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OREN FRANK
CEO
@talkspace

 

Oren Frank:
Good morning, everyone. Thanks for coming in. Yey, it’s working. Look at that, the wonders of technology. Thank you, Nick. Nick is one of our marketing experts and he spent a lot of time preparing this conference, inviting all of you and making sure that we are actually in time in delivering. Let’s see if it works out as planned. Welcome to Reshaping Behavioral Health in the Workplace. I think before we discuss what this means and what the hell are we actually talking about, we should probably talk about a little bit about the use of the system. If you look at the top left part of this very strange slide, you can see an OECD report that basically compares the expenditure per capita on healthcare versus the quality, as measured by life expectancy. You can very clearly see, if you go a little closer to the screen I guess, that we’re spending two and a half times the average of the OECD per capita while getting around 70% or 75% of the quality of the life expectancy.

There are many ways to look at this slide and many variants on this research but in all of them, the bottom line basically means that we have the most expensive and the least efficient healthcare delivery system in the world, number one, America first. Now, actually in many ways, this is a good feature because this chart describes the entire healthcare system while if you deep dive into behavioral health, it’s actually much worse. This is the picture that we saw, Ronnie and myself, in 2012 when we started Talkspace, which is a complete and I would say, I’m using the word disgrace and I actually think this is an understatement. It’s a broken underserved market that is really, really in many ways shameful. The timing now is likely different and I have to tell you that I’m personally very encouraged by the way attitudes toward behavioral health and mental healthcare have changed in the last few years. I traced this in my memory and my experience to one of the most horrific incidents I think in memory, at least in my memory, which is in Newtown and I think in my sense, in my gut, something changed about the public debate, the public discussion, the media ethnology almost around behavioral health since that horrific event.

I think today, and if you look on the right side of this messy slide, you see some reminders and some data are basically saying that I think people are beginning to understand the size, the incredible scale of the issue, which is the broken delivery system of behavioral health. It is expressed and it is being measured in incredible human suffering and pain to begin with, but also in huge damages to the economy. The numbers currently puts depression as a cost to the United States economy anywhere between $300 billion and $500 billion a year.

The WHO numbers put depression as the number one disease of the Western world in terms of cost and prevalence, well ahead of heart diseases or cancers or diabetes or any other phenomena that we all suffer from eventually. I think you know, it has come to a point in time where the debate deserves this kind of getting together and sorting out and looking for ways to change things in a very fundamental and a very effective way, because the one thing I think we can clearly agree upon when looking at the data, this is not personal. This is not judgmental. The data very clearly shows that the current system has failed big time.

When you look at the real life, one in every four Americans, so between 25% and 20% will suffer from a diagnosable mental health issue each and every year. That’s between 60 million and 70 million people every year. What does it mean one in four Americans? It basically means us. Let’s say that there are 150 people in here, then I would say that 40 of us will suffer from a diagnosable mental health issue this very year, during 2017, and this repeats itself in 2018 and so on and so forth.

That obviously means that it is us. It’s our friends, our family, it’s basically employees. I think when we look as employers at the employee landscape, this becomes very fascinating because most people that are here, they’re familiar with delivering behavioral health at the workplace and I guess we could agree that the current delivery system, any combination of BA and EAP or counselors on campus or whatever solutions we came up to address this, what do you think the highest penetration rate is going to be? 5%? Anyone wants to challenge that? 3%? Yeah. That’s a different kind of challenge. I accept it.

The data that we may see show that EAPs are penetrating at something between 1% and 3% and the best, really the best delivery systems of the best companies with the best policies and coverage reach 5%. Now if 25% of your employees and our employees ourselves will have a diagnosable mental health issue this year and we penetrated 5%, that is a very simple translation. It means that 75% of your, ours, their employees, are not treated at all or undertreated. I’m not going to go into all the details because I think the vast majority of you know it but undertreated for behavioral health employees will be absent for around, bless you, around a month in a year, 28 days actually. They will spend around 140% on increased medical costs because they will go elsewhere to look for help. They will suffer from much higher attrition and I’m not even talking about productivity and morale. The culture of the organization, which has to deal with people that are basically ill.

I think the effect or the damages to organizations that are delivering behavioral health to around a quarter of the people that really need it is something that’s becoming very, I think acknowledged and I think this may be a little bit of a wishful thinking but what I feel is that this is moving from yeah, we understand the problem, we acknowledge it, we face it, to actually how do we solve it in a fundamentally and dramatically better way, which is a very important shift and a very important development that has not been around culturally at workplaces up until very recently.

That’s I think the background to the issue that we’re dealing with. It is a society level issue. This is not something that’s technical. It’s not about improving the business outcomes of this business or the other business. This is something that’s very fundamental to the way we are together as a society. When we, going back to Talkspace and I’ll do a little bit of selling but don’t worry, I’ll do it quickly and I hope effectively, when we started Talkspace five years ago, we had a very simple vision, which is therapy for all. The reason we started Talkspace is because Ronnie and myself, who co-founded the company, are very big believers in the profession that’s called psychotherapy. We went through it ourselves. We know it pretty well from personal experiences and we felt that it’s really, it’s a shame, it’s just not fair that people cannot really get it and what we really set out to develop and find is a way for many, dramatically more people to be able to access therapy and say, “Well, you know what, at least I tried it. I went for it. I gave it a try.” If it helped me fantastically, it’s a convert. We know that people who have been successful with therapy are converts. They will tell the world that this is helpful and will spread the good news, and if not, at least you know that you’ve tried something.

Maybe you’ll try it again, maybe you won’t but it’s fair enough. That was our mission. When we looked and we studied why people are not accessing, using therapy much more than the relatively few that are actually doing it, we found three and a half entry barriers to the reasons why people are not using therapy.

Number one by far is cost. Again, let’s not go into too many details but I would say that the average cost of a therapy session is somewhere between $100 to $150 a session on average across the United States. Of course in Palo Alto, it’s going to cost a little more or on the Upper East Side and of course somewhere else in the country, it’s going to cost a little less but that’s the average. It’s interesting to know that around 75% to 80% of psychotherapy is paid out of pocket, and much of the reason, there’s a host of reasons why it is like that but I’ll mention just a few of them, which is if you actually try and get reimbursed by your insurance companies, you will pay expert level fees, so $30, $40 a session can happen easily.

I think more dramatically, this is going to go directly to your deductibles, which probably means you’re going to have to spend a few grand before you get reimbursed by your insurance companies, so it’s not a really good solution.

The second one is let’s say that we all work together and that Michael here is my boss and we are during a workday right here in the center of San Francisco and all of a sudden, I take off, and I go for you know a couple of hours, probably visiting Marine County or the Presidio where I meet my therapist for 15 minutes. It’s usually during office hours and I’m not really going to be very comfortable in telling Michael that I’m off for a couple of hours in order to see my therapist, not because I’m really ashamed of it, because I’m projecting on Michael and thinking that he actually is going to think that maybe I’m not worthy of a promotion or a raise in our next discussion.

This is a matter, a combination of the two other subjects, which is the convenience, so getting to see a therapist, the scheduling, the finding of the time, the troubling and the stigma. Stigma, thank you very much for asking, is extremely alive and well in 2017. I think you’ll hear further down the road today some very interesting thoughts about what is stigma, why is it still with us and who actually shouldn’t take responsibility in order to eliminate it.

Stigma is a complicated creature. Yeah, it has to do with shame that I don’t want other people to know that I suffer from a mental health issue but it also has to do with the sense of intimidation, the sense of being judged that is very common amongst people that are seeing a therapist face to face during the early days of their treatment, and as you will see in the data later, it’s very, very effective in the negative way on their adherence to treatment.

The last thing that is not really mentioned here is the match, matching with the therapist which is extremely important is the whole thing is based on relationship and on trust. It’s very anecdotal and it’s very hyperlocal. It’s actually mostly based on referrals by friends and family and on availability, so the level of, I would symptoms quality measures within a typical match is practically not existent. I’m going to get to it later.

The first phase of Talkspace was deciding a front end or delivery system that actually removes those three and a half entry barriers, the cost, the inconvenience, the stigma and the quality of the match. We called it at the time unlimited messaging therapy and what it fundamentally does is it does away with the 50 minute therapy hour and replaces it with a constant stream of communications, mostly asynchronous between my therapist and myself. When I say asynchronous messaging, it’s mostly in text, so writing to each other but also in audio messaging, which is very popular and very effective, video messaging and some live video and audio as well but interestingly enough, most of our clients and the therapists’ patients are really only open for a live video session once the bond or the attachment has been achieved with the therapist, so you actually gain trust and only then will you be ready to have the live video session.

Trust me, it took us a lot of time and money and mistakes and failures to understand that this is the modality that’s beneficial and is being used and accepted by both sides, by the providers, by the professional license therapists and by their patients.

I won’t go into too many details but this is working extremely well. How does it address the three barriers to entry? Well, it allows us to reduce the cost dramatically because of the unit of the time, of the matching of the time of the provider and the patient are smaller and along many more hours in the day and it’s asynchronous so each time each side responds at their convenience, it allows us to be much more efficient and to reduce the prices. I guess you understand that convenience is not a big deal and actually once I’m done here, I can leave the stage and text my therapist and tell her this has been amazing or this has been horrible or all of the above. I’ll get an answer, probably in a couple of hours so this becomes relevant to what I do today and what I feel and experience today as opposed to bury it here in your memory and let’s talk about it next Wednesday at 3 p.m.

Stigma is extremely interesting, how it behaves in this modality because people tend to feel and we have very strong data around it, much safer behind the screens so the technology that is such a separator of people in so many other applications such as social networks actually is used here to generate a sense of trust that allow our clients to open up and talk about their real core and deep issues far weaker than in the traditional delivery modality, and it allows them to go through treatment, which is the best solution for removing stigma.

If you actually were benefited by a psychotherapy, you’re not stigmatized anymore because you can feel the difference and you’re going to tell people around you that you guys are wrong. This is really helpful and once you get rid of the stigma, you can help yourself, so that’s extremely important for us.

One of the biggest issues or difficulties in the traditional delivery modality that we saw that is not addressing the need is the time to service. I would say that on average across the country and certainly here in San Francisco, if you wanted to schedule a face to face session with a therapist, it would probably take you between two and three weeks, which sometimes it depends on the level of the pain, level of the intent, level of the need is just not good enough, and we all know what happens so yeah, you know what, I’m going to go see a therapist and deal with it and then you make a few phone calls. You find someone. They say next Wednesday at 4 p.m. but you’re actually on a business trip or you have something else and they don’t have any other availability and then you settle for Tuesday in two weeks’ time. By the time this has arrived, around a third of the people don’t even make it to the first meeting, to the first session because life takes over, because you will have intellectualized your issue, because you would have found a different spouse or it’s usually moved on or usually you tell yourself, “You know what? It’s going to go away.”, or you went to your general practitioner and asked for a nice medication, probably an SSRI and deal with it that way, which we all know is not enough.

It’s helpful. It’s needed but it’s not enough, so the time to service is a critical issue that we addressed by working, by designing two layers. We have an amazing group of people called the matching therapists. They are all licensed professional therapists that are available 24/7 and they will take your issue in under two minutes. They will do a professional intake. They will understand whether you’re a good fit for psychotherapy and for our platform. They will offer you a plan to start your treatment and they will do a qualitative match, not an anecdotal match, according to your assumed condition and your history and as I said before, your first interaction with the therapist will happen in under two minutes, and around 80% of the people will be matched with their primary therapist, the therapist that will do the treatment with them in their own state on the same day, typically a few hours away.

I have a pain. I have decided to pursue this. In two minutes, I will talk to a therapist. I will choose, with this therapist, my primary therapist. This is how it feels like, and in a few hours, 80% of the time, in the same day, I will begin treatment. This is dramatically different and as you’ll see later, it has a dramatic effect on the results. The way we do the match is we actually have enough information about how well our therapists are performing per condition and we manage for quality, which I’ll show you in a few slides, so if I was diagnosed by my matching therapist as suffering from anxiety, the person that will be offered to me will be the highest available of scoring clinical efficacy anxiety therapist that the system can provide and there will be usually, certainly in California, which is a large state, multiple choices. If you can see the little details, we can actually tell you when we expect this therapist to get in touch with you so you can considerate once you read their CV, their history, their experience, other clients’ reviews and how they speak about themselves, you can include that in your decision making process and say, “I think I’m going to wait for this particular person which feels very right to me. It’s worth waiting 10 hours despite the fact that someone else is available in a couple of hours.”

We involve the clients, their patients, the therapists’ patients in the decision making process. It helps a lot in generating a good relationship, and to be honest, it’s really helpful for the therapist as well because they have a sense of being picked. Someone chose me as opposed to it’s just the algorithm that says, “Well you are the best fit for this particular future client.”, and this is working extremely effectively, and again, in terms of delivery results, same day you’re going to start your treatment.

Going back to the price discussion, compared with the $100 to $150, this delivery modality allows us to offer significantly lower prices. As you can see in the middle tier, the most used plan is costing $39 a week, $40 a week compared with $100 to $250 for a weekly session, so this becomes something that people can pay much more easily out of pocket. It’s much more affordable. They can start. They can stop. They can freeze. They can return to therapy. It’s extremely flexible and convenient in any aspect of using it and it is the lowest price, and that’s the way we look at it, that we can afford to offer so people have the most access while keeping the therapist properly compensated, bless you, and you know, keeping this equation of we need to pay the therapist for the time to be happy, because they’re our clients and our friends and the ones we adore but we want to keep the price to the end consumer as low as we can.

That was what we call the front end, which is this modality that allows us to dramatically change the proportions of the cost, the accessibility of the convenience and help remove a huge part of the stigma and match better. This is, I would say the tip of the iceberg of the Talkspace platform and the real meat if you will, the real business is behind the scenes. It’s called the back end, and the purpose of the back end that we build is to make sure that we deliver quality care, evidence based care at scale, because I’d like to be just a little controversial here and say that because I’m not a therapist and I’m not a trained clinician, I actually have a slightly more fresh, different point of view. I didn’t grow up with this profession. I’m just an outside admirer and I think that this profession has suffered and enjoyed, I acknowledge that as well, from I would say not a very diligent level of managing the quality outcomes over, I would say the last quite decades.

It is, again I’m stepping very, I’m treading very carefully here, but as one dear friend has said, it is usually managed by complaints so if someone screws up, we have to look at whether this therapist was right, whether this client is wrong and I think in many ways, it is not really structured as a process that is measurable and therefore manageable and repeatable, which is very basic management technique and approach to many other professions including in healthcare. Most other professions, and let’s say that psychotherapy is a little late to this particular show, and that is something that we set out to improve while using this extremely weird chart. What you see here is a brief description of the logic that we build in order to ascertain and manage the quality at scale. The very bottom, what you see is the structured treatment model that we created, which I would say roughly would be described as a timeline from intake through pre-treatment through the treatment cycle, during which we also measure the outcomes. I’ll talk about it in a second all the way to completion and termination and the other quadrants of this slide, you see the basic ingredients.

One is the quality of the network, of the Talkspace network, which is made up of who the therapists that are invited and being allowed to work with us because of very rigorous vetting process to make sure that they are who they are, that they claim they are, that they are really clinically extremely well trained, that they understand the benefits and the difficulties of working in a modality that’s different from what they studied at school. I’m not saying it’s better or worse but it’s fundamentally different and you need to understand the pros and cons.

The other, just the opposite side on the left side of the screen, you will see how we measure for clinical efficacy, and we’re using the very common and very fundamental industry scales, outcome measures, so if I was diagnosed with anxiety, I’ll get the GAD7, and with depression, I’ll get one of the PHQs and so on and so forth, but differently from brick and mortar therapy, what we do is we apply it to everyone from day one. This is not small retrospective sample, as you know to validate what’s going on, but every client that joins the system gets their scales at the very beginning, the mode of treatment once they have been diagnosed and gets it repeatedly in intervals of 21 days.

Because this is a pure digital solution, which means that every interaction in the system, platform is actually aligned in our database, we are for the very first time in the history of this profession have full data visibility into what works and what doesn’t work and we use it to inform both our matching algorithms, so let’s say if Nick is a therapist on the platform and he continuously scores extremely well on the GAD7s, he will be promoted inside our algorithm to be preferred in matching for future anxiety diagnosed clients and on the other side, if he’s extremely bad at treating anxiety, we will refer him to a subject matter expert that will help him get improved. We will give him content and opportunity to improve his outcomes in treating anxiety and to be very candid, if he doesn’t improve, he’s going to be asked to leave the system, but we do have a continuous live view into Nick’s performance as per the conditions and therefore, we have full view into how every client is improving or not. How the system is doing, we do our switch conditions, so in general, how well are we treating PTSD or OCD or anxiety, and so on, so forth.

We use this to inform the therapist along this structured timeline of the treatment and give them insights and feedbacks that I think dramatically improves their understanding on how the treatment is going. I’ve used this metaphor before so sorry for repeating but I’ve actually been wearing glasses since I was around four years old, and if I take them off, this becomes a very nice blur and I think for the platform vision of the back end of Talkspace, we want to create the perfect sense of lenses for therapists that are using this platform. They will be able to see better detail farther away and understand what to see, they see in a much better way because we know how to leverage the data and feed it back to them so they can learn and improve and they can be the best therapist that they are capable of being while using the set of tools that we’re building for them.

This is very, very shortly the nature of the back end, the operating system for the profession of psychotherapy that we have built with and for the therapists that are using Talkspace in order to help them be much better at what they do and also much more consistent. If you fly a 747 out of SFO somewhere, you’re not expected to remember all the checklists you need to make sure that they’re okay before you take off. There’s a manual. There’s a structure. There’s a process. This is a safety net for that particular pilot despite him having 15,000 hours of flying jets. He would never dream about well I’ll just memorize it and do it because this is going to end up in tears. This is another sort of metaphor for our operating system in which you remind the therapist of the very basics, which some of them may forget, not because they don’t care, God forbid, or because they’re negligent, because it’s very difficult to remember everything, but if we created an operating system that actually suggests and reminds and helps contextualize and provide relevant content for each state of therapy and it’s absolutely up to the therapist whether to use it and learn from it, which fundamentally all of them do because why wouldn’t you. It’s a tool there for you. We think it’s a huge help.

I’ll go very quickly because I think I’m getting a little low in time. This is a full back end for the therapist to manage their clinic. It’s a fully integrated solution. They have a dashboard telling them exactly what the situation and the condition of each of their clients is, and they can swipe and see all the information that are managed and much more than that, will be in video and text. They can see the structure of the therapy that I mentioned, again if you guys want some more details, we can do it offline and we contextualize all the content and reminders to the point in time where they are in treatment, and last but not least, they can see how well their clients are doing in terms of clinical efficacy. Is it significant? Is it not significant? Is it improving? Is it not improving? What we see in our back end, this is just a sample chart that shows us what are the percentages of clients per therapist that show significant clinical improvement.

As you can see, the top part is around 80% so 80% of these therapists’ clients are showing significant clinical improvement, as defined by the outcome measures that we’re using, not by ourselves, and therefore, we can better understand which are the therapists which are delivering better than others, help the others improve in their particular fields and manage the entire network for quality in a way that has not been possible, available or doable in any other delivery model. That’s the real essence of the Talkspace back end.

I’ll go very quickly and tell you that since we are a new model and there is resistance of some people are saying guys, I would put it like that. Every psychoanalyst above the age of 60 thinks that this is blasphemy. That’s a clear cutoff line, and we’re listening to that and we understand that this poses, generates some resistance and that not all people are created equal in their openness to change and also that we need them. We should tread very carefully and stay on extremely solid ground in terms of our clinical delivery because do no harm, do no harm, do no harm. We are extra, I would say careful to validate everything that we do in clinical research, and I’ll give you just a short list of what we’re doing. Actually I’m very happy to announce that we have concluded a large scale of roughly 300 patients sample with Columbia, with Professor Barry Farber, who leads clinical psychology at Teacher’s College, and his colleague Dr. George Nitzburg and it’s concluded and submitted to a very good journal, the Journal of Psychotherapy.

We know the results and I can give you just a few bits and pieces from it. One thing that’s really, really interesting and we see it across our audience that 50% of the people were tested that were researched, they never had any access to psychotherapy or any kind of behavioral health help before. That applies to our entire audience, which is extremely and especially heartwarming for us because it basically shows that we are successful in removing the entry barriers so those are people that they will testify that they could not access traditional therapy before and Talkspace removed those access barriers to them. Somewhat logically, they suffer from very high acuities, around 20% higher than expected in their condition, compared with the scale and the status of traditional therapy, and to get to the bottom line, this was done using the OQ 45, again very common for clinical outcomes and you expect a decrease or a change in delta of 14 points in clinical outcomes on this scale to show something that’s clinically significant. On average, we doubled it.

There’ll be much more details into it of course in the full report, per condition. We measured multiple conditions, multiple columns of clients and there’s a lot of detail into it but as you can see, it basically suggests that we are extremely effective and this has been validated and supporting previous research that we did that was actually published in the Journal of Telemedicine and eHealth that shows the clinical efficacy of the Talkspace platform is extremely similar, or sometimes tiny bit better than the baseline of traditional therapy, but the cost and the time to efficacy is around 30% to 40%. This has been published as well. We’d be happy to share with anyone that’s interested in reading it, and there are a couple of other researches that have been submitted and you can get them in the form of white papers that deal specifically with employee depression, which is kind of relevant to what we’re talking about today and we did an extremely large scale study of more than 5,000 clients because we have this data as I mentioned before on multiple conditions. You can have access to that. I don’t think that there has been this size of a research for decades now in psychotherapy.

We have done our own research on PTSD. We have a lot of veterans that suffer from PTSD as clients and we are very focused on helping them. This is why there’s an ongoing research, which is an external research, not our own, with Duke University, with Patty Resick, who is world famous in treating PTSD. It’s ongoing and it’s in RCT. It’s a very interesting research that will be concluded this year. I’m also very happy to announce something more recent, which we have signed an RCT with Yale. RCT or random control trial is the holy grail. It’s much more complicated. Personally, I think we have all the data in the world and we don’t really need it but because I think we should be extremely careful and solid, we are investing the time and the money in doing the proper RCT with Yale and it is due to begin on June 1st.

Last but not the least, we’re working with a neighbor, Stanford on something that is extremely fascinating and interesting for me as someone who’d like to think of themselves as driven by data in making decisions. The head of the NLP Lab in Stanford, he’s Professor Leskovec and his team are working on analyzing the qualitative aspect of language because come to think of it, when I go and see a face to face therapist for 50 minutes, there’s a lot of source code that’s changing hands. It’s called language, what we speak to each other, but at the end of each session, that thing has been erased and gone, and my therapist will probably write a description of their very subjective opinion of what happened during the session and it will be massively redacted version of the data that actually changed hands during the session.

No one had access to that black box before, which is what really is the code or the data, the language that’s in the therapy room, but today we have it and we already learned fascinating things about the usage of sentiment and different kinds of language patterns as it is connected to efficacy. We’re not doing that out of curiosity. We’re doing that in order to offer more tools to our therapists in order to be more effective and more helpful in what they deliver.

This is fascinating. We already have some early results from this and I do hope that in three to four months, this will be a massively interesting paper that will be published. At the end of the day, and this is data from multiple sources, what’s really happening and why the system is not functioning as it should be, as you can see on the right column is that out of every 100 people that set up the first meeting with a face to face therapist, only 22% or 22 out of 100, make it to clinical significant effect. Why? Because of all the things that we discussed, because some of them won’t make it to the first meeting and some of them will go to the first meeting and say, “Well you know this has been such a slap and I’m not going to up to Marine County again and I don’t know if this guy’s actually capable of helping me.” Then they’re not making it to the second session, and so on, so forth.

The access and the cost and the stigma and the fact that much of the traditional delivery modality is not really measured and managed for quality leads to I would say reaching efficacy and this is not about surviving three months, make no mistake. This is surviving the minimal time in order to get a clinically significant reduction in symptoms. That’s 22%. We tripled it. It’s not because we are smarter or have better intents or we care more. I don’t think so. I think we care. I think we’re doing as much as we can but I think we just took a completely different approach, a fresh look on the delivery system that has not been good enough and we see it on outcomes.

For us, this is the fact that we can get 60 people out of 100 to come through our gates to something that’s significantly and clearly and demonstratingly helpful for them is a huge achievement that we planned for, and I think by using more data and more learnings and better tools for therapists, we can actually improve on that as well. That is what I have to tell you guys. I thank you again for coming in today and I hope you’ll enjoy the rest of the day. Thank you.