#15 The Platform-Provider Problem
Why providers are frustrated and what platforms must do to make amends
Hi friends,
What the hell is going on between therapists and mental health platforms right now?
Last week, Spring Health announced a $100m Series E and this is the first post I saw about it on LinkedIn…
Not exactly congratulatory.
I read the comments and it became clear that lots of providers were frustrated - both with Spring and other MH platforms.
There’s a deep frustration within the provider community right now and it’s started to worry me.
We’re facing a mental health crisis, the size of which currently exceeds all of our combined capabilities and resources. And yet here we have two important parties (providers and MH platforms) in massive tension with each other.
The enemy is coming over the walls and we’re fighting over who gets the shinier piece of armour.
I wanted to get to the bottom of this tension, to understand exactly where it’s coming from and what we can do to resolve it.
So this week, I play marriage counsellor and have been spending the last few days having conversations with both parties.
In this post, I share what I learned about the compensation, clinical and communication challenges faced by therapists as well as how platforms are creating this tension by not truly understanding the labour of therapy.
And because we all want solutions (right?) I share how what platforms and providers need to do to find alignment and get back to working together on the problem we all care about solving.
Happy families once again!
A quick note on terminology for the rest of this post:
Providers = all mental health professionals (psychologists, therapists, counselors etc.)
MH Platforms = mental health companies providing therapy as a product to payers (e.g., Spring, Lyra, Alma etc.)
OK, we first need to know why providers are so frustrated.
Before we get into some of the practical elements causing frustration, there’s a very important element we must consider.
The relationship is damaged on an “emotional” level.
Providers have a deep-rooted feeling that they are not valued. They feel they aren’t being heard and that they are just being “used” by MH platforms.
I told you this would be a counselling session…
Jokes aside, they really do feel that they have become “the product” of MH platforms, that they have been commoditised, packaged up and resold at a marked-up price.
“What they did is create an unnecessary middle-man, between the mental health professional and the client. These clever companies take a significant cut of the profit and pay therapists an unreasonable wage for their field”.
Much of this feeling stems from a deep distrust of for-profit, venture-backed tech companies (but more on that later).
If we start to look at practical solutions without first understanding the psyche of mental health professionals — the context of their frustrations, their deep and justified need to feel valued — we are doomed to failure.
But of course, there are many practical elements of their relationship with MH companies that reinforce these beliefs and that we must also understand.
Provider frustrations:
- Providers are not compensated fairly for their work
- MH platforms prioritise profits over patients and providers
- MH platforms compromise on quality of care
- Providers are put under significant pressure to meet company requirements around case loads and other measured criteria
- Providers are not adequately represented in company leadership
- MH platforms don’t maintain ethical practices
- Providers don’t receive adequate support (supervision, communication regarding scheduling etc. )
- MH platforms don’t adequately communicate with providers (there is a lack of transparency, frequency and an ability to listen to their concerns)
Considering both the depth and breadth of these frustrations, it’s clearly not going to be a straightforward solution.
But… There is reason for hope.
Despite all of these frustrations, many providers are still choosing to work for these platforms.
And it’s not from lack of choice.
Despite their growth, MH platforms only represent a minority of all provider roles. Demand for care is high and there are lots of other options out there. Providers can work in private practice (by themselves or with someone else) or in a wide range of community services. They have options.
And yet many still choose to work with MH platforms. Why?
Because it gives them flexibility, supplemental income, a stream of clients and added benefits like reducing the amount of admin they have to do.
Here’s a quote from a Clinical Psychologist working with Spring Health.
“I currently see patients through Spring Health and they offer some nice options for therapists. We humans are (currently) in very high demand so they try to keep us happy.”
As for why he chose to work with Spring Health?
“(1) They find the clients for me. (2) The expectation is for short term treatment which I like. (3) They handle any crisis work that might show up and (4) their EHR is not too bad.”
MH platforms are clearly providing some value - if they weren’t, no providers would work for them. If they can find a way to rebuild the foundations of their relationship with providers, implement the practices that address their frustrations, whilst still ensuring the commercial viability of their business, then maybe, just maybe, we can step into a new era where platforms and providers work together to deliver the impact we all want.
There is hope.
The Root Causes
With everything I write, I want it to be actionable and solution oriented. And so I really want to get to the part where on what we can actually do to solve this problem.
But doing so before fully understanding the root causes of this tension would be a mistake. So let me explain what is causing these challenges and it defines the space we have for building solutions.
1. A conflict of nature
MH platforms have failed to fully understand the nature of the work done by mental health providers. They have built labour platforms using playbooks from other industries which don’t work as well in mental health and create conflict with providers.
Providing mental health care is a very different profession to most others in our society. Livia Garofalo describes the nature of mental health work wonderfully in her report Doing The Work.
Garofalo describes how mental health providers experience both the “work” of therapy and the “labor” of therapy.
- The work of therapy: the process and techniques of psychological healing with patients. “Doing the work”.
- The labour of therapy: the economic and professional arrangement that allows such work to be compensated and recognised
The work and labour of therapy have “been intimately connected since the formalisation of psychotherapy as a profession”.
But in most professions, this is not the case. There is little division between the work most people do and how they earn a living from it. A bricklayer builds a wall and gets paid for building that wall. In the mind of the bricklayer, there is little separation between his work (laying the bricks) and his labor (getting paid for laying the bricks).
Many of the large labour platforms have been built for these kinds of professions, Uber, Task Rabbit, Upwork etc.
These labour platforms can operate largely under free market principles, where the primary (and often only motivator) is to fulfil the “labour” needs of the workers. As long as they get paid to do they job they agreed on, they’re happy. The jobs are usually well defined and similar to how they’ve always done their work before the platform. Switching from being a taxi driver to an Uber driver does not require much change in the nature of their work.
But for MH providers, platforms have changed the nature of their work.
“The relationship between therapeutic work and therapeutic labor is being changed significantly through the increasing adoption of teletherapy and the entrance and mediation of platform therapy companies.”
Before Mental Health platforms, providers worked in private practice or in community services. The relationship between therapeutic work and therapeutic labor was straightforward. Their work was almost always structured around “the therapeutic hour” (face to face sessions lasting fifty or sixty minutes) and with consistent rates of pay. They saw patients over an extended period of time and had good (but definitely not perfect) insight into their outcomes.
But MH platforms have changed both the “work” and “labour” of therapy and it’s creating conflict with providers.
Look at how most MH platforms operate. They primarily function through telehealth and have started offering various modes of therapy, from 30 minute sessions, to text-based therapy and group therapy. Provider activity is tracked and measured against targets and benchmarks. They have new compensation schemes, targets and incentives for providers.
Providers need harmony between their work and labour. But these changes have disrupted that and it’s creating tension with providers. It’s this tension that underpins many of frustrations they experience and is at the core of the distrust they have in platforms.
2. A failure of incentive translation
In a previous post I joked about getting a tattoo of the Charlie Munger quote; “Show me the incentive and I'll show you the outcome”. Perhaps it’s finally time I pull the trigger on that one because I’m back to talk about incentives.
But more accurately, incentive translation. I believe that on a fundamental level the incentives across this system are aligned (despite what most people think) but that the cause of provider frustrations is driven by a failure to translate these incentives into tangible compensation that drives behaviour.
First I want to show you why incentives are not actually misaligned.
The simplistic view that I often hear about incentives is that “MH platforms and their investors want profits (which means growth and margins), whilst providers want more compensation and better patient outcomes”.
This is accurate.
Providers want (and deserve) to be paid more. Patients want better outcomes.
MH platforms want to achieve scale and as a business, want to make money. So do their investors.
But are these incentives really diametrically opposed?
The truth around incentives is a little more nuanced.
MH platforms are incentivised to make patients better. If a platform is not making patients better, in the long run, no payer is going to pay them for their services. The incentive is there, there just needs to be a better mechanism to translate that incentive into rewards for the platforms. For providers, they of course want to improve outcomes for their patients too.
Platforms are also incentivised to attract and retain providers on their platform. A MH platform with no providers isn’t going to be around for long…
Some platforms may get away with burning through providers over a short period, but the market is quite efficient at weeding these out. As providers keep reminding me “we all talk".
The deeper challenge is not that the incentives are in opposition, but rather that there’s a failure to translate these incentives into measurable and actionable benefits. Payers still pay by the session / patient (rarely for value based care). This then flows through to how providers pay therapists.
Platforms are incentivised to scale but by not giving providers equity in the business, they’ve failed to translate that incentive.
If platforms were genuinely not incentivised to improve patient outcomes or improve provider experience, then we would have a much bigger problem. But that’s not the case.
At the fundamental level, the theoretical incentives are aligned across the parties, but without translating them into tangible incentives (like compensation), they fail to drive behaviour and start to create frustrations within the provider community.
3. Market fundamentals
The sad reality here is that if people placed greater value on their mental health, a lot of these problems would go away. Consumers and payers just won’t pay much for mental health care and that flows through the market. It’s why insurance reimbursement rates are low and it’s what caps what employers are willing to pay to EAPs for treatment of an employee.
If a MH platform is only receiving $100 per hour of patient care, that places a hard cap on what they can pay the provider to provide that care.
Sure, we can debate what an appropriate margin for the company should be. Should they pay the provider $60, $70, or $80? I don’t know. However, the unwillingness of payers to spend more for care places a hard limit on this discussion. If payers were willing to pay $120 instead of $100, both the mental health platform and the provider could receive higher compensation (I discuss how platforms might achieve this in the solutions section below).
Another characteristic of this market that Garofalo points out is that MH platforms can’t influence the supply of providers. This is different to other labour platforms like Uber.
The supply of providers is constrained by how many people can get trained and accredited. MH platforms can’t influence this. This constraint in supply shifts some power to providers - but also creates incentives for MH platforms to find alternative ways of increasing supply. They do this through new modes of therapy as mentioned above (which contributes to the conflict of nature) as well as increased tech intervention. As long as they stay focused on outcomes and work keep alignment between the labour and work of therapy, I think this is actually a good thing - we need to find a way to break the supply-demand imbalance in Mental Health. But currently, the search for new forms of supply, driven by these market dynamics, is what has led to the conflict of nature mentioned above.
I’ve learned long ago that market fundamentals are like rip currents. They’re annoying as hell but there’s no point in fighting them. Better to swim with them and try sneak out the side when you can!
4. The challenged brand of tech
Tech companies have a brand problem and MH platforms are no exception to this
Trust and positive sentiment towards these companies has been in decline.
This is exacerbated in MH because the workforce is placed under significant pressure and as a result often feels exploited.
The problem of exploited labourers exists across our society. We can all agree that nurses, teachers, doctors and social workers are underpaid - this NY Times article shows specifically how healthcare professionals are taken advantage of within the hospital system. And like I mentioned above, the entire Mental Health market is challenged by underfunding.
What’s interesting to note is that tech companies often receive an outsized amount of criticism relative to their role in the problem - and as a result, are subjected to outsized feelings of frustration.
Community services put some of the highest case loads on their providers and are not known to pay well. Private practice owners often take 30%-40% of their clinicians’ hourly rates. But it’s hard to criticise the owner of a Mom-and-Pop sized practice or the director of a community service.
Do you know who is much easier to criticise? A thirty-something year old SF entrepreneur who just raised a bajillion dollars for their startup…
Some of the mistrust in MH brands is justified. A few companies have really messed it up for everyone else, crossing ethical and legal lines and receiving deserved punishment (hello Cerebral, Done and BetterHelp).
But I truly believe they are the exception in this space. I spend mall y days chatting to founders of MH startups and the vast majority of them are morally sound people with a genuine interest in improving outcomes for patients. But they are living in the shadow of tech’s brand challenge and unless they can find a way to differentiate themselves, will struggle to build trust with providers.
Like I mentioned in post #10 on the importance of brand, most mental health companies suck at branding. Look at Spring Health’s response to the first post I shared in this article…
“Enhance our technology and expand our services”. I just got sick in my mouth.
Sure, they are saying the “right” things and I’m sure their PR firm approves of comments like this. But this is not how you rebuild trust with a group of providers and shows an ignorance to the underlying frustrations and context of the providers they work with.
While this brand problem continues to exist, any efforts to change the practical relationships between provider and platforms will be met with a large degree of scepticism and will be a weight on the industry.
The solution:
One of the most insightful people in this space is Kelsey Quick who spent over four years at Spring Health running provider operations and now consults on this topic for some of the leading MH platforms. She doesn’t believe this tension is endemic and has lots of great solutions which I discuss below.
“I do not think the tension is endemic. I think there are a lot of happy providers at companies like Spring and Headspace.”
Kelsey Quick, former VP of Provider Operations at Spring Health
More hope. Yay!
I asked a bunch of people from both parties what needs to be done here and tried to find a degree of consensus.
For a long and happy relationship between providers and MH platforms (because that’s what we all want right?) there’s few things both parties can do;
Let’s start with the MH platforms…
1. Make provider relations a company priority.
Remember, before we start addressing some of the tangible concerns of providers, MH companies first need to mend the core relationship. This starts by making provider relationships a genuine priority for their business.
What does that actually look like? First, ensure that you have strong clinical representation in your leadership team. And more importantly, actually listen to them.
You also need to ensure that you have incentives and reporting aligned with provider satisfaction. Make someone at your business directly responsible for managing provider satisfaction and that relationship as a whole. This person needs to be part of your leadership team and have a voice in strategic decision making and board level discussions. Create a set of measures to track provider satisfaction - making sure to get providers input on what those measures actually are - and get your board to hold you responsible for them. If your board doesn’t believe that provider satisfaction should be a company priority, it’s your job to convince them - maybe send them this article!
Candice Thompson (a psychotherapist and mental health consultant in Silicon Valley) has some excellent recommendations for prioritising providers;
“Start your business with a qualified Chief Clinical Officer.
Connect with therapy professional organizations like CAMFT in California, the APA, State Board of Behavioral Sciences, and ask a lot of questions to understand the need and current clinical issues.
Create a clinical committee with a team of therapists that can help craft the initial structure and compensation.”
Kelsey also emphasised the importance of prioritising clinical rigour and compliance:
Clinical rigor & compliance really matters to most providers. Hiring solid clinical leadership internally is key. [At Spring] We had a great CMO, Quality team, Care Navigators who often connected with providers to make sure they feel heard and like the company is prioritizing clinical quality. If not already clear, providers like hearing from providers :)
Another tangible recommendation I heard was to have a “concierge service” for providers, a human that providers could chat with about what’s happening with their work and at the company. A relationship manager that would bridge the gap between company and therapist, increase transparency, foster connection and listen to provider feedback .
Lip service is useless here. Providers will see instantly through it - I mean, they’re literally trained to!
If you don’t have a genuine interest in improving the experience for providers, make it a company priority, define a set of metrics to track it and assign responsibility for improving these metrics, nothing else will matter.
2. Rebuild trusted brands
Whether you like it or not, whether you agree with it or not, you’ve lost the trust of many providers. You need to get this back. Trust is built through consistent, continuous action. It’s built by saying you’re going to do something, and then doing it. Over and over and over.
Once you are actually walking the walk, then you can focus on telling this story to providers. If I was running a MH platform, I would make provider relationships a priority and act continuously to improve them. Then, I’d build a brand around this. I’d make my company the one that providers want to work for.
3. Fairly compensate providers
It’s pretty simple, providers want to get paid more.
But you know this already, the question is, how do you do this without eroding your margin to the point that your business is not sustainable?
MH platforms need to have a clear understanding of market rates, provider expectations, their own pricing and the margins they need to generate. They should use this to set their pricing competitively. Be extremely thoughtful about defining your rates. You want to be able to maintain these over time and constant flip flopping will result in lost trust.
As Kelsey Quick told me, while compensation is the number one issue for providers, they care most about being paid fairly. Once you know what you can pay, have a transparent policy on compensation and communicate this (as well as the reasoning behind it) to providers.
I’ve been wondering is there room for an equivalent to Cost Plus Drugs in the Mental Health therapy market. Where platforms set an exact margin that they will generate from services and communicate this clearly to both providers and payers?
You should strongly consider share schemes to align provider incentives with the company’s long term success and to allow them to participate in the upside. You do it for employees already, so why not providers? I doubt providers would be as critical of a company reaching a billion dollar valuation if they owned a piece of that pie!
4. Deliver two sided value to maintain margins
Of course, if MH platforms are going to increase compensation for providers, they must think about how to maintain or increase margins while doing so.
We can describe the value (and associated margin) of a MH platform as the following.
Platform Value = Payer Value Created + Provider Value Created
To increase margins, platforms must think about how they can increase both sides of this equation.
The price they can charge payers is determined by how much value they can deliver to them.
The rate providers will accept is determined by how much value the platform adds to providers’ lives.
MH platforms must focus on both parts of this equation to be successful.
Creating value for payers:
To create additional value for payers (and their patients) platforms can improve the patient experience, provide access to insights and analytics, deliver quality and compliance tools, or access to digital tools and therapeutics for patients.
Companies who can innovate here have an opportunity to improve patient experience, increase prices, and thus, increase their margins without having to reduce provider rates. In face, the providers who can increase prices the most will have the most room to increase provider rates, which will attract higher quality providers.
Interestingly, one of the best ways to add value to payers is by having a high quality, deep network of providers. Oh wait! Have we finally found some aligned incentives for once?
Creating value for providers:
The rate a provider will accept from a platform is determined by how much value that platform actually delivers to them.
We established earlier why providers work for MH platforms - referrals, flexibility, extra income and reduced admin burden. MH platforms must double down on these non-financial benefits wherever possible.
An interesting thought exercise would be to ask a provider what their ideal work environment looks like. I would imagine it involves doing meaningful work, in areas they are passionate about, with patients whose outcomes they can see improve over time. I imagine it would also involve being part of a community of other providers with whom they can share their experiences, strong supervision, protection from the risks of the profession (law suits are more than you may think) and very little admin. It involves being fairly compensated and not overworked.
Candice Thompson has some tangible recommendations here too;
“Offer perks, like'; allowing the therapist to utilize the therapy services, full 40 hour CEUS, reimbursement for licensure. Create a therapy community for your therapists (like forums, in person luncheons, conferences, local peer consultation groups).”
Kelsey also had some wonderful ideas around how to add more value to providers:
“Create a product that enables seamless workflows (minimize admin work), is a one-stop shop (one log-in, even if you have various vendors behind the scenes), and provider control. The last note - control - is a big one for 1099 providers. 1099 providers want control of their calendars, caseloads, types of patients they see, to name a few. In 2023, 60% of Spring's providers shared with us that they work with other platforms like Spring, so desire for max control makes sense.”
“Provide growth opportunities. Providers wanted to know what the path for growth was. I think it was really exciting for our providers to work at an innovative company! And many people get burnt out from care delivery. This is not great for the business, given we exist in a supply constrained industry, but making sure you spend cycles on career pathing for clinicians will pay off.”
“Build an incentive program to protect margins, but celebrate your best providers. They love being recognized - ideally publicly.”
“Engage providers in other work within the company - blogs, presentations to clients about specific clinical topics, holding safe spaces during times of turmoil.”
Create value for payers so you can increase prices. Create value for providers so you can avoid increasing costs. Create enough value on either side of this equation and you deserve the margin that comes with it!
5. Create incentive alignment
The holy grail of all healthcare companies… But just because it’s elusive doesn’t mean we should stop looking for it. So get your Indiana Jones hat on and get searching for a measure that aligns patient outcomes with payer and provider incentives.
If I had the perfect solution here, I’d already be doing it myself. Incentive alignment is so incredibly powerful. The platform that can crack it, and build their business model around it will start a flywheel with patients, providers and payers that will be hard to stop!
I wouldn’t be a very good marriage counsellor if I only got one party to change their behaviours…
So here’s what I think providers can do to contribute to rebuilding this relationship…
1. Be fair and be intellectually honest
I might get in trouble for saying this but… I have found some providers to be biased in their assessment of MH platforms. As I’ve outlined above, I understand where their frustration comes from, but they often allow one story or a generalised scepticism of an industry to pre-determine their opinion of all MH platforms.
Many of these platforms genuinely care about patients, about outcomes and about providers. Give them a chance. If they show you evidence that they aren’t respecting your values, fine, but don’t assume they are not ethical organisations just because they raised venture capital or their founder has an MBA.
2. Keep talking
As I mentioned, MH platforms are incentivised to attract and retain providers. If we have an efficient market, over time, the poor platforms will get weeded out as no providers will want to work there. Providers can facilitate the operation of this market by continuing to be transparent (and honest) about their experiences with different platforms.
Megan Cornish created a clever way to do this with a Facebook group called FitCheck, “a safe space for mental health professionals to ask and answer questions about mental health companies.” Within just two weeks, the group already has over 700 members!
This system will only get better if we all come together to actually make it better.
We need more collaboration, especially in those areas where there is tension and frustration. We must voice what is not working and be genuinely interested in finding mutually beneficial solutions. We must recognise the unique strengths of everyone in this ecosystem. We must respect the work that everyone does, whether you have an MBA or an MCP, and understand the contextual differences with which we all approach this problem.
We must fight to align incentives and ensure that everyone is fairly compensated for their work. We must compromise. We must collaborate.
OK, this marriage counselling session is now over.
That will be $200 please.
What? You booked through a MH platform so I’m only getting paid $80?!
GRRR! P.S. Many thanks to Kelsey Quick, Vooha Vellanki, Candice Thompson, Megan Cornish and everyone else who contributed to this article.
Like this? Share it with someone. I put a lot of work into these articles each week so would really appreciate you helping to spread the word.
That’s all for this week.
Keep fighting the good fight!
Steve
Founder of The Hemingway Group
P.S. feel free to connect with me on LinkedIn
