Serious mental illness (SMI) startup Vanna Health has raised $29 million ahead of its official launch.
The company, which is focused on connecting SMI patients with community resources with a value-based approach, plans to use the new funding to help grow its partnerships and launch in a small number of countries. Among its leaders: former National Institutes of Health (NIH) mental health director Thomas Insel, MD, who serves as Vanna’s co-founder and executive chairman.
“We’re just getting started. We’re in deep conversations and we’re getting into the water in Massachusetts, in Pennsylvania and in Arizona,” Insel told Behavioral Health Business. “In each of these markets, we are just beginning to create partnerships and figure out the plan to engage in these communities. Funding gives us the opportunity to take risks to understand what the best services and product line will look like.”
The new capital will also allow Vanna to hire coaches, clinicians and mental health providers to build its clinical team.
The company recently struck deals with major insurers, including Blue Cross Blue Shield of Massachusetts and Blue Cross Blue Shield of Arizona.
“I think Blue Cross Blue Shield of Massachusetts and Arizona are interested in what a value-based model might look like in behavioral health,” Insel said. “We did that pretty well as a field in a couple of areas. We have really good bundled payments for knee replacements or maternity care. … But in behavioral health, it was really hard to go from fee-for-service [models] to any of the risk or value-based models.’
Moving to a value-based payment model in behavioral health will take many community partnerships. It could even take shape in some public-private partnerships, according to Insel.
“It’s done through partnership,” he said. “There is no single entity, whether it is a medical home, an inpatient unit or a crisis service – no one has all the cards in the deck. You’ll have to put them all together.”
Founded in 2021, the company is led by Insel and serial entrepreneur and Vanna CEO Dr. Giovanni Colella. Vanna’s goal is to help people living with SMI connect to the community ecosystem of care and resources.
“I’ve talked a lot about what I call the three Ps: providing people, place and purpose for those with serious mental illness,” Insel said before BHB. “And that if we did that well and we did it comprehensively, continuously, compassionately, we could really help a lot of people who today end up in prison or homeless or just really struggling.” We can help them have a much better life to help them thrive.”
The startup plans to take a for-profit model approach. Insel said there is a business case for caring for individuals with SMI through a community support model. Specifically, this model can reduce care costs and scale, Insel said in a previous interview.
“We strongly believe there is a business case to be made because these are the most expensive patients in many health plans, including Medicaid,” Insel said. “And we’ve seen that in the markets we’ve looked at — these are very expensive patients. But importantly, the costs are not on the behavioral health side; it’s on the medical side.
The estimated lifetime burden of SMI is $3 million per patient, according to research from the Substance Abuse and Mental Health Services Administration.
The traditional fee-for-service model is missing some key points, Insel noted. For example, many wraparound services do not have a CPT code.
“Think about it: If one patient costs you $45,000 a year, that’s what we’re paying for the current system with terrible outcomes. Absolutely terrible results. For $45,000 a year, you can do a lot for that person,” Insel said. “They can have a concierge social worker, they can have a pretty nice place to live. I mean, there’s really a lot of opportunity to serve them in a different way if you really focus on the people and the place and the purpose and not just making sure they get another ER visit or making sure that will receive a hospital stay.”
Vanna Health isn’t the only startup looking to care for SMI patients. California-based Amae works to bring together behavioral health, primary care and community support for patients with serious mental illness.
In addition, New York-based Firsthand is committed to helping SMI patients take the first step toward care. It does this by using peer support networks to help patients with SMI care in the community.
This year, those who follow the behavioral health industry can expect to see Vanna test her model, see what works and what doesn’t.
“2023 is really about proving the model and really developing what we think will be a new model for how we manage populations with serious mental illness,” Insel said. “And it’s going to take us at least a year to figure out how to do that in a way that’s scalable.”