Health Tech

Is there a Julie Yoo fallacy?


Andreesen Horowitz’s digital heath investor Julie Yoo has been building quite the theory of the present and future of health tech. I am going to try to write up a longer response to her but first, please view her presentation on the New Tech Stack for Virtual-First Care — a compelling 8 minute watch. And then have a quick read about how I am (trying to) put her in context.

Her first argument is that the digital services that you need to run health care (things like accounting/revenue management, network management, credentialing, pharmacy, etc, etc.) are getting really good. That means that startup digital heath companies can build services really quickly. No argument there. The second part of her argument is that incumbent organizations will also use these tools (actually already are using these tools) to improve their offerings.

Her argument is somewhere in the middle of three themes I’ve been banging on for a while.

My first argument is that too much VC money has been spent on new tech companies intending to prop up the incumbents and the incumbents by definition can’t change to become the type of virtual-primary care first chronic care management consumer friendly organizations that we need. I called this the Lynne Chou O’Keefe fallacy (which is why Julie wants one of her own!) and wrote it up on THCB about a year ago.

The second is the rather longer theme that I (with Indu Subaiya) have been banging on about called “Flipping the Stack”. The basic idea is that health care services now have the potential to go from an event-driven, encounter-driven acute-care delivery model to one where technology is able to measure, manage, message and monitor patients wherever they are, and that virtual services and physical interventions are layered over the top.

The third is my idea about the “continuous clinic” which is an attempt to describe the activities that an organization needs to run a 24/7 patient management organization. (I’ve presented on this many times but haven’t totally written it up–a version of how it might work for COVID patients is here).

Somewhere in what Julie is doing and in my fumbling towards new models is the idea of what a new health system will do and what it will look like.

Of course the related question is who will be the players? While we have United Healthgroup buying anything that moves and the incumbent hospital systems collectively sitting on an Apple/Google sized mountain of cash reserves, it’s hard to see the current system being changed dramatically by the people running it now.

But it needs to.

If you need to be reminded why, take a look at the comments about half way down in this piece in which a patient blogger Luke O’Neill asked his readers about their relationship with “their” doctor and the health system. And then consider whether we should trust the current incumbents to make that transition.

I’ll be back with more on this next week….

Matthew Holt is the publisher of THCB

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  1. I have followed the digital health movement closely since 1999. While I completely agree with Julie Yoo about the quantum leap in the quality of digital infrastructure, she did not really answer the question of whether “virtual first” is really a thing or not. Every health system seems to be building a “digital front door” but it remains to be seen how many folks post-COVID will walk thru it. Virtual care struggled to break through for thirteen years pre-COVID. I watched closely Jay Parkinson’s decade long struggle with Hello Health and then Sherpaa, the latter of which was an elegantly designed virtual first, mainly text driven primary care model, as well as the very long slow ramp for Teledoc and American Well’s initial offerings (“talk to a stranger on your phone about your medical problem right now”). Teledoc is now a digital health conglomerate fueled by a stock selling at 38X revenues. Not clear how much of it is “virtual first”. . .

    Admittedly, I am older than the assumed modal user as a seven year Medicare Advantage veteran (though one way or another, my 76 million rapidly deteriorating boomer age-peers will be the test bed for a lot of these ideas). However, my 2015 experience with head and neck cancer really sobered me about the level of trust required by the advent of a serious medical problem. The central question I wrestled with was: who do I trust to diagnose me and rid me of my cancer? Had a similar problem with the impending loss of my mobility and the ability to type that led to a 5 vertebra cervical spinal fusion in 2017. I have trouble figuring out how a virtual first model would have worked here. In both cases, I wanted to hold a real live human responsible for both framing my problem and solving it, and was lucky enough to find both. I do realize that roughly 20% of our US population do not have a physician or regular source of care, but the last time I looked at it, that percentage skews sharply toward the young and healthy. Sadly, it is “events’ that drive us to use healthcare. Absent the events, we don’t think very much about medicine or our need for it.

    I strongly believe we need a fundamentally re-architected and differently financed care model (and argued for it in my 2003 Digital Medicine book)- one which funds and supports relationships rather than care events. It won’t be the dreaded “incumbents” that stop this from happening, but the complexity of medical issues themselves. I think “virtual first” will be the latest in a long succession of tech-driven fantasies into which billions of LP dollars will disappear without a trace. Would dearly love to be proven wrong, Matthew. Just not sure I will live long enough to be able to say ‘I told you so!”

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