September 8, 2023
Good morning,
HILL DAY AT HOME
This year, the National Council will host its annual Hill Day event online. Please Raise Your Voice for Meaningful Legislation
Join your NYS Council colleagues and agency representatives from across the country for Hill Day at Home 2023 on Wednesday, Oct. 18, when we will urge Congress to pass meaningful legislation this fall. You’ll get to contact elected officials directly about key issues – from the behavioral health workforce shortage and the need for more investment in the nation’s crisis care infrastructure to expanding access to substance use care and treatment. Register for free today!
FOR BUDGET WONKS
The Art of Budget Forecasting Interpretation
State budget officials are anticipating future budget gaps in excess of $13 billion, but how reliable are projections two or three years into the future? Fiscal Policy Institute Executive Director Nathan Gusdorf discusses the challenge of long-term forecasting and how budget officials lean conservative when drawing their pictures of the future. Here’s a link to an interview conducted by Capitol Pressroom host David Lombardo with the Executive Director of the Fiscal Policy Institute.
Here’s a link to the radio interview that aired live yesterday: https://capitolpressroom.org/2023/09/07/the-art-of-budget-forecasting-interpretation/
How long can telehealth companies stay in school?
Modern Healthcare, 9/8/23
Mental health startups are opting for a business model that starts in school. Elementary school.
A growing number of mental telehealth companies are offering their services to school-age children by working with local schools. Many received federal COVID-19 pandemic relief funds, but with usage of this money set to expire, companies are looking to prove their value to cash-strapped school districts.
The U.S. Department of Education allocated $189.5 billion to state educational agencies through the Elementary and Secondary School Emergency Relief Funds program, or ESSER, which was included in three separate laws: the March 2020 Coronavirus Aid Relief and Economic Security Act, the December 2020 Coronavirus Response and Relief Supplemental Appropriations Act, and the March 2021 American Rescue Plan Act. Through ESSER, state agencies have provided funding to local educational agencies and school districts with the goal of mitigating COVID-19’s effect on elementary and secondary school-age children.
School districts are using both federal and state funds to provide telehealth mental health services to children. According to a survey from the Department of Education, 17% of public schools offered telehealth services throughout the 2021-2022 school year. Overall, 67% of schools increased mental health services and about 52% of schools used federal funds to launch mental health programs during this time.
“This massive unlock happened,” said Alex Alvarado, CEO at Daybreak Health, a youth-focused digital mental health company backed with funding from well-known venture capital firms Y Combinator, Lux and Maven Ventures. “That really is what unlocked Daybreak moving into this world of having the school sponsor a bulk of the services.”
This trend comes amid a rising youth mental health crisis. The Department of Education survey found that 76% of schools have seen an increase in staff members expressing concerns over kids’ mental health. In April, U.S. Surgeon General Dr. Vivek Murthy called the declining mental health of children the “defining public health crisis of our time.”
Is school-based telehealth sustainable?
Daybreak and other telehealth companies receive referrals from schools for students who might need services it provides. The company then matches students with clinicians in its therapy program, which can range from 12 to 18 weeks.
For payment, Daybreak bills through a student’s insurance plan or the school district will sponsor the care in some cases. Daybreak is in the process of rolling out Medicaid coverage in all states. Less than 10% of its school partners over the past year have solely used ESSER funds to pay for its program, a company spokesperson said.
Federal funds have allowed mental telehealth programs to launch in school districts that may otherwise lack resources. Jefferson County Public Schools in Colorado spent around $1.5 million from the district’s federal ESSER funds to partner with telehealth company Hazel Heath. Nearly half of public schools say inadequate funding prevents them from offering more mental health services to students.
With ESSER funds set to expire after September 2024, school districts are weighing the long-term viability of these telehealth programs. Elissa Dornan, director of elementary teaching and learning at the Bethel School District in Washington state, said federal dollars helped allowed the district to offer telehealth company Hazel Health’s services to students. The district found a shortage of providers existed and many students requiring mental health services were having to wait.
Dornan said the district of roughly 20,000 students received 800 referrals to Hazel Health’s service last year and 562 students completed appointments. Nearly 70% of the students had been successfully discharged when the data was captured but Dornan said the number is likely higher. But even with these numbers, Bethel School District may not have the funds to continue the service when the ESSER dollars run out.
“It’s hard to provide a great service,” Dornan said. “We are in that predicament of how do we continue it? Where do we even begin to start justifying the dollar amount for mental wellness for our students?”
The district is projecting 960 referrals for the current school year. Last year students were primarily referred due to family concerns, anxiety and sadness.
Hazel Health, founded in 2015, offers mental health services along with consultations for certain medical conditions like asthma, acne and sleeping problems. Hazel bills a student’s commercial insurance when available. School districts will pay a portion of the fee to Hazel to offset any out-of-pocket expenses not covered by insurance.
“We are a healthcare company. Full stop,” said Andrew Post, chief innovation officer at Hazel Health. “But we are one that is designed around schools being an access point, a referral source [and] a partner.”
Hazel is in the process of working with schools to keep these programs operating beyond temporary funding programs, while Daybreak is working to show a return on investment for school districts.
“We’ve actually been able to show that students’ success is kind of inextricably linked to mental health. So, for the students that we’re working with, they’re seeing improvements in behavior, they’re seeing improvements in attendance, [and] ultimately, they’re seeing improvements in their grades,” Alvarado said. “They’re able to themselves find longer-term funding sources, because the intervention that Daybreak is providing actually drives up those metrics for them and brings more funding into the district.”
Cartwheel, a school-based telehealth company that was founded in 2022, operates under a similar model to Hazel and Daybreak. It bills private insurance and Medicaid for services and charges schools for non-billable services like case management.
Joe English, co-founder and CEO at Cartwheel, said they work with insurers and the school district to ensure the program is financially viable. He said as ESSER winds down, districts are setting a higher bar for financial sustainability of these programs.
Dornan said the programs that will stick around after federal dollars dry up must serve the needs of students effectively.
“As district leaders, we have to really be in tune with what’s happening in the community,” Dornan said. “Really looking at the bottom line, the dollar amount, and if this truly is an area of need.”
UNITE US TECH COMPANY IN THE NEWS
9/7/23, Fierce Healthcare:
Unite Us, the tech company facilitating referrals to social services, has laid off a sizable chunk of its workforce, Fierce Healthcare has learned.
The layoffs happened on August 21 and affected people in at least six states, including Minnesota, Wisconsin, Texas, Illinois, California and Oregon. While Unite Us did not confirm how many people were laid off, a Slack channel created by and for those affected by the layoffs and viewed by Fierce Healthcare contained more than 120 members as of September 6.
In a statement to Fierce Healthcare, Unite Us confirmed the workforce reduction, saying “this decision was made to focus on the highest impact work for our customers, the communities we serve, and our mission.” In the last two years, the company has expanded nationally and made acquisitions to advance social care, the statement went on, and remains “focused on maximizing our impact on the people and communities we serve.”
The company will provide severance, reimbursements for health insurance premiums, career transition and job search support, co-founder and president Taylor Justice said in a Zoom meeting announcing the cuts. A recording of the announcement was viewed by Fierce Healthcare.
“Any organization would be fortunate to call our departing colleagues a member of their team,” Justice said in the recording viewed by Fierce. “We want to acknowledge that today is going to be a challenging day for everybody involved.”
Roles affected included customer and community success, sales, engineering and government and policy, according to the Slack channel created by those affected by the layoffs and viewed by Fierce Healthcare.
The company’s headcount in June was 846 employees, according to information shared with Fierce Healthcare.
Unite Us also had layoffs in 2022, several employees confirmed to Fierce Healthcare. Hundreds were reportedly eliminated, according to one affected employee’s LinkedIn post.
Launched in 2013, New York City-based Unite Us has raised $195 million to date, according to Crunchbase. The startup last raised $150 million in 2021, when it was valued at $1.6 billion.
In January, Unite Us touted a number of milestones, including that the use of its software had impacted 18.7 million people, bringing together healthcare, government, nonprofit and private-sector partners to address social determinants of health (SDoH).
THE COMPANY SAYS IT NOW POWERS SOCIAL CARE NETWORKS IN 44 STATES. OVER THE LAST YEAR, THE COMPANY HAS ONBOARDED 81 NEW CUSTOMERS AND ANNOUNCED 18 NEW UNITED WAY AND NATIONAL PARTNERSHIPS WITH COMMUNITY-BASED ORGANIZATIONS, EXECUTIVES SAID IN A PRESS RELEASE.
UNITE US ALSO HAS NOTCHED SEVERAL ACQUISITIONS TO EXPAND ITS DATA AND TECH CAPABILITIES. THREE YEARS AGO, THE COMPANY BOUGHT SOCIAL DETERMINANTS-FOCUSED ANALYTICS COMPANY STAPLE HEALTH. IN 2021, IT ACQUIRED CARROT HEALTH, A CONSUMER DATA AND PREDICTIVE ANALYTICS PLATFORM OFFERING ENGAGEMENT INSIGHTS TO PAYER AND PROVIDER CUSTOMERS. THAT SAME YEAR, IT ALSO SCOOPED UP ANOTHER MAJOR PLAYER IN THE MARKET, NOWPOW, TO SCALE ITS INTEGRATED HEALTH AND SOCIAL CARE NETWORKS.
Screenshots of the company’s financials reviewed by Fierce Healthcare reveal that Unite Us closed its 2022 fiscal year with $100 million in revenue, up 46% year-over-year, and an EBITDA loss of $66 million. Its year-to-date results in April 2023 were at $35 million revenue and a $23 million adjusted EBITDA loss. Two months later in June YTD, revenue grew to $54 million, while the adjusted EBITDA loss grew to $33 million.
Unite Us sent a message following the layoffs to its customers, according to a former employee. In it, Unite Us wrote it is “in the process of streamlining and re-organizing our structure in order to best prioritize delivering exceptional technology and support for our customers and communities.” The message was viewed by Fierce Healthcare, though the date was unclear.
Unite Us’ chief financial officer (CFO), David Rudow, appears to have left the company in August 2023 after seven months with the company, according to his LinkedIn profile. One former employee confirmed the departure. A new CFO, Apollinaire Amondji, appears to have been promoted to the position the same month, according to his LinkedIn profile.