Hi friends,

I’m a happy man today.

Trilliant Health just released their 2025 report on Trends Shaping the Health Economy. It is a beautiful report. Hats off to you, my fellow data nerds!

The report is dense with interesting, sometimes surprising, and often alarming data. I’ve spent the last day extracting the charts that you need to be aware.

So in today’s edition of The Hemingway Report, I’ll share the six charts that help explain the US mental health market right now, and what that means for you and your work.

Let’s get into it.

Time is running out to sign up for Inside The Lab, APA Lab’s flagship event for mental health innovators. If you are a founder, clinician or researcher, interested in getting together with like-minded people and collaborating to build actual solutions, I think you’ll enjoy it. It’s a chance to test ideas, get direct feedback, and build important relationships.

They’ve also given me a discount code for Hemingway readers - just use ITL2025GJMMM at checkout for 20% off.

Key Takeaways (for those short on time)

1. Behavioural health visits are growing faster than primary care (and may even account for more total visits)

2. Access challenges remain, driven primarily by financial constraints

3. Teletherapy is in decline amongst the commercially insured

4. Therapy adoption is unevenly distributed, presenting opportunities to build for underserved segments

5. Medicare Advantage enrollment grows as employer-sponsored insurance remains flat

6. Costs are completely out of control (surprise, surprise)

1. Behavioural Health Visits Are Growing Faster Than Primary Care

The Data: For the first year ever, there were more behavioural health visits than primary care visits among commercially insured patients. Now, this could be a quirk of how primary care visits are measured in this report. But whether the actual number of visits is actually greater or not doesn’t really matter. What is interesting is the rate of growth. From 2023 to 2024, behavioural health visits from patients with commercial insurance grew by 11.4%, primary care visits declined by 5.6%.

What It Means: The demand for mental health services continues to outpace other areas of healthcare. This data represents a sustained shift in the demand for mental healthcare. It also raises a bunch of questions about what is happening in primary care.

So What: The underlying demand for mental healthcare is strong and growing. But as we’ve seen, high demand alone doesn't guarantee success in this space. Competition is high, and pricing pressure is real. Companies must be thinking about differentiation and meaningful innovation to build high-performing businesses.

2. Access Challenges Remain, Driven by Financial Constraints

The Data: Almost 20% of US adults report anxiety or depression, but only 13.4% receive therapy. As I discussed in a recent report, 19% receive prescription medication, and 23% receive therapy or medication. Of the top six reported barriers to care, three are related to cost, two are related to finding a provider, and one is related to stigma.

What It Means: Access remains an unsolved problem. Innovation and cultural shifts have definitely helped more people get the care they need - we can see that in the data. That is great and one of the truly positive stories in mental health innovation. But it’s clear that we have a lot more work to do. In addition, we must be aware that simply increasing access to ineffective, expensive treatment won’t suffice. We need to improve access and quality in parallel if we want to solve this problem.

So What: There is still a lot of opportunity for those who can meaningfully improve access. That means solving the supply side of mental healthcare and making it more affordable. Also, the job of reducing stigma is not complete. When working in this space, we can often assume stigma is a solved problem. I’m guilty of that. But the data tells us that is clearly not the case.

3. Teletherapy Continues to Decline

The Data: Despite the overall growth in behavioural health utilisation, telehealth for behavioural health has been in decline. According to this data, since 2021, telehealth for behavioural health has been in decline amongst commercially insured population groups, down to approximately 38 million telehealth visits per year. Across all of healthcare (not just behavioural health), most patients receive in-person care only. For 18-44 year olds, approimatley three in four people receive in-person only care, approximately 1 in 4 receive hybrid care (a mixture of in-person and telehealth), and a tiny percentage receive telehealth only care. I’d love to see this data for behavioural health specifically.

What It Means: This trend can be somewhat explained by a post-pandemic mean reversion. But it is also an important reminder that most people are getting healthcare in person. This has implications for potential care models and referrals.

So What: There are significant benefits to having in-person care offerings. Companies should think deeply about what modalities actually work best for their specific population, their clinical approach and their business model, and avoid defaulting to virtual-only services. If they do choose a virtual-only model, they should ensure their client acquisition strategy appreciates that most people still get their healthcare in person.

4. Therapy Adoption is Unevenly Distributed

The Data: The chart below speaks for itself. There is significant variation in therapy engagement across population groups. For example, 63% more women receive therapy than men *(16.5% vs 10.1%), and only 7.1% of Asian people receive therapy vs 15% of White people. While this chart doesn’t include data on variations in mental health needs of these groups, I think it is safe to assume that they do not fully account for the differences in therapy engagement, i.e., women don’t need 63% more mental healthcare than men.

What It Means: While overall mental health utilisation is up, significant gaps remain for specific populations - particularly among men, and racial and ethnic minority groups. These aren't small niches; they represent millions of people who need and want care but aren't being adequately served by existing solutions.

So What: I believe this is one of the biggest opportunities in mental health right now - developing tailored solutions to underserved niches. Yes, it requires more work to understand their unique needs and delivery preferences. Yes, it might mean you can't use the exact same playbook as everyone else. But that's precisely why it's an opportunity. The companies serving these populations well will have less competition, easier customer acquisition and stronger customer loyalty.

5. Medicare Advantage Enrollment Grows as Employer-Sponsored Insurance Remains Flat

The Data: While those with employer-sponsored insurance remain the largest (and most profitable) cohort of Americans (181 million people), the cohort did not grow from 2023 to 2024. Meanwhile, Medicare Advantage (MA) enrollment is accelerating, growing by 0.7pp from 2023 to 2024 as a share of the covered population. By 2034 MA is projected to account for 64% of all Medicare beneficiaries. The share of those enrolled in Medicaid declined by 1.3pp from 2023 to 2024 as a share of the total covered population.

What It Means: The traditional employer-sponsored insurance market doesn’t seem to be growing. As the US population ages and more people qualify for Medicare, and as Medicaid eligibility expands, the payer mix is shifting. Of course, within these population groups, behavioural health spend may be growing faster than the overall population size. But demographic shifts like this are powerful determinantsnts in defining the size of a market over time.

So What: The employer-insured market is still the largest and the most lucrative market. However, other areas, like Medicare Advantage, provide opportunities for growth. They require a different approach - different reimbursement models, different outcome metrics, different sales cycle - but they are also traditionally underserved by the mental health market and present an interesting opportunity to those who can crack the right model.

Join The Hemingway Community

Applications are now open for the next Hemingway Community cohort.

We just crossed 200 members in our crew (woo!) and if you’d like to apply to join our next cohort, you can learn more here.

6. Costs Are Completely Out of Control

The Data: Between 2010 and 2024, average annual insurance premiums increased by 85.7%. Employer contributions grew even faster - up 97.2% - while employee contributions rose 57.5%.

What It Means: The cost of delivering healthcare continues to increase, and it’s flowing through the system. Behavioural health costs are no exception. Earlier this year, United explained that its behavioural health costs are running at 20% YoY growth. This is unsustainable and must be addressed. Especially when it’s so hard to show evidence of outcomes and ROI.

To date, employers have largely just accepted these rising premiums. They have made some efforts to contain costs: implementing wellness programs, increasing employee contributions, negotiating with providers/carriers, etc. But these strategies have been largely ineffective. As the report highlights, if the market (specifically employers) does not change, change will be forced upon them by government.

So What: ROI is more important than ever, especially if you are building for employers. Employers are desperate for interventions that actually reduce their healthcare spend, not just shift costs to employees. This means you need to demonstrate clear outcomes and cost savings, ideally by preventing expensive downstream utilisation. The companies that can show they reduce total healthcare costs (not just behavioural health costs) will win.

That’s all for this week.

Kudos to the Trilliant Health team for their great work on this report. I’d thoroughly recommend reading the entire thing if you have time.

As always, please get in touch and let me know what you thought of this report. I always want to hear from you.

Keep fighting the good fight!

Steve

Founder of The Hemingway Group