As sports betting and online gambling expand, providers, payers and investors have begun directing greater attention toward gambling addiction, which has emerged as a new pressing behavioral challenge.
Nearly 20 million people in the U.S. report experiencing at least one problematic gambling behavior in the last year, according to the National Council on Problem Gambling (NCPG). This issue may only be growing as it begins to impact younger generations.
“The highest growth behavior that schools are worried about for middle schoolers here in Massachusetts, where we unfortunately have legalized a whole bunch of gambling, is gambling,” Rebecca Schechter, senior advisor at McKinsey and Company, said to Behavioral Health Business. “We’re talking about middle schoolers. And so if you put yourself back now in the shoes of a payer, trying to get ahead of an emerging trend. I look at this as something that is going to emerge with a whole new generation of folks that, be it social media, gambling, etc, are creating a whole new set of needs that the current environment is not quite geared to serve.”
New providers have begun to emerge focused on combating this issue. For example, gambling addiction provider Birches raised $20 million to grow its platform.
Schechter, Andrew DiGiacomo, senior vice president of strategy at Birches Health and Youssef Kalad, principal investor at Ally Corp, sat down with Behavioral Health Business to discuss the future of gambling addiction.
The following text is a selection of highlights from our latest episode of the Behavioral Health Business Perspectives podcast. It has been edited for style, length and clarity.
BHB: I want to start off by helping listeners understand this very specific sub-sector of behavioral health as it exists today. I’ll ask each of you to share some foundational insights that will give us a solid footing for the conversation as we move forward. Andrew, I want to start with you. So, from the perspective of a leader at a treatment organization that is Birches, what are the most defining features of the world of gambling addiction treatment?
DiGiacomo: I think first off, for me, it’s how far behind the treatment infrastructure is starting to fall behind. The speed at which online sports betting and online gambling has just expedited is unbelievable. You now have 39 states and DC that have legalized sports betting, and one of the wildest numbers we’re starting to see is that 28% of adults are now gambling daily online.
And then, very similar to what we saw probably about four or five years ago, coming out of COVID-19, there’s a shortage of clinicians who are specialized in this.
The other defining feature is that, unlike substance use disorders, where gambling disorder doesn’t require detox or management, for the most part, and which means the clinical model is looking differently little bit of the Wild West, and that’s where I get so excited about Birches, is we’re taking this step forward to not only grow the population of providers, but also dive into the clinical models and the clinical path to serve the United States.
BHB: The role of third-party payers in healthcare generally cannot be understated in any segment of any part of healthcare. Rebecca, given that part of your background includes working on the payer side of things, what can you tell us about how payers have approached gambling addiction treatment?
Schechter: I would take a step back relative to your question and say, in general, how do payers view specialized solutions? And maybe even before answering the question, I have to say, I have to echo Andrew’s sentiment and actually double-click one level deeper.
I happen to be the parent of a middle schooler. And what I found out is that the highest growth behavior that schools are worried about for middle schoolers here in Massachusetts, where we unfortunately have legalized a whole bunch of gambling, is gambling. We’re talking about middle schoolers.
And so if you put yourself back now in the shoes of a payer, trying to get ahead of an emerging trend. I look at this as something that is going to emerge with a whole new generation of folks that, be it social media, gambling, etc, are creating a whole new set of needs that the current environment is not quite geared to serve so as as a payer, when I would get approached by specialized solutions, I actually would put it through four filters, if you want the first and always, my first and foremost was the clinical model.
Having a valid clinical model is critical because you want to make sure it’s not just a solution that doesn’t actually deliver what it promises. The second is, do they actually measure clinical outcomes, and how does it compare to alternatives? And I know we’ll talk a little bit about what Birches is doing, but having the ability to show that you are driving care through measurement-based methodology, and that you can show improvement relative to alternatives, is key.
The third is: how does it impact affordability and slash the cost of care, particularly in the environment right now, where a lot of payers are facing difficult trends they hadn’t anticipated? How does this actually help them stretch every dollar they invest, helping members get the most out of it?
Lastly, is this a solution that, if I lean into it, I can actually see will scale? Do they rely on a platform, or do they have a better way to recruit and retain providers? I do think that ends up being pretty critical, particularly if you’re talking about national plans looking for solutions to pitch to employers and government agencies at scale.
BHB: Yusuf, I want to turn to you and get your perspective. So your firm has invested in Birches Health from the perspective of capital. Why is this industry something that warrants a place to put this kind of money?
Kalad: think I’d love to start with kind of our mandate, and then talk about the why now, I think, from a mandate perspective, how we think about investing, and in particular, my team at Ally Corp is investing in companies, rethinking economic infrastructure, for families, for individuals. So we spent a lot of time in health and in care. We spent a lot of time on the clinical workforce area, which I think I’ve been obsessed with over the last four or so years, is this question of will, sort of despair.
Some have called it male despair, and also this disintegration in families. So I spent a lot of time looking at solutions in universities and colleges and the education and workforce. The thing that consistently popped up is the link between despair at the individual level and despair within communities and within families, and the prevalence of this sort of gamblerization, or the financials of so many things in society, and the impact it has on people.
That was, I think, a very clear sort of mandate.