Competition among digital mental health apps heated up during the COVID-19 pandemic and spurred demand for tools to help users manage conditions like depression and anxiety.
Apps including Calm, Headspace and Talkspace, generally started with direct-to-consumer offerings, but have inked a rising number of deals during the pandemic with payers and employers looking to stave off worsening health outcomes and keep workers productive.
San Francisco-based Calm is taking it one step further, launching a clinical mental health offering called Calm Health that’s available to not just self-insured employers and payers but providers, too. Though Calm’s bread-and-butter is meditation and sleep improvement programs, Calm Health, which builds off Calm’s acquisition of tech startup Ripple Health Group in February, includes condition-specific programs meant to bridge the gap between mental and physical healthcare.
Healthcare Dive caught up with Calm CEO David Ko on the sidelines of the Reuters Total Health conference in Chicago to discuss the 10-year-old company’s goals for the new venture, pending HIPAA compliance and Calm’s profitability.
This interview has been lightly edited for clarity and brevity.
HEALTHCARE DIVE: Why branch into clinical mental health?
DAVID KO: It’s a natural progression. We’ve been fortunate that we’ve been able to affect over 100 million lives in the direct-to-consumer route, and that’s more through traditional app channels and the web. What also happened in that timeframe is that employers came to us and said, “We want Calm for our employee base.”
So now we’ve got over 3,000 employers using us. And that’s led to the natural progression of now going to payers and providers. Our employers are saying, “Wait, we were giving this as a benefit, but maybe this is something that you as a provider or payer should also offer in your own bundles to us going forward.” So we’re trying to meet our members wherever they are, whether that’s coming to you from direct-to-consumer, whether its coming from employer, or whether it’s coming a little bit more integrated in payer and provider channels.
So we’ve just announced the product. We’ve got a lot of interest. As we start to roll the product out in Q1 of next year, we expect to do so with some partners.
Why is Calm Health interested in provider clients too?
KO: Payers and providers today, they recognize digital is a great way for them to be proactive rather than reactive to meet members where they’re at.
We have a relatonship with Kaiser Permanente — they distribute Calm. They’ve given it to their employees but also all their members. Outside of the obvious benefits, it also gives providers back time, meaning they can focus on the people that really need the help. So hopefully Calm can lessen the load and free up resources for people who have a serious mental health illness.
Too often, technology companies come to the conversation and knowingly or unknowingly they add more costs. And so they’re creating more inefficiencies in the system. So we’re hoping to do the opposite: higher quality of care with lower costs. We do that by working within the system today.
So what we’re trying not to do is add another app that adds another point solution — we’re trying to bring something that people already know and use and say, “How can we take your programs in? How can we follow your care plans?”
So Calm Health will integrate with provider apps?
KO: We can integrate a number of different ways. This is where the acquisition of my prior company, Ripple Health, came in. We were already on a HITRUST and HIPAA compliance path, and now we’re taking that to Calm.
Is Calm profitable?
KO: Profitability is an important narrative for the company. There’ve been times when the company has been profitable, and there’s times when the company has not. It’s an ebb and flow.
How much is Calm investing in Calm Health?
KO: We’ve made a tremendous investment into this going forward. If people want to come to us from direct-to-consumer, we’ve invested a lot over 10 years that has allowed us to gain their trust. Now, employers are starting to trust us. Hopefully, going forward, we’ll have payers and providers working with us as well.
We don’t have individual numbers broken out. We think of it as a whole — a lot of programs from direct-to-consumer, we use in our payer and provider landscape. For me, those costs, I think of it as one P&L.
There’ll be times we will invest more in certain groups than other groups and vice versa, but that will be dependent on the data that comes back. Right now, it’s hard to create healthy habits. And I feel like we’ve created a very healthy mental habit. So we want to continue investing in that going forward.
