Healthcare Brew covers pharmaceutical developments, health startups, the latest tech, and how it impacts hospitals and providers to keep administrators and providers informed.

Healthcare Brew

Mental Health

Cassie McGrath

Healthcare Brew delivers the latest news and trends in healthcare.

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It’s been more than five years since the arrival of Covid-19, which has led to the deaths of 1.2 million in the US and 7+ million around the world, according to the 

Readers may also remember another crisis that emerged alongside the pandemic: pediatric mental health.

From March to October 2020, emergency department mental health visits rose about 24% among children ages 5–11 and around 31% among ages 12–17 from the year prior, 

. Suicide attempts also rose nearly 51% among teenage girls in 2021 compared to 2019, the 

At that time, there weren’t enough providers to meet the increased need, an issue the industry has reckoned with 

 leading up to the pandemic. As a result, many young patients ended up 

 in the ER to be admitted to inpatient care.

To help address this need for care, several new behavioral health startups popped up during the pandemic. While not all of them made it—like 

—others, like InStride Health and Brightline, are still going strong.

“It was very clear that what was in existence at the time was not sufficient to meet the needs of kids and families,” InStride Health co-founder and Chief Medical Officer Mona Potter told Healthcare Brew.

Christine Crawford, associate medical director at the National Alliance on Mental Illness, told us there was a youth mental health crisis before 2020, but the pandemic made it worse.

“The system was already quite fragile—and fragmented—prior to the pandemic,” she said. But due to social distancing practices and a loss of social activities, there was a “worsening of mental health symptoms.”

Naomi Allen co-founded California-based Brightline, which provides in-person and online appointments, in 2019. She already had 10 years of experience in executive leadership for new digital health companies, including Castlight Health and Livongo, helping adults with care navigation and chronic disease management.

But Allen pivoted to pediatric mental health when one of her children was in need.

“We just really struggled as a family to navigate the healthcare system,” she said. “We paid cash for everything. Most of our clinicians were out of network…and we sat on a waitlist for nine months.”

The idea was to establish physical clinics for in-person appointments with therapists and psychiatrists, supplemented with a digital platform for caregivers to help them do everything from scheduling appointments to following along to see how the child was progressing.

Brightline was getting ready to open its first clinic in Q1 2020 when the pandemic hit, so it shifted to online only. 

Across the country, another startup—InStride Health—emerged in 2021 for similar reasons. It was built out of McLean Hospital, a psychiatric facility in Massachusetts associated with Mass General Brigham.

Potter originally thought she would only work in academic medicine for her whole career, where she was developing “cutting-edge” treatments, like the McLean Anxiety Mastery Program (MAMP). This specialized treatment program launched in 2014 to treat kids with severe anxiety and obsessive-compulsive disorder using cognitive behavior therapy and group meetings.

Yet lingering were inquiries from families who needed help for their children but faced a four- to six-month wait list “at all times” due to limited participant capacities in academic medicine.

So Potter took MAMP out of academia and built the fully virtual InStride Health, which allowed her team to negotiate directly with insurance companies and design a technology platform.

That shift to telehealth was one of the pandemic’s long-standing impacts on healthcare. It forced providers to move from in-person to virtual care “in one day,” Potter said, creating a “natural experiment” for her team to collect data and evaluate its effectiveness.

From March to June 2019, only 0.3% of all medical treatments for working-age individuals were conducted via telehealth, but in the first three months of the pandemic in 2020, that portion shot up to 23.6%—a 766% increase, according to a 

In October 2020, Brightline also launched a Covid-19 behavioral health indicator, a 30-question survey, to help parents understand the impact of the pandemic on their child’s mental health, Allen said.

“We felt this immense need for moving with speed because we knew we were out in front and that families had a tremendous amount of need,” she said.

Brightline now has 550 employer customers across six states. It also launched in-person care, with one clinic in Brooklyn and two more under development in Manhattan and Long Island. By next year, Allen said she expects to have eight to 10 additional sites, but did not specify where.

InStride is fully active in 10 states, and Potter said the goal is to expand it to all 50. In 2025, the company enrolled 2,500 new patients.

Both companies also addressed out-of-pocket payment challenges patients previously faced, making sure their services are covered under some commercial plans.

Speaking of challenges, upcoming Trump administration 

 for LGBTQ+ youth are presenting additional hurdles to care, Allen said, as the 

Still, Allen said greater awareness in schools and among the public has made a difference. In 2022, KFF 

 of US residents think there is a mental health crisis in the country.

“If there is any silver lining coming out of Covid, it’s that the child and youth mental health crisis that existed already is certainly much more the national dialogue,” she said.

Close up of African-American psychologist taking notes on clipboard in therapy session for children

Pediatric mental health startups launched during Covid. Here’s where they stand now 

Brightline and InStride offered a new kind of care for kids. 

Nicole Ortiz

Occasionally, we schedule our rounds with Healthcare Brew readers. Want to be featured in an upcoming edition?

Loneliness epidemic. Mental health crisis. These terms are often used to describe the state of mental health in the US, all while the country is also experiencing a behavioral health 

These mental health professionals provide counseling without going through the traditional state licensure process. One group, the 

 (LCA), is helping train groups like social workers, legal aid staff, and community health workers to become lay counselors.

Co-founder Alli Moreno brings her own expertise as a defense investigator and lay counselor to provide guidance for others interested in a “nonconventional pathway.”

After leaving the legal field when she started a family, she told us she was looking “for something that would be intervening or making a meaningful difference in people’s lives.” She joined up with co-founder Elizabeth Morrison in 2021 to see how Morrison’s psychology background and Moreno’s experience could help shape the field.

Healthcare Brew spoke with Moreno about her career and what people might not know about lay counseling.

This interview has been edited for length and clarity.

What do you think are some of the biggest misconceptions about lay counselors?

One that comes to mind is this misconception that mental health counseling is only being provided by licensed professionals. The reality is that, as we all know, the mental health crisis is acute, and the 

 is severe, so there’s that ongoing barrier to access.

There’s tons of different ways to approach this issue, but one of them is to acknowledge that mental health counseling is happening. Really pour in rigorous professional development like workshops, training, practice opportunities, adding weekly clinical supervision and support, all of that to make structural adjustments so that counseling that’s already happening is more effective and the people providing it are more confident in doing so.

[Another] misconception is the idea of a triage, or the idea [lay counseling] is a cheaper way to provide care. Our hope is that it is equivalent in terms of value.

What are the biggest challenges you’re trying to address through the LCA?

It’s really access to quality mental health support. The need is so severe, and it’s only increasing as more marginalized, vulnerable communities are targeted in government policies and 

. It’s already affecting young people and immigrants and LGBTQ+ community members; it’s already affecting people in 

There are so many competent, skillful people who are nowhere in this conventional licensure pipeline. But they have skill, and they have community connection, and they have the desire to be helpful. So, bridging that gap of helping folks, who are already in connection with people who need the help, to help them be able to do that even better and more competently and confidently and feel acknowledged is the biggest challenge.

What are the ways health equity plays into how you’re approaching this?

When you think about people who have lower resources, have lower social power, they’re less likely to be able to get care that they need. When we’re supporting people who are already in those communities—who already have relationships to meaningfully respond to those needs and to do so in a way that’s supported and there’s continual learning and growth—we’re responding to people who have the least access. That’s where we’re gravitating toward first.

What’s your biggest achievement in your career so far?

These [cohorts] are hearing these mental health struggles from people, which means that they’re doing something to indicate to the people that they’re safe. And that means that they have some sort of skill. And then not only is that person telling them, but they keep coming back.

I always feel so proud and happy to be able to elevate and amplify and acknowledge that skill in other people who come through our course and who are on our team, too.

A portrait of Alli Moreno, co-Creator of the Lay Counselor Academy & Counselor.

Lay Counselor Academy's Alli Moreno discusses lay counseling and reaching underserved patients

Through the Lay Counselor Academy, Moreno is addressing a provider shortage in behavioral health.

Alli Moreno discusses lay counseling and reaching underserved patients

illustrated headshot of caroline catherman, healthcare brew reporter

Caroline Catherman

 artificial intelligence (AI) chatbots as therapists.

 shows testimonies from users who swear by ChatGPT as a confidant, and several companies have designed chatbots specifically for this purpose. But there are also tales of AI 

As use of AI grows, regulators are struggling to keep up. Mental health experts told us AI can potentially fill gaps amid a 

 for new patients in a 2024 survey. But providers caution against relying on AI too heavily.

“There’s a mental health, global crisis,” Russell Fulmer, a licensed professional counselor and associate professor at Kansas State University, said. “AI can be a piece of that puzzle to help, and it will continue to gain ground and probably help us with things like diagnosis. But I don’t see it replacing [practitioners] because of that human connection that is needed.”

Clinicians hold varied perspectives about AI for therapy, Vaile Wright, American Psychological Association (APA) senior director for healthcare innovation, told us.

“There is a group of individuals who recognize that it’s very human to turn to ChatGPT for emotional support,” Wright said. “There’s a group of individuals that just think AI has absolutely no place in this space at all. These can be, in some ways, overlapping groups.”

Olivia Uwamahoro Williams, a licensed professional counselor and clinical assistant professor at the department of School Psychology and Counselor Education at William & Mary, said she sees chatbots as a tool. For example, they could be used to help “triage” people who call chronically 

But she doesn’t think chatbots can replicate the 

—an honest, empathetic connection between a therapist and client—which 

 suggests can be crucial to therapy’s effectiveness.

Uwamahoro and Fulmer worked in a group formed by the American Counseling Association to draft a number of recommendations. The group urges avoiding overreliance on the tech, advocates for further research, and says AI should be a tool, not a replacement, for human care.

 on the use of AI therapists, but plans to start soon.

Separately, Brown University is set to lead a research institute focused on AI assistance in behavioral health, backed by $20 million from the US National Science Foundation, the university announced July 29.

For now, APA is urging federal regulators to put out guidelines and require apps to have safety measures like crisis support. One of the biggest concerns is making sure users understand what these apps can and can’t do and risks associated with using them, Wright added.

One newer app—a chatbot called Ash—was created by 

Backed by $93 million in funding, the company unveiled Ash on July 22 after 18 months of development with 50,000 beta users.

Ash is different from other AI offerings because it’s trained on its own large language model that includes “hundreds of thousands of hours” of clinical conversations and a vast array of therapeutic approaches, Daniel Reid Cahn, co-founder and CEO of Ash, told us.

Unlike other AI chatbots, it’s also not designed to tell people 

, agree with them, or be their friend, Cahn added.

Ash is advertised on the company’s website as a nonjudgmental tool that will “challenge” users and remember conversations, during which the AI will ask constructive questions and offer users insights.

The app primarily targets people without clinical-level mental disorders, but it can identify and flag people in crisis or experiencing delusions for the app’s team of clinicians to review, founding clinical lead and clinical psychologist Derrick Hull said. Unlike a therapist, it won’t try to evaluate or recommend treatment.

“We don’t believe that the relationship will be exactly the same as the relationship that people would form with the human therapist. Nor should it be exactly the same,” Hull said.

Fulmer said the directors and advisors at Ash “appeal to clinical expertise,” but one thing that makes him wary is the lack of peer-reviewed research.

Cahn said that’s coming, but it’s a long process. Early results have him feeling confident, though, he added.

In addition, Ash, like similar apps, advertises “AI built for therapy” and “AI-powered mental health support,” but in the terms and conditions, the company says the tool “is not a healthcare provider or a provider of mental health services and does not engage in the practice of medicine.” Instead it gives users an opportunity to “self-help.”

“Are they a tool that actually treats mental illness?” Wright said, speaking generally about AI therapy apps. “They’ll say in the fine print, no, but that’s how they’re marketing themselves. And if that’s the case, then they really ought to be regulated by the FDA, and they’re not. They’re in the direct-to-consumer wellness space.”

Hull said the app makes clear what it can and can’t do.

“The nuances of healthcare are lengthy and complicated. We save a lot of that for the in-app experience. So if there are expectations that people have of Ash that Ash cannot and should not meet, there’s signposting throughout and baked into Ash’s behavior,” he said.

Psychologist AI humanoid robot talking with a sad depressed patient, artificial intelligence and psychology concept

As AI therapy grows, clinicians try to chart a path forward

Bots have the potential to both help and hurt the mental health crisis, experts say.

Medicare codes for digital mental health treatments were used for 99 patients across 184 visits in Q1 2025, according to a new report on this multibillion-dollar industry.

The report—shared exclusively with Healthcare Brew by analytics firm Komodo Health—analyzed deidentified data from more than 330 million patients, looking at the use of three new codes introduced on Jan. 1. The codes allow providers to bill Medicare for the cost of supplying and treating a patient with one of seven FDA-cleared 

 (DTx) for conditions like anxiety and depression.

This is the first year Medicare has offered coverage, and experts previously 

 the DTx industry’s success hinges on whether providers use it. If they do, other payers may also 

 Without widespread payer coverage, device makers are struggling to profit off their products. Insurance denials fueled the 2023 

 of DTx company Pear Therapeutics, its CEO said on 

 at the time. That same year, digital medicine company Akili Interactive switched from a prescription to 

 model following its own failed battle for payer coverage.

The good news is that while uptake may seem low, it’s growing.

The number of visits associated with the codes jumped from 48 in January to 85 in March, Evan Woodward, MD and senior clinical product manager at Komodo Health, told us.

“The limited uptake likely reflects ongoing confusion around code applicability and reimbursement pathways—common barriers we see with new digital tools in clinical practice,” Woodward said.

Andy Molnar, head of digital health at the American Telemedicine Association’s advocacy organization ATA Action, told us this is a promising start. 

“We continue to be excited about the movement,” Molnar said.

David Cooper, executive director of professional group Therapists in Tech, told us he wishes uptake was higher, though he noted that, like all new concepts, there’s a learning curve. Most of this software requires prescriptions from people not used to prescribing, like psychologists or social workers.

Cooper added these codes also use a “buy-and-bill” model, meaning providers pay up front and are reimbursed only after submitting a claim to Medicare.

Medicare hasn’t set one national rate for these devices yet. The rate is decided by Medicare’s local contractors in each region, meaning providers in different parts of the country may be reimbursed at different rates or may not know what they’ll be paid at all when they submit codes.

If Medicare eventually sets a generous national rate, Cooper expects DTx to “boom.” If not, he expects more companies to declare bankruptcy or choose not to go the DTx route at all.

“The reimbursement piece is the make-or-break for digital therapeutics,” he said. “Why would a company go through all of the extra work of FDA [clearance] if there is not equivalent reward for that?”

Mashup of a phone, brain, sky, pill, and healthcare symbol

Data shows growing use of new Medicare codes for digital therapeutics

New billing codes drew 184 claims in Q1 2025, data shows.

Homelessness was declared a public health emergency in Los Angeles in late 2022, with an 

 43,699 people who are unhoused in the city and 72,308 people unhoused in LA County.

 to end up in the emergency department compared to people with housing, according to one 2023 study. But emergency departments are 

 across the country, and appointments are expensive for both the patient and the hospital due to frequent and complex medical care that’s often further complicated by mental health issues within this population.

At the same time, it’s difficult to provide consistent care for people experiencing homelessness.

“There has been a demonstrated need…for this specific population to get some stabilizing healthcare in a way that’s more affordable than getting it in the hospital,” Brittnee Hill, director of interim housing and enriched residential care for LA County’s Housing for Health, told Healthcare Brew.

Opened in July 2022, the 96-bed Restorative Care Village provides free short-term housing for patients discharged from the hospital to continue their recovery while gaining access to stabilizing and housing resources. The program is a county partnership between Los Angeles General Medical Center and the Housing for Health effort within the LA County Department of Health Services.

Within the Restorative Care Village, buildings and tables

The idea is to have one medical campus that can treat everything from mental health to substance use disorder to emergency and inpatient care, Brad Spellberg, chief medical officer at the Los Angeles General Medical Center, said.

“And no matter what level of care you need, you move up or down that ladder to get to where you need to be until ultimately, you’re reintegrated into the community,” he added.

Something that sets the program apart from the 

 respite programs in the US, Heidi Behforouz, chief medical officer at Housing for Health said, is patients are also allowed to stay in the facility for longer periods. While some programs last only a few weeks, Hill said the average stay for recuperative care center patients is 180 days. (For comparison, the average respite stay in the US is 31 to 45 days, according to the National Institute for Medical Respite Care.)

“Sometimes it just takes two to three weeks to even unpack who are they underneath all of this immediate trauma and then start to work on recovery and rehabilitation,” Behforouz said.

The center, which also treats victims of domestic violence and substance use, additionally helps patients prepare for treatment that requires prep, like a colonoscopy.

In an attempt to build long-term solutions, the staff also works to connect patients with housing. In 2019–2020 in LA County, there were more than 186,167 

 from unhoused patients, according to the California Department of Health Care Access and Information.

The recuperative care center is just the first phase of a three-part plan. The campus will also include a residential treatment program for mental health, a sobriety center to help with substance use, and permanent housing support.

Since the program is still in its early stages, Spellberg said it’s still too early to understand its effects on the hospital and county.

But that doesn’t mean the program isn’t already affecting individuals.

Moises Alvarado has been homeless in Los Angeles for eight years.

In April, the 56-year-old was taken to Los Angeles County Hospital for the seventh time for the same affliction: ulcers in his feet. He was there for 12 days receiving antibiotics.

It’s a cycle for Alvarado. “Pretty much every year” his feet get infected, he said, and he’d be brought to the hospital before getting sent to a local respite center. But the treatment didn’t stick because he’d get discharged and lose access to social services. As a result, he wasn’t able to recover enough to get healthy or find a job and permanent housing.

But this time, he was sent to the Los Angeles General Restorative Care Village.

“Being on the street, it makes it a little hard to keep up with the appointments and for them to contact you,” Alvarado, who doesn’t have a cell phone, said, adding it’s challenging to keep paperwork.

Alvarado’s wounds are healing and he can walk better now. He’s also spoken with staff about finding permanent housing and connecting with agencies that can help with his condition.

“This is the best [facility] that I’ve been to,” he told us.

LA hospital Restorative Care Village, county partner to address unhoused crisis 

The program is still in its early stages, with more mental health and substance use treatment and housing support to come. 

LA hospital, county partner to address unhoused crisis 

Karen Fischer

Though UK-based pharmaceutical company Compass Pathways reached its primary endpoint from its June 23 Phase 3 trial to use synthetic psilocybin for treatment-resistant depression (TRD), investors were seemingly underwhelmed. That same day, shares plunged 46% to a record low of $2.35 a share for the biotech firm.

But Kabir Nath, CEO of Compass, defends the results of the trial, telling Healthcare Brew the team isn’t focused on share prices. The results are significant, he said, and ample bipartisan support in 

 means this changes nothing about the quest for more research into psilocybin to treat certain mental health disorders.

The psychedelic healthcare market has been ramping up since June 2023 when the FDA 

 for biopharmaceutical firms interested in pursuing research on psychedelic drugs to treat psychiatric and substance use disorders. The three main drug compounds of interest were psilocybin, LSD, and MDMA. 

Trial participants were patients with TRD—a diagnosis given after first-line treatments such as antidepressants fail two or more times to manage symptoms—and were living with multiple episodes of chronic depression for an average of three years. 

“This was a population with a high-level of suicidal thinking [in the past],” Nath said. 

The first of Compass’s two Phase 3 trials started with patients completing a Montgomery-Åsberg Depression Rating Scale (MADRS). This is a common way of 

 in adults through a seven-point scale response rate.

Patients were then randomized into two groups: one that received a placebo in the form of a sugar pill and the second that was given a single 25mg dose of psilocybin on the first day. Researchers checked on patients for safety the following day and again two weeks later, then administered another MADRS test six weeks after the first dose.

Study results showed that after one dose of psilocybin, patient symptoms improved with an average 3.6-point decrease in MADRS scores, which is positive from both clinical and trial perspectives. 

The subsequent stock drop can be attributed to the fact that investors had their sights set on a five-point MADRS decrease, which would be a stronger finding for a new field of study, even with 

Psychedelics are an effective alternative to traditional pharmaceuticals for mental health disorders, according to the 

, because they can target serotonin receptors and forge fresh neural pathways in people with severe depression. Over the last decade in the US, the CDC reports that rates of depression have increased 60%, and 1 in 10 adults have taken medication to combat it.

By 2031, the global psychedelics market is 

—Compass, Jamaica-based Minerco, and Canada-based Numinus Wellness—are working on developing psilocybin-based products. Minerco and Numinus are developing raw psilocybin materials or manufacturing processes to produce pharmaceuticals while Compass is actively developing a therapeutic for TRD.

Aside from other common treatments like SSRIs, Spravato (an esketamine nasal spray) by Johnson & Johnson is another drug in the US market used for treating TRD. It received initial FDA approval in 2019 and was approved as a standalone treatment for major depressive disorder and suicidal ideation in January. (There’s 

 over its status as a psychedelic drug, however.)

But psychedelics have been hit hard by roadblocks to FDA approval. In August 2024, pharma company Lykos Therapeutics’s MDMA therapy to treat PTSD and other mental health disorders was 

. According to Lykos, this came following questions about its efficacy as a new body of research and whether existing interventions already address the need for this population, Healthcare Brew previously reported.

Compass has a second Phase 3 trial underway with preliminary results expected sometime in the second half of 2026. Psilocybin doses will be administered twice at three weeks apart, and the dosages will vary between 1mg, 10mg, and 25mg.

Nath is optimistic about the existing and growing bipartisan support for alternative treatments to depression, including 

 from Health and Human Services Secretary Robert F. Kennedy, Jr.

Lynn Marie Morski, president of the Psychedelic Medicine Association, is also optimistic about the future of psilocybin research, even if these trial results were not what investors expected.

“[Psilocybin] is being investigated for such a wide range of indications that I believe it will still eventually get FDA approval for one or more of those, and show itself as a very versatile and safe option,” she told us.

Across the field, Morski said she has her eye on psychedelic therapies like biotech MindMed’s LSD-based therapy for generalized anxiety as well 

person with hands in their lap on left, brain and a hand holding mushrooms on right

Support for psychedelic treatments means full steam ahead at Compass, despite stock drop

Investors were seemingly not satisfied with psilocybin trial results, but the psychedelic health community disagrees.

Amid a national mental health crisis and provider 

, some experts are asking: Are we making it too hard to become a therapist? 

Traditional state licensure is expensive and time-consuming, requiring a bachelor’s and a graduate degree, according to the American Psychological Association (APA). In 2016, the APA found early-career psychologists had an average $80,000 in student debt. There’s also a lack of diversity; in 2019, 88% of mental health counselors were 

As a result, some are redefining who can provide counseling.

One example is the Lay Counselor Academy, co-founded in 2021 by psychologist Elizabeth Morrison and lay counselor Alli Moreno. It focuses on training people who are already connected to their communities—like social workers, legal aid staff, case managers, and community health workers—to provide mental health support. Morrison said about 850 people have been trained so far.

“Now, the community health worker who was helping someone with their diabetes and finding childcare can say, ‘Yeah, I’m glad you told me about the panic attacks. Tell me more,’” Morrison said.

Research backs up Morrison’s approach, suggesting that even when counseling is provided by someone who learned outside the licensure pathway—one version of this is called a 

 to when they see a licensed mental health provider.

The academy is a 14-week program that provides 65 hours of training, including instruction on cognitive behavioral therapy, motivational interviewing, and counseling practice with other participants. The group also does specific trainings for conditions like substance use disorder, trauma, and suicidal ideation.

 contract with Morrison to give this training to their staff at the cost of $5,500 per participant for groups of less than 10 and $4,800 per participant for groups of 10 or more, according to the program’s website.

Research suggests the key to successful therapy is the establishment of a 

: a trusting, honest, empathetic connection between therapist and clients. A master’s degree isn’t necessary for this, Morrison told us.

Many people in the academy instinctually know how to do this already, and the program just hones their skills, Morrison said. (Organizations are asked to enroll people who are emotionally mature, self-aware, have humility, and other qualities that make a good counselor, according to Morrison.)

The idea isn’t to replace licensed therapists, she added. Lay counselors from her trainings don’t work independently; they operate within organizations and under licensed providers’ supervision.

 In a March report conducted by the independent nonprofit philanthropy California Health Care Foundation and consultant Prism Partners Group, participants largely said they were more confident in their counseling skills, and in a follow-up survey, said they were more likely to address clients’ mental health issues post-academy.

On top of that, 77% of the 319 surveyed participants were non-white and 63% spoke other languages in addition to English. The report noted this was more diverse than California’s licensed workforce, a development that “may eventually result in improving access to mental health care for diverse populations.”

A middle aged gentleman sits across from his female therapist as they talk through his struggles.  The Therapist is dressed professionally and taking notes on a tablet.