Do You Know Where Your Therapy Dollars Go?

You pay for your sessions with your therapist, but does it fund your healing or billionaire investors?

During the COVID-19 pandemic, mental health therapists and other healthcare providers were busy supporting their clients from afar because of the need to isolate and quarantine. This led to companies noticing how profitable telehealth and telemedicine platforms might be. Platforms like Headway, Grow, Betterhelp, Talkspace, and others started popping up all over the place, and as the industry got more attention, more therapists and providers entered the arena wanting to meet the need. These companies started targeting these providers, promising them hassle-free insurance credentialing, higher rates for taking insurance, and a constant flow of referrals. What could be so bad about that?

Enter Venture Capitalist (VC) companies. A venture capitalist (VC) is a professional investor who provides money to high-potential, early-stage, or startup companies in exchange for equity. They invest in companies with high growth potential, often in technology or biotech, and now healthcare. Their platforms siphon the fees you pay to investors while shortchanging care.

Why would VC companies want to invest in these platforms?

1. Increasing market demand - There is more awareness of mental health conditions than ever before.

2. Technology is scalable– this allows VCs to receive income from millions of users quickly,

whereas traditional therapy practices grow slowly and have an eventual cap.

3. Mental health tech can close gaps in care; it can be more cost-efficient and accessible.

4. Regulatory changes support telehealth as a viable business model.

5. Many platforms are subscription models, which allow for predictable, recurrent revenue.

6. VCs have an interest in “impact investing”-- meaning they like to spend money to "create

social change".

7. VCs are laying the foundation for the shift to Measurement-Based (MBC) or Value-Based

Care (VBC).

Here's how it works:

1. You pay the platform either using your insurance (copay/coinsurance/deductible) or with a subscription out of pocket.

2. The platform takes a cut.

3. The therapist gets paid.

4. The data is monetized: Metadata (session times, IP) shared with Facebook/Google for targeted ads—despite privacy claims (more on this later).

5. The VC Investors are paid

6. Lather, Rinse, Repeat

Platform	Client Pays (e.g. session)	Therapist Gets (~)	Platform/VC Cut	VC Funding/Valuation
BetterHelp	$60-100/wk	$25-40/wk	60%+ to Teladoc	Parent: $269M Q1 revenue
Talkspace	$65-110/wk	Per text (~low)	High (B2B focus)	Profitable via employer deals
Headway/Alma	Insurance co-pay	Varies	20-30% + fees	Headway: $325M funded, $2.3B valtexau+1
Grow Therapy	Insurance	Varies	Significant	$150M raised, $3B val, $1B rev

Therapists are scared into thinking that credentialing is too hard or time-consuming to do on their own, and/or are promised significantly more money than those who do not use the platforms.

For platforms that accept insurance and are sometimes backed by insurance companies, they can expedite the credentialing and contracting process and occasionally offer higher rates to clinicians. This is because the rates are often based on a state where the provider may not reside. For instance, while therapists in NJ who credential themselves might receive around $120 per session (including copay), Headway might offer $129 per session to clinicians using their platform because their headquarters is in NY, a state with a higher cost of living. Additionally, this is possible due to their financial backing. Although Headway pays therapists $129, they charge over $150. Where does the rest go? Into venture capitalists' pockets.

While the rate sounds good to new and aspiring clinicians looking to start their own business, these companies rarely follow through with things like referrals and often expose clients to dangers they may not be exposed to if clinicians didn't utilize them.

What is the Negative for Clients?

Many investors have extensive portfolios that encompass AI and data collection alongside healthcare entities. It is challenging to find a VC tech company that hasn't faced a lawsuit over illegal data collection from mental health consumers. For instance, Headway's privacy policies clearly outline the data being collected and its distribution. Cerebral includes a note stating, "Cerebral operates the Platform but does not provide medical services and is not a medical group." These "loopholes" appear to be methods to bypass HIPAA requirements.

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a US federal law designed to protect sensitive patient health information from being disclosed without consent. It mandates privacy and security safeguards for Protected Health Information (PHI) held by covered entities, such as healthcare providers, insurers, and clearinghouses.

These companies have also been in trouble with lawsuits for other things:

1. On top of HIPAA loopholes and selling your information, Headway has been in hot water for not being transparent with clients about the cost of services and overcharging them. They are also being sued by employees for unfair labor practices

2. Alma has reduced reimbursement rates for clinicians, and clinicians have no way to

   negotiate for themselves with the platforms.

3. Grow Therapy receives similar complaints from clients related to a lack of cost transparency and over-charging for services. They are also overstepping the boundaries of 1099 contractors by imposing documentation reviews. A company cannot dictate how a 1099 contractor works; they are potentially misclassifying their therapists.

4. Rula has a complaint filed against them for “using illegal criteria to perform improperly delegated medical necessity reviews”. Their terms of service include binding arbitration, meaning that by using their services, you waive a clinician's right to go to court, and are also harming clients by overcharging them for services rendered.

5. Cerebral is in trouble with the government for illegal prescriptions and selling sensitive client information. They also have multiple ethics complaints on the Better Business Bureau.

6. Lyra Health, Spring Health, and Modern Health are EAP companies, meaning employers pay for their services as a benefit to their employees. Lyra is accused of unethical practices and has gotten into trouble for operating without a license. Modern Health was sued by its own co-founder for bribing and lying to its customers.

7. Talkspace has been accused of misleading clients and installing tracking software on its site.

8. VC tech companies like LifeStance are now entering the field to provide in-person services. If you Google them in your area, you may find multiple sites within a small radius. You may also notice advertising sites like PsychologyToday flooded with profiles of practitioners from LifeStance. LifeStance is currently being sued for selling client information to Meta

   They just settled a lawsuit related to lying to their investors. They violate labor laws and are facing other lawsuits related to kickbacks and retaliation against employees.

Venture Capital tech companies are entirely profit-driven. The shift towards Measurement-Based Care (MBC) or Value-Based Care (VBC) is already underway. MBC is fundamentally designed to maximize VC's return on investment, focusing on providing minimal services for maximum savings. This might involve altering the criteria for diagnoses that justify therapy as an intervention, limiting the number of allowable sessions to 3-14 based on the insurance plan, auditing charts for medical necessity, offering bonuses for quickly "curing" clients, or a combination of these strategies. UnitedHealthcare has been a leader in implementing MBC, but they are not the only insurance plan starting this rollout. VC is not concerned with client care or the value of therapists; their sole focus is profit.

How does that impact you? These Venture capital-backed platforms compromise the quality of care by focusing on fast growth and investor returns instead of deep therapeutic engagement. This approach results in clinician burnout, improper matching of clients to suitable therapists, and ethical issues, ultimately restricting clients who are seeking genuine progress, especially with complicated cases. Quotas force shorter sessions and "quick-fix" algorithms over personalized plans, which will stall healing or even cause people to drop out of therapy.

What is the negative for clinicians?

Clinicians using these platforms face potential privacy violations for their clients and often lack adequate support when platform issues or overcharging occur. A significant 81% of platform therapists report inadequate support. Clinicians have limited control over platform operations, and many overlook the fine print. Many are unaware that leaving the platform requires restarting the credentialing process, and contracts often state that clients seen under the platform belong to the platform, similar to working for someone else. Additionally, variable rates and the need to justify work with metrics shift the focus from people to money. Many platforms demand caseload quotas, contributing to clinician burnout.

Businesses running independently from VC-backed companies are struggling to compete. Small practices aren't able to funnel as much money into marketing and advertising. With insurance companies contributing to the investments of these companies, therapy practices not using these platforms are being pushed to the bottom of insurance provider lists. With listservs like PsychologyToday and others also being in bed with VC-backed companies, practices not using these platforms are being pushed out of the way and not popping up in searches. Even a quick Google search for therapy in your zip code search, shows sponsored ads from these platforms first.

Referrals are disappearing. The industry is changing. And it isn't with anyone's health or well-being in mind.

So what's the answer?

The industry is shifting toward profit over people, but you can fight back.

For Clients: Choose transparency. Demand to know where your money goes. Find out if the therapist you are looking at or working with runs their practice through a VC-backed platform. Book with independent private practices like Symmetry of Self Counseling Center. 100% of the funds go to your healing with specialized and tailored care. No VCs, no data grabs. Schedule today: www.symmetryofself.com

For Clinicians: Break free from the burnout. Our business coaching guides you to independence (credentialing, marketing, referrals) without platforms owning your clients and with peer-led support. Email heather@symmetryofself.com to start.

Together, we reclaim therapy for humans, not algorithms. Share this post. Support small practices. The revolution starts with informed choices.

Sources

1. BetterHelp FTC Fine ($7.8M data sharing): FTC.gov, July 2023

2. Headway Overcharging Complaints: Reddit/r/therapists, Jan 2025

3. Headway Labor Lawsuit (Overtime): CA Lawyers Assoc., Feb 2026

4. Alma Pay Cuts (Optum): ClearHealthCosts.com, Nov 2024

5. Grow Therapy BBB Complaints (Billing/Misclassification): BBB.org, Dec 2025

6. Cerebral $3.65M Fine (Adderall): Reuters/Healthcare Dive, Nov 2024

7. Therapist Turnover/Burnout on Platforms: Reddit/r/therapists, Oct 2025

8. Headway NJ Rates ($95-129): Reddit/r/therapists, Apr 2024-Jun 2025

9. Teladoc/BetterHelp Q1 Revenue ($269M): BHBusiness.com, Jun 2024

10. Headway Funding ($325M, $2.3B val): FierceHealthcare/VCNewsDaily, Jul 2024

11. Grow Therapy Funding ($150M, $3B val): LinkedIn/BHBusiness, Mar 2026

12. VC Impact on Care: IMHPA.org, 2021 (updated trends)