Ann Arbor Startup Workit Health Is on Its Way to Unicorn Status

Online therapy is clicking as the pandemic reshapes addiction treatment options
workit health
U-M grads Lisa McLaughlin and Robin McIntosh’s company Workit Health is valued at $500 million. // Photographs courtesy of Workit Health

Metro Detroit native Lisa McLaughlin attended an Alcoholics Anonymous meeting in the San Francisco area in 2009, working to maintain sobriety after her days in the Detroit underground club scene left her with addictions to overcome. Sitting knee-to-knee with her was a fellow University of Michigan alum, Robin McIntosh, who was fighting alcoholism and an eating disorder.

Six years later, the two found themselves looking for a solution to the same problem: How could they help improve access to substance use treatment, something that had long taken place in depressing, dimly lit church basements?

The answer to that question has made them millionaires. The company they founded, Workit Health, provides online addiction treatment services in 13 states and, per an October 2021 round of venture capital funding, is valued at $500 million. That puts Workit, based in Ann Arbor, halfway to “unicorn” status, the entrepreneurship world’s term for a $1 billion startup. Only two Ann Arbor companies have hit that status, cybersecurity firm Duo and supply chain software giant Llamasoft.

“In 2016, we were two women bootstrapping, trying to raise venture capital,” McLaughlin says. “We just don’t fit the mold most investors are used to — kids from Ivy Leagues wearing hoodies. We weren’t the next Elon Musk or Mark Zuckerberg.”

McLaughlin and McIntosh were also proposing a concept that, at the time, seemed unlikely to succeed. Using telemedicine for mental health services, especially addiction, had long been a regulatory nightmare; a 2008 federal law required in-person evaluations from doctors issuing prescriptions for controlled substances. What’s more, many health insurers refused to cover telemedical sessions related to mental health.

Then, in early 2020, the Drug Enforcement Administration loosened those restrictions in anticipation of the onset of the COVID-19 pandemic. Suddenly, medications to help with withdrawal, like Suboxone and naltrexone, could be prescribed more easily.

At the same time, the stress and isolation of the pandemic sent substance use disorders skyrocketing and, given the necessity of social distancing and lockdowns, forced both patients and practitioners to turn to virtual communications. By June 2020, 13 percent of Americans had started using or increased use of substances, according to the Centers for Disease Control and Prevention, and Overdose Detection Mapping Application Program found an 18 percent increase in overdoses in the pandemic’s early months. In December 2020, the American Medical Association reported that more than 40 U.S. states had seen increases in opioid-related deaths.

With the pandemic forcing the closure of many rehabilitation centers, telehealth became the most practical option for people in substance use recovery. As a result, insurers began covering online therapy sessions. 

“The pandemic has exacerbated something that’s endemic to the addiction space,” says McIntosh, who graduated from U-M with degrees in creative writing and economics. “We already had such a deep access problem, and then most treatment centers shuttered. The main reason people don’t get help or get better is lack of affordability and lack of access, and that has changed some.”

All this led to an explosion of demand for Workit, which bills health insurers or Medicaid, bringing in $4,200 per client per year, depending on treatment plan and length as well as insurance coverage.

Membership was already rising in late 2019, but the March 2020 start of the pandemic in the U.S. sent the service into overdrive. The company has seen 400 percent growth for two years running, McIntosh says, with 7,000 patients now registered on the platform. Workit Health employs a team of more than 120 licensed behavioral health counselors and professional care coaches. Counselors only provide therapy within the state they’re licensed in.

Digital treatment programs like Workit are now essential, says Dr. Lewei (Allison) Lin, a Michigan Medicine psychiatry professor. Many people in recovery face transportation problems or avoid going for help because they feel ashamed or embarrassed.

“We’ve done research involving lengthy interviews with patients on perceptions of telehealth, and not having to physically walk through those doors is an advantage,” Lin says. “COVID isn’t something anyone would’ve asked for, but it’s really changed the way we deliver health care.”

This story is from the April 2022 issue of Hour Detroit. Read more in our digital edition