As healthcare innovators, I’m sure that you’re all constantly thinking about the ever evolving landscape of the industry in the U.S. That’s why I wanted to share a great piece from one of our partners, Dave Vreeland, Managing Director of Jumpstart Capital. He recently published an article on the U.S. healthcare industry and the ways in which it’s ripe for innovation. In this 3-part post, he offers a comprehensive view of U.S. healthcare – highlighting the fact that this country spends significantly more on healthcare than others without outcomes to justify the costs. As Dave puts it:
“Shockingly, the U.S., perhaps the most advanced economy and the world’s only superpower, is one of the least healthy countries in any list of peers, with nearly half of our population suffering from Type 2 Diabetes, the symptoms of which include “heart disease, strokes, diabetic retinopathy which can result in blindness, kidney failure, and poor blood flow in the limbs which may lead to amputations.”[4]
After establishing the problems that exist with both outcomes and ever increasing spend, Dave discusses some of the ways in which he can see the industry adapting to overcome these challenges. Most notably, he wraps up by offering a peek at his view of the type of company that could lead us into the future of healthcare. Read a few of his thoughts below:
A Great New Healthcare Technology Company
“As a thought experiment it seems to me that this business would require a large, cash rich firm the likes of Amazon, Walmart or Google; with a retail orientation and big technology skill base. You’d start with a couple billion dollars and build a mobile app that’s fully encrypted and HIPAA compliant. Patients/customers would be able to use a single visit for free, but would then be required to sign up for a quarterly or annual subscription for primary care services at a reasonable amount – $50/person/month. For this the person would get unlimited consultations with a nurse or mid-level provider, and a physician if necessary.
The business would own no offices or facilities, however to make it work the financial backer would probably have to buy a national mail order pharmacy and negotiate prices with the pharma manufacturers to ensure that the prescribed meds were available at a reasonable price. Obviously the Amazons of the world already have the logistics expertise, infrastructure and subcontracts in place to get items to patients’ homes quickly so this is a prerequisite as well.
Taking the thought experiment to the next logical phases isn’t hard. Over time this business builds a large enough base of customers to eliminate insurance companies for primary care. Extensive agreements with service providers like specialists, hospitals, surgery centers and imaging centers aren’t a stretch to imagine and the concept of scale enables this company to command substantially large discounts, taking the costs of healthcare for their customers down substantially.
As this company’s customer base grows from ten million to one hundred million (a third of the U.S. population), think about the possibilities for totally reordering the healthcare economy in our country. Hundreds of smaller companies who are ahead of the curve on this vision will be started; some of which will get acquired along the way. Several new “healthcare platforms” will come out of this new trend. May sound far-fetched but it happened in a half dozen other industries and companies that most you can rattle off of the top of your heads. And so on.”
Whether you agree with Dave or not, everyone seems to agree that there is a lot of room for improvement. I highly recommend checking out the entire article, which provides much more depth!
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