Chicago Startup Raises $1.8M for Virtual Mental Health Consultations (Regroup Therapy)
Featured on the Chicago Tribune
Chicago-based telehealth startup Regroup Therapy, which provides virtual mental health consultations to treat depression and a wide range of other issues, has raised more than $1.8 million in funding.
Regroup, founded in 2011, has a network of more than 2,000 mental health professionals, including psychologists, counselors, therapists, psychiatrists and others. Regroup connects those professionals to health care organizations and their patients via a web-based video platform.
The Series Seed round closed in mid-April. It was led by Hyde Park Angels and included Chicago investor Lon Chow and Wasson Enterprise, the family investment firm of former Walgreen Boots Alliance CEO Greg Wasson.
Regroup says its goal is to fill gaps in mental health services.
“There’s just this really deep shortage of providers” in mental health, founder and CEO David Cohn said. “Fifty-five percent of counties (nationwide) don’t have any behavioral health providers in them. Not a social worker, not a psychiatrist, nothing. It’s a huge problem.”
Regroup operates like a staffing agency, Cohn said. When clients like primary care center chain Oak Street Health have a patient who needs to see a mental health professional, the organization can set up a patient with a specialist using the Skype-style platform. Those professionals act as part of the organizations using Regroup; those organizations pay Regroup for set periods of coverage.
“Imagine if Uber had small teams of people that only worked in certain neighborhoods, so you knew you were going to get the same guy over and over again,” Cohn said. “Every entity has a dedicated team that works with them.”
Health care providers using Regroup typically arrange for a consultation with the patient from a screen within the practice.
Patients typically go into a doctor’s office when talking with a Regroup specialist, interacting via a screen. That way, a clinician can hand off the patient to the specialist on the screen and on-site nurses can take vital signs.
Depending on the state and payer, services are often more likely to be reimbursed if provided in-office instead of at-home, Cohn said. The specialists can do nearly anything they’d be able to do in person, including treating serious persistent mental illness or prescribing medication except for controlled substances.
Doing the consultations virtually brings providers to areas where mental health professionals are scarce, but also helps stretch resources if a health care group has multiple locations.
“You can do a session at 8 a.m. in site one, followed directly by a session at 9 a.m. at site two, then at site three, another session at 10 a.m., and you don’t have to drive between the sites. You don’t lose any time between those,” Cohn said.
As health care transitions gradually shift from a fee-for-service model to value-based care, Cohn said health care groups are looking for services like his.
“This is the first time when entities really are incentivized to provide better services earlier in care to avoid much bigger bills later from patients they may have missed ending up in inpatient environments,” he said.
Sapan Shah, the Hyde Park Angels deal lead and a managing partner at Flagship Healthcare, said Regroup’s services benefit patients by facilitating better communication between mental health professionals and a healthcare organization.
“They’re part of the team, just as they would be if they were on-site,” he said.
The funding round also included investments from OCA Ventures, Impact Engine, New Stack Ventures, Harvard Business School Alumni Angels of Chicago and MD Angels. Grubhub co-founder Mike Evans and Lou Malnati’s Pizzeria president Mark Agnew also invested.
mgraham@tribpub.com
Twitter @megancgraham