Mindpath seemed like a success story for private equity in mental health. Now, it’s a cautionary tale

As a Covid-driven mental health crisis enveloped the U.S. in 2020, two private equity firms began rapidly buying up psychiatric practices from coast to coast. By late last year, they owned more than 100 therapy clinics in eight states — rebranded as Mindpath Health — and had plans to expand further.

Therapy, from a private-equity perspective, was ripe for the taking, and the company’s timing seemed ideal, given the surge in demand for outpatient mental health care. But at the start of this year, Mindpath suddenly laid off fleets of staff and shuttered some locations it had acquired just over a year earlier.

As private equity increasingly wades into mental health clinics — with more than $14 billion spent on mental health and addiction treatment centers since 2021, according to PitchBook data — Mindpath’s stumbles are a neon red warning sign for the field. On its website, Mindpath describes itself as an “organization with patients at its heart.” Behind the glossy veneer, though, therapists and other employees describe a desperate focus on growth above all else, and a need to convert patients into profits — fast.

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