Eads Bridge Holdings is delighted to announce our first partner company, Stokes Counseling, based in Naugatuck, CT. Dr. Michael Stokes founded the practice in 2011 as a “single shingle” and has since grown the platform to have over 180 clinicians that care for over 3,500 patients. Stokes Counseling is the leading independent mental health practice in Connecticut specializing in treating depression, anxiety, and PTSD with particular expertise in tailoring care for individuals in the LGBTQ+ community and families experiencing foster care or adoption challenges.
The United States is currently experiencing a mental health crisis due to the increasing prevalence of cases and the limited access to care particularly in marginalized communities. The Covid-19 pandemic further exacerbated the need for mental health as people struggled with isolation from social support networks and burnout and stress due to employment challenges and increased caregiver responsibilities. In the U.S., 4 in 10 adults have experienced high levels of psychological distress since the beginning of the pandemic[1]. A meta- analysis from the first year of the pandemic suggests that 1 in 4 youth globally are experiencing clinically elevated depression symptoms, while 1 in 5 youth are experiencing clinically elevated anxiety symptoms[2]. Demand for health care in our schools, businesses, and communities has never been greater, requiring a call to action for both the public and private sectors.
Since founding the practice, Dr. Stokes has been committed to serving his community through a relentless focus on delivering quality care for patients and creating a supportive environment for clinicians. The pandemic was a forcing function to transition the practice from solely in-person sessions to include virtual care, and Dr. Stokes quickly diagnosed that telehealth actually enhanced the patient experience. He recognized that this was an inflection point for the business and that embracing technology would augment the efficiency and efficacy of the practice. Furthermore, a partnership with Eads Bridge Holdings would provide him the capabilities and resources necessary to take the company to the next level.
Eads Bridge Holdings is a “software-defined holding company.” Our focus is on identifying opportunities where we can acquire businesses and provide them the resources and capabilities to leverage technology to build franchises that can endure and succeed over the long-term. We hold businesses with an indefinite time horizon, hopefully forever, so that we can fully implement our EBH Tech Playbook while empowering management to grow their market leadership.
Technology itself is not a panacea, therefore the focus of the EBH Tech Playbook is ensuring that we have the right people, processes, and systems in place to sustain continued growth. Our model is particularly well suited for an industry like behavioral health where a short-term focus on growth and profit maximization can come at the expense of delivering high quality outcomes. Our investment thesis in mental health is simple. Software will enhance the accessibility and effectiveness of mental health services by providing the tools for communication, assessment, and treatment, while also improving the efficiency of operations. Fewer than half of Americans receive the care they need, yet more than 80% have a smartphone[3]. The internet provides a pathway into nearly every person’s pocket. This creates an unparalleled means to increase awareness, educate patients, reduce stigmatization, and ultimately provide a quantum leap in increasing access to care. Virtual care has already demonstrated the positive impact it can have on creating a comfort zone for patients to get started on their care journey from the familiar surroundings of their own home. Telehealth won’t always be a perfect substitute for in-person care, but it’s an invaluable tool for engaging patients who otherwise may go untreated.
Software is a critical mechanism for delivering care, but it is not well suited to provide care itself. Providing quality care is not about AI chatbots but rather hiring and retaining great clinicians. Clinicians require endless amounts of patience, resilience, and empathy. We’re focused on supporting our team to be the first line of defense in the battle for the wellness of our communities. We want our clinicians’ focus to be on what matters most – our patients – and we plan to leverage software to facilitate onboarding, scheduling, payment, and support in the most seamless way possible. Delivering benefits to our team of clinicians ultimately leads to benefits for our patients.
In 1994, Stanford economist, Brian Arthur, published a book articulating the key distinction between the smokestack era of the past and the digital era of today. Over the last century, industry moved from processing resources to processing information and the “underlying mechanisms that determine economic behavior have shifted from ones of diminishing to ones of increasing returns.[4]” More specifically, “increasing returns are the tendency for that which is ahead to get further ahead, for that which loses advantage to lose further advantage.” Software provides the capability for creating these powerful feedback loops or flywheels.
Viewed through a digital lens, mental health counseling operates as a two-sided marketplace. Understanding the nature of network effects is important to ensuring a path to “increasing returns.” In this case, the value of the platform to the participants increases with each new patient or clinician by increasing the likelihood of finding the right match of needs, expertise, availability, and personality traits. With more participants comes the greater chance of finding the right match for both patients and clinicians.
The role of technology is to optimize the interaction between patients and clinicians and maintain the balance between both sides of the market. In order to maintain the efficacy of the system, it’s critical that both sides of the market work in concert together. Losing rhythm can reverse the virtuous cycle into a doom loop. The key to avoiding this downfall is constructing your business system to create scalability and enable data-driven decision making.
A thoughtful construction of your business system produces Actions and Insights. Using APIs and other software to automate tedious workflows generates data. That data surfaces insights providing you greater perceptivity into your business.
The opportunity exists for every company to be a software company whether or not its product is software or it has software engineers on staff. It’s about leveraging software to strengthen and deliver your value proposition to customers. The future is already here, it’s just not evenly distributed. We plan to change that.
We would be remiss not to thank the fantastic partners we had in this transaction: Mertz Taggart, Parkway Capital, Waller Lansden, and the EBH Investor syndicate. It takes a village to get a deal done and we recognize how critical it is to have great people working alongside you.
References:
4 - “Increasing Returns and the New World of Business” by W. Brian Arthur