Startup Introduction ⑦: "Legion Health"

Overview
In the "Legion Health", I introduce the company overview, the market environment, the psychiatric care flow in the U.S., and the value provided by Legion Health.

Company Overview

• Established: 2021

• Location: Austin, TX, USA

• Founders: Yash Patel, Arthur MacWaters, Daniel Wilson

• Business Overview: A vertically integrated, AI-enabled psychiatry network offering insured patients streamlined care through direct provider management, improving quality and efficiency with LLMs and AI agents.

• Total Funding: $3.7M

Legion Health | Texas psychiatry covered by insurance - get treatment for anxiety today

Legion Health: World-class, AI-enabled psychiatry covered by insurance | Y Combinator

Market Environment

Issues with insurance coverage and access to psychiatric care

• Low insurance acceptance rate

  • In the U.S., while more than 90% of other medical professionals accept insurance, only about 50% of psychiatrists accept health insurance.

  • Psychiatrists in the U.S. tend to avoid insurance due to the significant administrative workload including scheduling, billing, patient support. This workload results in minimal profit even after insurance reimbursement, making it less attractive for psychiatrists to accept insurance.

• Restrictions on accepting new patients

  • Less than 20% of psychiatrists can accept new patients, and the median wait time for an initial in-person appointment exceeds 60 days.

  • The low percentage of psychiatrists accepting new patients is due to the time and effort required for initial consultations, diagnoses, and medical record creation, along with the burden of ongoing treatment and follow-up care for existing patients in a context of psychiatrist shortages.

  • The low percentage of psychiatrists accepting new patients is due to several factors.

    • Firstly, there is a matching issue where psychiatrists may not be a good fit for certain patients.

    • Secondly, there is a capacity issue, where psychiatrists are either already at full capacity or may not want to accept patients with specific conditions.

    • Additionally, the administrative burden associated with initial consultations, diagnoses, and medical record creation, as well as the ongoing treatment and follow-up care for existing patients, further limits the availability of psychiatrists in a context of shortages.

Reference

Acceptance of Insurance by Psychiatrists

US Psychiatrist Shortage Causing Months-Long Wait Times

High demand for psychiatric care

• Increased demand post-COVID-19

  • After COVID-19, around 32% of American adults experience mental health issues annually, equating to about 83 million people.

  • About 50% of these individuals do not receive the necessary treatment. Among them, it is assumed that approximately 25% (around 10 million people) may require psychiatric care, although this number is not definitively known. This assumption is based on a top-down or bottom-up Total Addressable Market (TAM) analysis, so please keep this in mind.

• Shortage of Psychiatrists

  • In over 60% of U.S. counties, there is a shortage of psychiatrists, particularly in rural areas, which leads to a significant lack of psychiatric services.

Reference

The Implications of COVID-19 for Mental Health and Substance Use | KFF

Adults Reporting Symptoms of Anxiety or Depressive Disorder During COVID-19 Pandemic | KFF

A growing psychiatrist shortage and an enormous demand for mental health services

https://www.samhsa.gov/data/sites/default/files/reports/rpt39443/2021NSDUHFFRRev010323.pdf

Psychiatric care flow in the U.S.

The figure shows the psychiatric care flow in the United States. The blue section highlights where Legion Health offers services to both patients and psychiatric providers.

Scenario 1: When a PCP refers a patient to a psychiatrist within the network

1. Patient seeks psychiatric consultation

   • Patients with mental health issues typically first consult their Primary Care Physician (PCP).

   • If the PCP determines that psychiatric consultation is necessary, the process moves forward.

2. Insurance eligibility check

   • Before referring a psychiatrist, the PCP coordinates with the insurance provider to confirm if the patient's treatment will be covered under the network.

3. PCP referral to in-network psychiatrist

   • If the PCP identifies an in-network psychiatrist, they will refer the patient to that psychiatrist. In this case, the patient has two options for consulting a psychiatrist

     • Accept long waiting times

       • The patient may choose to wait until the referred psychiatrist becomes available, which can take more than 60 days for an initial in-person consultation.

     • Find a psychiatrist indecently if patients don't want to wait

       • The patient may search for a psychiatrist themselves and must coordinate with their insurance provider to understand the extent of coverage.

4. Psychiatrist’s consultation

   • The patient receives a diagnosis and treatment from the psychiatrist, paying a co-payment.

5. Insurance claim and reimbursement

   • The psychiatrist submits a claim to the insurance provider, which covers the treatment costs.

Scenario 2: Finding a psychiatric provider through legion health

Legion Health helps patient and PCP find suitable psychiatric providers

1. Contacting Legion Health

   • The PCP and patient also can find a suitable psychiatric providers in Legion health network,  so the PCP and patient directory reach out to Legion Health

2. Legion Health intervention

   • Legion Health steps in to match the patient with a suitable psychiatric providers within their network, supporting the patient throughout the process.

3. Consultation with Legion Health network psychiatric providers

   • A psychiatric provider within Legion Health’s network provides the patient with diagnosis and treatment.

   • The patient pays the usual co-payment.

   • The psychiatric providers submit a claim to the insurance provider, and the provider covers the treatment costs.

The value provided by Legion Health

Legion Health’s AI capabilities cover LLM (Large Language Models)-based matching functions to the automation of the entire care process, patient data analysis, risk assessment, and continuous learning and improvement, which collectively revolutionize the delivery of psychiatric care.

Value for patients

1. Quick access to psychiatric providers

   • Even if the PCP cannot find a suitable in-network psychiatric providers or the psychiatric providers cannot accept new patients, Legion Health ensures that patients can see a psychiatrist within a week.

2. Optimal psychiatric provider matching with AI

   • Leveraging LLM, patients are matched with specialists best suited to their conditions, receiving personalized and high-quality care.

3. Reduced financial burden

   • By maximizing insurance coverage, Legion Health keeps the patient’s out-of-pocket expenses under $30.

4. Prompt medication delivery

   • Patients can receive their prescribed medications from the pharmacy within 24 hours after consultation.

Value for psychiatric providers

1. Reduced workload

   • AI automates tasks like insurance billing and patient follow-ups, allowing psychiatric providers to focus on patient care rather than administrative tasks.

2. Streamlined care process

   • AI assists in the diagnostic and treatment process, enabling psychiatric providers to provide accurate and efficient care.

3. Enhanced patient matching accuracy

   • AI helps in accurately matching patients with psychiatric providers, ensuring that doctors meet patients most aligned with their expertise, improving care quality.

4. Continuous improvement and data utilization

   • The implementation of AI agents allows for the aggregation and analysis of patient data, leading to deeper insights, improved workflow efficiency, and enhanced care quality.

5. Maximized economic incentives

   • By improving efficiency through AI, psychiatric providers can increase the number of patients they see and reduce operating costs, thereby boosting profitability.