Elemy launched a fourth round of layoffs on Thursday, effective that day, as part of its move to a near-pure software platform.
The San Francisco-based behavioral health tech startup declined to specify how many roles will be affected. The layoffs are part of its evolution from a tech-backed autism service provider to a near-pure software company, Elemy CEO Yury Yakubchyk told Behavioral Health Business.
This layoff and another earlier in the year bring the company closer to its founding purpose, which is to be a software provider and platform for pediatric behavioral healthcare providers and patients.
“The interest of our business was to gradually move into a model where we had a software platform that empowered clinicians and also families, but didn’t have full-time salaried clinicians on our side – we’re moving gradually towards that,” Yakubchyk said. “And as more and more automation is introduced, we’ve had to let go of more people.”
Yakubchyk said 38 roles of a 40-person patient reception team were eliminated due to the efficiency of his software.
Founded in 2019, Elemy has developed tools to help support pediatric behavioral health services, including scheduling, patient-provider matching, patient and provider integration, quality control, logistics and route management. She also started her home-based Applied Behavior Analysis (ABA) practice as a testing ground to prove that her software worked and met industry needs. While developing the software, Yakubchyk said the company needed a large administrative staff to support the ABA practice.
The company has since expanded its virtual care services to other pediatric behavioral health conditions, including ADHD.
Elemy has grown rapidly in terms of geography and funding. In 2022, it had a footprint of 14 states. It also caught the eye of investors, landing $323 million in venture funding, according to crunchbase.com. In October 2021, Elemy raised a Series B funding round of $219 million, with a valuation of $1.2 billion.
A leading investor in the Series B round includes SoftBank Vision Fund 2, which is also an investor in Cerebral.
Elemy, founded as Sprout Therapy, won over investors by being able to prove its software helped accelerate access to ABA services, improve outcomes, and improve the experience for patients and providers, has said Yakubchyk in a podcast. He was able to do this because he could test software himself in the real world.
“In retrospect, I probably would have used third-party call center teams or field operations teams for clinician onboarding, for family onboarding, because as we develop more software, we don’t necessarily need so many people in-house does its job for us,” Yakubchyk said.
During 2022, the company laid off much of the staff needed to support the ABA practice, Yakubchyk said. The company now only practices in California, Texas and Florida.
Most of the behavioral healthcare providers he still employs directly — both employees and contractors — are paid hourly and are largely self-employed. Eventually, through atrophy or other means, Elemy will only engage with clinicians through third-party interactions.
However, the company will still employ Certified Behavioral Technicians (RBTs). RBTs are most often the professionals who treat children with autism under the direction of board-certified behavior analysts (BCBAs) or comparable clinicians. And Elemy will associate the RBTs with its supplier customers.
“We want to make sure we’re involved in the care, supporting the therapists on their journey and actually delivering the care without actually managing the therapists,” Yakubchyk said.
In April, Elemy launched Ecademy, a 3-month fully paid training and certification program, in California, Texas and Florida.
Yakubchyk said the company’s history with layoffs and investments is fundamentally different from other ABA-related layoffs that have defined the year. Several private equity-backed vendors have announced layoffs and are pulling out of public contracts due to labor issues and sluggish payor reimbursement.
“We don’t need so many people thanks to automation,” Yakubchyk said. “Private equity-backed ABA agency players don’t invest in this type of R&D at all. Instead, they focus on selecting insurance partners and providing care exclusively through clinics.
Yakubchyk has said in several public appearances that the plan is still to expand Elemy beyond ABA and even behavioral health. During an appearance, he said he could see Elemy’s treatment-agnostic software playing out across the chronic care home management industry.
“Step back, pediatric behavioral health, like many health service verticals, is extremely nuanced, extremely complex,” Yakubchyk said. “I have a lot to learn about pediatric behavioral health. I believe I can build a very, very large, sustainable and impactful company that changes people’s lives just in the area of pediatric behavioral health.
At least for the next five years, he doesn’t see Elemy moving into other healthcare verticals.
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