In the face of an increasingly expensive, digital, and consumer-focused healthcare landscape, the discussion of funding impacts more and more of the future of healthcare. Over the last 20 years, the US has shifted from a manufacturing-based economy to a healthcare-based economy. The BLS reports that as of 2015, healthcare is “the dominant industry in 33 states.”
We can argue all day about whether or not that’s good or sustainable, but in the meantime, it’s clear— there’s money to be had in healthcare.
I do have to admit I have somewhat of a skeptical attitude toward investment dollars flooding into healthcare. Too often, we see a company board focused on profits making decisions that will negatively impact outcomes for patients. In fact, KLAS Research (where I’m currently employed) exists today because of a decision prioritizing money over people and outcomes.
When the health IT company Kent Gale worked for decided that they would significantly cut back their customer support arm prior to an IPO in order to sweeten their asset/liability mix, Kent—who had just sold several customers on their industry-leading customer support—took it as a sign to move on. He felt the disservice to providers highlighted a need for providers to have insight into how their HIT vendors behave.
This begs the question, “Where does investing fit into healthcare?” I’d argue that for both investors seeking a return and providers seeking solutions, innovation and disruption-focused investing fits the bill. Healthcare is a notoriously regulated—and therefore, slow-to-change—industry. As Rasu Shrestha, MD, MBA, and EVP of UPMC puts it, “Most startups are in a hurry; most of healthcare is not.”
Often, the funding from outside sources becomes the bridge that spans the gap between disruptive ideas and stodgy healthcare bureaucracy. But successful funding means identifying the right partnerships where the culture of provider, vendor, and investor align.
Announcements such as Amazon’s acquisition of PillPack or Apple’s investing time and money in a health record app get me excited. I heard skepticism from plenty of peers surrounding both announcements. But I’m optimistic that as the hype-induced fog of war dissipates, we’ll be left with better tools and new solutions to old problems.
Join us Tuesday December 11th at 8:30pm ET (for your local time click here) when we will be discussing healthcare + investing:
- T1 Where is investment most needed in healthcare? for patients? caregivers? clinicians? administrators?
- T2 How can we avoid making healthcare investments that hurt, rather than help, healthcare?
- T3 How could we better align investor and provider outcomes/expectations?
- T4 Share your examples of healthcare investment “wins.” Why do you consider your example a win?
Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Major industries with the highest employment, by state, 1990-2015, https://www.bls.gov/opub/ted/2016/major-industries-with-highest-employment-by-state.htm accessed 6 December 2018
Adam Gale, President, KLAS Research, KLAS Blog, KLAS in the Garage, https://klasresearch.com/resources/blogs/2017/03/13/klas-in-the-garage accessed 6 December 2018
Rasu Shrestha, MD, MBA, UPMC, UPMC Enterprises Blog, Health Tech – Going from Here to There. A Health 2.0 Recap, https://enterprises.upmc.com/blog/health-2-0-recap/, accessed 4 December 2018
“Amazon to Acquire Pillpack” BusinessWire, June 28, 2018, https://www.businesswire.com/news/home/20180628005614/en/ accessed 6 December, 2018
Jonah Comstock, Healthcare IT News, Apple to launch Health Records app with HL7’s FHIR specifications at 12 hospitals, https://www.healthcareitnews.com/news/apple-launch-health-records-app-hl7s-fhir-specifications-12-hospitals accessed 6 December 2018
Invest Key on Keyboard – GotCredit https://flic.kr/p/TqXhpX