(This story is from our new Health Tech newsletter. If you’d like to sign up, just click here.)
Talkspace CEO Jon Cohen told investors Tuesday that health insurers have been reducing the number of telehealth companies they work with.
Jon Cohen“You’ve probably seen some of the major payers have made formal announcements about narrowing their networks. They’ve decided that they may have too many telehealth companies,” Cohen said during the company’s second-quarter earnings call.
It’s tough for companies to switch from selling directly to consumers to going in-network with insurers, Cohen said. The process requires changing the design of a product to suit people with insurance, and getting set up to bill and collect from health plans. It also takes a significant amount of time to negotiate insurance contracts and credential therapists, he said.
“We’re two and a half years into this journey. So any entity out there, and there are several who are considering or talking about getting into network, it’s just it’s going to take them some time to get there,” Cohen said.
Over the past few years, the virtual mental health company has been slowly pivoting from selling directly to consumers to getting paid by insurance companies. Earlier this year, it announced plans to start serving people enrolled in Medicare, and is currently doing so in 12 states with plans to expand nationwide by the end of this year. And this week, Talkspace said it’s now in network with Humana’s health plan for military members.
Talkspace isn’t alone in trying to change up its customer base. Its rival Teladoc, which operates the struggling direct-t0-consumer therapy business BetterHelp, earlier this summer hired a new CEO with a health plan background, as the telehealth giant pushes into selling to health plans to reverse its post-pandemic slump. Last week, Teladoc executives said they plan to get health insurers to cover BetterHelp services.
Talkspace reported second-quarter results in line with Wall Street expectations, recording revenue of $46.1 million, an increase of 29% from last year, driven by growth in revenue from insurers and employers. It reported a net loss of $474,000, compared with a loss of $4.7 million in the same quarter in 2023.