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Key Assumptions
- Session Fee: $35 per session per user.
- Distribution of $35: $18 to the therapist, $17 to BTN.
- BTN Operational Expense: $2.25 per session, leaving BTN with $14.75 net operating revenue per session ($17 - $2.25).
- Provider's Current Cost: Under the existing model, the provider pays $118 per session directly to the therapist.
- Provider's Population & Usage: 100,000 members requiring 4 mental health sessions per year, resulting in 400,000 sessions annually.
- BTN Model vs. Current Model: Switching to BTN, members pay the $35 session fee (approximate co-pay level), and the provider no longer pays the therapist per session at all.
Financial Analysis: Current Model
Provider Perspective (Before BTN)
The provider currently covers 100% of therapy sessions at $118 each.
Number of sessions per year: 100,000 members x 4 sessions = 400,000 sessions.
Total annual provider cost: 400,000 sessions x $118 = $47,200,000 per year.
This $47.2 million outlay significantly impacts the provider's bottom line as it represents a direct annual expense with no offsetting revenue from the member's perspective.
Financial Analysis: BTN Model
With BTN, the member pays $35 per session, of which the therapist gets $18 and BTN retains $17. BTN incurs $2.25 operational costs per session, resulting in a net operating revenue (close to EBITA) of $14.75 per session.
Number of sessions per year remains the same: 400,000 sessions.
Total member payment: 400,000 x $35 = $14,000,000 annually (paid by members, not the provider).
Therapist total income: 400,000 sessions x $18 = $7,200,000 annually.
BTN gross revenue (before expenses): 400,000 sessions x $17 = $6,800,000.
BTN operational expenses: 400,000 sessions x $2.25 = $900,000.
BTN net operating revenue (EBITA approximation): $17 - $2.25 = $14.75 per session x 400,000 sessions = $5,900,000 annually.
Impact on the Provider
In the BTN model, the provider no longer pays $118 per session. That entire cost is removed from the provider's annual expenditures:
$47,200,000 in annual payments are eliminated, converting what was previously a massive cost center directly into profit or strategic reinvestment opportunities.
This represents a dramatic improvement in the provider's operating income. Instead of funding each session, the provider lets members pay their share (similar to a co-pay), and the provider retains the previously spent funds as either pure profit or redeploys it into other high-value areas.
Benefits to BTN
BTN stands to gain significantly from this arrangement. With $6,800,000 in gross revenue and $900,000 in expenses, BTN realizes $5,900,000 in net operating revenue annually from just one provider contract involving 100,000 members.
This represents a highly scalable, high-margin revenue stream. As BTN onboards more providers or as usage increases, EBITA expands proportionally. Low operational expenses and strong unit economics highlight BTN's potential for substantial profitability and growth.
Win-Win Scenario
Provider's Perspective
- Saves $47.2 million annually by eliminating direct therapist payments.
- Converts a large expense into profit or strategic capital.
- Members pay a manageable $35 per session, maintaining accessibility.
BTN's Perspective
- Generates $5.9 million EBITA from one provider relationship.
- Achieves strong margins ($14.75 net per session) with scalable economics.
- Reinforces a sustainable, recurring revenue model tied to essential mental health services.
Investor and Partner Perspective
- Massive provider cost savings make the proposition highly attractive to large healthcare organizations.
- Robust EBITA and predictable cash flows enhance BTN's valuation and investment appeal.
- Room for growth: Additional providers, more sessions, and expanded service offerings can drive incremental returns.
Conclusion
The business case clearly demonstrates how adopting the BTN model results in substantial financial benefits for both the provider and BTN. The provider eradicates a $47.2 million annual cost, while BTN enjoys a $5.9 million EBITA stream, all without compromising care quality or accessibility. This alignment of incentives provider savings, BTN profitability, and member affordability creates a compelling environment for strategic partnerships and investor interest.
