11 May 2022

This Will Not End Well

With millions of people immiserated by our economy, or the pandemic, or the opioid crisis, or the general abandonment of the most basic ideas of community, people are sad.  They are very sad.

So, what do sad people do, at least in the United States, they get therapy, and frequently psychoactive drugs as well.

So demand for psychological services in America is rising, so private equity looters want to do to the counseling industry what they did to ER services, which is to say that they want to burn it all down for the insurance money.

There there is nothing that exists where adding Wall Street finance to the mix will not make it worse:

Psychiatrists and psychologists once ran their own practices. Now the local therapist office could be controlled by a buyout king.

Venture capitalists and private-equity firms are pouring billions of dollars into mental-health businesses, including psychology offices, psychiatric facilities, telehealth platforms for online therapy, new drugs, meditation apps and other digital tools. Nine mental-health startups have reached private valuations exceeding $1 billion last year, including Cerebral Inc. and BetterUp Inc.

Demand for these services is rising as more people deal with grief, anxiety and loneliness amid lockdowns and the rising death toll of the Covid-19 pandemic, making the sector ripe for investment, according to bankers, consultants and investors. They say the sector has become more attractive because health plans and insurers are paying higher rates than in the past for mental-health care, and virtual platforms have made it easier for clinicians to provide remote care.


The number of behavioral-health acquisitions jumped more than 35% to 153 in 2021 versus the previous year, and of those, 123 involved private-equity firms, according to Mertz Taggart. In the first quarter of this year, there were 41 acquisitions, of which 30 involved PE firms.

The push into mental health carries risks. A rush of private-equity firms could send prices for practices higher, reducing potential profits. A risk for patients and clinicians is that new owners could focus on profits rather than outcomes, perhaps by pressuring clinicians to see more patients than they can handle. If care becomes less personal and private, patient care might also suffer.

Might?  When you look at what they did to emergency room and air ambulance operations, it's clear that overcharging and worse health outcomes are the goal, not an unintended side effect of PE takeovers in healthcare.

Online mental-health company Cerebral and other telehealth startups have begun to face scrutiny over their prescribing practices. The Wall Street Journal has reported that some of Cerebral’s nurse practitioners said they felt pressure to prescribe stimulants. This past week, Cerebral said it would pause prescribing controlled substances such as Adderall to treat ADHD in new patients. Last year, Cerebral logged a $4.8 billion valuation.

As an aside, it should be noted that Cerebral is backed by SoftBank, which funded WeWork, Uber, etc. so it's kind of a self licking ice cream cone:  They search out companies whose business model is based on making their employees' lives awful, and now they are going to make money from these folks needing counseling for their miserable lives. 

This, buy the way, is why I do not support single payer healthcare.  I support a national health service, where the medical facilities are government owned.

Single payer will end up a lot like the defense industry, a criminogenic monopsony that will continue to ill serve both the public health and the public purse.


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