Monday, December 5, 2022

Alma Raises $130 Million to Expand Platform for Mental Health Clinicians

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Alma, a mental health startup that helps therapists manage their practices and contract with insurers, raised $130 million from backers including private equity firm Thoma Bravo and the venture capital arm of Cigna Corp., the company said.

The deal values ​​Alma at about $800 million, according to a person familiar with the situation, who asked not to be named discussing private information.

A growing number of investor-backed startups are trying to meet the growing demand for mental health treatment, a trend that was amplified by the pandemic. Harry Ritter, the physician who founded Alma in 2017, said the company seeks to enable sole practitioners to maintain their practices and join major insurance networks.

“How can we help these wonderful people, who are mostly small business owners, to be more successful in the modern health care system?” he said.

Mental health providers pay a fee to join Alma, and the company also receives transaction fees for patient visits it facilitates. Alma has signed up 8,000 mental health professionals and has deals with insurers, including Cigna and units of CVS Health Corp. and UnitedHealth Group Inc., which therapists can access.

It has historically been difficult to get mental health care covered by health plans. Insurers sometimes place restrictions on mental health care that don’t apply to other medical care, and their provider directories can be wildly inaccurate, making it difficult to find doctors who accept new patients. Many practitioners only take patients who can pay in cash.

Insurers are undergoing a “fundamental shift in attitude and appreciation of the importance of mental health care,” Ritter said.

Health insurance companies are turning to Alma to expand their offering of mental health professionals. Cigna’s clients “need more care in the behavioral health space than is currently readily available in the market,” said Tom Richards, who heads Cigna Ventures.

Optum Ventures, part of UnitedHealth, is also an investor in Alma. With the new funding, the company has raised about $220 million to date.

The rapid growth of online mental health startups has brought scrutiny to some of their practices. Companies including Cerebral Inc. and Done have been discontinued by some pharmacies and insurers over concerns about how their doctors prescribe controlled substances. While Alma has several doctors and nurse practitioners on its platform who can prescribe medication, prescriptions are handled off-platform and the company does not dispense medications, Ritter said.

Ross Devor, a partner at Thoma Bravo, described Alma as a “three-sided market” that benefits patients, doctors and insurers. The technology matches patients with clinicians more effectively and can “capture data about outcomes that will increase care payers’ bottom line and, hopefully, lower their overall cost of care” as access to health care improves. behavior expands, he said in an email.

Ritter, a veteran of insurer Oscar Health, founded Alma with the goal of providing shared physical spaces for therapists to meet with patients along with software and a community to support their businesses. Alma had just opened its second space in New York City when Covid shut down in-person visits.

Mental health care quickly moved online and largely stayed there. While almost no behavioral health care was offered online in the US before Covid, about 40% of outpatient visits for mental health and substance use disorders were virtual during the first months of the pandemic, according to the Kaiser Family Foundation. This ratio decreased slightly in the following year.

Alma closed its brick-and-mortar locations during the pandemic, losing about 65% of its revenue, Ritter said. Now 90% of sessions booked through Alma are virtual.

Ayana Ali, a licensed clinical social worker in Brooklyn, New York, had a part-time therapy practice for 16 years, but always held other jobs. When her position at a union was eliminated in January, she began her practice full-time. Ali said it was only possible because of Alma.

The company enabled her to accept insurance for the first time. She also connected it to patients in her area of ​​focus: professional women of color dealing with severe anxiety or pregnancy loss.

“Alma gives you opportunities to exist in your niche in a way I haven’t seen before,” Ali said.

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