“Healthcare is a journey for patients. Just helping them with one piece of it — it just doesn’t get the job done…”
That’s Brian Roberts of Venrock talking about how he and Bob Kocher have moved on from investing in one-trick-pony health tech point solutions. What are they favoring now? Well, they’re not alone in seeking out platforms…especially those that solve big work flow, patient journey, or systems issues.
The underlying motivator here is, of course, money. Or rather, as Roberts puts it, the fact that “no one in the healthcare system makes any real money.”
ROI is different in healthcare. And they encourage startups — and those health systems, health plans, and provider groups that buy their solutions — to really consider what that means.
Kocher explains that what’s often overlooked is how quickly relationships turn over in healthcare. Patients can change insurance plans every year, or they may switch doctors or hospitals based on when they can get an appointment. This thwarts development of any real customer loyalty, and worse for startups, creates a situation where they need to prove tangible cost savings or increased revenue in a short 1-2 years.
What’s an entrepreneur or investor to do? Listen in for more ROI talk and advice for pivoting a point solution startup.
Get a glimpse of the future of healthcare by meeting the people who are going to change it. Find more WTF Health interviews here or check out www.wtf.health. Filmed at Health Datapalooza in Washington DC, April 2018.
For what is now an annual tradition, we are once again attempting to be healthcare soothsayers. We are proud to share with you our 10 healthcare predictions for 2018. In 2017, amaz-ingly, eight of our predictions came true.
For 2018, we are betting on the following:
1. Another Theranos
We think at least one healthcare information technology company with an enterprise value of more than $1 billion (not including Outcome Health, which we could not have predicted tanking so spectacularly quickly) will be exposed as not having product results to support their hype. It will also expose embarrassed investors who did not do careful diligence and founders with poor integrity.
2. Hospital hiring slows
After a decade of sustained hiring every month, hospitals will stop. Many will downsize their administrative staffs as admissions continue to slowdown and reimbursement pressures intensify. We expect multiple months with net healthcare job losses which would be the first time this has occurred since the Bureau of Labor Statistics started tracking the data.
3. Successful HCIT exits
After a long wait, and more than $10 billion of venture capital invested in startups over the past five years, we will begin to see successful IPO and M&A exits. These will reassure growth investors to keep pouring money into companies with traction.
4. Amazon does not disrupt PBMs
Despite daily rumors, we think Amazon will not shake up the PBM sector. Instead, Amazon will limit its healthcare market footprint to its existing consumer products and distributing non- regulated healthcare goods to healthcare providers (adopting a B2B and not B2C strategy).