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Hi friend,

Today I’m sharing insights on rates, margins, growth and valuations in mental health.

In the last few weeks, five public mental health businesses released their Q1 results. These include important financial and operational data as well as commentary from the company’s management on what they’re seeing in the market. I’ve been pouring over this data and the call transcripts and in today’s Hemingway Pro article, I’ll share everything I’ve learned.

We’ll dive into data from Talkspace, Lifestance, Acadia, Teladoc (BetterHelp) and (for the first time) Brainsway and look at some of the major trends shaping the industry.

Let’s get into it.

The Key Takeaways:

1. Clinician productivity is key in a low growth market
   Overall, growth in the market remains modest. Among services business, LifeStance grew the fastest (21% YoY) followed by Talkspace (18% YoY) and Acadia (8%). Productivity has been a primary driver of growth for these businesses. LifeStance’s visits per average clinician were up 7% year-over-year — the second consecutive quarter of 7% productivity improvement. On the earnings call, management attributed this to "enhancements to new patient conversion and engagement," supported by clinician-level visibility, education and incentives. Talkspace’s provider network scaled to support 31% growth in payer sessions. Across the board, growth is modest and the market is rewarding operational efficiency. Incremental growth delivered from increased clinician productivity is therefore highly valuable.
2. Rates see low single-digit growth (at best)
   LifeStance's revenue per visit was $163, up 3% year-over-year. Their full-year guidance assumes "low-to-mid single digit increases" to total revenue per visit. Acadia's same-facility revenue per patient day rose 5.6% to $1,052, but only ~2% of that is due to underlying rate growth. Talkspace rates appear to have declined by ~2%. While they don’t disclose revenue per session directly, we can back calculate it based on disclosed payer revenue ($48.6M) and payer session volume (459,300), the implied rate is approximately $106 per session — down roughly 2% year-over-year from an implied $108 in Q1 2025. If accurate, this suggests Talkspace's 28% payer revenue growth in Q1 was entirely volume-driven rather than rate-driven. Across the set, any significant rate growth remains elusive. There was also extremely limited mention of any value based payments across the cohort.
3. More outcomes data is being published to support new market positioning
   LifeStance published an outcomes study covering approximately 180,000 patients. This was referenced in both the earnings release and the CEO's prepared remarks, stating that three-quarters showed clinically significant improvement in anxiety and depression. While not included in this report (because they don’t publish quarterly earnings) Kooth recently published a study on outcomes for Soluna in California. Talkspace have also been publishing more outcomes focused reports. This is a reaction to a market that is demanding more evidence of outcomes and quality care. LifeStance CEO Dave Bourdon stated that they “continue to see a growing demand for high-quality mental healthcare”. Proving outcomes and high quality care is a shift I welcome.
4. AI is being deployed operationally, but not yet clinically

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