Mental Health

Mental Health Crisis Meets Market Innovation

How telepsychiatry is delivering $4 for every dollar invested

Bob Crants III
Bob Crants III Founding Partner & CIO, Pharos Capital Group

I was talking to a hospital administrator in a rural state, and she told me it can cost her over $200,000 just to hire a single psychiatrist[32]. Hospitals everywhere are facing this same challenge. The demand for mental health services has exploded, but there's a critical shortage of psychiatrists. About 65% of rural U.S. counties have no psychiatrists at all[33]. It's a genuine crisis, but it's also a problem that technology is perfectly suited to solve.

The Telepsychiatry Transformation

The U.S. telehealth market is expected to reach about $43.78 billion by 2024 and grow to $317.19 billion by 2034, and telepsychiatry is a huge part of that at nearly 30% of the distribution segment[34]. This isn't just hype; it's a fundamental shift driven by necessity. The traditional staffing model is broken. Innovative telepsychiatry models, like the one used by our company FasPsych, completely change the economics. Instead of a huge upfront investment to recruit one doctor, a hospital can access an entire network of specialists on a flexible, as-needed basis. The results are transformative. By eliminating recruitment costs and optimizing schedules, these models can deliver $4 in value for every $1 invested, saving hospitals a fortune on hires they no longer need to make[35].

A Case Study in Value: FasPsych

Founded in 2007[36], FasPsych has spent over a decade perfecting this. They solve several critical problems for hospitals all at once:

1. Immediate Availability: They provide coverage now, not in six months.

2. 24/7 Scalability: They can cover a weekend shift or an overnight emergency, preventing burnout of the on-site team.

3. Zero Capital Investment: Hospitals get access without buying any new equipment.

The key is that the telepsychiatrists are fully integrated into the hospital's workflow and EHR systems. It's not a clumsy add-on; it's an embedded part of the care team. For hospital administrators, for rural patients, and for a country facing a mental health crisis, this is more than an innovation. It's a solution that can finally meet the scale of the challenge.

References

  1. Industry analysis of psychiatrist recruitment costs including agency fees, advertising, and onboarding (average industry costs) ↩
  2. Rural Health Information Hub, Mental Health Professional Shortage Areas data, https://www.ruralhealthinfo.org/topics/mental-health (65% of rural counties lack psychiatrists) ↩
  3. Market.us Telehealth Market Report, 2024-2034 projections, https://market.us/report/telehealth-market ↩
  4. FasPsych cost savings, https://faspsych.com/blog/solving-mental-health-staffing-crisis (up to $200,000 saved per hire) ↩
  5. FasPsych founding, https://pharosfunds.com/FasPsych.php (Founded 2007) ↩