How Startups Can Help Fix Our Broken Healthcare Infrastructure — The Unbundling Of The Hospital

A pandemic exposes the flaws in our society, healthcare very much included. While meaningful improvements require all 5 Ps — Payors, Providers, Patients, Pharma, Policy-Makers — startups can help. Big time. Entrepreneurs by definition are those that break the mold, square pegs in round holes, who advance ideas that convention rejects and resists, until it finally accepts and eventually adulates. And many are chipping away at the marco theme of unbundling of the hospital, which will certainly be accelerated in a pos-covid world.

Caveat: the challenges of healthcare far exceed what a thousand books, much less a short article could describe. The realities of one country must be translated with a high degree of caution to others. In fact even within a country that task is daunting, different parts of the US have vastly different needs and thus necessitate different solutions. But lest we run into analysis-paralysis this post is an argument on why unbundling the hospital is overwhelmingly a good idea.

Costs are not just high but crazy high in the US. We are almost triple of the average of countries comparable to the US, as the graph below from OECD shows. Their reports incidentally have a wealth of information for those wishing to explore the subject deeper, from how the number of doctors per capita to the growth rate in income for nurses are significantly lower in the US.

Unbundling of hospitals is fundamentally about leveraging technology so we can track our health better and from everywhere. Watches that can detect blood pressure, trackers that can detect propensity to fall, cell phone attachments that can measure electrocardiogram are all steps in that direction. In fact, there is a lot here, the market map below being itself only the tip of the iceberg.

Indeed, remote management has been a theme of digital health since “digital health” itself became a theme a decade ago. It started with the large chronic diseases. For instance, a cadre of startups has tackled diabetes including Livongo, Glooko, Omada, Vida and Virta; consider that between those affected and at risk we are talking a third of Americans.

But now that we are hitting critical mass of devices in the hands of patients we are experienced a fundamental break. It’s not just about collecting data but actually giving diagnostics and fundamentally directing care. It’s about optimizing one sonata but the whole concert: communicating with your doctors more constantly, detecting signals within noisy data, reducing hospital visits overall, getting medications when you need them, among others. It’s not just about helping manage a chronic condition but actually about everything around your health.

Healthy.io allows a woman to track her pregnancy — pee on a stick, take a photo with a camera, get a bunch of diagnostics. Spect allows primary care physicians (PCPs) to perform eye exams during the annual physical. You detect potential problems earlier and make more targeted referrals to specialists. RubiconMD provides a similar value by helping PCPs consult with a network of specialists, even outside their own health system, before making the referral. Second opinions, informed crowdsourcing if you may, improve efficiency, lead to better outcomes, and happier patients and physicians.

The unbundling of the hospital won’t solve all our problems but is a huge step in reducing costs, improving efficiency, and saving lives. And the good news for entrepreneurs: there is so much more to do. I invite everyone to comment on the latest innovation that can bring us closer to having truly a doctor for all things in our pockets.

I have been an investor in Glooko and Healthy.io through Samsung NEXT and am currently an investor in RubiconMD through Tau Ventures. Originally published on “Data Driven Investor,” am happy to syndicate on other platforms. I am the Managing Partner and Cofounder of Tau Ventures with 20 years in Silicon Valley across corporates, own startup, and VC funds. These are purposely short articles focused on practical insights (I call it gl;dr — good length; did read). Many of my writings are at https://www.linkedin.com/in/amgarg/detail/recent-activity/posts and I would be stoked if they get people interested enough in a topic to explore in further depth. If this article had useful insights for you comment away and/or give a like on the article and on the Tau Ventures’ LinkedIn page, with due thanks for supporting our work. All opinions expressed here are my own.