- Elemy, a $1.15 billion startup, promised families and healthcare providers quick access to autism care for kids.
- But it often failed to deliver, interviews with more than 20 current and former employees suggest.
- Employees said the startup left kids on waitlists because it struggled to hire clinicians.
Riley and Qin never suspected that their daughter had autism.
Their toddler, Hope, didn’t mind being touched or making eye contact, which can be early signs of the developmental condition.
Still, Hope didn’t speak.
So the family, who lived in a suburb outside of Austin, Texas, waited about nine months for an appointment in March with a specialist at Dell Children’s Medical Center in Austin. Insider is identifying the family by their first names to protect their privacy.
They left the visit with an official diagnosis and a recommendation to start Hope in a popular type of autism therapy known as applied behavior analysis, or ABA. Among the three ABA providers the specialist referred them to was a startup called Elemy.
Elemy surprised the family by calling the minute they stepped out of the specialist’s office when they were still processing the news. The company sounded like a fit: It offered convenient in-home therapy and flexible hours, perfect for a busy family with no ABA centers nearby.
Elemy said it would match Hope, who was by then about 3, with a therapist in no more than eight weeks, following an initial behavioral assessment. It failed to deliver.
Eight weeks passed, and Hope still wasn’t in treatment. It became clear to her parents that she wouldn’t receive therapy from Elemy anytime soon, so they decided to look for other options, worried how wasting that time would affect their daughter. The earlier kids are diagnosed and treated for autism, the better the outcomes, evidence shows.
“Here they are saying that they’re going to provide services and they just straight didn’t after charging a family who’s already hurting,” Riley said.
Elemy used relationships with doctors to build demand, then struggled to get kids into care
The experience of Hope’s family wasn’t unusual. Elemy told families like Hope’s and their healthcare providers it could get kids with autism into care quickly but often couldn’t meet demand, interviews with more than 20 current and former Elemy employees from across the company suggest.
To build up demand for its services, Elemy developed relationships with pediatrician offices, children’s hospitals, and other organizations to collect hundreds of patient referrals, six former employees, including some directly involved in forming the provider relationships, told Insider. The former employees said many kids referred to Elemy became stuck on waitlists because the company had not yet hired clinicians to treat them or wasn’t fully set up to take certain insurance plans.
The current and former Elemy employees who spoke to Insider for this story requested anonymity because they feared retaliation from the company.
“We were going and gobbling up referrals anyway just to stash them on our bench,” one of the former employees in business development told Insider. The former employee said logistical hurdles made it difficult to deliver on Elemy’s promises: ”In reality, these kids never had a shot at getting care with Elemy.”
Elemy’s founder says waitlists are a challenge for autism-care companies, and the startup is working to build its infrastructure
In an email to Insider, Elemy’s founder and CEO, Yury Yakubchyk, said the company has had “significant waitlist challenges,” but that waitlists are a common problem in autism care.
“You correctly point out that we gradually encountered our own significant waitlist challenges given the serious demand for the clinical outcomes and personalization that our platform provides,” Yakubchyk said. “Overall, waitlist challenges are not unique to us and impact virtually all care providers in our industry. In our next chapter, we are working hard to solve these through technology while maintaining our high clinical outcomes.”
As of July 2022, Elemy was actively caring for 462 kids, according to a screenshot of an internal company dashboard seen by Insider.
The company has slowed its growth this year to build infrastructure, Yakubchyk said. Since March, Elemy has been retreating from the 14 states where it previously treated kids. In July, it abruptly stopped services for kids in Georgia and Illinois as it laid off clinicians and other employees in operations, Forbes reported. It’s now focusing on three states: California, Florida, and Texas.
“Earlier this year, we made the decision to slow down our growth in the near term to focus on building platform infrastructure to scale our high clinical outcomes to tens of thousands of families in the coming years,” Yakubchyk said in his email. “Our various partners were instrumental in crafting our strategy change, working hand-in-hand with clinical and compliance experts. We are investing in long-term impact and these are early innings.”
Elemy was founded to address the growing demand for specialized autism care, and drew lots of money from investors
Other Silicon Valley companies, like the SoftBank-backed mental-health startup Cerebral, have won hundreds of millions from investors at steep valuations, thanks to bold missions to use technology to tackle complicated problems in healthcare. Some, including Cerebral and its competitor Done, which provides ADHD medication online, are facing federal investigations into their practices.
Elemy, founded in 2019 and launched in 2020, has raised $270 million from the likes of venture-capital firms SoftBank and General Catalyst and celebrities including Chelsea Clinton. The company said it wanted to expand access to ABA therapy through technology and in-home care.
A spokesperson for SoftBank declined to comment for this story. General Catalyst and Clinton’s venture firm, Metrodora Ventures, did not respond to requests for comment.
Elemy targets a real problem. ABA therapy, while somewhat controversial, is the most widely used treatment to teach kids with autism new skills and discourage challenging behaviors. It’s seen an avalanche of interest from private-equity firms that were attracted to the space by the growing number of kids being diagnosed with autism and the opportunity to collect recurring revenue.
The therapy can be hard to get, because demand for it far outpaces the behavior analysts and therapists available. Families can wait months to years to get their kids into treatment, depending on their location and type of insurance.
Elemy claimed it could get families into care faster — four times faster than typical providers and “no long waitlists,” its website said as recently as May — by making the process, from onboarding to scheduling, more efficient with software.
But the nature of Elemy’s business model made that promise difficult to keep. The company generally brought on patients first and then hired therapists to treat them, six current and former employees said. Sometimes therapists weren’t easy to find and match to a family’s specific location or availability, three of those people and a former recruiter said.
“We didn’t have enough therapists to actually go and do the job,” a former Elemy manager said. “They were so concerned with selling the product that they forgot that we actually needed staff to implement the product.”
For Hope, the process began with an Elemy behavior analyst evaluating her in a series of virtual meetings in April and May. The analyst asked Hope’s mother, Qin, questions and observed Hope through the camera, Qin said. Elemy charged the family $625.02 for the assessments, after insurance, according to a bill reviewed by Insider.
Following the assessment, Hope was supposed to be connected with a therapist for in-home therapy. But after eight weeks of waiting, Riley demanded answers and was told by the Elemy behavior analyst that the company couldn’t find any therapists to treat her.
When he asked, incredulously, why Elemy didn’t check availability before, the behavior analyst said: “I guess we were just hopeful,” Riley recalled in an interview.
Elemy tapped into referrals from health systems to grow more quickly
Elemy found Hope through a relationship the company’s business-development team forged with Dell Children’s, illustrating a strategy that the company landed on to grow more quickly as investors poured in cash and the company sought to justify higher and higher valuations.
Elemy’s Series B round in October 2021 valued Elemy at $1.15 billion, based on its annual recurring revenue of $24.5 million at the time investors committed their cash, according to a screenshot seen by Insider of a slide from May 2022 showing Elemy’s revenue growth. The next milestone Elemy wanted to hit was a $10 billion valuation based on annual recurring revenue of $333 million to $500 million, according to the slide.
Getting there would require explosive growth in patients. As of June 6, 2021 — just a few months before the funding raise was announced — the startup was actively caring for just 219 kids, according to an internal memo titled “Weekly Business Review” seen by Insider.
Through at least mid-2021, the company attracted most patients through online ads or word of mouth, a May 2021 internal company presentation on its business-development strategy indicated.
It wanted to grow faster. So it came up with a strategy to grow “10x” more at a lower cost of acquiring customers by hiring dozens of business-development employees to forge informal partnerships with pediatrician offices, diagnostic specialists, hospitals, and schools, so they’d refer kids with autism to its services, according to a separate May 2021 presentation, seen by Insider, outlining the growth strategy.
At the direction of leadership, Elemy employees on the business-development team told those organizations to send their kids with autism, according to four former employees directly involved in forming referral relationships. Those employees said they promised providers that Elemy could get kids into care quickly, and that Elemy could take Medicaid or would be able to soon.
Elemy’s claim that it took Medicaid, the state-federal program providing health-insurance coverage to low-income families, was a particularly big deal. In some areas of the country, few ABA clinics care for kids enrolled in Medicaid because of its low reimbursement rates. So Elemy drew in lots of children covered by the program, three former employees, including two of the former business development employees, said.
Elemy said it took Medicaid, but insurance problems prevented it from treating some patients
But a tangle of insurance problems prevented Elemy from caring for some patients. In some states, it appeared the company wasn’t fully set up to accept Medicaid or certain Medicaid managed-care plans, the two former business development employees and the former manager said. Elemy took the kids anyway.
“When Elemy walked through the door and said, ‘Hey, we’re accepting Medicaid,’ these offices went ballistic,” one of the former employees in business development said. “Their faces would light up. On my end, it was such a good feeling, because I was like, ‘Oh my God, we’re finally going to help these people.’ I was naïve because I was just being told to do something and it wasn’t true.”
Dell Children’s, where Hope was diagnosed, referred roughly 150 to 200 kids to Elemy, many of them covered by Medicaid, three former employees said. Just one of those kids was in care as of at least May 2022, according to one of those employees; another confirmed that figure up to June.
In a statement to Insider, a spokesperson for Dell Children’s said its standard protocol for families seeking ABA therapy is to provide at least three referrals for therapy. Demand for services grew when the therapy became covered by Medicaid in Texas earlier this year, and “Elemy represented itself as a Medicaid provider,” the spokesperson said.
The spokesperson said Dell Children’s mental-health care department made 45 referrals to Elemy. One parent called with a complaint about scheduling, while the others found help through the additional referrals. Dell Children’s stopped referring kids to Elemy in the summer, the spokesperson said.
As of September 9, Elemy was not enrolled in the state’s Medicaid program, though it has an application in process, a spokesperson for the Texas Health and Human Services Commission told Insider.
Elemy gave some kids behavior assessments before hiring therapists, potentially trapping families on the waitlist
The waitlist stacked up. Kids waited anywhere from a month to a year for care, depending on their location and insurance, while some never got into care, nine current and former employees said. Four former employees said that out of hundreds of referrals they generated, they saw a small fraction of kids start therapy.
“We had this huge backlog of patients,” one former employee said, adding that it appeared to him that the company had no plan to get them into care.
As in Hope’s case, sometimes Elemy gave kids a behavioral assessment and then kept them hanging weeks or months before starting in-home therapy, four of the former employees Insider spoke to said. One of those former employees, an operations leader, said there were cases in which enough time had passed since the first assessment that it lost its relevance and had to be redone.
Putting a child on a waitlist after performing an initial behavior assessment can make it hard for the family to seek care elsewhere, Jon Bailey, an expert in autism therapy and professor emeritus at Florida State University, said.
Each ABA company performs its own expensive, time-consuming behavior assessments, and some insurers pay for only one assessment every six months, he said. So if a family stuck on the waitlist wanted to look for faster care elsewhere, it may not be able to because insurance wouldn’t pay, he said.
It’s best practice to start therapy immediately after the behavior analyst’s assessment, said Zachary Stevens, the owner of the ABA provider Practical Behavior Analysis, which serves kids with autism in Tennessee and California. Giving kids assessments without having a therapist ready to treat them is unfair to families and gives them false hope, he said.
Waitlists without end
Six current and former Elemy employees said the company wasn’t clear with families about how long they might wait to start therapy, in part because it had no way to estimate how long it would take to hire a therapist.
“I felt like we were just constantly lying to the people,” said one former case manager overseeing 40 families, most of whom were on the waitlist. The case manager said she didn’t move a single family from the waitlist into therapy during her handful of months at the company.
Others said they were honest and sometimes told the families facing long waits that they should start looking for care elsewhere.
ABA experts agree that transparency is essential.
“These are children, and you need to be extremely transparent with the family when you’re doing this,” Adam Weinzimer, the owner of Training Wheels ABA, an independent ABA provider in Austin, said.
His company has a waitlist, particularly for Medicaid patients, he said, but the families on it know exactly what to expect. If a family feels the waitlist is too long, Training Wheels ABA works with them to find another provider, Weinzimer said.
Hope’s parents didn’t get transparency. After Elemy promised them that it would get her into care within eight weeks, the family stopped moving forward with other autism-care companies, so they didn’t have a backup plan.
The family had considered moving to be closer to an ABA facility when Hope was diagnosed, but with Elemy’s assurance of in-home treatment, the family stayed put.
After the family realized Hope wouldn’t be getting treatment from Elemy, Riley hit the pavement, knocking on doors of brick-and-mortar facilities and asking for tours. He found Training Wheels ABA, and Hope started care there within two weeks. The family is now moving about 30 miles to Austin so she can go to treatment every day.
Blake Dodge contributed reporting to this story.
Have you had an experience with Elemy that you’d like to share? Contact Shelby Livingston (+1 843-412-6857) or Blake Dodge (+1 252-241-3117).