Have you ever walked into a doctor’s office and thought to yourself, “This experience could be so much better?”
It can be. Like many first-generation immigrants, I worked in the family business growing up. However for me, the family business was my dad’s medical practice, an adult and pediatric urology solo specialist clinic on the outskirts of Boston. I had a front-row seat to what went on behind the scenes to deliver care to patients. By age 11, I had held every non-medical job in his practice, from filing printed lab test results in color-coded manila folders to typing up patient visit notes on an ancient Windows terminal. For 25 years, until my father retired, I was conscripted as the clinic’s unofficial tech and admin support.
I was a generalist investor when I first started in VC, but over time, I moved deeper into health care and returned to my roots. That’s when I realized how valuable my early exposure to health care software, physician incentives, and the business of medicine was. Still, it was astounding to me that the admin tasks I did for my father’s clinic — from copays to referrals to rebilling claims — were all still done the old-fashioned way through faxes and filing cabinets. To this day, health care is still a space where nurses in some sectors manually log patient notes on paper clipboards. In that time, my father helped thousands of patients and meanwhile, I learned how those dated, bureaucratic practices often worked counter to patient experience — and came away with a deep sense of the multitude of ways this could be improved.
When I joined Initialized in 2021, I was blown away by our healthtech portfolio. To date, Initialized has made investments in 20 seminal healthcare companies, of which only 11 have been publicly announced. Of those 11 companies, six are unicorns. Five others, which I’ve led or am point-person for on our team, will launch later this year. Through these investments, we have a front-row seat to the rebuilding of the healthcare stack, and the incorporation of new types of patient data from genomics to diagnostics to wearables.
Our healthtech thesis derives from my personal and professional background: working at my father’s clinic, starting a company, and now investing as a VC.
For the first time, I see a new category emerging. One that puts the patient front and center. I call this revolution PX – healthcare as driven by Patient Experience (PX) and outcomes. The transformative shift is that companies that innovate and excel at patient experiences and outcomes are gaining significant market share for the first time.
DTC as the Patient Wedge
The U.S. healthcare system is a minefield for new entrants and that’s why it’s been hard to build here. It’s not a lack of spend. In fact, health care spending grew 9.7% in 2020, reaching $4.1 trillion, and accounted for 19.7% of GDP, according to the Department of Health and Human Services.
Historically, the gatekeepers have worked overtime. Either physicians or insurers had to sign off on new products to be part of a patient’s care journey. Sales processes took years and required an army of reps selling door-to-door to notoriously tech-avoidant doctors or late adopter payers.
Unlike Apple’s famous 1984 ad, health care innovation didn’t have a single on-screen sledgehammer moment, but rather crept in through the side door over time. The first crack was digital advertising, particularly after Instagram launched in 2010. That’s when we saw personalized health services and products reach consumers directly for the first time. Customers flocking to superior options being invented coupled with a more competitive insurer marketplace required payers to get on board. Value based care further closed the loop on efficacy.
Today’s hammer is the empowered patient experience, and we’re investing in that experience so patients can choose personalized services that fill in the gaps for the past’s expensive, lackluster, and cookie-cutter care offerings.
Returning Power to the Patient
We are excited to fund companies working on a full-stack rebuild of the health care startup ecosystem, which returns power to the patient and innovates on patient experience (PX) and outcomes.
Our three predictions for the future of healthcare:
1) Patient-Driven Health Care: We see a future in which health care will become truly personalized, meeting patients where they are, whether at home, in long-term care facilities, or at the hospital. Overwhelmed primary care physicians are not equipped to provide the comprehensive project management and follow-up required to treat most chronic ailments. Certainly not as well as home therapeutics can. Examples of companies in our portfolio:
- Athelas, a startup offering remote patient monitoring and blood testing using computer vision.
- Ro, a full-stack health care offering mental health, women’s fertility, and other services.
- Truepill, pharmacy and telehealth-as-a-service powering many of the best new consumer health offerings.
2) Data-Informed Therapies: We are seeing more health care companies utilize input from new diagnostics — from genetic, blood-based, and microbiome, to sensors and other digital endpoints — for critical diagnoses and responsive follow-up care. We also see data science applied to drug discovery and treatment plans. Examples of companies in our portfolio:
- Bodyport, a company focused on the detection and remote management of heart disease.
- Color Genomics, a company that provides genetic tests and analysis directly to patients.
- Enable Medicine, a startup building a search engine for complex biology in order for labs around the world to communicate with one another and share research findings.
3) Tech-Enabled Caregiving: It’s important that humans are not abstracted out of patient care but instead empowered to make better decisions, have better productivity and communication tools, and can tap overlooked labor markets to meet the ever-rising demand for human talent.
Examples of companies in our portfolio:
- Papa, a platform that pairs seniors with companions.
- Clipboard Health, an online marketplace offering staffing for health care facilities and on-demand shifts for healthcare professionals.
- Radial Analytics, a company optimizing patient care transitions with real-time decision support solutions.
For everyone who has walked into that doctor’s office and thought, “this could be better,” you are right. It can be. Our founders are passionate about patient experience and outcomes and personalizing health care so that patients get the care they need. We’re here for the flipped health care system. Join us and we will improve the patient experience and provide better health outcomes for all.