Healthcare: The Great Unlock | Summary and Q&A

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August 7, 2020
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a16z
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Healthcare: The Great Unlock

TL;DR

The COVID-19 pandemic has created a unique opportunity for fundamental changes in healthcare, with shifts in care delivery, provider networks, and data utilization happening faster than expected.

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Questions & Answers

Q: How has the COVID-19 pandemic accelerated healthcare transformation?

The pandemic has significantly sped up changes that were expected to take years, such as unbundling hospitals, transitioning to value-based care, and exploring direct-to-consumer models. This has resulted in a fundamental shift in healthcare delivery and utilization of data.

Q: What are the challenges in maintaining comprehensive patient data in the new healthcare landscape?

Currently, data collection is fragmented and time-consuming, with redundant processes and lack of interoperability. The goal is to shift towards a system that maintains a unified, real-time patient narrative, enabling doctors to focus on personalized care plans rather than data collection.

Q: How can supply-demand matching be optimized in the new healthcare landscape?

With virtual care networks, patients are no longer limited to their local geography. The challenge lies in intelligently routing patients to the right care providers and load balancing across virtual networks. Additionally, there is an opportunity to build new insurance products with dynamic pricing and transparent options based on virtual network capacity.

Q: What role does regulation play in healthcare innovation?

Regulation has often been seen as a barrier to innovation in healthcare. However, it can also act as a catalyst for creating major platforms and industry-defining companies. Current regulatory changes, such as reimbursement codes for remote care and interoperability standards, are enabling wider adoption of new paradigms.

Summary

The speaker discusses the current state of the healthcare industry and the opportunities for innovation and disruption. They highlight the tectonic shifts occurring in healthcare, such as the unbundling of hospitals, the transition to value-based care, the redefining of provider networks, and the focus on interoperability and automation. They explain how the pandemic has accelerated these changes and how they will impact data flows, utilization, and operations in the industry. The speaker also emphasizes the changing dynamics on both the supply and demand sides of healthcare and the need for new infrastructure and technology solutions. They propose the need for a new operating system for care delivery, a more efficient and personalized patient data system, and the leveraging of digital health and life sciences convergence. Lastly, they discuss the opportunities for supply-demand matching at a national scale and the potential for new insurance products and pricing models. Overall, they express excitement for the future of healthcare innovation and transformation.

Questions & Answers

Q: What were the tectonic shifts discussed by the speaker?

The tectonic shifts discussed by the speaker include the unbundling of hospitals, the transition to value-based care, the redefining of provider networks, and the focus on interoperability and automation.

Q: How has the pandemic impacted the timeline of these shifts?

The pandemic has accelerated the timeline of these shifts, with the speaker suggesting that they will now play out in two or three years instead of the previously expected 10 years or longer.

Q: What are the implications of these shifts on data flows and utilization?

These shifts will fundamentally change how data flows and gets utilized in healthcare. The speaker highlights the need for new infrastructure and technology solutions to support the changing dynamics and to ensure that data can be effectively collected, analyzed, and utilized.

Q: How are legacy providers being affected by the shifts?

Legacy providers are having to shrink their services to essential ones, creating vulnerabilities around the edges and leaving ancillary services open for competition. Additionally, providers are having to rethink their understanding of competition as supply from all over the country becomes accessible through various channels.

Q: What are the impacts of mass unemployment on the demand side of healthcare?

Mass unemployment has led to massive shifts in insurance coverage, making affordability a more prominent focus for consumers. This may result in consumers severing long-standing provider relationships in favor of more affordable and accessible options.

Q: How are digital health providers changing the patient journey?

Digital health providers are aiming to own the end-to-end patient journey by creating one-stop shops for care. They are focusing on specific patient populations and becoming the best providers for those segments, such as primary care, chronic disease management, and specific demographics like seniors or women.

Q: How does data generated by novel care providers compare to traditional data stores?

Data generated by novel care providers, outside of traditional electronic health records (EHRs) and providers, is more high resolution and granular. The speaker believes it will soon be more valuable than traditional data, especially with the rise of remote patient monitoring, contact tracing, and home-based lab tests during the pandemic.

Q: Why is data interoperability important, and who should be the focus of interoperability efforts?

Data interoperability is crucial for enabling seamless data exchange and continuity of care. The speaker argues that interoperability efforts should shift focus from incumbents and traditional EHRs to the next generation of care delivery providers, such as virtual clinics and digital care providers.

Q: How can regulation be a catalyst for innovation in healthcare?

The speaker suggests that top-down regulatory mandates can actually drive innovation and lead to the creation of major platforms and iconic companies, as they have historically. They mention several regulatory changes, such as remote care reimbursement codes, transparency initiatives, and interoperability standards, that are already impacting the industry.

Q: What are the opportunities for startups in the current healthcare landscape?

The speaker believes there are innumerable opportunities for startups to play a mainstage role in creating and operating the care delivery system of the future. They discuss the need for a new operating system for care delivery, personalized patient data systems, and supply-demand matching at a national scale, among other areas for innovation.

Takeaways

The current state of the healthcare industry presents a unique and exciting opportunity for transformative innovation and disruption. Tectonic shifts, accelerated by the pandemic, are creating unprecedented opportunities for company creation and the reshaping of healthcare. The focus on unbundling hospitals, transitioning to value-based care, redefining provider networks, and leveraging interoperability and automation is fundamentally changing the healthcare landscape. Legacy providers are shrinking essential services, leaving room for new players and competition. The demand side is being impacted by mass unemployment, leading to a focus on affordability and access. Digital health providers aim to own the end-to-end patient journey and specialize in specific patient populations. The potential of data generated by novel care providers and the need for interoperability with traditional players are driving changes in data utilization. Regulatory changes can act as catalysts for innovation in healthcare. Startups have numerous areas of opportunity, including building new infrastructure tools, transforming patient data systems, and enabling supply-demand matching at a national scale. The next 10 years are expected to be transformative for those seeking to revolutionize the healthcare ecosystem.

Summary & Key Takeaways

  • Pre-pandemic, the healthcare industry was already undergoing tectonic shifts, including unbundling hospitals, transitioning to value-based care, and exploring direct-to-consumer distribution.

  • The pandemic has accelerated these changes, leading to the fundamental redefining of healthcare, including data flow, operations, and business models.

  • On the supply side, legacy providers are shrinking their services, creating vulnerabilities and new competitive dynamics. On the demand side, unemployment and shift in insurance coverage impact affordability and provider relationships.

  • New opportunities include building a new operating system for care delivery, maintaining comprehensive patient data, and developing new insurance products that leverage virtual networks.

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