Episode 39: Expanding Treatment Options for Opioid Use Disorder with Ophelia Founder Zack Gray
Greater access to opioid treatment through telemedicine
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In this episode, Carrie, Rebecca and Zack discuss:
Why Medication Assisted Treatment (MAT) is a proven treatment for Opioid Use Disorder (OUD)
Why only 5% of clinicians are licensed to prescribe buprenorphine and how this drives traffic to the black market
How telemedicine breaks down barriers and stigmas for clinicians and patients in the treatment of OUD, making them an ideal combination for addressing the opioid epidemic in the U
Keep scrolling for a transcript of this episode.
Key Takeaways
What many people don’t know is that we already have working solutions for opioid addiction and have for a very long time. A widely accepted treatment called Medication Assisted Treatment (MAT) is highly effective at keeping people alive.
Breaking down barriers for clinicians as well as for patients is critical to the solution. Only 5% of clinicians are licensed to prescribe buprenorphine, a medication used in medication-assisted treatment. Many people who seek treatment are forced to get medication through the black market.
There are two main problems that telemedicine solves in regards to getting a patient into a healthy long-term treatment: getting patients to opt in and getting them to stick with treatment.
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“Telemedicine is great for allowing people to get treated privately, and do so in a way that fits into their schedule. It’s also great at helping people stick with treatment.”
Read the transcript
Rebecca Gwilt (00:01):
All right, everyone, welcome back to Decoding Healthcare Innovation. I am so glad to be with you today and with my guest today, Zack Gray, CEO and co-founder of Ophelia. He is a rocket scientist turned digital health CEO, and I'm excited for the conversation we're gonna have today. Welcome, Zack.
Zack Gray (00:34):
Ah, thanks for having me.
Rebecca Gwilt (00:36):
You're absolutely welcome. Glad to have you. So first I wanted to start off by just like a quick, how are you doing? My car was stolen this week, and I have been following the aftermath of the hurricane in Florida, and I feel like it's just been a hard month, maybe a couple of months, maybe a year for folks. And I just wanna check in with you. How, how are you doing, Zack?
Zack Gray (00:59):
I'm doing great. Doing exactly what I wanna be doing with the people I want to be doing it with, and feel very fortunate for that. So I have nothing to complain about.
Rebecca Gwilt (01:09):
That's a great place to be. That's a great place to be. So, I wanna talk really quickly about Ophelia. This is a company that provides online treatment for opioid dependence. And, you know, I know Zack, you've got a personal connection to the mission of Ophelia. You launched the business following the death of someone that you loved and, and that seems to have inspired a pretty ambitious mission and, and led you to help a lot of people raise more than $70 million. I'd love to hear a little bit more about the company, about what you're doing and in particular, how your mission has evolved since, since you started on this journey.
Zack Gray (01:53):
Yeah. So, you know, our raison d'etre, to use a a French term, is the same as it's been since the very beginning. It is to make evidence-based treatment for opioid addiction accessible to everyone. Not many people know much about how opioid addiction is treated, but it turns out that we have solutions and have for a very long time that work extremely well. There is a widely accepted treatment called medication-assisted treatment that is highly effective at keeping people alive, backed by decades of science, and looks a lot like the treatment you might get for depression or anxiety. So it's chronic medication and therapy, looks nothing like what most people think of as rehab, but looks a lot like what people are seeking. The challenge is that it's very difficult to get for a whole host of reasons, and only about 10% of Americans who need this treatment are able to get it. The rest are sort of doing it on their own. And as a result of the barriers to accessing this medication, which helps with withdrawal and that's a key component of ceasing to use drugs, there is a huge black market for the medication where people are spending thousands of dollars because they can't access it through proper clinical channels.
(03:22):
So we, everything that we do is designed to break down those barriers and make treatment accessible for people who don't otherwise have access to it.
Rebecca Gwilt (03:30):
Yeah, I'd like to go a little bit deeper into this because I do think that there's a lot of mystery around certainly substance use disorder treatment, but medication treatment, medication-assisted treatment in particular. I served for a few years on the Medicaid Board in my state of Virginia, and I started that tenure during the time where they were implementing the ARTS program. I don't know if you're familiar with the Addiction Recovery, Treatment and Support Program, I'm sure that you are. But that was when I first learned about sort of what this is what it does. I have a couple questions about that for you, but starting point being like, what does this look like for a patient? Like what, what, what who do they interact with? What does the course look like? You mentioned the the, the vast difference between this and rehab. I'm just interested in the specifics.
Zack Gray (04:25):
I mean, it, it looks a lot like this: It is a relationship with a medical provider and a care team that can manage your treatment with medications and with support and therapy. And so most virtually all patients who start with Ophelia find us directly online. You know, we are specifically trying to serve what I call the invisible 80% of people who are not engaged with the healthcare system, undiagnosed with opioid use disorder, and therefore aren't going to come to you through referral, but certainly are interested in getting treatment. You know, step one is get on the phone with someone on our team, learn about our program, see if it's right for you, figure out if we're in network with your insurance, if not, if you're willing to pay out of pocket. Step two is sit down with a licensed medical provider who has an X waiver to prescribe buprenorphine and go through a full medical intake evaluation, diagnosis, treatment plan.
(05:36):
And at that point, if you are interested in moving forward with the program and deemed medically eligible we will send a prescription to your pharmacy. And then it varies based on patients. So some patients are currently using drugs and need to go through an induction period, which can be intense. And so we'll have, have regular check-in calls with them. They have access to our care team via text message or phone seven days a week. At the very least, there will be weekly video visits. We'll send drug tests to their home. And then at that point, depending on how they're doing, they can eventually move to bi-weekly and monthly. They have access to peer support services if that's something that they want. But you know, the way to think about it is very similar to the way that you might think about getting treatment for any other psychiatric condition.
Rebecca Gwilt (06:30):
Yeah. And, and, and it's telemedicine, right? IYou know, one of the problems that the Commonwealth of Virginia has been struggling with for a while, since they sort of got on board right, to say like, medication assisted therapy is, is the standard of care. And you know, we, we think this will be good for our, for our Medicaid population in the state. One of, one of the big challenges was just finding wavered clinicians, that sort of just supply issue. Is that something that you've been solving for?
Zack Gray (07:03):
Absolutely. You know, we think about breaking down barriers for clinicians as well as for patients as being critical to the solution. You know, the, the, the challenges here are really not medical or scientific in nature. The challenges are providing treatment that works for patients that is flexible enough to fit into their lives and that is also economically sustainable so that you can keep an operation alive and ideally growing. And the system makes it really difficult. So, as you cited, you need a special waiver to prescribe buprenorphine. Anyone in this country with a prescription pad and DEA license can prescribe you everything else, Oxycontin, Vicodin, Adderall, Xanax. But in order to prescribe buprenorphine, you needed a separate license from the DEA called an X waiver. Only 5% of clinicians in this country have that waiver. Many of the ones who have the waiver aren't using it cuz they work in other places where they don't see addiction treatment patients.
(08:06):
And that is a, a serious constraint on supply, which makes it difficult to find qualified and trained providers. And those who are in short supply can command higher wages. And then you have to provide treatment in a way that is reimbursable and reimbursable sufficiently to cover those costs. In many states, Medicaid rates are so low that even if you utilize a clinician with 100% of their time, you still can't break even. And so the system makes it extremely difficult to provide this care and if they made it less difficult, then we wouldn't be seeing the number of deaths we're seeing on a daily basis
Rebecca Gwilt (08:48):
Here. Here. Absolutely. Well, and I, and, and it seems to me like telemedicine is a really apt solution in this area because a lot of where we're seeing sort of concentrations of addiction are areas where there's not many docs anyway. Forget, you know, buprenorphine, wavered docs, just not many docs anyway. And certainly we have broadband issues in rural areas that telemedicine is, you know, becomes challenging to deal with. But, but in general, what are your thoughts about sort of the combination of addiction treatment and telemedicine and sort of where it can get us that we, that we haven't been able to get until now?
Zack Gray (09:32):
I think it's a perfect fit. Really there are two problems to be solved when you want to get a patient into treatment and healthy long term. The first is getting 'em to opt in. The second is getting 'em to stick with treatment. And opt in is really difficult for people because of logistical challenges. As you mentioned, 40% of counties in this country don't have a single X waiver provider. So you may be going an hour to a clinic multiple times a week. If you have a job and family, this can be difficult because these programs are often only open during work hours. And of course there is a major privacy concern, right? So telemedicine is great for allowing people to get treated privately and do so in a way that fits into their schedule. It's also great at helping people stick with treatment. What often happens in the brick and mortar world is when you are at, you know, proverbial rock bottom, you're willing to jump through hoops to get into care, but then a couple months go by, you start to feel better. Maybe your opportunity cost is higher, cuz now you have a job and it's very easy for people to drop out. So the retention in brick and mortar programs is quite low and the opt-in is very low as we already talked about. So, yeah.
Rebecca Gwilt (10:53):
Are you all currently working with payers? Like how are you getting, how are you getting to the sort of financial barrier piece of this?
Zack Gray (11:02):
Yeah, I mean, we are trying to be in network with any insurance company that will work with us. And that includes Medicaid, Medicare, commercial. It's a challenge, to be honest. Yes. Sometimes it's a challenge just getting a network despite the massive treatment gap. We have plans that say they already have adequate network coverage or haven't fully come around to telemedicine. Then we have other contracts with plans that will pay us for certain things but not others. And then we have a handful of friendly contracts. Contracting is one part of it. The other part of it is the actual administrative cost of and timeline of getting contracted credential billing. So today about 50% of our patients are using insurance and most of our insured patients are on Medicaid.
Rebecca Gwilt (11:53):
And how are these patients finding you? Cuz you know, the education barrier, I mean, you talked about the opt-in barrier, but even getting to the opt-in for folks must be a challenge. You know, and I know, you know, we live in the information era of course, but like, how are folks learning about MAT as an option and how are they finding their way to you all?
Zack Gray (12:13):
Yeah, I mean, what you'll find is that whether or not people know the term medication assisted treatment (MAT) or understand the nature of the medical protocol itself, they know about suboxone because they know that without it, they're gonna go through a hellish period of withdrawal. Yeah. They know they can get it on the black market, but it'll have to be done illegally, unsafely and unreliably. And they want an easier, more affordable means of accessing medication. And so they know about the meds and they find us the same way that any other company gets found. Google, Facebook, Instagram, word of mouth. Yeah.
Rebecca Gwilt (13:05):
So, so you founded the company in 2019, is that correct? Yes. 2019. Was it like late 2019?
Zack Gray (13:16):
Yes. And we didn't see our full patient until April of 2020.
Rebecca Gwilt (13:23):
Okay. So this is what I wanted to talk to you about. So running a sort of teleMAT company in the era of COVID, during the explosion of sort of digital health VC, and sort of in the middle of you know, an opioid crisis must have been, must continue to be wild. I'm sort of interested in what that looked like, right? Your first patient is in April, 2020, everything shut down in March. And then the government said you can prescribe medication online. What did that, like, what did that look like for you?
Zack Gray (14:04):
I mean, it was certainly unexpected. It made it easier for us to operate, easier for us to find patients for sure. I would guess easier for us to find interest from investors. And there is, and you know, there was, and still is some level of uncertainty around what the future holds, particularly at the state level with respect to telemedicine based prescribing after public health emergencies expire. But while I can't compare it to a period before the pandemic, cuz we didn't exist, then all I can say is that it certainly made it easier for us to offer this treatment.
Rebecca Gwilt (14:47):
Yeah. You said something here and I'm not sure everybody that's listening is you know, as deep in the weeds on this as, as as I am and certainly as you are, but there is a lot of uncertainty not just for you know, substance use disorder companies, but for a lot of the telemedicine companies around if their model that is completely virtual can continue if a large portion of that is related to prescription and prescribing. Yep. And we've certainly seen bad actors in the space who I will not name, but bad actors in the space who were not making it easy on companies who are operating above board when it comes to tele prescribing. How are you planning for this? How are you thinking about this? Is there a secret digital health tele prescribing monthly meeting where you just run around and freak out and figure out sort of how this is gonna go?
Zack Gray (15:40):
No, no, but there's a lot of information out there and there is guidance coming out from the federal government. And I I guess for the listeners who aren't as informed on the topic, historically, you needed to do an in-person visit in order to prescribe any controlled substance. The medication, the core medication we prescribe buprenorphine is a controlled substance , as is Adderall and benzodiazepines. But the view of, and all of that has been suspended during the federal public health emergency, and for the most part, suspended at the state level, although the state level public health emergencies expired. And so it's actually illegal to prescribe controlled substances virtually in certain states even today. But I, I mean the, the key point is that not all medications are viewed equally by the federal government. When the SUPPORT act was passed in 2018, the Drug Enforcement Agency, which is responsible for overseeing this regulation, was commanded to create a special exception for buprenorphine. So this is something that we're already,
Rebecca Gwilt (16:52):
We're still waiting.
Zack Gray (16:53):
Yeah. Something that we're already working on. You know, they had a deadline of October, 2019, they came out and asked for more time and then the pandemic hit and
Rebecca Gwilt (17:00):
and then the pandemic hit.
Zack Gray (17:01):
Yeah. Everyone kind of forgot about it. But this was all already on their agenda. And they've recently come out and said that they are committed to making medication-assisted treatment by telemedicine permanent. And there have been supporting studies by CMS touting its efficacy. The same is not true for other medications such as Adderall, in part because the safeguards that have been put in place by the X waiver for buprenorphine guarded against abuse. So in addition to requiring an dneeding an X waiver to prescribe buprenorphine, there's a limit on the number of patients you can treat at once. And for some clinicians that's a hundred. There were no such limits on stimulants. And so you had prescribers at other companies that were overseeing thousands of patients that raised alarm bells and pharmacies and kicked off a whole bunch of investigations. But the safeguards that were in place for buprenorphine prevented anyone from even having the ability to go there should they have been tempted to in the first place.
Rebecca Gwilt (18:05):
Yeah. It's actually really interesting to watch Congress and the Congressional Budget Office in particular think through how and if they're gonna sort of expand flexibilities for, for virtual care. It is interesting to see that they're, that they are so swayed by sort of circumstance currently. Right. There's a lot of flexibilities being put into place for behavioral health in particular substance use disorder treatment in particular. They've decided that for those things you know, the risk is low enough both to the fisk and to the patient that they're going to make exceptions. So I imagine that that bodes well for companies who are in both the MAT space and the behavioral health space. But it's also caused, I think, sort of like a glut of behavioral health competitors in the markets and marketplace. I mean, y'all are pretty specialized, but are you experiencing challenges related to sort of the number of behavioral health competitors out there? Or maybe even just the difficulty in, in finding clinicians in general in the behavioral health space, given how much competition is out there?
Zack Gray (19:28):
I mean, again, I don't have a counterfactual to compare it to, but I would say no, not really. And I think the, the reason is that the clinicians we are employing at Ophelia are already so scarce and so specialized that we've had to go basically find and train our own.
(19:50):
We have our own X waiver training programs. Yeah. And what is unique about our model is that you know, we recognize that there's a, there's only 5% of clinicians in this country that are wavered, but half of them aren't using their waiver. Those clinicians still wanna work. They just don't have, there was no part-time...
Rebecca Gwilt (20:06):
How do you find them?
Zack Gray (20:08):
You know, most of it comes through referrals from our existing clinicians. I mean, if you have your X waiver and you work in a hospital, you work in a primary care clinic, you wanna make some extra money, you like this patient population, we'll employ you for anywhere from eight hours to 40 hours a week. you can work evenings, weekends, treat your patients and then not worry about your patients when you're off the clock cuz they're paired with a full-time care team. And that has given us access to a universe of clinicians that other companies just aren't going for. So we haven't seen much competition there. And then while there are a number of players in the MAT space, there are a few that are approaching the problem, like we are, are, which is going direct to patient and also being willing to service Medicaid and fee for service contracts. Yeah. You know, our competition is really the system. Can we make the economics and growth together work on low value contracts that others are not willing to accept? Yeah. And if we can, there will be no competition.
Rebecca Gwilt (21:07):
Yeah. I mean this is really a sort of a public health issue, right? And it's, it's probably a good place to be to have agencies like SAMHSA, they're probably interested in sort of working with you and and maximizing your success here. We've talked about this before. Are you finding that sort of the regulators and the agencies are sort of invested in what you're doing as well? Do you feel like you're sort of rowing the same direction?
Zack Gray (21:33):
I mean they're, they're saying the right things, <laugh> and they are demonstrating some level of activity, but I'm not convinced that they're acting in the correct way.
Rebecca Gwilt (21:44):
Yeah.
Zack Gray (21:45):
I think there's a fairly simple way to solve this problem, which is to pay more and pay fairly for medication assisted treatment. Right? That's the system that exists to incentivize providers. The reason so few providers are willing to offer this treatment, let alone accept insurance, let alone Medicaid, is cuz the they don't get paid enough to do it. Yeah.
Rebecca Gwilt (22:06):
If it doesn't get paid, it doesn't get done.
Zack Gray (22:08):
Yeah. Yeah. And the solutions that the government continues to employ are things like creating grant programs for legacy clinics that aren't necessarily evidence-based or the kinds of places that people want to go. If you wanna lubricate the market and allow companies like Ophelia to thrive, well there's a system for it. All you have to do is pay appropriately for the treatment and they will come.
Rebecca Gwilt (22:32):
Yeah, yeah, yeah. Well, let's talk about, give me, I'd love to hear sort of an example or two of you know, where you really knew you were moving the needle on this, the success stories, the times where you look at these things and you go, Yeah, I'm doing the right thing. We're really making this happen.
Zack Gray (22:52):
I mean, right away, right away. I mean, I had a personal experience with a data set of n=1. And I had theses about this population, but wasn't sure if they were, those theses were extensible to others. And as soon as I got on the phone with patients, I heard the exact same stories over and over and over again. Yeah. You know, I had a C-section eight years ago and my doctor over-prescribed me opioids and then all of a sudden he stopped prescribing. I was dependent. I needed to go to the street. Now I'm using you know, $200 worth a day. I can't afford childcare. I got kicked out of this past program cause I missed an appointment cause I was working. It's just the stories over and over and over again. So yeah, the demand was validated very early on.
(23:39):
And then the, you know, the efficacy when we started Ophelia, the, the focus was really access. The, the idea was MAT works really well already. If we can be almost as good as traditional delivery models and get treatment in the hands of more patients, we would save lots of lives. And we've been very successful at doing that. We've also been successful at improving the efficacy of care by making easier for patients to stay in care. So the number one outcome metric is retention. Our retention is about 2X the industry average. And we saw that very, we saw that very early on in treatment through, you know, quantitative and qualitative data. And, you know, I am not a physician by training, but I look to our medical directors who are at the top of their field and you know, they told me right away, like, we're providing as good of you know, good quality care as, as any program I've ever seen. And that was enough.
Rebecca Gwilt (24:31):
That's great. And, and, you know, obviously so, so needed. So so, so what's next? Right? What's next on the horizon? We're almost at the end of 2022. Certainly public health emergency is gonna go away at some point. But also, you know, you must have, you know, dreams for the next, the next step here. You know, what is the CEO of Ophelia focused on for the next year or so?
Zack Gray (24:59):
This may be an, an uninteresting answer to you, but more of the same, frankly. You know, we have something that is working, it's working well. Yeah. But we've only just begun to touch the patients who need this care. We're serving a very small fraction of Americans with OUD [opioid use disorder]. we need to grow up, we need to expand our services to more patients, and we need to do it in a way that is self-sustaining so that we're not reliant on outside capital and we can continue to grow organically into the market. Yeah. So really more of the same with a focus on efficiency because if you're not efficient with your operations, then there is a tradeoff around which contracts you can accept and which states you can accept Medicaid in. And, you know, we want to be the low cost provider and be able to serve everybody.
Rebecca Gwilt (25:54):
Yeah. So I don't find sort of expanding life saving treatment to more Americans boring. I think that's an amazing thing to be focused on. I usually at the end of, of these interviews ask one piece of advice you'd give other digital health founders to help them supercharge their success. But maybe today, just, just maybe a piece of general advice for all of us as we navigate through good times and bad, something that you've learned that we can all take home and put in the bank and use today.
Zack Gray (26:29):
A piece of general advice for the general audience, not for entrepreneurs?
Rebecca Gwilt (26:35):
Just in general. Listen, I am having a week here, like I mentioned <laugh>, the the personal disaster, the disasters on the news, all of that. I'm sure there's a number of people listening who have had their fill of all of the amazing, you know, digital health content out there. But you know, as a person who is under a lot of pressure, growing a company dealing with pretty serious subject matter, I'm sure that you developed some tips and tricks over time to get yourself through.
Zack Gray (27:17):
Yeah, I mean my my philosophy is focus on the big picture. The big picture is what matters. Little things will go wrong on a daily basis, but if they're not an existential threat to your overarching goal, then they're not worth worrying about. They're just blips on the radar screen as you, you know, traverse the, the journey of your life. And ultimately if I've learned anything in this endeavor there are a lot of people out there who are far less fortunate than we are. And absolutely, if the, the quality of your life is determined by the quality of your mind, then many of those people can be happy. And depending on, regardless of what is going on in our lives, stress or not, we can be happy, too.
Rebecca Gwilt (28:08):
Well, I'm gonna do that. I'm gonna meditate on the big picture practice gratefulness. And I will start with being so grateful that you joined me today. It was great speaking with you, Zack. I wish you all the best of luck as you expand expand Ophelia. And I hope to talk to you again soon.
Zack Gray (28:31):
Yes. Well, thank you so much for your interest in what we're doing. you know, I'm, I am a fan of the podcast, so I look forward to continuing to follow your conversations.
Rebecca Gwilt (28:40):
Thank you so much, Zack. All right. Take care. Bye all.
Outro (28:46):
Thank you for listening to Decoding Healthcare Innovation. If you'd like the show, please subscribe, rate and review at Apple Podcast, Spotify, or wherever you get your podcasts. If you'd like to find out more about Carrie, Rebecca, or Nixon Gwilt Law, go to NixonGwiltLaw.com or click the links in the show notes.