Cost, Care, and the Need for Transparency: A Statement From Our Co-Founder
This article is written by Stella Co-Founder and Chief Strategy Officer, Michael Gershenzon.
As the Co-Founder of Stella, I’ve got something to say.
The team at Stella is comprised of over 50 full-time employees who come from varying walks of life. Each employee has a unique background and personal story that led us all to where we all are today. They could be doing just about anything with their careers – working at Fortune 100 companies, bolstering their resumes and enjoying luxurious company perks.
But they chose Stella.
They chose a risky, small start-up born during the chaos of COVID-19 attempting to bring to market the first new FDA-approved standards of care for mental trauma sufferers in over 2 decades.
And Stella chose them, along with everyone else who would come under our care.
The people at Stella are grappling with a conundrum that our clients are also feeling. We’re all asking ourselves:
“Why are these treatments so expensive and why won’t insurance help?”
Myself, our C-suite and our board have been trying to crack this since inception. As the Co-Founder, I’m going to attempt to very directly answer these “why” questions below.
The responses are probably unsatisfactory… but true.
Health Runs Through Insurance Companies (and The Government)
For better or worse, the US healthcare system revolves around health insurance companies which serve as the arbiters of what care you can receive (and don’t receive). At the risk of oversimplifying, we need three ingredients for a treatment to be adopted by insurance:
- A government agency (i.e. the FDA) signing off the treatment is safe and effective
- Proof the treatment saves the insurance company money. In many cases this is by offsetting an existing cost elsewhere. The cost of trauma, depression and anxiety are enormous, however they are often indirect (lost productivity, absenteeism, etc..) as opposed to an existing direct insurance cost.
- A bureaucratic process that entails pitching and contracting with each insurance company to convince them to include this as a benefit for their members
The median cost of FDA approval for a new drug is $19 million. The process from pre-clinical testing to FDA approval takes an average of 12 years for a drug and 7 for a medical device. While that time passes, people suffer and in some cases die.
Importantly, the absence of FDA approval or insurance coverage does NOT mean a treatment is not effective. There are roughly 10,000 approved therapeutics for roughly 10,000 individual diseases but once a drug is approved for one condition its often not approved for others where it can be beneficial. A few common examples include:
- LASIK for Vision Correction (FDA approved but not covered by insurance)
- Aspirin for Cardiovascular Disease Prevention (not FDA approved for that indication)
Mental Health (Let Alone Interventional Mental Health) Is Way Behind
Despite the jaw dropping impact to the US economy ($210+ billion from depression absenteeism alone, according to the APA), immeasurable personal and familial suffering, and very measurable loss of life (death by suicide is the 10th leading cause of death, according to the CDC), mental health is decades behind other healthcare fields in terms of medical innovation and even willingness to acknowledge the problem.
As humans, our most important organ, the brain, is one of the least understood. The complexity of the brain and relative astronomical cost of brainscan technology, like fMRI, have put research and innovation in this space on the backburner.
You can see physical symptoms of disease. You can see a broken bone. You can see cancer. You can’t readily see mental trauma without a brain scan (see point about its uneconomical cost above).
It’s no wonder why society generally views mental afflictions as “something just in your head that you can tough through.”
In this context, it may be easier to understand why proven treatments have been forced outside of insurance and FDA adoption.
While the Stellate Ganglion Block (SGB) for trauma and acute anxiety, ketamine infusions for treatment resistant depression, and other modalities have proven their efficacies, they remain FDA approved for other indications, just not for mental health.
These treatments are administered by the same exact Board-Certified Doctors which may treat people with SGB or Ketamine for pain, but these modalities are forced to wear the “off-label” tag. This off-label tag impacts everyone involved:
- Doctors shoulder materially more liability
- Mental trauma survivors pay out of pocket
- Companies fight an uphill battle of educating clients
We’re dedicated to providing people with access to treatments that work while proving to the industry that these biological treatments are not “fringe” – they just haven’t made it through the multi-decade process of FDA approval, insurance reimbursement, and medical community adoption.
Stella Invests In Much More Than “Just The Procedure”
For every mental trauma survivors we treat, Stella loses approximately $2,000. By the way, we’re not alone. Some companies like Field Trip Health, Novamind, Numinus, Ketamine One, Wesana, Revitalist, TrippSitter and others do as well. (They are public companies and so are their numbers, you don’t have to take my word for it). More on this later.
Unfortunately today, there is no singular “mental trauma cure.” Individuals’ paths to healing are customized to each respective person, their circumstance, their biology and their lifestyle.
What we’re building is not just “a procedure” or “an infusion.” It’s a curated whole person care model which encompasses medical, behavioral and social determinants of care (which may involve a procedure or infusion along the way). Stella pairs biological modalities with psychological ones to ensure the most effective, lasting outcomes.
In some ways, you could compare Stella’s approach to mental trauma treatment to tearing an ACL. Treatment for an ACL tear often looks something like this:
- Surgery to repair the torn ligament
- Appointments with qualified doctors to verify all is healing appropriately
- Medications along the way to manage the pain
- Months of physical therapy to relearn to walk
- Crutches to aid your walking while you rebuild strength
We follow a similar blueprint for mental trauma relief.
Stella provides a biological intervention to heal the injury caused by mental trauma, pair it with trauma-informed therapy for reintegration, provide self-help tools to manage the pain along the way, and recommend a support system to ensure you maintain the gains. This is all wrapped up in dedicated compassionate care coordination that guides your journey from beginning to end.
This may shed light on the earlier point – “how is it possible Stella loses $2,000 per treated patient?” The simple answer is – we don’t exist to “transact a procedure.” Matter of fact, you may be able to get that cheaper somewhere else.
We’ve invested in 360 degree care coordination that leads to outcomes previously unfathomed.
This is all on the bet that one day, this will be a standard of care for mental trauma survivors. That insurance companies will adopt the new age of mental healthcare. That those we serve no longer have to come out of pocket for treatment to which they have a right.
Oh and by the way, if we don’t successfully obtain FDA and insurance adoption, we’ll likely be out of business in the next few years.
We’re not able to fix the US healthcare system. I wish we could. We can’t.
We are able to make innovative treatments accessible to mental trauma survivors nationally (50+ locations in the US) and globally (we have locations in Australia and Israel).
We are able to wrap these treatments in additional care and not view them as “transactional procedures.” Mental trauma survivors need care – not procedures.
We are able to prove to the government regulatory bodies that these treatments are objectively safe and incredibly effective for the right people and when administered by the right teams in the right settings.
We are able to prove to insurance companies that these treatments both save lives and save them money.
Unfortunately, between now and insurance reimbursability, these treatments will cost survivors too much money and force companies like Stella to subsidize losses.
We’re working hard to change that. We chose you.