"Why Isn't Someone Already Doing This?"

My least favorite question, answered

I speak to a lot of venture capitalists. I speak to a lot of private equity investors. I have to tell you. Impressive folks! And if you're one of the people who I've spoken to, and you're wondering if I'm referring to you, no, of course not. This article is specifically about someone else who is not you, or your astute fund. I often explain that I think brain stimulation is the future of psychiatric care, given remission of depression rapidly has been demonstrated repeatedly and at large scale.¹

One of my least favorite questions from venture investors follows a typical format: “ Why isn't somebody doing this already?”

This is a reasonable question for most tech investments. It's a less reasonable question when it comes to innovation in mental healthcare. I'm going to walk through the math on why this is a dumb question, so I don't have to do it over and over again. It’s not a serious article when it comes to math—I’m making a point.

There are not an infinite number of people available to do the things that are required to create innovative value-based care models in tech-enabled mental health. Further, actions taken, by venture and private equity, have reduced the pool of people who are willing to get anywhere near their nonsense.

The “reason someone isn't doing this already” is that you have decided to fund, as a giant Pool of Money, terrible ideas over and over again. The limited pool of people who know how to accomplish a better structure for mental healthcare in America? Many now don't want any part of what you have to offer. We don't like you. We don't trust you. And we won’t have anything to do with you. Remember Done? That raised money.

There is a pool of physicians who could create innovative mental healthcare for the future. They are trained in the discipline of psychiatry, at a minimum. One could argue that other doctors could pull this off, but frankly, they haven't, so let's limit ourselves to the total pool of available Psychiatrists to start.

Nationally, there are 56,536 practicing psychiatrists. I'm an interventional psychiatrist, I am going to use that subset, because it's the group that I'm most often asked about.

The clinical TMS Society indicates that it has 1000+ members, in 43 countries, let's assume that's 100% American, and the thousand number is “good enough.”

Roughly, 1.7% of psychiatrist are using transcranial magnetic stimulation (TMS), Defined by membership in the clinical TMS Society. That is assuming 100% of the members were Psychiatrist and 100% in the US.

We could add ketamine clinics to the number, if we really want to get ambitious, but many of them are not run by Psychiatrists—and I would argue an anesthesiologist, apart from knowing how to manage ketamine, don't know how to build large scale networks for mental healthcare, on average.

The American Society for Ketamine Physicians advertises 400+ members, in 50+ countries, but again, let's assume that 100% of those members are in the US, and 100% of the physicians, and so we have something like 400 additional doctors who could change the world…maybe. For the sake of argument, we will include them.

That gets us to 1400 total doctors to lead us into the future. What is the chance that someone ambitious enough to change the world has never gotten their name on an academic paper? I think it’s probably low—not that these are overlapping skill sets, but it’s probably a marker of ambition at the very least. Mark George, M.D. has 153 coauthors on Google Scholar—he created the therapeutic version of rTMS for depression. Let’s be very generous—let’s assume research as a medical student counts.

The percentage of graduating medical students reporting research activity during medical school has been rising in recent years. In 2020, 82.5% of the graduating medical students reported participating in a research project with a faculty member (Table 1). This reflects a steady increase since 2011, when 66.3% had a research experience. During this same period, the number of graduating medical students with sole or joint authorship of a research paper rose from 40.6% to 55.1%.

That is 55.1% who have done any, even during med school. That drops our total pool to 770. What is the chance the leader of the future has never taken insurance? I think it’s low. It's complicated! But scalable, plausibly.

In a study of the individual market, only 43 percent of psychiatrists were in network.

So now, that number drops: 331 plausible candidates. Plenty of these doctors will have PTSD². I don’t know that it rules them out.

May docs are going to stop practicing soon: Nearly 30% of physicians retire between 60 and 65 years old, and 12% retire before 60, according to survey research conducted by AMA Insurance Agency Inc.

Now we are down to about 200 candidates. Let's assume all of those want to try to build a company! Let’s further assume half get into Y combinator—the most successful startup accelerator. Let’s be even more gracious, and assume half of those companies obtain funding! The real number is something like:

Since 2005, Y Combinator has funded over 3,000 companies and worked with over 7,000 founders. Every 6 months over 10,000 companies apply to participate in our accelerator and we typically have a 1% acceptance rate.

It not really 50%. Now we are at 25 companies founded or hiring CMOs from 25 physicians. 90% of startups fail: that is 2.5 physicians left winning the race to become a billion dollar company (at a minimum).

The most successful healthcare companies haven’t been that successful going through this model. From a “market cap” perspective, anyway. These companies have had valuations, at best, in the billions to 10s of billions. To remind readers, the market cap of UnitedHealth Group is 540 Billion today. The most valued companies in healthcare are all insurance or pharmaceutical. It's not care delivery. So we have to assume every physician leader who might be able to build the future is dumb enough to try to do it in the least profitable part of the healthcare market—from a corporate valuation perspective.

The money isn't in care delivery historically. The future of brain healthcare needs to have different outcomes financially and clinically, to be worth doing. “Why isn’t anyone doing this?” Because accepting the current payment infrastructure means building less profitable businesses, and that won’t win for patients.

We need different approaches to contracts, risk management, workflow, financial models, and more to make a novel clinical business worth building.

Thanks for attending my grumpy TED talk.

1. Roth, Y., Tendler, A., Arikan, M. K., Vidrine, R., Kent, D., Muir, O., ... & Zangen, A. (2021). Real-world efficacy of deep TMS for obsessive-compulsive disorder: post-marketing data collected from twenty-two clinical sites. Journal of psychiatric research, 137, 667-672.

Tendler, A., Goerigk, S., Zibman, S., Ouaknine, S., Harmelech, T., Pell, G. S., ... & Roth, Y. (2023). Deep TMS H1 Coil treatment for depression: Results from a large post marketing data analysis. Psychiatry Research, 324, 115179.

DeSouza, D. D., Nakano, E., Hoang, V., Hoang, K., Ling, D., Muir, O., ... & Carreon, D. (2024). Real-World Outcomes and Predictors of Accelerated rTMS Treatment Response for Treatment-Resistant Depression. medRxiv, 2024-05.

Cole, E. J., Stimpson, K. H., Bentzley, B. S., Gulser, M., Cherian, K., Tischler, C., ... & Williams, N. R. (2020). Stanford accelerated intelligent neuromodulation therapy for treatment-resistant depression. American Journal of Psychiatry, 177(8), 716-726.

And so many more…

2. Lazarus A. Traumatized by practice: PTSD in physicians. J Med Pract Manage. 2014 Sep-Oct;30(2):131-4. PMID: 25807606.