Two Chairs is a mental health startup banking on in-person therapy

It’s a toss-up which is more nerve wracking: a first date or a first visit to a new therapist. Dates require small talk. But with a therapist, there can be pressure to really bare your soul. 

A growing Bay Area company called Two Chairs wants to take the stress out of finding and paying for therapy. Unlike other mental health start-ups, it doesn’t skim the earnings of therapists, or sacrifice in-person appointments for video or text chats. 

Instead, it runs brick-and-mortar clinics and directly employs therapists. It uses a human being (along with an algorithm) to match you with the right therapist. And then it handles the insurance paperwork so you can get a reimbursement check. 

“What we saw over and over in the research and literature is that the relationship between the therapist and the client is very consistently the best predictor of outcomes,” Alex Katz, Two Chairs’ founder and CEO, told Mashable. “We think owning that end-to-end experience is ultimately the only way to dramatically increase access to care.”

The first step in that “experience” is building, designing, and running clinics — an unusually resource-intensive decision from a start-up. It employs therapists, who have , as salaried employees with benefits. That means the company doesn’t take a cut of appointment payments or charge clinicians membership fees.

“The choice to salary our clinicians was very intentional,” Katz said. “It’s really about trying to create stability.”

This is a refreshing model from a tech company, especially when the standard in Silicon Valley is to outsource through the gig economy or take commissions from existing businesses.

Two Chairs is also trying to match patients with therapists who have the right clinical experience and personality for them. This is usually a process where patients put their faith in janky search engines and gut intuition. 

“The gold standard for searching for a therapist today is this notion of speed dating, where you go through a first session with a bunch of different therapists,” Katz said. “The problem is that that is expensive, time consuming, and difficult. And most people don’t want to do it.”

“The gold standard for searching for a therapist today is this notion of speed dating.”

Two Chairs thinks there’s a better way. It created a user-friendly online portal that gets a prospective patient into a clinical assessment at one of its clinics. From there, clinicians ask specific questions, guided by proprietary software. Katz says the software helps assessors ask the right questions to find the best patient-therapist match. Then, using that input, an algorithm helps match patients with one of nearly 40 clinicians across six locations.

“The way we think about this is that technology plays a really important role, and data science plays a really important role,” Katz said. “But we’re also relying on a therapist, intuition and judgment. I think we found that humans are complex, and it’s really hard to just reduce that to a few pieces of quantitative data. So we’re really trying to find the intersection of human expertise and software.”

Even if Two Chairs makes a good match, paying for therapy can be a hassle. Two Chairs clinics are out-of-network, so HMOs won’t cover them. Some people with PPO insurance, however, can file reimbursement claims for their therapy. But it’s a lot of work, which is why many people don’t do it.

“Out of network options are really underutilized,” said Vaile Wright, a psychologist and spokesperson for the American Psychological Association. “People just don’t understand them.”

Two Chairs figures out what insurance companies will reimburse for a patient, and then actually files the claims for them. 

“I do think that this could be encouraging in terms of filling that gap,” Wright said.

Investment in mental healthcare is booming. Rock Health, which invests in health startups, tracked $333 million in just the first half of 2019. Compare that to $378 million in all of 2018. 

Two Chairs just got a significant chunk of that change. It recently announced that it had raised a $21 million funding round, bringing its total investment to $31 million. It says it will use the cash to scale staff, develop technology, and open in new markets such as Los Angeles and New York in the coming year.

“There’s a lot of interest in this space just from a dollars perspective,” said Chipper Stotz, who analyzes digital health trends at Rock Health. “But there’s also a lot of experimentation around the right model that can help address what is a really huge challenge for the country and for patients at large.”

One of the primary challenges to improving mental health care is making it accessible. It can be hard to find a therapist who can see you at a time that works, and that you can afford.

“This combination of access and cost is the number one barrier that we see to entering therapy,” Wright told Mashable. “There’s a really large unmet need of individuals out there.”

With about American adults suffering from some form of mental illness, of people screened for depression are left untreated. Companies like BetterHelp and TalkSpace have tried to improve access through telehealth or virtual therapy. Advekit and SonderMind are also attempting to build services that connect patients to therapists, but they refer to external practitioners (and charge therapists a membership fee to use their booking tools).

Still, the employment model has its drawbacks. Katz confirms that Two Chairs enforces quotas for its therapists. That is, therapists must see a certain number of patients per day, which some who claim they worked for the company say was burdensome. Katz defends the model as being “core to the mission” of improving access to care.

“We do have expectations about clinicians staying relatively busy,” Katz said.

And its therapy isn’t cheap. Each session is $180, so even if a person gets reimbursed, they’d have to be able to pay up front. Not everyone regularly has that kind of disposable cash on hand.

Additionally, PPO insurance plans are more expensive than HMO plans. That means the majority of people who are able to wait for reimbursement money would also have the money to pay more for insurance in the first place. PPOs also require users to hit a deductible before they reimburse anything — meaning people could be paying $500 or $1,000 before being eligible for reimbursement. 

Katz says that Two Chairs eventually wants to increase financial access to services. It is already offering a cheaper option. And it hopes to work with insurance providers in the future to potentially become an in-network choice. However, it chose to start with PPOs to focus on what Katz described as “pricing transparency,” and take the problem of providing more access “step by step.”

“In the long run, our mission is certainly to expand access as dramatically as we can,” Katz said. “Today, access for most people is very, very difficult. So it’ll take us time to create the access that we want to create in the long run.”

Finally, Two Chairs is putting a lot of stock in its matching process. However, like most early technological solutions to medical problems, there isn’t objective, data-driven evidence proving that its service is actually improving patient outcomes. Providing the receipts will be crucial to Two Chairs’ viability.

“As we think about how companies can best scale in the mental health space, I think it will be critical to demonstrate clinical efficacy very early on, through robust clinical studies pointing towards actually providing evidence based care,” Stotz said. “[Two Chairs’] ability to match a patient to a provider that they want to stick with would be an interesting data point to look at.”

Two Chairs says it is constantly trying to analyze what data points make for good matches, but that a lot of that is still unknown. There have been no clinical trials related to its matching process so far. 

As a startup willing to take on the overhead costs of in-person care, Two Chairs is already doing something different than most mental health start-ups.  

Its challenge will be doing so equitably, both as an employer of clinicians, and a medical provider for patients of all walks of life. And it still has to prove in can innovate responsibly by backing up its methods with solid evidence. 

If it can do those things, Two Chairs has a shot at expanding access to mental healthcare, something too many Americans badly need.