Up-and-Comers 2017: Quartet’s Venture into Behavioral Health

May 26, 2017
Quartet’s CEO and chairman found early on that they shared a passion for solving some of the healthcare sector’s challenges involving behavioral health.

Each year, to accompany our Healthcare Informatics 100 list of the largest companies in U.S. health information technology, we profile six fast-growing companies that could very well make The 100 in the future.

The growth trajectory of these startups suggests they could have a significant impact in health information technology. Most have drawn strong interest from venture capitalists. Others are coming at seemingly intractable problems in healthcare from completely new angles. The next such company on this year’s list is New York-based Quartet.

Editor’s note: All of the 2017 up-and-comer stories can be read, as they come out this week, right here.

Both Arun Gupta and Steve Shulman had plenty of experience with healthcare business ventures before founding New York-based Quartet in 2014. Gupta had served as a general partner at Accretive, a firm that has launched several companies including Accolade, which offers an on-demand healthcare concierge for employers and health plans. Shulman previously served as the CEO of Magellan Health, one of the nation’s largest behavioral health managed care companies.

Gupta says they found they shared a passion for solving some of the healthcare sector’s challenges involving behavioral health. “We saw how many people struggle to get a reasonable diagnosis and access to the right kind of treatment pathway,” he says. About 19 percent of the population deal with issues such as depression, anxiety and substance use disorders, he notes, and utilization data shows that population consumes roughly half of the healthcare resources every year. “Looking at all that data, coupled with Steve’s prior experience in behavioral health, gelled into what would become Quartet,” he says. The startup company uses a technology platform to make it easier for primary care physicians, patients and behavioral providers to coordinate care.

Arun Gupta

In its earliest stage, the company, with Gupta as CEO and Shulman as chairman, went through a period of research and development, talking to primary care doctors, insurance companies and behavioral care providers. “There are some pretty good models of collaboration out there, largely in academic medical settings,” Gupta says, “but they hadn’t scaled.” They decided that the right communication software could help allow behavioral and primary care providers to collaborate fairly seamlessly and move toward universal screenings and diagnosis, which should result in less healthcare resource utilization overall.

Primary care physicians seeing patient that they believe could benefit from access to mental health resources can send that patient to Quartet with a few mouse clicks. “We take it from there,” Gupta explains. “We figure out the right behavioral provider match for the patient, who will take their insurance, and who is available. The primary care provider will get an update when the patient sees that provider. They get the information on the diagnosis, assessment, and treatment plan that they need to stay in the loop.”

Through Quartet’s platform, a primary care doctor could have a real-time phone consult with a psychiatrist about issues such as medication levels. Quartet also uses algorithms to suggest to the physician, based on the patients in their panel, people who could benefit from an initial assessment.

All of this is free to the patient, the primary care doctor and the behavioral providers. Quartet partners with large payers and enterprise health systems that sponsor the regional networks it creates. They started in Massachusetts with Steward Health Care Network and have expanded from there. Quartet has partnerships with Highmark in western Pennsylvania, Premera Blue Cross in the Puget Sound area, and Humana in New Orleans. Gupta says the company would announce partnerships in two new geographic areas this summer and a handful more by the end of 2017.

So the economic beneficiary is the enterprise partner but the user is the primary care practice and the behavioral provider. At first, that two-level aspect of their business model was daunting, Gupta admits. But eventually he decided it has been a good way for the company to get built because Quartet cannot cajole or require the users to do anything. “We can only provide value and try to show them we are useful,” he says. “We had to create a delightful user interface and experience to give them what they need. That is why we have user-centered design teams and onboarding specialists in primary care offices every day.”

Quartet’s first round of venture capital, $7 million, came in 2015 before it had earned any revenue or launched a product.  Then in 2016 it raised an additional $40 million led by Google Ventures. “That gives us access to some of the best and most epic Googlers,” Gupta says. Some of Google’s best product design, engineering, machine learning, recruiting and product marketing people now work for Google Ventures full time to help companies like ours get to maximum success. That has been fun.”

Gupta says Quartet will have more than 200 employees by the end of 2017. “We have hired more than 100 people in the last 12 months and will hire more than that in the next 12 months,” he says. Quartet is in a high-growth stage where it is being selective about partnerships. “It takes constancy of focus,” he explains. “We are only going to take on what we can do in a high-quality way, but I think we are clearly out in front on a huge issue in society that is driving a ton of healthcare cost. It is a hard problem.