The Hidden Cost of Profit-First Telehealth: When Therapists Are Left Without Support.


By Dr. Gregory Lyons, PsyD, LCPC.
8/12/2025

Editor’s Note: This article reflects the professional opinion of the author and is informed by publicly available information from credible sources, regulatory reports, and first-hand clinical experience. Company names are included only in the context of verifiable, published facts. This piece is intended to foster dialogue about ethical, sustainable telehealth practices and is not an allegation of unlawful conduct.

A Crisis Meets a Gold Rush.

America is in the midst of a mental health crisis. Demand for services has soared, fueled by pandemic-era isolation, rising rates of anxiety and depression, and a shortage of in-person providers. Into this gap has stepped a wave of venture-backed telehealth companies promising affordable, accessible care for all.

On the surface, this sounds like innovation in action. But beneath the marketing gloss lies a troubling reality: some of these companies are founded and led not by clinicians, but by entrepreneurs with no grounding in the therapeutic process. Their business models are often designed without meaningful infrastructure or support for the therapists they hire — outsourcing everything, keeping overhead low, and leaving the clinician to shoulder the entire clinical and relational workload.

When Care Is a Line Item.

In these business-first models, the emphasis can shift from relational, client-centered therapy to rapid scalability and profitability. For therapists, this can mean:

The result? Clients risk receiving fragmented care, and therapists face burnout, moral injury, and diminished capacity to practice ethically.

Some companies also bypass building their own client networks entirely. Instead, they rely on preexisting public directories, such as the widely used Psychology Today therapist listings, as their primary client source. They then route these clients into their billing systems, essentially repackaging leads rather than creating robust, independent referral pipelines. While this approach reduces costs, it adds little value for the therapist beyond administrative processing — again leaving the clinician to do the heavy lifting.

Why This Model Exists.

Investor-Driven Growth Mandates.

Between 2020 and 2021, funding for mental health startups more than doubled, rising from $1.5 billion to $4.5 billion (Techstars). In 2024 alone, the digital mental health sector attracted $2.7 billion across 184 deals (Galen Growth). Venture capital demands rapid user growth and revenue scaling — often in months, not years. Building robust clinical infrastructure takes time and money; outsourcing operations to individual therapists and using preexisting client pipelines is faster and cheaper.

Low Operational Barriers.

Launching a telehealth platform requires far less investment than opening physical clinics. Without office leases, support staff, or large administrative teams, a small founding group can run a “therapy company” from laptops — while therapists provide all the actual care remotely.

Regulatory Grey Zones.

 Telehealth law is a patchwork. State-by-state differences in licensing, supervision, and caseload oversight create gaps in accountability (BBS). Many jurisdictions have no specific standards for therapist support structures, allowing companies to scale without the clinical safeguards common in traditional practice.

Gig-Economy Mindset.

Some platforms replicate the gig-work approach, treating therapists as interchangeable contractors. This minimizes obligations for benefits, professional development, or long-term pay stability — allowing the company to keep more revenue while externalizing the workload.

Do Exploitative Telehealth Companies Exist?

Yes — concerns about certain telehealth business models are well-documented by journalists, regulators, and clinicians.

BetterHelp.

Cerebral (and Similar Startups Like Done).

What Needs to Change.

Not every telehealth company is built on a profit-first, clinician-last framework. A growing number are proving that scale, innovation, and genuine therapist support can coexist.

These companies show that telehealth can be ethical, supportive, and effective — serving clients without sacrificing therapist wellbeing or professional standards.

For telehealth to truly serve the public good, it must be grounded in ethical, sustainable, and clinically sound practices:

Without these safeguards, telehealth risks becoming another cautionary tale of the gig economy — fast growth for a few, high costs for everyone else.

Final Thoughts.

Therapists have every right to feel slighted when treated as expendable labor in an industry that depends on their expertise and emotional resilience. Clients deserve more than a corporate structure that treats mental health like a subscription service.

The mental health crisis demands innovation — but innovation must honor the sacred trust between therapist and client, not erode it in the name of quick profits.

A Call to the Industry.

If you are a clinician, client, policymaker, or industry leader, your voice matters in shaping the future of telehealth. Demand transparency from providers. Ask about clinician support, caseload limits, and data protection policies. Share your experiences — positive or negative — with colleagues and advocacy groups. And most importantly, push for state and federal standards that ensure ethical, clinician-led care models.

Innovation in mental health care is essential, but it must be built on a foundation of trust, clinical integrity, and mutual respect between therapists, clients, and the organizations that connect them.

References.

Federal Trade Commission. (2023, March 2). FTC bans BetterHelp from revealing consumers’ sensitive health data to Facebook, others for advertising. https://www.ftc.gov/news-events/news/press-releases/2023/03/ftc-ban-betterhelp-revealing-consumers-sensitive-health-data-facebook-other-companies

Galen Growth. (2024, July 15). Mental health’s investment resurgence: A market ripe for innovation. https://www.galengrowth.com/mental-healths-investment-resurgence-a-market-ripe-for-innovation/

Psychotherapy Notes. (2022, October 14). When good therapists are exploited. https://www.psychotherapynotes.com/good-therapists-exploitation/

Techstars. (2022, February 22). Navigating the startup revolution: How mental wellness and economic shifts are shaping the next decade. https://www.techstars.com/blog/pov/navigating-the-startup-revolution-how-mental-wellness-and-economic-shifts

The Guardian. (2024, June 18). Why critics worry counselling app BetterHelp could create codependency. https://www.theguardian.com/society/article/2024/jun/18/why-critics-worry-counselling-app-betterhelp-could-create-codependency

TIME. (2022, October 13). Two mental health startups are under investigation. https://time.com/6225361/telehealth-startups-cerebral-done-ahead/

Wikipedia contributors. (2024, November 5). Cerebral (company). In Wikipedia. https://en.wikipedia.org/wiki/Cerebral_(company)

California Board of Behavioral Sciences. (2023). AB 1758 Telehealth FAQs. https://www.bbs.ca.gov/pdf/ab1758_faq.pdf

Zynnyme. (2024, April 25). Therapists demand boycott of telehealth companies over session recordings and AI use. https://www.zynnyme.com/blog/therapists-demand-boycott-of-telehealth-companies-over-session-recordings-and-ai-use-citing-client-privacy-violations