Scoop: $50M for wraparound addiction support

Eleanor Health, a startup applying harm reduction to addiction and other mental health issues, raised $50 million in Series C funding led by General Catalyst, CEO Corbin Petro tells Axios exclusively.

Why it matters: Rates of addiction and overdose have risen sharply amid the pandemic. Rather than requiring people to abstain entirely from drugs and alcohol — a strict approach that's seen mixed results — Eleanor provides wraparound treatment including therapy, peer coaching, case management and medications, including medication assisted treatment (MAT).

• Eleanor's methods revolve around harm reduction, an approach to addiction treatment that is linked with higher survival rates, greater treatment retention figures, decreased use of illicit drugs and healthier births among pregnant people with substance use disorder.
• "When you have any chronic medical condition, you need people wrapping their arms around you, not creating potholes for you to fall into," Nzinga Harrison, Eleanor's co-founder and chief medical officer, tells Axios.

Context: Addiction, drug overuse and overdoses have spiked during COVID.

• More people died of overdoses during the first six months of 2021 than during any continuous six-month period in 2020, according to the Commonwealth Fund.
• Centers for Disease Control and Prevention data from 2020 showed significantly higher overdose death rates among 25-54-year-olds, Black people and American Indian and Alaska Native people.

How it works: Eleanor offers its services as an in-network insurance benefit via partnerships with payers including Tufts, Amerigroup, Optum and Aetna. And Eleanor takes on risk for its members.

• If patients recover — get healthier and stay out of the hospital — payers and Eleanor split the savings. If they don't, both parties lose money.
• Eleanor provides 90% of its services virtually, but the company also operates 28 clinics across six states where people meet with community health workers. "We meet with people where they are physically and where they are along their care journey," Petro tells Axios.
• Unlike traditional detox centers, Eleanor follows up with patients for a minimum of five years after they recover, because that's when research indicates relapse rates return to the level found among the general public.

Details: Existing Eleanor investors including Warburg Pincus and Town Hall Ventures also joined the round, alongside new backers NorthPond Ventures and Rethink Impact.

• With the fresh infusion of capital, Eleanor plans to hire more staff, deepen its technology, enter new markets and form a research division to partner with academic institutions and publish its outcomes in peer-reviewed journals, Harrison says.

Our thought bubble: We can think of at least three trends coalescing to help fuel the growth of companies like Eleanor Health:

1. A surge in funding for behavioral health companies.
2. Increased momentum behind value-based care arrangements.
3. Heightened awareness of evidence-based approaches to addiction and substance overuse.

Yes, and: Because of its non-traditional model, Eleanor faces challenges, including hiring and training staff.

• "It is a hard recruitment market," says Harrison. "We have to find people who can learn to practice in a way none of us has been trained."
• For example, where traditional drug rehab centers tend to punish patients for positive drug tests, Eleanor trains its staff and patients to see them as a means of building trust, with the goal of having a patient's results align with what they feel comfortable sharing with their caregiver.

What they're saying: Academics increasingly support approaches to addiction guided by harm reduction, and investors say Eleanor's methods make logical sense.

• "Traditionally there are short-term, abstinence-based modalities with high relapse rates where people cycle in and out without any sort of longitudinal care," General Catalyst managing partner Chris Bischoff tells Axios. "Eleanor’s thought of the inverse of that."
• "Even if people are not ready, willing, or able to stop using an addictive substance, they can start getting help and making positive changes ... and a harm-reduction approach to treatment can help," clinical psychologist and Washington State University professor Susan Collins writes in STAT.

💡 One fun thing: The name Eleanor was inspired by Eleanor Roosevelt, an early supporter of the idea of universal human rights — including medical care. And in Greek, the name means shining light.

• "We want to be that shining light for people, even in their darkest moments," says Harrison.