Venture Capital Firms See Profits in Therapy, but Is a Profit Model Appropriate?

Toll on Mental Health

In the wake of the pandemic, many Americans have struggled with their mental health. Lock-downs, working from home, social distancing, and even masks left some feeling disconnected and lonely. Fears related to the virus and the general uncertainty around outcomes left many in a state of ongoing anxiety. For those who lost loved ones, grief was often kept bottled inside as so many were left unable to be with their loved ones to say goodbye.

The World Health Organization estimates there was a 25% increase in anxiety and depression during year one of the pandemic. Therapists are experiencing an explosion in requests for appointments as pandemic-weary patients seek support.

Breaking Down Roadblocks to Care

The demand for mental health services is making it difficult for some to get timely or affordable care. Some therapist’s practices have wait lists. There is also the issue of whether a practitioner is in-network with insurance.

Some investors are addressing these potential roadblocks. Private equity companies and venture capital firms such as KKR and Summit Partners are investing billions to acquire psychology practices and to build out telehealth platforms. Investors spent $4.5 billion in the US last year on mental-health technology start-ups.

Is Profit Model Appropriate?

The investors claim they will offer more in-network providers, enhanced protection of patient privacy, and more clinicians, which could ultimately boost access to care. The build-out of remote care options could also help in this regard.

Critics argue prioritizing profits could come at the expense of patient care. As investors look for ways to cut costs and increase the bottom line, a variety of scenarios could play out. Possible issues include practitioners being required to see many patients per day or being pressured to prescribe unnecessary medications.

Those looking for care may feel the need to ask who’s calling the shots as they seek out a therapist. It’s a sensitive issue that speaks to the need for expanded focus on mental health both on a financial and societal level.

Things are changing daily within the financial world. Sign up for the SoFi Daily Newsletter to get the latest news updates in your inbox every weekday.
Sign up

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS22051002