ICHRA: The Next Big Thing?
Sam Bogrov·4 min
Healthcare
Why We Invested In Decoded Health aka "A Medical Resident In Your Pocket"
AG
Amit Garg
February 8, 2021·4 min read
In January we invested in Decoded Health as part of their $4.5M seed led by Sierra Ventures. Tau Ventures is an AI-first fund in Silicon Valley investing primarily in seed but we occasionally take later bets when we see immense promise. Previous investors in Decoded including Perot Jain and Vituity have also invested in this round. Decoded provides an AI for both patients and physicians, automating conversations and clinical tasks so healthcare is better, faster and cheaper. They were founded in 2018 and impressed us with (1) a strong need, (2) building an execution-focused team, and (3) creating a differentiated product.
1) The Need
The US spends a fifth of its GDP on healthcare, almost double of the average of similarly developed countries. Our outcomes are not significantly better and there is a significant amount of patient dissatisfaction. A fair bit of that sentiment can be attributed to inefficiencies, whether it be overtesting / undertesting or sheer bureaucracy. In fact, about a third of our costs are administrative -- paperwork that exhausts patients and physicians alike. you will find a level of dissatisfaction. Decoded makes a meaningful difference in all of these factors by providing an AI-driven app that serves as the patient’s first point of contact. In many hospitals that is often a medical resident (a physician in training) working closely with an attending (a fully licensed physician). Decoded provides a virtual medical resident that connects with the EMR, parses through what patients want / need quickly, giving them a more efficient triage and diagnostic. The final decision is still made by human beings but even just routing the patient more efficiently to the ER, urgent care, primary care or specialist, makes a huge difference in the quality of care.
2) The Team
The four founders incubated Decoded within SRI International, the same venture studio behind world-changing companies like Intuitive Surgical, Nuance and Siri. Mark Hanson came out of Nuance where he honed his product, BD and design skills around natural language processing. CMO Brent Sugimoto is a family physician who understands the challenges of healthcare and how to work through sales cycles that are typically as long as 9-18 months. Brecken Uhl is a PhD specializing in data science. Kevin Bayes and Shimi Baliti heads architecture and engineering while based in New Zealand -- a testament that it’s possible to build effective distributed teams from day one, a belief we share at Tau. We also gave weight to the “extended” team at Decoded which includes SRI and Vituity, the third largest provider of medical services in the US. Vituity has already launched Decoded into three of their sites and will roll out in several more including large hospitals, which gave us much conviction the company can scale quickly.
3) The Product
The core of Decoded is DARPA-funded technology around understanding human intent and supporting clinical decision-making. Many companies have, are and we believe will continue working on this problem which we believe is big enough for multiple winners. What attracted us about Decoded specifically was they had built an ontology around all of medicine, not just a specific disease or organ. Being comprehensive while also accurate is an incredible technical challenge; we see Decoded continuing to improve constantly by learning from the data they are collecting. The net result is they make physicians 60% more effective, which from the perspective of providers not only decreases costs (less wasted work) but also increases revenues (more patients can be seen).
We are honored and excited to be part of Decoded Health’s journey, using technology to solve a big problem. More at http://decodedhealth.com.
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.
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Amit Garg