4 questions with Brightline's CEO on scaling behavioral health

Pediatric behavioral health company Brightline announced a pivot last month involving organizational changes and a shift in the go-to-market strategy. This move meant less focus on jumbo employers—which requires a national footprint—and instead a more targeted push to patients and their families in a few select geographies. It also meant moving from telemedicine to hybrid care. What precipitated the change? What does that say about our industry? And is there anything fellow founders should take away from it?

Brightline CEO Naomi Allen wrote an in-depth blog post on the topic, describing the company’s evolution. But Second Opinion wanted to run a few additional questions by Allen, who was joined by one of her investors (our contributor, Alyssa Jaffee). We suspect Brightline will be the first of many companies to embrace a hybrid model, so we wanted to ask Allen about that. Plus, as we’ve argued in the past, brick-and-mortar is undervalued! There are also fascinating threads to pull here about the right ways to build in behavioral health.

As an aside, I’m enjoying this format—“4 questions with!”—and would love to hear your feedback. Keep the comments coming. It’s one of my favorite parts of the day to read them. Note: This post is reserved for premium subscribers only and edited for brevity.

Second Opinion: How did Brightline come to be? Can you share the story from the beginning and also touch on how that led you to employers?

Naomi Allen: I started the company because of a health crisis with one of my kids. When he was in therapy, there was no communication between sessions, no suggestions on how we might track progress, or work on homework to help him get better faster. There was just a vast gap between his appointments with no information or coordination. But science tells us that having families engaged in the child’s mental health services helps kids get better and stay healthier. Initially, we had a vision of wrapping that dyadic care model around hybrid care delivery where we’d see kids and teens in person in a clinic, and parents could support their child’s care with a parent-facing app. Parents could also have virtual sessions with a parent coach. But when Covid hit, we moved to virtual care and had great clinical outcomes. I saw that we could scale the virtual care model into states more quickly, so I raised our Series A to hire clinical staff and move into new states. Then, I started getting calls from employers. They told us that working parents were struggling and they were seeing mental health challenges with these kids first-hand. That took us down the path of 50-state expansion, plus a digital platform and a coaching team for families who told us their kids weren’t ready for therapy. By 2021, we were in the scaling model, commercializing through health plans and employers. By 2022, we had amassed an expansive network of hundreds of employer customers but didn’t see enough top-line growth with families signing up for virtual mental health care for their kids and teens through their employers. We started to realize that the mission we were founded upon, enhance access to high quality pediatric behavioral healthcare, was not being fully realized.

Second Opinion:Tech-enabled services is hard enough. It’s even harder to build in all 50 states, but it is typically a requirement for any company chasing employers who won’t work with you without a national footprint. When do you know it’s worth the expense versus a more targeted approach?

Alyssa Jaffee: Tech-enabled services involve supply and demand matching, and that’s one of the most challenging things founders have to figure out in health care. You’re simultaneously hiring providers, whether 1099s or W-2s, getting them credentialed, ramping them, and thoughtfully matching them to the right patient. Then you’re balancing their caseload based on the consumers coming in through the door and whether they’re cash-based, plan-based, or through an employer. The expertise required is so complex. Not to mention, there’s the 'choose your own adventure' aspect of the plan you’re associated with, the training that’s required and then the match that needs to be made between the patient and consumer. And here’s something we don’t always appreciate regarding behavioral health. It’s not like other areas of health care because if a therapist calls in sick, you can’t just match them to another therapist. Unlike urgent care, you’re building a one-on-one relationship intended to last for a long time.

Allen: It does take a durable set of investors. We were working with our employer customers and building subclinical programs, proving that they worked and also investing time and energy in our health plan partners along the journey.

Second Opinion:Let’s dig in on the billing rates. How did you find a way to get Brightline’s care reimbursed across payers and employers, particularly as you offered coaching and care?

Allen: We have learned so much. When we started our go-to-market journey, we thought about running our care model through health plan rails on network FFS rates or going directly to the employer and selling as PEPM. But as we talked to employers, we heard they didn’t want to add a  PEPM for pediatric mental health on top of an EAP. They pushed hard for us to run our services as fee-for-service, network-based, and activation-based through health plans. That seemed appropriate and understandable, but it meant we didn’t have contract structures with most of our employers that obligated them to drive activation marketing or have financial skin in the game. The short story: It doesn’t work. Employers have bought too many solutions, and if you don’t have alignment around what activation marketing they’re willing to commit to and running full activation revenue, it’s a hard thing to build. I think there are certainly structure and business models that work in terms of the employer space. We landed on PEPM as a sub-clinical offering, with the clinical care running on network FFS contracts, and then we hang employer marketing obligations on that PEPM contract. So it would be mostly fee-for-service, but run through in-network rails on the health plan side. That model would have worked, but by then, we had invested too much money and time trying to get the employer activation model to work. We had to make some hard decisions and focus.

Second Opinion:This can’t have been an easy decision. What gives you confidence it’s right? And how did you communicate it along the way? I’m especially interested in what you could share with other entrepreneurs.

Allen: There’s a lot we learned that’s shaping our new model that I wish we had learned earlier. I do feel that but I also don’t have regrets. We are preserving capital to lean in and have made choices that I believe will have long-lasting positive impacts on the business and the families we serve. We have been running almost a year of what it takes to acquire members through community and partnership-based referrals as well as DTC in California. We have members referring through word of mouth, schools, community-based organizations, and pediatrician practices.  We are taking the best of what we’ve built: a care model that works, virtual care, and strong health plan partnerships, and we’re honing and sharpening from here.

The big change is reframing our approach to the market. In a 50-state practice, we had to be all things to all people, but now, with a more targeted approach, we can hone in on what is best for the communities we serve. When I knew it was the right thing, I sent a note sharing my decision to our investors. If there’s an important thing for other entrepreneurs to learn here, it’s to ensure you have the right people around the table (investors and senior leaders). I knew we’d have some stuff to figure out but having the right investors and leadership makes those decisions feasible. So if I were to share something tangible with others, it would be this:

Make sure you have a high level of transparency with your board. Share your concerns early and not when the house is burning down. At the end of the day, you have to make a call, so don’t wait too long. I remember Annie Lamont (an investor at Oak FTC) telling us that we should run our business as if we were not going to raise any more money. Every bit of capital is precious. That was great advice, and it should make anyone running a company want to move more decisively. Every month you don’t do that is burn—and money you’ll never get back.

Jaffee: Naomi, to her credit, was able to do this. This process went smoothly because she built trust and she was open. There were no surprises. Founders, it’s a marriage. We are on your board for 5, 7, or even 10 years—or longer. Like any marriage, what works is a relationship based on trust.

Naomi Allen is the CEO of Brightline, a pediatric mental health company backed by investors like GV, 7wire, and Oak FTC.

Alyssa Jaffee is a GP at 7wire Ventures