Today, The Frontier Psychatrists welcomes back my friend Ben Spielberg. He's been a reader for a long time and has contributed to the newsletter in the past. It was on Clinical Trial design, a perennial favorite around these parts. With only light edits, what follows is his work, narrated by me, for the Audio Version. I would invite you to the live class today on working as an out-of-network provider, but it sold out last night, so you'll have to wait for the next one. My prior article on Spravato is available here. The year is 2024. OpenAI has just launched its latest update to ChatGPT, promising more natural and less artificial-sounding language. Donald Trump has won the nomination for President of the United States. Another chain of ketamine clinics has engaged in a corporate reorganization. There is conflict in the Middle East. Are we sure that we're not living Groundhog's Day? I am the founder of Bespoke Treatment, an integrative mental health facility with multiple locations that has at times been referred to as a "ketamine clinic." I have also seen countless so-called "ketamine clinics" sell for pennies on the dollar and go bankrupt seemingly overnight. In this case, Numinus, a company that was publicly traded in Canada and owned a number of psychiatric clinics specializing in ketamine in the US and Canada, has sold its clinics to Stella (a company that has stealthily become one of the larger mental health providers in the country and is the first to bring the awesome SGB treatment to scale). It's not the first time this has happened. It's not the second, nor the third, nor even the fourth time this has happened. But yet, the common consensus is that ketamine clinics are a cheap, easy business with recurring revenue. So, what gives? Figure 1. A reddit user asking anesthesiologists if they should start a ketamine or Botox clinic for easy cash on the side. Does this make you feel gross? Should it? The Ketamine Clinic Model 101 The most basic outline for a ketamine clinic is as follows: a provider rents an office space with, on average, five or so exam rooms. They buy equipment for infusions like a pump, catheter, needles, and syringes. They buy some comfortable recliner chairs. They hire a receptionist to answer phones, field patient questions, charge credit cards, and handle medical record requests. They hire a nurse to insert the IV, monitor vital signs, check blood pressure, juggle multiple patients at once, and make sure the ketamine is flowing into patients’ veins unencumbered. Two SKUs are typically offered: ketamine infusions for mood, which last approximately 40 minutes, and ketamine infusions for pain, which last for up to 4 hours. Zofran is offered for nausea, and some clinics have fun add-ons like magnesium or NAD. An average mood infusion costs around $400-$500 in a medium cost-of-living area, while mood-infusions can run up to $700 in a higher cost-of-living area. Some clinics offer package discounts if patients buy six or more upfront, which helps with cash flow for the clinic (cash now is better than cash later, of course). A Note on Scope of Practice The first wave of ketamine clinics was started mainly by providers who were not mental health specialists. Instead, they were owned by anesthesiologists, ER physicians, and sometimes CRNAs. These providers were especially experienced with ketamine in hospital settings, as well as setting up infusions. Psychiatrists, on the other hand, do not usually order infusions in outpatient settings, and very few had actual hands-on experience with ketamine in practice. That being said, there are a number of variations to the model above: psychiatrist-owned ketamine clinics would often prefer to use intramuscular injections in lieu of infusions, but 2-3 injections would have to be given during a single session for mood and pain sessions were out of the question. Other ways to save costs might include having an EMT do the actual injections (this is highly state-dependent), asking nurses or MAs to work the front desk, or working a full-time regular doctor job. In contrast, your nurses run the actual ketamine services via standing orders, a written document that details routine and emergent instructions for the clinic. Some clinics offer full evaluations prior to rendering treatment, but many offer a simple brief screening on the phone to check for contraindications before scheduling a patient for their first session. The clinics owned by psychiatrists have historically been a bit more thorough in terms of the initial psychiatric evaluations, given that they can actually perform initial psychiatric evaluations within their respective scope of practice. Sometimes clinics may have therapists on-site who can render ketamine assisted therapy (meaning, therapy occurring concurrently) for an additional $100-$300. Otherwise, there is not much decision-making that goes on— other than deciding on medication dosages. Most infusions start off at .5mg/kg of body weight, which is by far the most evidence-based dosage. In practice, most clinics increase dosage every session because even though ketamine is considered to be a weight-based medicine for anesthesia, there is thought to be a “sweet spot” of dosage for everyone, if one can imagine an inverted U shape curved, where the ideal dosage for each patient is at the tippity-top of the inversion. Dosage increases are highly variable depending on the clinic: some have a maximum dosage, some will only increase a certain percentage, and some may even use standardized increments (e.g., only offering dosages in increments of 50mg). A typical series of infusions is 6-8 over 3-4 weeks, followed by boosters as needed. Fool’s Gold At first glance, the business model seems fantastic. As a cash business, there are no AR issues, no third party billing companies to deal with, and no prior authorizations to fight over. Sure, the cost is high, but it’s not that high compared to many other healthcare services. Since the benefits fade over time, a ketamine clinic has built-in recurring revenue from patients every week, month, quarter, or year – it’s like a subscription business! Ketamine is trendy and sexy; TV shows like White Lotus mention it, and ravers from the 90’s recall it with great fondness. Unlike SSRIs and psychotherapy, ketamine works for depression fast. It’s amongst the fastest treatments for depression that we have today, and there are a lot of depressed people. It can help someone out of debilitating depression in 40 minutes. It has none of the un-sexy side effects of SSRIs like sexual dysfunction, gastrointestinal discomfort, or uncontrollable sweating. Instead, it has sexy side effects: euphoria, hallucinations, and feelings of unity with the universe. Also, unlike SSRIs, it helps most people who try it. It really is an amazing treatment, and I often feel grateful that my clinic is able to offer it to patients in need Figure 2. Most business-savvy reddit user. Supply and Demand… or Something Mood disorders disproportionately affect individuals who are of lower socioeconomic status compared to individuals with a lot of disposable income. Of course, wealthier individuals are no more immune to mental health disorders than anyone else, but the main target market that benefits most from ketamine just do not have the means to afford it. They don’t have $3,000 to burn on yet another treatment that may or may not work. Often, the patients who could really use a series of ketamine infusions cannot scrounge enough money for a single infusion, let alone a whole series and prn boosters. However, there should be enough depressed people with cash to throw around out there… right? Wait, Isn’t That A Horse Tranquilizer? Of course, ketamine clinics can find more patients via marketing and advertising. However, I’ve found that many medical doctors who see this population, like primary care providers, are not up to date with the research. When I first launched my company, I used to go door-to-door to medical buildings in Santa Monica with cookies to speak with them about advancements in interventional psychiatry. I cannot count the number of times that I was laughed out of each office; referring providers are risk-averse, and the perception of ketamine has traditionally been poor. Medical doctors would exclaim, “Of course people feel better; you’re getting them high,” and lament that I was administering a drug thought to be highly addictive. Psychotherapists, who would also be fantastic referral partners, generally refer to psychiatry, but it’s less common for them to refer to specific treatments. Nowadays, psychotherapists who are particularly invested in ketamine can sign up with venture-backed companies like Journey Clinical and render their own ketamine-assisted psychotherapy with some prescriber supervision. The issue is that despite the media attention, people with depression don’t read innovative health newsletters, nor do they review papers in scientific journals. They rely on information from their psychiatrists, medication management providers, and psychotherapists. If they are not told that this is an option for them, they won’t hear about it without ad spend. Oh yeah, and there is a major issue with ad spend: the word ketamine itself is a restricted drug term, and legitimate clinics routinely get banned from Google and Meta for mentioning it, which makes digital advertising more difficult than it would be for any other legitimate service. The Matthew Perry Effect Ketamine is very desirable for some patients (unfortunately, sometimes the patients who want it most are frankly the worst candidates for it), but I’d wager that the majority of patients who need it are kind of scared of it. They want to feel good, they want relief from depression and trauma, but it’s a weird thing to do a drug that is a horse tranquilizer and also an anesthetic in a reclining chair in a medical off
