Optum BH CEO exits, joins Boston venture firm

This week, Boston-based .406 Ventures announced it hired former Optum Behavioral Health Solutions CEO Trip Hofer as a partner. His relationship with the firm's managing partner Liam Donohue goes back decades, and Hofer used to be chief executive of AbleTo, the .406-backed mental health tech company that was acquired by UnitedHealth Group subsidiary Optum in 2020. Rumors put price in the $500 million range. Hofer last year took charge of Optum's entire behavioral health business.

Hofer told STAT he'd long been ready to depart for something smaller but had wanted to help "stabilize" the behavioral health group in the face of surging demand for services.

"It's just a fascinating industry that went from 0 to 60 in like two years, and in health care, that doesn't happen," he said, pointing out that mental health has suddenly become a top concern for companies picking health plans for their employees.

Indeed, this past summer, UnitedHealth blamed a lower operating margin on more people seeking care and called out an increase in demand for behavioral health services as a culprit. In August, Optum shook up its leadership, which is around the time Hofer departed the company. Though he didn't address UnitedHealth's margins specifically, he said all insurers would have to figure out the financial details of delivering mental health care at large scale.

"All these plans are grappling with… there is a real need to provide mental health services, but there's also a need to appropriately control cost," he said, adding: "We live in a world where you just can't spend money on everything, right? You've got to do it in a rational way."

Hofer will be able to keep his hands in behavioral health at .406, which has invested in numerous early stage startups in the space. Though health tech investment has cratered since its peak in 2021, Hofer said that deals are happening, there's just a lot more scrutiny in the due diligence. In addition to his new role at .406, Hofer took over as CEO at the firm's portfolio company Redox which makes interoperability technology, an area where he sees a huge unmet need much like what he saw for mental health services when he joined AbleTo in 2018.

Digital Health

More behavioral health tech industry news

.406 Ventures, which we just discussed above, invested in Nema Health, which announced $4.1 million in funding to support its business offering virtual treatment for post-traumatic stress disorder and related conditions. Optum Ventures is also an investor. Nema follows in the footsteps of several other companies offering virtual treatment for more complex behavioral health conditions, like NOCD, for obsessive compulsive disorder, and Equip, for eating disorders.

New York City officially announced NYC Teenspace, a program to offer free online therapy to all teenagers between the ages 13 and 17 through Talkspace. It's a $26 million, three-year contract, which was first reported last month. It's not the first time Talkspace has waded into delivering care to the entire population of a city. But the deal underscores the opportunity many mental health companies see to tap government funding to deliver care to young people.

Artificial intelligence

UnitedHealth faces class action lawsuit over algorithmic care denials

Earlier this week, my colleagues published a deep investigation into UnitedHealth Group's practice of using an algorithm to determine how long its Medicare Advantage members ought to stay in rehabilitation care. In an immediate sign of impact, the monolithic health care company has already been hit with a class-action lawsuit that alleges the practice is illegal.

Telehealth

Virtual cardiac rehab in the spotlight at AMA

AHA Circulation

Cardiac rehabilitation, a plan of exercise and other steps that's designed to help people with cardiovascular disease avoid worsening health has been shown to work — unfortunately, most people never actually complete it. During the American Heart Association Scientific Sessions in Philadelphia, a panel discussed the opportunity of using digital technology to increase access and compliance — and the challenges ahead.

Mayo Clinic's Francisco Lopez-Jimenez crisply spelled out the problem that can be addressed by digital health, saying cardiac rehab represented one of the largest gaps between what we know works and what people actually get: "The fact that only 20% of Americans who need rehabilitation with approved indications get it is one of the biggest tragedies of modern medicine."
Dan Forman from the University of Pittsburgh highlighted how despite some factors like low visual acuity and fall risk might seemingly preclude the virtual administration of a cardiac rehab program, "there are strategies to really reduce some of the risks that emphasize incremental benefits over time and not really trying to have the exact same standard or trajectory that you might think of for younger adults," like for example beginning with seated exercises.
Existing financial models can be a barrier to access as well: "Many hospitals that have existing site-based programs are reluctant to talk about in a sense cannibalizing their population, as they might see it, to having home-based models that compete," said Forman. To help address the problem, there is an effort in congress to pass legislation that would permanently enshrine telehealth reimbursement for cardiac rehab for people on Medicare. "We know that in medicine, what is not being paid for doesn't happen," said Lopez-Jimenez.
There's an ongoing study funded by the Patient-Centered Outcomes Research Institute investigating the comparative effectiveness of virtual cardiac rehab and its in-person counterpart. And the AHA over the summer i ssued an advisory spelling out important considerations around virtual rehab.

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