telemedicine
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Backed By $900K From Keith Rabois And Angels, Breakthrough Is Your New Online Shrink

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Today, one in four Americans suffer from a diagnosable mental illness, yet only one-third of those with symptoms are treated. Among the reasons why: The poor distribution of mental health professionals, the stigma that comes with mental health issues and, sadly, the high cost of care.

In 2009, Mark Goldenson launched Breakthrough at TechCrunch50 to address this problem, offering an easy and private way for anyone and everyone to connect with mental health professionals via email or a HIPAA-compliant video platform on the Web. Today, Breakthrough enables users to search for providers based on price, specialty or disorder, while giving psychiatrists and psychologists a management suite through which they can keep track of appointments and payments.

Breakthrough recently took several big steps forward in its mission to bring online mental health treatment to the mainstream, as it has signed on two major health insurers, being Magellan and one of the largest insurers in California (which will be announced at a later date) — which collectively cover mental health care for two million Californians. According to Goldenson, this gives Breakthrough the largest insurance coverage of any online therapy service.

Not only that, but Breakthrough is officially revealing that it has raised $900K in seed funding to date from a host of angel investors, including Ash Patel and Mike Marquez of Morado Ventures, Charles River Ventures, Square COO Keith Rabois, Badoo COO Benjamin Ling, Gus Fuldner, PracticeFusion co-founder Matthew Douglass, PayPal Director and former eHealth exec Avery Kadison, Invite Media co-founders Nat Turner and Zach Weinberg, and more.

Why does this matter? Well, the funding’s use is apparent, as it’s helped the founder grow the team and develop his startup’s product. Not to mention that it’s important early validation, as raising money for companies in niche areas of healthcare isn’t easy. As in education, a lot of investors seem to be holding back, waiting for some of the early players to establish themselves as leaders.

And as to the partnerships, as Goldenson points out, insurers are to mental health care what advertisers are to social media — they are the subsidizing third-party that makes services affordable, put in context by the fact that 88 percent of mental health spending is paid by a public or private insurer.

Of course, the challenges of signing insurance companies has turned many startups away, meaning that many telehealth companies end up requiring people to pay out of pocket for treatment. Goldenson says that Breakthrough wants to be the company that solves the hard problem of getting online care covered by insurance companies — and now with insurers beginning to get on board, there’s evidence that the startup has begun to make headway.

For users, coverage means that, instead of seeing out-of-network providers and paying $100+ per appointment (out of pocket), Breakthrough patients with health insurance can see any in-network providers who are on Breakthrough and take advantage of a co-pay of $25 or less.

What’s more, with the upholding of health care reform (a.k.a. ObamaCare), forty million previously uninsured patients are now going to get healthcare coverage. And Goldenson believes that accountable care (in which doctors are paid for keeping patients healthy instead of paid fee-for-service) is going to change the face of healthcare.

But for insurers to absorb this huge influx of new patients without significantly impacting quality and access to care, the argument is that technology is the best answer, as it can improve mass efficiencies and limited distribution. For example, the large majority of rural towns in this country have no psychiatrists, but with a HIPAA-secure video network, telepsychiatrists can begin reaching those previously uncovered regions.

It’s also true that telemedicine, although showing a lot of promise, has grown more modestly than many expected. But Goldenson believes that this new legislation, along with patient demand and broadband and webcam penetration are accelerating the growth of telemedicine. Some estimates indicate that the global telemedicine market will double to $27 billion in five years, with home-based solutions growing the fastest.

Since graduating from Stanford’s StartX accelerator this winter, Breakthrough has been hard at work signing insurance companies to help its patients cut costs. With insurers like Magellan (which is the largest mental health insurer in the U.S. with 33 million members) now able to approve and reimburse online care, Goldenson says that the startup has seen a three-fold increase in appointments. And that the wait list for providers has now grown to 1,200.

And considering that Americans spend $135 billion on mental health care each year, Goldenson is naturally convinced that the startup is in a position to do a lot of good — and make some money while doing it.

Unfortunately, Breakthrough is currently only serving California, but it’s planning on expanding to several more states by the end of the year.

For more on Breakthrough, find them at home here.