In November of 2015, I posted a tweet that declared Benchmark was interested in discovering Internet healthcare investments. Our firm has had the good fortune to invest in many two-sided networks that used information aggregation, supplier aggregation, and user generated content to attract and inform consumers and resultantly disrupt and change different industries. Examples of such companies include Yelp, OpenTable, GrubHub, 1stDibs, DogVacay/Rover, Zillow, and Uber. It only seemed logical to us that the same opportunity should exist in healthcare. Most people are aware that healthcare spending in the U.S. has risen to 17-18% of GDP and is grossly out of line with other comparable nations. Additionally, all of us that have been consumers of the U.S. system are blindingly aware that numerous inefficiencies exist in the system. Simply put, there is amble room for improvement. So if Internet and mobile technologies can be used to change real estate or transportation, why not healthcare?
Over the next two years, I looked at many healthcare IT investment opportunities – I went “all in.” It’s worth noting that our primary focus was on technologies that aided and improved primary care, which is about half of the U.S. market in terms of revenue dollars (there is no question that digital tools will successfully impact specific acute diseases/disorders, but it’s our intuition these are best left to 100% focused HC investors). At first, this deep dive proved frustrating. The more we learned, the more we realized how much we did not really understand. The U.S. healthcare system is confusing and complex. Eventually, however, we gained our footing and developed a mental model for the industry and a framework for where opportunities do exist. We also discovered what we believe is a large and investible trend/theme. In May of this year, Ezra Klien, who is remarkably informed and intelligent on the topic of healthcare, was kind enough to include me on his podcast to discuss and debate my learnings. That podcast is included here along with a transcript.
Ezra Klein: Hello and welcome to the Ezra Klein Show, a podcast on Vox Media Podcast Network. I am Ezra Klein and my guest this week is Bill Gurley. Bill is a general partner at Benchmark, one of Silicon Valley’s really legendary venture capital firms. He is one of Silicon Valley’s legendary venture capitalists. He was named the venture capitalist of the year in 2016 at the TechCrunch’s annual Crunchy awards. He’s been an early investor in Grubhub, OpenTable,Uber, and Zillow and all kinds of things. A very, very smart guy, a very thoughtful guy. We’ve been talking recently because he’s been thinking a lot about healthcare.
Not long ago, many services such as tax accounting were delivered episodically and in-person, as most health care still is today. Periodically, a client and accountant would meet, review financial materials and status and, at the end of the encounter, make an appointment for the next meeting. Increasingly, in-person accountant visits have been replaced by phone or web meetings and do-it-yourself software like TurboTax. There is still a need for accountants and face-to-face meetings, but typically accountants now require such visits for only the more complicated cases that can’t be managed with software or a call.
Health care has proved resistant to a similar transition, although everyone would benefit. While some aspects of care clearly require doctor and patient to be in the same place at the same time, many demonstrably don’t. Nonetheless, even those parts of care that could be freed from the doctor’s office
Intense pressure from the $719 billion Medicare program on the finances of U.S. hospitals promises to worsen in the years ahead. To prevent an already bad situation from getting worse and possibly even threatening their institutions’ viability, leaders of hospitals must take action in five areas: using analytics to identify ways to improve profitability, curbing the costs of corporate services, tightening the purchase and use of medical technology, developing standard clinical protocols for treating conditions, and pushing physicians to adhere to them.
The losses of U.S. hospitals from treating Medicare patients escalated sharply in 2012, when Congress included Medicare in its budget sequester, and they have remained high since. About three-fourths of short-term acute-care hospitals lost money treating Medicare patients in 2016, according to the Medicare Payment Advisory Commission (MedPAC), an independent agency established to advise the U.S. Congress on issues affecting the Medicare program.
The proposed merger of CVS and Aetna will test what it means today to create value in business. Shareholders may gain, but will consumers? The Department of Justice (DOJ) will be setting important case law with its treatment of this vertical merger. And, in the end, we consumers will learn if these kinds of mergers are, literally, good for our health.
The crux of the matter is whether vertical mergers — between a buyer and its supplier — are better for consumers than horizontal mergers between two sellers. In the health care arena, horizontal mergers seem to have run their course: The proposed mergers of insurers Aetna and Humana, and of Cigna and Anthem, were challenged by the DOJ and withdrawn, as was Walgreens’s proposed acquisition of Rite Aid. Among hospitals, too, consolidation may have peaked. In Boston, Partners Healthcare was blocked from acquiring three large suburban hospitals.
The mentor-mentee relationship is a tango between a more senior person and a junior one. Just as in dance, coordination and orchestration between parties is necessary for grace and success. And while we and others have written about what makes the ideal mentor, comparatively less attention has been given to the other partner. This gap is unfortunate because, like mentorship, menteeship requires specific behaviors — without which the mentee’s success may be threatened. In this article, we outline six habits of ideal mentees and provide anecdotes and views from our combined years of academic experience. While we focus on the relationship in academic medicine, the takeaways apply to most any field.
Clarify what you need.“I need a mentor” is a plea often heard in the hallowed halls of hospitals, especially academic medical centers that serve as the training grounds for future physicians. As academic physicians,
William Osler, often called the father of modern medicine, famously advised his students: “Just listen to your patient; he is telling you the diagnosis.” A century later, clinicians and health system leaders started tuning out the patient’s voice, turning instead to electronic health records and the latest care protocols to manage their most complicated and high-need patients. We believe it’s time for an urgent and strategic reset. The factors that lead people to become our nation’s costliest are complex. But they call for, at the start, the simplest intervention: listening.
According to the National Academy of Medicine (NAM), “High-need individuals are disproportionately older, female, white, and less educated. They are also more likely to be publicly insured, have fair-to-poor self-reported health, and be susceptible to lack of coordination within the health care system.” Overall, these patients make up just 5% of the patient population, but
There’s been a lot of talk about technology — and AI, deep learning, and machine learning specifically — finally reaching the healthcare sector. But AI in medicine isn’t actually new; it’s actually been there since the 1960s. And yet we …