Monetizing Mental Health Technology

The rapid growth of mental health technology companies over recent years has brought both significant advancements and considerable challenges. While digital mental health solutions have made mental health care more accessible and innovative, recent high-profile layoffs and ethical breaches have highlighted the need for better clinical and business practices. This article explores the current state of the mental health tech industry, the reasons behind its struggles, and the promising future that lies ahead.

The Boom and Bust of Mental Health Tech

The Initial Surge

In the early stages of the COVID-19 pandemic, the mental health tech industry experienced a substantial boom. With low interest rates and a heightened focus on mental health, venture capital poured into digital mental health startups. Companies like Better Therapeutics, Akili Interactive, Headspace Health, and Noom thrived, driven by the urgent need for accessible and affordable mental health care.

The Downturn

However, as economic conditions shifted, many of these companies faced significant challenges. Layoffs became common, with Better Therapeutics and Akili Interactive laying off over 30% of their workforces. Even well-known products struggled; Headspace Health let go of 33 therapists, and Noom made multiple rounds of job cuts. Pear Therapeutics, after going public in 2021, filed for bankruptcy and sold its assets in April 2023.

These business struggles were compounded by ethical breaches that caused therapeutic harm to patients. For instance, Headspace abruptly laid off therapists without adequate warning, causing distress among patients. Cerebral faced scrutiny for unethical prescribing practices, problematic advertising, and sharing personal health data with social media platforms.

The Consequences of Missteps

Clinical Integration

One of the fundamental issues contributing to these challenges was the lack of integration of clinical expertise from the outset. Companies that did not involve mental health clinicians in the development of their products faced significant obstacles. As Jessica L. Jackson, PhD, chair of APA’s Mental Health Technology Advisory Committee, aptly noted, “How are you building mental health tools or mental health care without mental health clinicians? You don’t see companies building a pacemaker without cardiologists.”

Abrupt Layoffs and Their Impact

The abrupt firing of clinicians not only undermines the goal of providing effective mental health care but also damages the business. Patients feel abandoned, and those who stay engaged with the technology may become disillusioned with mental health care. As C. Vaile Wright, PhD, senior director for health care innovation at APA’s Practice Directorate, pointed out, “These apps could be a gatekeeper, in a good way, where they allow people a less stigmatizing or more cost-effective way to approach their emotional well-being. But if someone has a bad experience, how does that impact them in the long run?”

Learning from Mistakes: The Second Wave

Shifting Investor Focus

Despite these setbacks, there is optimism for the future of mental health technology. A “second wave” of mental health tech is emerging, characterized by a shift in investor focus. Investors are now more cautious and are prioritizing mental health care experts who are developing technologies and digital products. This approach ensures that new ventures are clinically sound and better equipped to meet the needs of those seeking help.

Clinical Leadership

New startups are learning from the mistakes of their predecessors by integrating clinical leaders from the beginning. Companies like Nema Health, Appa Health, and Instride Health exemplify this trend, emphasizing mental health care while leveraging technology to reach more people. These companies are not merely tech firms addressing mental health but are fundamentally mental health companies utilizing technology to enhance care.

Research and Efficacy

Investors are also demanding proof of clinical efficacy from the outset. This focus on research presents an opportunity for psychologists to contribute their expertise in data collection and analysis. By guiding startups on what data to collect and how to use it effectively, psychologists can ensure that digital mental health solutions are both effective and trustworthy.

The Future of Mental Health Tech

Expanding Access and Inclusivity

Technology holds the potential to expand access to mental health care, making it more inclusive and accessible. However, ethical considerations must remain at the forefront. Ensuring that apps and digital solutions are developed with ethical standards in mind will prevent the missteps seen in the initial wave of mental health tech.

Diverse Roles for Psychologists

For psychologists looking to enter the digital mental health field, diverse roles are available beyond traditional clinical positions. Psychologists can work in operations, product management, design, software development, customer success, and content development. Organizations like Therapists in Tech are supporting this transition by offering career development, mentorship, and advocacy.

Training and Academia

The recent challenges in the mental health tech industry also highlight the need for better training and education. Graduate programs should incorporate skills needed to work in tech, such as navigating electronic medical records and understanding industry expectations. By equipping new professionals with these skills, the field can continue to evolve and adapt to the growing intersection of technology and mental health.

Conclusion

The journey of monetizing mental health technology has been marked by rapid growth, significant challenges, and valuable lessons. While the initial wave of digital mental health companies faced hurdles due to a lack of clinical integration and ethical missteps, the emerging second wave offers hope for a more sustainable and effective future.

By prioritizing clinical leadership, rigorous research, and ethical considerations, the mental health tech industry can continue to innovate and expand access to care. Psychologists play a crucial role in this evolution, bringing their expertise to diverse roles within the industry and contributing to the development of clinically sound digital solutions.

As we navigate this second wave, the potential for technology to enhance mental health care remains vast. With careful planning, collaboration, and a commitment to ethical standards, the future of mental health technology holds the promise of improved access, inclusivity, and efficacy, ultimately benefiting individuals and society as a whole.