A behavioral healthcare startup has snagged $11 million from investors as it seeks to expand service in New York and San Francisco and sharpen its ability to work with insurers.

Octave Health, matches patients with personalized behavioral health services, typically either in-person therapy or virtual coaching. It is one of several firms promising to make mental health care more accessible and more affordable. Others include Big Health, Meru Health and SonderMind. Venture capitalists have been increasing their investments in behavioral health. And now payers, who have faced years of pressure to improve their coverage of depression, anxiety and other behavioral conditions, are attempting to do something about it.

“Payers are increasingly recognizing that they need to expand their behavioral health networks and their access to those networks,” said Sandeep Acharya, founder and CEO of Octave, which is based in San Francisco.

A 2017 study by consulting firm Milliman found that outpatient behavioral office visits were roughly five times more likely than medical/surgical primary care office visits to be provided on an out-of-network basis between 2013 and 2015.

But while other companies focus largely on care delivered via app or phone, Octave is blending virtual sessions with conventional, face-to-face therapy. And it also is looking to offer ways for its patients to meet in real life, such as in mindfulness workshops, said Acharya, the former head of strategy at One Medical, one of the largest independent primary care practices in the U.S.

Acharya believes the appeal of real-world approaches will grow as everyday life moves more and more online.

“When you’re living in a society with less interaction, these things like classes and personal interaction are of greater value,” he said.

The $11 million Series A investment was led by venture capital firm Greycroft, with participation from Obvious Ventures and Felicis Ventures. Felicis is among the company’s early investors having joined the $3 million seed round with angel investors.

In addition to the new investment, the company said it has struck its first deal with an insurer: Octave has become an in-network provider for Anthem Blue Cross of California, which covers more than a million people in the Bay area.

The funding is covering the cost of new offices and of expanding Octave’s technological, clinical and operational systems to work with insurers.

To serve new patients, Octave is opening a therapy office in San Francisco on Oct. 28. It already has an office in New York City, with plans to add a second there by December. The company expects eventually to have between seven and 10 offices in the two cities and is eyeing other regions for growth, Acharya said.

Founded in 2018, Octave matches patients with therapists and coaches by relying on data and clinical judgments that weigh factors such as a patient’s values, personality and mental health status. The right match can lead to better outcomes, Acharya said.

“If you don’t feel safe with your therapist, you’re never going to make the progress you need, no matter how good that therapist is, so a match is really, really important,” he said.

Some patients may need traditional therapy from a clinician who specializes in their condition. Others may benefit from virtual coaching sessions. Patients also have access to group classes, interactive exercises and other activities they can access online between coaching and therapy sessions.

The company employs nearly 30 therapists and coaches who are led by Dr Sarah Adler, Octave’s chief clinical officer and a psychology professor at Stanford University.

At the same time, the company is applying evidence-based approaches and tracking outcomes in a field that traditionally has been resistant to measurement and standardization. Only about 10 percent of therapists measure outcomes, Acharya said.

Measurement can be costly for therapists, Acharya acknowledged. But if insurers can’t be sure therapy is working, they hesitate to cover it to the extent it may be needed. The 2017 Milliman study found that behavioral healthcare providers were generally reimbursed below Medicare-allowed rates between 2013 and 2015, while medical and surgical clinicians were paid above those rates. Therapists, in turn, opt out of the insurance system, making care less accessible.

Octave is looking to bridge the gap by persuading insurers it can deliver cost-effective care that yields results, and by hiring therapists who are willing to follow clinical guidelines and let Octave negotiate with insurers. Octave also offers therapists a chance to collaborate with peers, something they may find only in a large hospital health system.

“We offer a third way for clinicians to be part of a community that is reshaping how mental health care is delivered,” Acharya said.

Octave is seeing positive results from its approach to care, Acharya added. For instance, coaching is proving to be a lower-cost treatment that is equally effective as therapy for some patients. But, he said, the company is not ready to share numbers.

Octave’s therapy sessions last 45 minutes and cost between $180 and $250, though the price can vary based on insurance coverage. Coaching sessions last 30 minutes and cost $110 per session.

Photo: Abscent84, Getty Images