Mental illness affects ~43.6 million U.S. adults!  Furthermore, the percentage of individuals affected by mental health issues has been increasing.  The average cost to treat a high-cost patient with a mental health condition vs. another high-cost patient is on average 33% greater.  These facts support the need for increased access to mental health care and are the driving factors for companies trying to improve the ease at which a patient can access the mental health system. Quartet Health is benefitting from this trend of digitization to aid in the treatment of patients who experience mental health issues. Quartet is a platform that connect primary care doctors to mental health providers to better facilitate a handoff of the patient from the primary care physician to the mental health provider. Currently, this connection is often not being made in the healthcare industry, and doctors are not addressing the root causes for their patient’s problems. Quartet’s platform also creates a feedback loop that helps drive improved patient outcomes by requiring the mental health provider to send a report back to the primary care provider. Quartet has focused on mental health because it is an area that has become less stigmatized but has not been managed well by doctors. For payors, a patient with depression can cost ~2.6x as much as a patient who is not facing depression, so addressing the depression early on by a primary care provider referring a patient to a mental health physician can help identify any issues before they become more serious 
In the short term, Quartet is benefitting from an increase in use of electronic medical records (EMR) and increased penetration of handheld technology that doctors are using in their offices. These tools are being leveraged to make a quick call to a provider or quickly provide available appointments to their patients to make the transition seamless. In the future, Quartet will likely gain more access into patient’s records and be able to help prompt doctors who are treating high cost patients to consider whether mental health issues may be a root cause for the patient’s issues. Additionally, Quartet may be able to expand its suite of services from mental health to helping be an easy referral pathway for primary care physicians to help their patients quickly schedule meetings with other clinicians that have a specialty. This more team-based care can reduce per patient costs for a health plan by up to ~$115 per year which is a ~3% reduction which can drive significant profits for payors given their scale. 
Adoption of Quartet’s product is hampered by two key factors. First, Quartet’s product must be adopted by the physician who must be more comfortable having a mental health conversation with a patient. Primary care physicians are busy treating their patients on a day to day basis, so it is very difficult to interrupt or adjust their flow to integrate a new product into their system. Furthermore, primary care physicians have been slow to adopt EMR systems which could facilitate the use of Quartet’s system.  Alternatively, Quartet could continue to leverage the payor (healthcare insurance company) that is currently paying the doctor and paying for Quartet’s service to drive adoption by having the payor require doctors to sign up for the system. Secondly, Quartet need to increase the size of its marketplace for mental health providers and increase their adoption of the technology. Without a broader set of mental health providers that are inputting their availability on the system, the patients will not have the flexibility to find doctors that are convenient in terms of both location and schedule to facilitate the connection to the provider. Longer term, I am concerned about Quartet’s ability to continue to demonstrate cost savings to the payor as physicians may become more aware and comfortable with mental health conditions and find Quartet’s connection and feedback less valuable. However, I strongly believe that if Quartet can achieve scale to the point at which all mental health providers are integrated into their system, they will be tough to remove from the system if they achieve full integration.
The most important open question around this technology is going to be whether doctors will adjust the flow of their current process to integrate Quartet’s system into the flow of the patient. With low adoption of EMR’s and a general reluctance for change, Quartet will need to continue to collect evidence to demonstrate the value of the platform to all constituents involved including the patient, doctor, mental health provider, and the payor. Other risks to the success include risks around the data that they are collecting on the patient and violating HIPAA or having a data breach or not ultimately demonstrating success in reducing healthcare costs with their digitized system for referrals.
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