence-based intervention to reach one more person, isn’t that a win?

3. Accelerate our path to a VBC future

We can’t wait for the system to change, but we can try to accelerate it.

Ultimately, if provider organisations were paid based on outcomes instead of services, there would be a lot more scope to invest in these kinds of interventions. However, we should recognise that a future where organisations are paid based purely on outcomes, through capitated agreements, is very far away. And even if we do get there, no single organisation will be able to influence the entire range of biological, environmental, and social factors that influence mental health outcomes.

However, that should not stop us from trying to move to a VBC world, where we can get paid to deliver the kinds of services that actually move the needle on outcomes, not just those with CPT codes.

Provider organisations can try to accelerate this transition by being proactive with payers around these agreements. Take on VBC contracts, push for more risk-based payments, own outcomes, implement these kinds of initiatives and prove that they can work.

Most payers actually want to move to a value-based care world, but providers need to show them proof that they can deliver.

If you believe that we are moving to an increasingly value-based method of payment, then now is the time to build the evidence base behind your interventions.

What else do we need to do?

If we are serious about addressing the biological, social and environmental determinants of mental healthcare we need to become skilled in two things; collaboration and behaviour change.

The social and environmental factors that impact someone’s mental health, will themselves be determined by a wide range of parties. From private businesses, to organisations like schools and universities, to public bodies like Departments for Housing and Social Welfare, and to the health system itself, a single individual will be affected by the work of dozens of parties, directly or indirectly.

The organisations that learn how to collaborate with this ecosystem, prioritising the individual at the centre of their services, will have the most impact. Who can you partner with that also serves your target community? How can you work together with them in genuine collaboration? Building these kinds of collaborative partnerships is hard, but creates a huge opportunity for better outcomes, clinically and commercially.

Lastly, you need to get really good at changing behaviour.

You need to deeply understand behaviour change and then act boldly in how you implement that into your product or service. I’m not just talking about gamifying your app. No, think much bigger than that.

What does Tony Robbins do? He gets you in a room with hundreds of other people and moves you into a peak emotional and physiological state. He uses storytelling, repetition and social proof to drive real change. Again, whether we like his tactics or not doesn’t really matter, it works!

There are a lot of digital health businesses trying to drive behaviour change. This is a good thing. We just need to ensure these businesses use all the tools available to them when trying to influence positive behaviour change.

Our mental health crisis demands solutions that go beyond the medicalized, reimbursable model of care. While therapy, medication, and clinical interventions play a crucial role, many of the most impactful factors - from sleep to social connection, to purpose - remain difficult to monetize and scale.

While we must push the system to pay for the kinds of interventions and social change that will improve mental health outcomes, we also can’t wait around for that to happen. We need to build sustainable solutions that address these factors. Whether by repositioning our products to get consumers to pay, or finding creative methods to use those same interventions as acquisition tools that can be monetised in other reimbursable services.

We have to untie our hands and be bold about using the full arsenal of interventions at our disposal. Because we need them now more than ever.

That’s all for this week.

I’d love to hear your thoughts on this.

What ways have you found to deliver non-reimbursable interventions? The more I learn about the underlying determinants of mental health, the more I realise that we must address the social and environmental factors if we want to move the needle on outcomes. I’m very passionate about this and would love to connect with anyone thinking about this problem.

Keep fighting the good fight!

Steve

Founder of The Hemingway Group

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