Author: ontheflyingbridge

Dentistry: Open Wide and Say Aah…

While over $142 billion is spent annually on dental care in the U.S., many only really think of dentistry when in the exam chair and yet there are many exciting developments to chew on. The last 20 years witnessed a coordinated effort to implement more impactful public policies (expanded Medicaid, Affordable Care Act, more Federally Qualified Health Centers), improve educational programs, and to activate more robust professional societies to better integrate dental care with overall healthcare. Meaningful advances have been made to improve access, and while prevalence of oral diseases remains a persistent challenge, innovative new products and services have created more effective treatments.

An adult with relatively good dental health will spend about $1,000 on dental care each year. Over 40% of all dental care costs are covered by private health insurance, while just over 35% is out of pocket. With the onset of the Covid pandemic, there was a marked increase in one-time, non-recurring government support programs covering dental care costs. Notwithstanding that, there remain concerns that lower income and the elderly are not receiving adequate preventative care; in 2019, just 43% of Medicare beneficiaries had a dental exam.

Payment reform and appropriate insurance coverage continues to be a significant issue in dentistry. As of 2020, only 18 states offered extensive dental benefits under Medicaid, with another 10 states only covering dental emergencies and three states not providing any coverage. Despite the overall trend in dentistry to focus more resources on prevention, avoidance, and promoting good dental health, (Read more...)

Another Addition to Flare Capital Team…

How can it get any better? And yet it does…

Please welcome Soltan Bryce to the investment team at Flare Capital Partners. As we prepare to invest our most recent fund, we have added a few more “healthcare rock stars” to the team and Soltan continues that theme. In addition to an impressive academic career (University of North Carolina at Chapel Hill, Harvard Business School), he has worked for some of the most important healthcare companies in the industry: The Advisory Board Company (ABC), athenahealth, and most recently, Boston Medical Center (BMC). And in the midst of all of that, Soltan was on the Founding Team and Head of Growth for Plume, a leading provider of gender-affirming healthcare services in the country.

What is so profoundly striking about Soltan is his deep commitment to issues of equity, inclusion, access, and quality of care; quite simply, it touches all aspects of his life. Upon graduating from Harvard Business School, he joined BMC as a Special Assistant to the Chief Operating Officer & EVP of Strategy as a one-year HBS Leadership Fellow expressly to focus on improving access to equitable care and affordable coverage at the city’s largest safety net hospital. Given the important role social determinants of health play in many of our portfolio companies, Soltan’s insights here will be invaluable given his work at BMC.

His work at The Advisory Board Company and at athenahealth provided a deep understanding of the role technology plays in the transformation (Read more...)

That’s Italian…

It is remarkable how chill the Italians can be – I was reminded of that yet again a few weeks ago when I was over there. Amidst continued and extraordinary political turmoil and a looming national election on September 25, life simply rolls along. The recent collapse of the Draghi government and bickering among the center and left political parties appear to have created the path for the coalition of right-wing parties led by the far-right Brothers of Italy to secure this upcoming snap election. It is feared that the €200 billion in reform commitments funded by the European Union may be reversed.

And this financial support will be desperately needed as economic conditions rapidly deteriorate. According to S&P Global’s flash composite purchasing manager index, business activity in the eurozone has reached the lowest levels in 18 months. Volatility in the Italian bond market has widened spreads against German bonds to 2.3%, the highest in months, and exacerbated by an unprecedented €39 billion short bet against Italian debt – all signaling a pending financial crisis and whispers of an “Italian Contagion.” The Milano Indice di Borsa (Italian stock market) reflects recent investor anxieties as well as the dramatic downdraft at the outset of Covid (more below).

The most recent International Monetary Fund forecast is calling for a 5% contraction to the four countries most directly impacted by the restriction of Russian gas, which includes Italy. Eni, the large Italian energy company, just announced that Gazprom has reduced natural gas deliveries (Read more...)

Psychedelics: What a Long Strange Trip It’s Been…

The numbers are staggering. An estimated twelve million Americans suffer from post-traumatic stress disorder (PTSD) according to data from the U.S. Department of Veterans Affairs, approximately 37% of whom are considered to have severe symptoms. At some point in our lives, six in ten men and five in ten women will experience meaningful trauma; approximately 6% of the population will go onto to suffer with PTSD. While the causes of PTSD are relatively easy to identify (combat, accidents, assault, etc), the symptoms can reveal themselves in confounding ways and the treatment modalities can be frustratingly ineffective for many. Data from the National Institute of Mental Health show greater prevalence of PTSD among women and with older Americans.

The healthcare industry has had a complicated history with developing proper therapeutic treatments for PTSD. Given the extraordinary urgency and overwhelming need, in part due to the trauma in war zones in Iraq/Afghanistan/Ukraine/Middle East, severely limited behavioral and mental health resources, and issues associated with the pandemic, there has been a renewed interest in psychedelics. Recent estimates from the Substance Abuse and Mental Health Services Administration showed that over $280 billion is spent annually on treatment services for mental health and substance use disorders, and this is barely adequate. While the most effective treatment for many is “talk therapy,” the healthcare system today simply does not have enough providers.

In response, the biotech industry has started to embrace a class of mind-altering compounds such as psilocybin, lysergic acid diethylamide (LSD), and 3,4-methylenedioxymethamphetamine (MDMA (Read more...)

Flare Capital Team Updates…

It is always nice to ring the bell when a great person joins our investment team – this time we get to ring the bell twice.

Venture capital firms simply do not need to hire a lot of people. While we will make at least several dozen investment decisions together over the course of a fund, we might only make a handful of hiring decisions. Each addition to the team is important and well-considered with an extensive interview process and a long courtship. Notwithstanding that, recruiting Uma Veerappan and Kelly Scherrer were easy decisions and are two more important pieces to the puzzle.

Uma is well-known to the Flare Capital team. While earning her MBA from the University of Chicago Booth School of Business last year, she was a Flare Scholar in the great Class of 2021. She did terrific work on a number of projects, including the closing of our investment in Elektra Health. As soon as we first met Uma, we knew she was special. Her passion for healthcare and deep understanding of this sector’s many complexities and nuances were immediately evident. While in business school, Uma both worked with a few healthcare technology start-ups and held roles at two venture firms.

Earlier in Uma’s career, she was a Strategy Consultant at EY with a particular focus on launching next-generation products at the intersection of healthcare and technology. Specific areas of interest included applications of artificial intelligence and surgical skills assessment. Prior to her time at EY, (Read more...)

One Medical Acquisition: The Path Forward…

Last week’s $3.9 billion acquisition of One Medical (NASDAQ: ONEM) by Amazon triggered significant hyperventilating about the transformative and immediate impact of this transaction on the healthcare industry. Interestingly, Amazon’s market capitalization increased 1.4% or $18.3 billion on the day of the announcement, paying for the purchase a few times over. Undoubtedly there could be exciting near-term benefits for the 750k ONEM members as their Amazon Prime accounts are linked to their ONEM memberships, facilitating targeted Whole Food and Amazon Pharmacy coupons. But what might we expect to see over time is a provocative debate with powerful implications for how each of us manage the arch of our healthcare journeys.

Important Disclosure: Flare Capital was a significant investor in Iora Health and had a board seat. Iora Health was acquired by ONEM in September 2021 for approximately $2.1 billion and is an important part of the ONEM story going forward. Amazon now has an important foothold in the Medicare market. This is not meant to be a victory lap as the stars of the Iora Health story were squarely the management team, particularly the founding CEO, Rushika Fernandopulle. And while Rushika may have been the lead actor, the supporting cast numbering in the several dozens and too many to list here played a critical role in that company’s extraordinary success (raised nearly $350 million, sold for $2.1 billion).  

Indeed, it does appear that Amazon is methodically stitching together a series of assets that over the next few years will (Read more...)

Digital Health – 3Q22: What is the Diagnosis?

You know it is bad out there when the best performing financial asset in 2Q22 was the Russian ruble which appreciated 48.6% – the next closest investment was orange juice which was up 18.2%. Even the Kazakhstani tenge far outpaced the S&P 500 and Nasdaq Composite indices, generating a return of 0.1% versus –16.5% and -22.5%, respectively. On real terms, this has been one of the worst starts of any year for the S&P 500 since 1872. With a myriad of issues swirling around us – inflation, war in Ukraine, China geo-economic tensions, domestic political paralysis, climate concerns, racial inequities – it is a wonder that the U.S. equity markets have not suffered more greatly. J.P. Morgan is even teasing at perhaps a strong 2H22 in the capital markets.

Not to diminish at all the numerous problems confronting policy makers, the inflation concerns are real (obviously) and insidious, compromising basic economic decision making. When looked at historically below, just how extraordinary this new investment climate is becoming is starkly apparent. There is an entire generation (maybe two) of investors who have never experienced this before, much less a public market correction of this magnitude. To confuse matters further, June’s strong jobs report with 372k new jobs created (well ahead of analyst expectations) is hard to reconcile with the 1Q22 GDP decline of 1.6% heightened concerns that the U.S. economy may be stumbling to the feared “two-quarter GDP decline” definition for recession.  

An interesting corner of the market to look (Read more...)

Littered with Trash…

Nationally there are 2,632 landfills and 72 incinerators which handle much of the 250 million tons of trash produced in the United States each year. It is estimated that each of us generate nearly 4.4 pounds of garbage every day. Globally, the Organization of Economic Cooperation and Development calculates that 2.6 trillion pounds of trash are produced annually. In light of this most pressing problem, last week’s Supreme Court decision to sharply curtail the Environmental Protection Agency’s (EPA) authority to oversee power plants was particularly troublesome.

Obviously, the wellbeing of a given population is impacted by numerous factors. Most directly, the advances in therapeutics and medical technologies can have profound and almost immediate impacts. Improvements in general living conditions, including environmental, have a significant and perhaps less obvious influence on overall health. The promise of digital health innovation to inform, engage, activate users can also be quite dramatic, although may be limited when damaging environmental conditions persist. It is the confluence of all of these advances, supported by thoughtful responsive regulatory frameworks, that will lead to improved outcomes for all. Unfortunately, poor environmental conditions can overwhelm all of the other beneficial activities to improve health.

The EPA has been responsible for the implementation of the Clean Air Act for fifty years. This act to regulate fixed sources of air pollution reflected an emerging belief that public health was directly and profoundly impacted by environmental conditions, and that the infrastructure to manage issues such as waste was often sited in near (Read more...)

Turkey Resides in a Complicated Neighborhood…

Istanbul literally is both in Europe and Asia which underscores just how complicated the neighborhood around Turkey is. To its south is Syria and Iraq; to the east is Iran; to the north across the Black Sea is Russia and Ukraine with Europe to the west. Almost 100 years to the month, the Greek, Armenian, and French armies were expelled from the country, and the current Republican political system was established, bringing to a close the Ottoman monarchy rule of over 620 years. Current events made my recent trip to this most extraordinary country even more confounding.

It was somewhat unsettling to see massive tankers navigate the narrow Bosporus strait, which bisects Istanbul, on their way to/from the Black Sea and the Ukrainian war zone. Because of the Montreaux Convention, which effectively affords Turkey significant control over which military vessels can access the Black Sea (civilian vessels are granted “complete freedom” during peacetime), global attention is now directed to this important waterway as the west wrestles with how to best assist Ukraine and secure safe passage of its agricultural products to the rest of the world.

With 84.7 million people, Turkey ranks as the 18th most populous country with nearly three-fourths of the population being ethnic Turks and another 20% of Kurdish descent. While a secular country, it is estimated that more than 80% of Turks adhere to Islamic faith. Importantly, Turkey is a member of North Atlantic Treaty Organization (NATO) but its application to join (Read more...)

Meet You in the Healthcare Metaverse…?

This is going to be huge, right? CB Insights says that the metaverse will be a $1 trillion market by 2030, just over a mere seven years from now. It is the buzzword of the day, right up there with crypto, EVs, and NFTs (both two words, actually). Unfortunately, all of those buzzwords seem to have run right into the cold hard reality of the real world after the last few months so what might we expect for the metaverse, in particular, how might it reveal itself in healthcare.

It still is not entirely clear that people are yet actively looking for the metaverse. According to a recent Axios analysis, 60% of the respondents could not describe what it is and nearly 90% of all respondents were either indifferent or scared by the metaverse with only 7% excited. Only 22% of Gen Z’ers (less than 25 years old) were excited about the future of the metaverse.

Data: Momentive; Chart: Thomas Oide/Axios

In general, it appears that the metaverse plays out between two ends of the spectrum: functional versus frivolous. Clearly, there are a number of very obvious, practical and perhaps even valuable activities enhanced by or extended into (is that the right preposition?) the metaverse, such as entertainment, education, commerce, and business gatherings. One might debate how satisfying or enduring this modality would be if 100% of our entertainment was conducted in the metaverse, but it is very conceivable that this will be an important venue for many activities once (Read more...)