davidshaywitzAt his yearly CEO summit, noted VC Vinod Khoslaspoke with Google co-founders Sergey Brin and Larry Page (file under “King, Good To Be The”).

Towards the end of a wide-ranging conversation that encompassed driverless cars, flying wind turbines, and high-altitude balloons providing internet access, Khosla began to ask about health.

Specifically, Khosla wondered whether they could “imagine Google becoming a health company? Maybe a larger business than the search business or the media business?”

Their response, surprisingly, was basically, “no.”  While glucose-sensing contact lenses might be “very cool,” in the words of Larry Page, Brin notes that,

“Generally, health is just so heavily regulated. It’s just a painful business to be in. It’s just not necessarily how I want to spend my time. Even though we do have some health projects, and we’ll be doing that to a certain extent. But I think the regulatory burden in the U.S. is so high that think it would dissuade a lot of entrepreneurs.”

Adds Page,

“We have Calico, obviously, we did that with Art Levinson, which is pretty independent effort. Focuses on health and longevity. I’m really excited about that. I am really excited about the possibility of data also, to improve health. But that’s– I think what Sergey’s saying, it’s so heavily regulated. It’s a difficult area. I can give you an example. Imagine you had the ability to search people’s medical records in the U.S.. Any medical researcher can do it. Maybe they have the names removed. Maybe when the medical researcher searches your data, you get to see which researcher searched it and why. I imagine that would save 10,000 lives in the first year. Just that. That’s almost impossible to do because of HIPAA. I do worry that we regulate ourselves out of some really great possibilities that are certainly on the data-mining end.”

Khosla then asked a question about a use case involving one of my favorite portfolio companies of his, Ginger.io, related to the monitoring of a patient’s psychiatric state.

Responded Page, “I was talking to them about that last night. It was cool.”

That pretty much captures Brin and Page’s view of healthcare – fun to work on a few “cool” projects, but beyond that, the regulatory challenges are just too great to warrant serious investment.

(To be clear, Brin and Page emphasized their personal distance from Google Ventures, which has conspicuously pursued a range of health-related investments.  “Medicine needs to come out of the dark ages,” Google Ventures Managing Partner Bill Maris recently told Re/code.)

On the face of it, it’s pretty amazing that a company that doesn’t think twice about tackling absurdly challenging scientific projects (eg driverless cars) is brought to its knees by the prospect of dealing with the byzantine regulation around healthcare (and more generally, our “calcified hairball” system of care, as VC Esther Dyson has put it).  A similar sentiment has been expressed by VC and Uber-investor Bill Gurley as well; evidently taking on taxi and limousine commissions is more palatable than taking on the healthcare establishment.

Yet others – with eyes wide open – are taking on the challenge.  AthenaHealth’s Jonathan Bush, for instance, is maddened by the challenges of regulatory capture (see my WSJ review of his book here), yet he shows up each day to fight the battle.

Similarly, while I’ve not always agreed with Khosla’s perspective on algorithims, I’ve consistently admired his willingness to enter the fray (see hereand here).

This morning on Twitter, he asked whether his willingness to invest in healthcare means he’s courageous (as I suggested) or naïve.

The answer, I imagine, is probably both.  The challenges in healthcare, especially regarding regulation, are real, and disruption is hard to come by.  As Brown University emergency physician Megan Ranney comments, there are “big risks, lots of roadblocks” but also “huge potential for humankind.”

I suspect the key to overcoming the regulatory roadblocks will be making the use cases more persuasive and immediate.  After all, most people have the enlightened self-interest to embrace life-saving innovations (anti-vaxers notwithstanding).

The challenge is that to this point, the benefits of technology generally seem less than persuasive – the tech seems “cool,” as Page and Brin might say, but not exactly convincing.  I’m not just talking about Google Glass (which perhaps defines the genre) and Google’s contact lenses (I’ve not met many experts who’ve bought into this technology), but also approaches like 23andMe.  When they ran up against regulators, there wasn’t exactly an outcry, “this technology has transformed my life and now you’re shutting it down.”  If only.

In contrast, efforts to shut down Uber typically generate far more impassioned protests.  Why? Because it’s immediately apparent to users how Uber improves their lives.  To use the service once is to be convinced.

What healthcare technology needs is to find a way to be similarly indispensable.  Page may cite the potential to save 10,000 lives, but the challenge is to convince anyone this applies to their own N of 1.  More directed examples of instances where technology could immediately impact lives, and could impact more were it not for oppressive regulation, would go a long way to rolling back the regulations that seem to impede progress.

Rather than focusing on the thousands of lives that could be saved in an imagined future, technologists would do well to provide a compelling demonstration of what big data and sophisticated analytics can achieve for the health of discrete individuals in the present, even with current limitations; success here could help innovative entrepreneurs push back on antiquated regulations, and bring healthcare delivery into the modern age while ushering in a new era in biomedical research driven by access to rich coherent datasets.

The truth is, Page is probably right about the underlying opportunity.  In particular, as I’ve long-argued, there’s tremendous potential to be found by thoughtfully combining comprehensive genomic and rich phenotypic data – immediate opportunities to impact clinical care, and the chance for a longer-term impact on scientific understanding.

I’m perhaps more optimistic than Page is, however, both about our collective ability to succeed meaningfully even within the constraints of our existing system, and about the ability of demonstrated success to move even the most intransigent stakeholders.

 

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9 Responses for “Google Co-Founders: “Thanks, But No Thanks””

  1. Granpappy Yokum says:

    “Generally, health is just so heavily regulated. It’s just a painful business to be in. It’s just not necessarily how I want to spend my time.”

    More and more physicians agree with him.

  2. Vik Khanna says:

    “is brought to its knees by the prospect of dealing with…” I see their decision quite differently. Smart guys bright enough to see that self-absorbed, crony capitalism cesspool that is modern American healthcare doesn’t deserve their time and effort.

    You needn’t be brought to your knees by something to realize that you’ve got better things to do.

  3. Dr. Mike says:

    Most of the regulatory burden is the result of the third party payer system. It’s not due to fee for service, it is due to third party fee for service.
    Who buys google glass? Who buys the new cell phone? Now who buys the glucose monitoring device? It’s hard to innovate when the purchaser doesn’t give a about anything other than cost.

  4. gendoc says:

    “Generally, health is just so heavily regulated. It’s just a painful business to be in. It’s just not necessarily how I want to spend my time.”

    Nothing untrue about that, imho. I am sure Google has more prospective ventures, at least when it comes to profit. Should they get into health care stuff just because of some sense of “human loyalty” or something? Nah.

  5. Wojtek says:

    “After all, most people have the enlightened self-interest to embrace life-saving innovations (anti-vaxers notwithstanding).”

    Have to agree with that.

  6. Interesting article but there’s a lot of misunderstandings in all this talk about Google not wanting to become a healthcare company as it already is eg. it generates $B’s from healthcare ads (including all the illegal ads for prescription drugs that were key to early revenues), it supports the entire cloud based backend of major healthcare brands (like Roche), helps major healthcare providers (like the NHS, Kaiser, etc) draw insights from the medical record information of their Patients, Patients google healthcare professionals (and vice versa), Google also provides on site healthcare services to it’s 50,000 employees, etc, etc…

  7. Oliver Jones says:

    They’re absolutely right to stay clear of healthcare. ARRA-2009 pierces the corporate veil to punish individuals who disclose HIPAA-protected health care information, even by mistake.

    HIPAA’s original purpose was to prevent payers (insurance companies) from misusing personal information. But, nobody can get care without signing a waiver giving blanket data rights to payers, and so rendering HIPAA toothless for its original purpose.

    So, HIPAA now serves primarily as a daunting barrier to entry for any entrepreneur who might seek to improve healthcare by improving information or communication. “Cesspool of crony capitalism” is about right.

  8. Christopher says:

    Good decision, of course this won’t stop them from throwing tons of money at BHO and the Democrats who quadrupled the regulatory mess they speak of.

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