The pandemic has enormously increased the demand for access to personalized mental health services and brought digital mental health solutions and digital therapeutics programs to the frontline of global health investments. Millions of dollars were invested in innovative digital health providers to scale mental health care delivery and chronic disease management programs to improve population health outcomes. To honor the mental health awareness month, we talked to Christopher Wasden, Head of HappifyDTx at Happify Health, a leading global software-enabled healthcare platform focused on improving mental and physical health that recently got $73 million in funding, about how the company successfully supports top pharmaceutical partners on digital therapeutic solutions and payers and their members’ mental health and chronic illness needs, works with employers to enable their employees to take a more active role in their mental health, as well as what are the challenges of scaling DTx across different countries.
In the past few years we have witnessed a positive change in the tone of the conversation on mental health and its importance to the population’s overall well-being. Covid-19 has shed light on the enormous supply and demand imbalance when it comes to access to mental health services. Evidence-based digital therapeutics mental and wellness care programs offering personalized self-service solutions and AI-powered coaching alongside individual patient journeys are shaping the digital mental health space improving care and health outcomes at scale. For severe mental illness cases, teletherapy and telemedicine are helping to overcome in-person therapies with a psychologist / psychiatrist.
Investments in the digital mental health space are also catching up with the rest of the digital health sectors. The increasing importance of digital mental health solutions for population health has positively changed their reimbursement. As a case in point, most of the health applications that can be reimbursed by statutory health insurance in Germany focus on mental health solutions. (To learn more about the German digital health market and how to successfully enter it, download “DiGA in Germany” whitepaper here). But, can digital mental health solutions live up to the growing expectations?
What is the problem in mental health therapy today? How can a company deliver digital mental health support at scale with measurable business results? Why are health plans demanding more evidence that a drug therapy works?
To dive deeper into these topics, we talked to Christopher Wasden, Head of HappifyDTx at Happify Health, a leading global software-enabled healthcare platform that combines digital therapeutics and care delivery solutions to improve individual mental health, physical health & well-being journeys, supports more than 10 chronic conditions and covers more than 20 million lives, about their B2B2C business model and unique value proposition to employers, health plans / health systems, Pharmaceuticals and individuals, market trends and company’s future plans.
Research2Guidance: In March 2021 Happify Health raised new $73 million in funding. Congratulations to you and the team. For anyone who is not familiar with the company’s story, could you please share it?
Christopher Wasden: Thank you. Happify Health was founded in 2012 by a team of entrepreneurs who knew nothing about the healthcare industry, but who were very successful in the video game space. They have designed several games like Hearts and Solitaire that were played by more than 66 million users over and over. So, they had a very flourishing business and years of expertise on how to design a product that can lead to better engagement, more use and behaviour that could become a habit.
Happify Health was born out of the thought: “How to take what we already know – the science of engagement and behaviour – and apply it to empower people to take better care of themselves?” The mental health market potential and the enormous global opportunity seemed like the best space to venture into healthcare.
It took us some years to figure out the right business model and create self-service solutions across the individual patient journey that are human centered, personalized, evidence-based and AI powered to help us scale.
Today, Happify Health is known as one of the leading global healthcare platforms that combines digital therapeutics and care delivery solutions to improve mental health, physical health, and well-being.
Research2Guidance: How a company profitably scales its solution is a key to success. What is your business model?
Christopher Wasden: Our business model is B2B2C.
The problem in healthcare is that the patient / consumer has been taught to never pay for their healthcare. Yet, at the end of the day, it is the patient who is using the solution / service offering.
In our business model B can be an employer, a health plan / health system, or a drug company. Those are the business partners that pay for our products to be used by patients / members / consumers.
To give you some perspective, we work with employers to enable their employees to take a more active role in their mental health, reinforce positive thinking and turn this mindset into a daily habit; we partner with payors to help support their members’ mental health and / or chronic disease care journeys and we collaborate with some of the leading Pharma companies on digital therapeutic solutions.
Our platform covers more than 20 million lives.
Research2Guidance: You have quite a broad portfolio of clients. In what ways do you differentiate yourself from your competitors?
Christopher Wasden: Yes, you are right. Our portfolio of clients’ variety is impressive. If you look at our competitors, they tend to be only in the employer market or the health plan market, but they are not in the Pharma market, and in the provider market.
Some of the market players only focus on prescription digital therapeutics, whereas we have this as an area, but we also focus on digital therapies that are not prescription only. Happify Health stands out with the broadest portfolio of products, the broadest portfolio of clients, the broadest portfolio of indications that we focus on treating and managing. We also have the broadest capabilities when it comes to engaging and retaining customers.
I would say, we are also the only company that really enhances direct to consumer experience that deals in the B2B space with Pharma, health plans and the employers. In fact, our team is good at finding patients through social media, onboarding them on our programs and inspiring them to use our product. Our competitors rely on their B2B clients to do all of that, and they are not that good in that either. This is a huge differentiator for us.
A case in point, we recently did a concept pilot for a Pharma company, where we were able to find 5000 patients to take part in it in just 2 weeks. Our client would normally have to pay millions of dollars to an agency for this service. So, the fact that we can find thousands of patients with a specific disease in a short amount of time, who will download our app, use it and at the end show clinical benefits from our programs is unprecedented. There is no other company in the market that we are aware of that can do things like that.
Research2Guidance: Interesting. How do you find patients on social media?
Christopher Wasden: We have this unique ability to blend gaming, science, people and technology.
The messages we post on social media are thoughtful and personalized to people who have mental health problems and are looking for a solution that can support them on their individual mental, physical and / or wellbeing health journey. The value proposition is attractive to make them download our app, use the disease specific care delivery and community programs, thus enabling each user to take a more active role in their self-care, which leads to positive health outcomes. We also have a lot of hooks that we use to bring people back again and again. 60% of people are still using our product after 2 months and 40% are still using it after a year. This alone tells a lot.
Research2Guidance: Finding the right people for a program, being able to engage and retain them is a key ingredient that leads to higher market penetration. In a nutshell, what is your service offering?
Christopher Wasden: At Happify Health, we deliver a range of evidence-based science, mental health and well-being products and solutions that adapt to a variety of individual needs, creating personalized and targeted therapies across organizations and diverse populations to better support health journeys with measurable business results.
We have several key products:
Connect – is the Enterprise gateway / portal. It creates a single, digital entry point for people to be seamlessly screened with a series of questions and then guided to the right care based on their personalized needs, like telehealth or self-care, or even in-person therapy.
Happify Connect is partner agnostic, so health plans or pharma companies can use us to integrate their existing partners or to connect to other solutions and create their own best-in-class ecosystem.
Kopa – is patient-centric and free to consumers. It helps patients better manage their chronic care journeys and experience by getting community support, tailored disease specific content, clinical and some mental health interventions at the right time.
This product incorporates Happify’s science-based activities and games to help people reduce stress and build resilience. Our first Kopa is designed to support patients with psoriasis. In the next couple of months, we will roll out other specific disease-oriented features.
Digital Therapeutics – We have pioneering product therapies for different levels of severity of mental health. For example, we have clinically proven programs designed to help individuals reduce anxiety and depressive symptoms, or practice mindfulness to improve mental clarity, improve their sleep.
We have a variety of therapies for disorders such as multiple sclerosis, migraine, etc.
Research2Guidance: Profitably scaling a solution and having an answer to who is going to pay for it is essential to get a company off the ground. What is your revenue model?
Christopher Wasden: Our distinct offerings have a different revenue model depending on the type of clients we have.
For example, our offering to Pharma companies has different revenue models. One is through our DTx model, where we work with Pharma’s existing patient population for a specific medical condition to support patients better manage their health challenges. PDT is an FDA-cleared, digital prescription therapeutics to treat patients’ mental and physical conditions.
We can also attract and retain patients with specific medical conditions that are comorbid with mental health challenges. We educate them on various therapeutic options, for example, access to telemedicine services or to any drug or digital therapy clinical trial.
Research2Guidance: You have different programs. What is their usual duration?
Christopher Wasden: It all depends on the product and the objective we are trying to achieve across a continuum of needs – from maintaining wellness and building resilience to early detection and support for diagnosable mental health conditions.
For example, Kopa is patient-centric for people with chronic conditions. The expectations are that these people are part of the Kopa community for the rest of their lives.
We have other products that are more used episodically. Very few people are depressed all the time through their whole lives. This state of mind tends to cycle, so people use our product when they need it. They might use it 2-3 times a week for a while and then they might hardly use it for a certain time and then come back again. It is a unique journey.
And then we have a prescription DTx product where the dosing is intense for 10 weeks. The aim is to treat the patient to a remission, complete disappearance, or elimination of symptoms.
Research2Guidance: What role does coaching play in your service offering?
Christopher Wasden: Coaching is an interesting point. Most patients will benefit from coaching. The question is “What type of coaching do you provide?”. The only type of coaching that scales is an AI coaching.
Anna is our AI-powered, digital coach designed to model the conversations and interactions one might have with a human coach or therapist. By eliminating the human interaction, we improve care. How do we do that?
We looked at thousands of public articles with evidence-based science on what type of intervention works for patients to treat mental health disorders, and then we asked ourselves: “What is the problem in the mental health therapy today? How can we deliver mental health support at scale with measurable business results?” At present, within the space there are many challenges.
We knew we can do better than that. We can measure all our patients’ state to see whether they are getting better from a therapy and we can eliminate all the hustle that cost people to not get therapy. If you look at CBT, the best practice is for a patient to take 12 CBT classes. Yet, the average number of classes taken by a patient is exactly 1. It is because taking CBT is a hustle. One must take in some cases 3 hours out of work to attend his / her session.
Our solution offers CBT in short sessions. One can do each therapy from 10 to 20 minutes, one can do them any time he / she wants, from whenever one feels like it – at home, at work, on the go.
We have more patients, we offer better quality therapy, we measure the outcomes of our therapy and we can scale it infinitely to as many patients as it is needed. Through Happify Connect, we can also seamlessly integrate behavioural health coaching into our clients’ support system.
At the end of the day, if only necessary Happify highly trained coaches can provide private 1:1 guidance and encouragement.
Research2Guidance: Your solution is global. What are the challenges of scaling DTx across different countries?
Christopher Wasden: This gets into the complexity of the type of the products and the specific country / region regulations. Depending on that the scaling challenges are different.
A wellness product is not regulated by most governments, so providing access to such a product / solution is less of a challenge. As opposed to a product that is a therapy treatment, which is regulated. Also, different countries have different regulatory mechanisms. For example, in the EU there is ISO9000, CE Mark, etc. but in Japan, or China they have another regulatory system.
In the USA, wellness is not regulated, enforcement discretion is regulated, but not cleared and the 3rd category is an FDA cleared products. We have products in all 3 categories.
Scaling a DTx also depends on who B is in the B2B2C.
On the consumer side where our product is free, we are in over 178 countries. People can find it in the app store, they can download it and they can use it.
When it comes to more clinically oriented products, we really focus on having partners. The partner can be a health plan, a Pharma, that is involved in the distribution of the payment and reimbursement of the product.
Research2Guidance: What makes a successful partnership? What have you learned from the partnerships you had so far?
Christopher Wasden: I think when you look at the mental health and DTx space you have to differentiate between companies that are going to partner to make a product vs companies that are going to partner to distribute the product that is already made.
We are a company with our own products. We can show our clients be it a Pharma company, a health plan, an employer, how our solutions work, we can configure our products to a specific disease our client is interested in, and we can add some features to personalize it. At the end of the day, the client will pay us a license fee to have access to this final product and to deliver it to their members network (health plan), employee (employer), to their patients / customers (Pharmaceutical).
We had a partnership with a Pharma company to help manage and improve psychological outcomes in people with multiple sclerosis (MS). I think what makes such partnerships successful is that we already have a product, and we could move quickly. We can take our current product and with one month of signing a contract we can launch a proof-of-concept pilot to run in 2-4 months. If needed, we can recruit thousands of patients and show that our product works. So, in less than 5 months of signing a contract, we can put data in the hands of a client that demonstrates that our product is highly effective in helping people with mental health and other related conditions. You do not have to work with us for years to get the data outcomes.
Second thing is, when we configure our product for a specific disease case within 6 months, we can have a product in clinical trials. There is nobody out there that can move as fast as we can move. And the speed matters when demonstrating efficacy through data. Within months, we gather all the right data, and we share it with our clients so now they are making decisions based upon facts. The results bring confidence in the effectiveness of our solutions, clearly show better outcomes, while lower health costs.
Research2Guidance: Covid-19 has impacted the healthcare and digital health industry. Which of the changes that are happening right now or have happened in the past one year you think will stay in the future?
Christopher Wasden: Looking at our clients, I think Covid-19 was a real wake up call for the Pharma industry. Over the years they have spent a lot of money on digital, but they really have not got any success and they were not that committed to it. What happened with Covid is that their sales reps could not go to the doctor’s office, doctors could not meet face-to-face with their patients and so Pharma companies have realized that if they do not have a digital channel directed to patients their business model is at risk.
We see more Pharma clients come to us looking for a “digital solution for the last mile which is the patient. The solution that can help them develop a relationship with the patient, collect data on the patient, have a direct access to the patient, help them find ways to treat the patient that include Pharma company products but also other products” so, Covid has forced Pharma to be a lot more creative on how data, the relationship and last mile is developed.
When it comes to Employers, we can see the same sort of issues in a different sense. The pandemic has changed the way we work, our physical settings, our lives. Today, as employees we are working from home, some people experience stress levels two to three times higher than they were before Covid-19. This affects the work performance, so employers have realized they need to have solutions in place that help with self-care, that offers a personalized experience from home and is easily accessible.
Health Plans face a similar challenge, it is just a different module. Covid-19 has changed the way healthcare is delivered. Telehealth and remote patient monitoring, along with digital health mental solutions are being recognized as important to improve the population health outcomes and reduce healthcare costs. At Happify Health, we show a personalized support for health plan members’ mental and physical health by effectively screening and referring individuals to the best level of care for them at the time they need it. From effective wellness self-guided practices to dedicated support for chronic conditions to higher-touch care through integrated partners, we can deliver the right level of support. And I believe the need for personalized mental and physical healthcare at scale will stay in the future.
Research2Guidance: What trends do you see in the market?
Christopher Wasden: Some of the trends that we see in the market are really benefiting us. Like, for example:
This is a very important trend, because the only way a drug company can gather evidence to justify reimbursement on a physical drug is through a digital mechanism. So, they come to us looking for ways to expand the label of their product digitally, so they can treat more symptoms of the disease, and gather data showing adherence, efficacy, and improvement of quality of life.
So, the willingness of payers to pay for services that do not require in-person visits, and do not require a video-consultation is another important trend that will enable better access to products and services and decrease healthcare costs.
Research2Guidance: What are the main drivers of large acceptance and adoption of the digital health service offering?
Christopher Wasden: In my opinion, the drivers differ by market.
Employers would like to improve productivity, support their employees with the right tools to deal with stress, burnout, anxiety, depression, etc. and improve their overall wellbeing. Employees will use digital health and mental health / behaviour change programs, that help them feel better whenever they need it.
For the health plan, it is all about decreasing medical costs and medical burden. Solutions like ours, that offer end to end personalized behaviour healthcare solutions at scale across a broad continuum of care will be largely accepted and adopted by health systems.
For the Pharma, it is more about increasing adherence and sales volume of their drugs for patients. Digital health solutions that target Pharma companies also need to show that they are decreasing medical costs.
Research2Guidance: What is next for Happify Health?
Christopher Wasden: We are going to over double our headcount this year, and will also expand our product offering and client relationships across our entire business. We will continue to expand our disease focus beyond mental health to include many other disease conditions. We are entering our scaling phase, where we plan to double revenues every year for the next several years, and expand internationally as well.
Research2Guidance: Christopher, thank you very much for sharing with us Happify Health’s journey and your vision of the market. We wish you and your team to stay safe and healthy.
About Happify Health
Happify Health is a global software-enabled healthcare platform focused on improving mental and physical health. Our platform utilizes an evidence-based approach that delivers scientifically-validated programs which positively impact behavior to help manage chronic conditions alongside providing access to solutions such as telehealth, AI-powered coaching and access to therapeutics, as required, to improve peoples’ everyday lives. Happify Health offers two core solutions for its customers and end-users; Digital Therapeutics and Care Delivery solutions and services across the healthcare ecosystem, including enterprises, health plans, health systems, pharmaceutical manufacturers, and individuals. Today, the Happify Health platform is available globally in 10 languages, supports more than 10 chronic conditions, and covers more than 20 million lives. For more information, visit www.happifyhealth.com.