Psychedelics are widely touted as potential game changers for mental health. But these treatments, which often involve many hours of talk therapy before, during, and after sessions, can cost thousands of dollars, leaving many wondering how accessible psychedelic medicines will be to the general public.
Sherry Rais, co-founder and CEO of Enthea, the first and only health plan benefit administrator for psychedelic healthcare, acknowledges that there is a “huge equity crisis” when it comes to psychedelic medicine. While hundreds of clinics offer ketamine-assisted therapy across the country, no mainstream insurance providers currently include psychedelic medicines in their healthcare plans. Enthea formed to bridge the gap between the sky high costs of treatment and the public’s growing mental health needs.
“We’ve found something that could potentially transform the way we treat mental health. And yet, most Americans won’t be able to afford this,” says Rais. “Addressing that equity crisis is Enthea’s mission.”
Enthea’s model positions them to serve as a third-party administrator that provides psychedelic healthcare through employers. While Enthea generally targets companies that are self-insured, “there’s no real limitation,” says Rais. “Smaller companies are among Enthea’s first customers – even those who do not self-insure traditional healthcare.”
Once a company is contracted with Enthea, their employees receive access to an online portal, connecting them with Enthea’s vetted network of licensed medical providers.
Because the field is so new, board certification for practitioners in the space is still to be introduced. Enthea’s medical team has developed standards and criteria through interviews with clinics and panel discussions to collect best practices, explains Enthea co-founder and chief growth officer Joshua Barber. “We’ve had to create our own highest standards,” he says, “to provide a network of safe providers.”
A priority is to build a provider network with diversity and inclusion in mind. Rais explains, “We’re looking at a variety of people from different backgrounds, genders and orientations,” so that patients can find a provider who suits their individual needs.
Having completed an initial funding round of $2 million this fall, Enthea is primed to start contracting with employers and administering access to legal psychedelic-assisted therapies for thousands of employees next year. Thirty-two companies have already expressed interest, Barber says.
Starting with Dr. Bronner’s
Research indicates that mental health issues significantly disrupt the workplace. Rais points to studies showing that employees with unresolved depression experience a 35% reduction in productivity, more than half of Gen Z and millennials have left their jobs due to mental health reasons, mental health conditions account for more than a third of disability claims in the U.S., and depressed employees miss an average of 31.4 days a year, and an additional 27.9 due to unproductivity.
“There’s a lot of data I bring to employers around what depression and anxiety does in the workplace,” says Barber. “There’s absenteeism, where they’re not showing up, and presenteeism – they’re showing up, but in a whirlwind of their own issues. We want to improve that.”
It’s not just about the employer, stresses Barber. “The benefit extends to the employee’s family, their spouses and home life.”
Dr. Bronner’s Magic Soaps, a longtime vocal and generous supporter of psychedelic research, signed on as Enthea’s first client. The company implemented a pilot program at the beginning of the year, offering employees 100% coverage for ketamine treatment through Enthea.
So far, 30 of Dr. Bronner’s 300 employees have participated in the program, matching the company’s projection that 10% of their workforce would take advantage of the offer, says David Bronner, the company’s CEO.
Because ketamine is used off-label to treat a myriad of mental and physical health issues , Dr. Bronner’s could choose a plan with a broad range of qualifying conditions, including something called “adjustment disorder.” The diagnosis “means you don’t necessarily have an organic underlying condition – you’re just going through a tough time in life,” explains Bronner. This condition, alongside the full coverage, makes ketamine therapy accessible to virtually all Dr. Bronner’s employees. “A few employees have said to me that they would not have tried this if it wasn’t covered 100%,” shares Rais.
About half of those who underwent treatment expressed their gratitude to the CEO personally.
Liz Kost, a Bronner’s employee, described the process of finding a provider as “super simple.” She connected with an all-women led ketamine clinic that provided a “safe space,” she writes in a blog post on the company’s website.
“I had been living in survival mode for many years by suppressing my sadness, anxiety, anger, and grief,” writes Kost. “By participating in Ketamine-Assisted Therapy, I went from surviving by suppressing trauma, to thriving by processing and going beyond my past to live in the present.”
“Current therapies and medicines that are available for people struggling with mental health issues are often inadequate,” says Bronner. “Ketamine-assisted therapy is shown to be extremely powerful for people struggling with depression.”
Bronner also says the company intends to offer treatments with other psychedelic substances like psilocybin and MDMA once they are legally available. “We will be one of the first companies offering.”
Addressing other employers who might consider what this health plan could mean for their company, Bronner advises, “Having a healthy, high vibrating workforce is a crucial piece of all business success. And providing an effective intervention for people struggling makes economic sense, in terms of reducing paid days off for staff who otherwise can’t show up to work on a consistent basis. In addition to being the right thing to do, it makes your workplace that much more productive.”
The pilot program, conducted before Enthea completed their funding, made clear how important data collection is, notes Rais. With their investment round completed, Enthea plans to implement a new, automated system in January, and to “partner with others to collect more data,” she says.
Revising Enthea’s Business Model
When first conceived in 2019, Enthea was going to be a nonprofit organization. “The idea was to protect policy and procedure from money,” explains Barber. “It’s not just about the medicine session, but the psychotherapy. Helping people integrate and supporting them through their journeys. We wanted to protect that.”
But the nonprofit approach led to problems. “We saw quickly that a nonprofit couldn’t raise enough money through philanthropy” at the scale or rate necessary, says Barber.
The company shifted gears and became a Public Benefit Corporation in August 2022, which attracted the finances needed to grow while still maintaining certain protections around the company’s mission. Rais says the restructuring helped Enthea become a more “streamlined, efficient, and scalable business.”
According to Rais, the company’s ethos and culture remains unchanged. “We’re here because we care about access to these medicines.”
For Marik Hazan, founding partner of Tabula Rasa Ventures, the psychedelic VC fund that led the seed round, “everything popped into place to allow for this business to be successful, scale, and make a difference” this year.
Hazan, a self-described “fanboy” of Enthea, felt aligned with their mission when he first heard of them in 2019. “A healthy foundation for insurance is one of the most important ways to create true access within the psychedelic therapeutics sector,” he says. Enthea’s “community and impact-oriented focus,” coupled with their potential for growth, made them a good match for Tabula Rasa.
“We’re big believers in multi-stakeholder alignment. Enthea is doing that in a really incredible way, interacting with investors, entrepreneurs, activists, advocates, therapists, research institutes, and more,” says Hazan. “They’re doing it in a way that is graceful and taking everyone’s needs into account.”
Investors who once likened the field to the cannabis boom may not have always recognized the necessity of insurance in the psychedelic space, suggests Hazan. “Now there’s many more educated investors who understand the importance of this infrastructure.”
As Enthea’s provider network grows, so will their ability to reach a broader employee base. Currently, Enthea targets companies with 250-1000 employees, says Rais. By 2024, they expect to include companies with 3000 employees.
“We’re currently doing business in San Diego, the Bay Area, New York and Austin,” says Barber. “Those are our next markets to hit.” Enthea then plans to expand their network to 40 cities nationwide, including Oregon and Colorado, the two states preparing for legal psilocybin therapy programs.
As more psychedelic substances beyond ketamine receive FDA approval, including MDMA and psilocybin, Enthea intends to integrate licensed providers administering those treatments into their network.
Over time, Enthea expects that mainstream insurers will start to provide psychedelic coverage as well. But to build a network of providers from scratch will be difficult, explains Rais. “These things take years to do, especially in a large, bureaucratic company that is not psychedelic-oriented. They don’t have that expertise in-house.”
In that scenario, Enthea would be well positioned for acquisition. Another future possibility would be selling access to their network as a wholesaler. “Ideally, it would be a wholesale situation,” says Barber. “So we can keep doing what we do.”
Some estimates suggest that psychedelic therapies could allow for cost savings for insurance companies. While the psychotherapy component of psychedelic treatments is often considered expensive, “economic research of MDMA-assisted therapy for PTSD” estimates millions in longterm net health care savings “when compared to the current standard of care for PTSD,” says Fluence co-founder Ingmar Gorman, referring to a recent study.
Enthea hopes to see more insurers entering the psychedelic therapy field. “Enthea establishes safety for larger insurers to come into the space,” says Barber. “There’s a vast blue ocean of people out there that need this kind of care. There couldn’t be enough companies coming forward to begin this process.”