How Technology Disrupts Health
Human health is an enormous part of the US economy, with costs generally growing faster than the economy as a whole. Massive incumbents across the ecosystem, including UnitedHealth, Kaiser Permanente, and CVS Health have significant incentives to maintain the status quo. But technology will continue to transform every sector of the economy, and health is no exception.
Outside of technology, the health system is slowly transforming. This includes a shift from traditional hospital system providers to the rise of urgent care and similar facilities across the country, as well as the transformation from a fee for services model in traditional Medicare to a more value-based care model in Medicare Advantage. Decentralization of providers enables new modalities of care, while value-based care incentivizes the delivery of more cost-effective outcome-driven solutions. Meanwhile, technologies like AI and remote-patient monitoring and care provide the building blocks to transform how health care is delivered.
Many imagine technology driving healthcare changes through pure-play healthcare IT companies delivering improved online experiences. And while this may indeed be a piece of the transformation, it represents only a microcosm of the changes. Disruption will come from the inside out - health insurance companies aren’t overhauled overnight, health must be made more efficient. Companies need to sell into existing workflows with products that deliver according to the needs of the stakeholders. Technology companies must understand the flow of money and deliver better products aligned with the existing transaction models, as opposed to unwinding entrenched market participants that would otherwise have every incentive to resist change.
In the case of a portfolio company Candid, for example, they deliver a product that fits into the existing workflow of GP dentists as they currently work with their patients. It uses AI and remote patient monitoring to make the GP dentists more money and to improve patient outcomes, without needing anyone to rethink business models. In the case of Freenome, another portfolio company, they enable doctors to provide early screen and detection with high levels of confidence through liquid biopsies. They leverage machine learning at scale, but the doctors care about the results and the adherence more than the underlying technology. And most importantly, they sell in a way that does not threaten anyone’s business models.
Over the 30-year horizon, nearly every touchpoint in human health will be affected by technology. This includes AI-based drug discovery and development, remote patient monitoring, enabling higher accuracy and higher throughput in provider care, and even how insurance is underwritten. But companies need to take care to build products to the path of least resistance, understand who their customer is, and sell to the person paying for the product in the way that makes sense to the stakeholders.
