Magellan Health is granting its customers access to Livongo's suite of behavioral health tools

  • Magellan Health is granting its customers access to Livongo's suite of behavioral health tools.
  • And the forthcoming Livongo-Teladoc combined entity will be a force to be reckoned with when it comes to telemental health.
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Managed healthcare company Magellan Health is making digital therapeutics (DTx) bellwether Livongo's portfolio of behavioral health tools available to its members—and the duo plans to jointly develop and roll out digital mental health solutions in the future.

Livongo for Behavioral Health consists of digital tools for managing and treating 15 common mental health conditions, including anxiety, depression, and insomnia—and these will now be embedded into Magellan's behavioral health suite, which its partnered health plans and employers can deploy for their members.

Legacy healthcare firms have been relying more heavily on digital mental health services in recent months.

  • The coronavirus pandemic is shining a spotlight on behavioral healthcare that can be delivered virtually. Stay-at-home and social distancing guidelines have made it difficult or impossible for patients to seek care in person—bringing telemental health center stage. Further, in mid-July, 53% of US adults said their mental health has been negatively affected by worry and stress brought on by the pandemic—underscoring the need for heightened access to virtual care. In turn, telemental health providers have reported rapid upticks in use of their solutions: Digital behavioral health startup Ginger reported 265% higher use for its psychiatry and therapy solutions compared with pre-pandemic rates, for instance. 
  • Digital mental health providers are scoring tie-ups with legacy healthcare firms—a trend we don't expect to fizzle out. Cigna granted its employer-sponsored members access to Talkspace's virtual therapy, for example, while Centene gave its members nationwide the ability to use Quartet's telemental health services. And Livongo—which moved into the mental health space in early 2019—has been garnering attraction for its behavioral healthcare tools amid the pandemic: Kaiser Permanente tapped the DTx vendor for mental health tools in April. Experts are positing that the pandemic will have lasting effects on mental health, meaning we'll likely continue to see healthcare players leaning on telemental health products.

We think Livongo's upcoming merger with telehealth giant Teladoc will create a massive digital mental health unit—a force that will be difficult for smaller players to reckon with. Livongo and Teladoc announced their $18.5 billion merger last month, forming a huge digital health powerhouse with a combined 70 million members.

Separately, the two companies' mental health arms have been seeing success: Livongo attributed its recent revenue spikes partly to a surge in its behavioral health program's enrollment—and its behavioral health unit's revenues increased by $1 million in Q2 2020. Meanwhile, Teladoc said uptake of its mental health services underwent "rapid acceleration" in Q2.

Once combined, they could meld Livongo's coaching and monitoring tools with Teladoc's virtual care delivery, which should win it even more attention from payers and consumers. Thus, we could see smaller players in the digital mental health space consolidating to beef up their offerings, build out consumer bases now, and stay afloat once the threat of the Teladoc-Livongo giant materializes. 

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