Posts from hacking healthcare

Healthcare At USV

Over the last five years, we have stepped up our investing in and around healthcare. About 15-20% of the early stage companies we have invested in over our last two fund cycles are working in this sector.

If you look at our current investment thesis at USV, you will see that wellness is one of the key areas of interest for us:

USV backs trusted brands that broaden access to knowledge, capital, and well-being by leveraging networks, platforms, and protocols.

So where in the healthcare sector are we focused?

Rebecca tweeted this out yesterday and I think it is a good articulation of what we find most interesting in healthcare:

Making affordable healthcare more available to everyone seems like the winning formula in this sector.

Take our portfolio company Nurx for example. They make birth control and other important prescriptions and home testing kits available to millions of people who have found them difficult to obtain through traditional channels.

I hope and expect that we will increase our investment in the health and wellness space in the coming years. It is an important sector that has immense challenges, but also immense opportunities.

Audio Of The Week: Reimagining The Well Woman

One of the areas we have been investing a lot in at USV is women’s healthcare (Clue, Modern Fertility, Nurx).

Another interesting company in women’s healthcare, that USV is not an investor in (at least not yet), is Tia, which calls itself “The Women’s Health Clinic.”

In this discussion with the Gotham Gal, the founder of Tia, Carolyn Witte, talks about her inspiration to start Tia and how she has evolved the business over the last couple years.

Creating Surplus

Consumer surplus is the delta between what consumers expect to pay or are willing to pay for an item and what they actually have to pay given market dynamics. A good example of where we are generating a lot of consumer surplus is technology. I would be happy to pay for my email (and do) but I can get it for free from Gmail. A 49″ smart TV sells for about $300 on Amazon. A Samsung Chromebook is $200 on Amazon.

I like to think of all of this “found money” that consumers are getting from technology as the dividend we are getting from the technology revolution. It is also true that technology takes jobs out of the market, and adds them too, and that it may be a zero sum game or worse.

But the truth is many things have gotten a LOT less expensive over the last twenty years and that has made managing the household budget a fair bit easier.

My colleague Nick sent me this chart yesterday. I don’t know where he got it so I can’t identify the source.

What you see from the chart is that wages have increased about 70% over the last twenty years and many things, including housing, food, clothing, and most dramatically technology, have increased less, or have actually gone down in price, creating room/surplus in the household budget.

But not everything has gone down. Health care and education, most notably have increased dramatically.

So it is time to take aim at those sectors. We can do the same with education that we have done with other services. And we will. I feel that healthcare will be a harder lift, but I do think it can be tackled too.

In fact, our current thesis at USV compels us to go after these sectors. So we will.

I am excited about the potential to bring consumer surplus to these sectors and make more room in the household budget in doing so.

Business Model Innovation in Healthcare

Naomi posted some thoughts on changing business models in health care on the USV blog yesterday.

The one that I am personally most excited about is what Naomi calls “change of venue” and within that I like the “virtual primary care” model.

A pure virtual primary model eliminates fixed costs associated with brick and mortar expansion and is able to focus resources on reaching more patients, recruiting more doctors to their platform, and improving the experience for current patients. Payments on a subscription basis allow doctors to get paid more consistently rather than waiting for insurance companies to process claims and paying overhead costs to negotiate reimbursements with their billing offices.

We have portfolio companies executing this model like Nurx and Modern Fertility and we hope to add more.

I value the doctor/patient relationship, but I think there is a lot technology can do to make that relationship less expensive, more engaging, and more convenient (for both parties). And generational changes in doctors and patients are catalyzing and facilitating this transition.

Audio Of The Week: The Changing Nature Of Women’s Healthcare

One of the themes we are deeply bought into at USV in our approach to healthcare investing is the opportunity in women’s health care, particularly providing care to young and healthy women. Our portfolio companies Nurx, Clue, and Modern Fertility are all doing that.

This podcast, which I listened to earlier this week, is a discussion of exactly that opportunity and features Hans Gangeskar, CEO of Nurx, and Carolyn Witte, CEO of AskTia.

The Unbundling Of Health Care

Naomi Shah, one of our analysts at USV, has been doing a deep dive on health care since she joined us this past spring.

She has started to publish a series of blog posts on what she has learned and what she thinks is investable at the intersection of healthcare and consumer tech.

Kind of like putting our playbook on display before we have even implemented it.

But that is how we roll at USV.

At least this way, we get feedback and input on these sector theses which ultimately make them even better.

And we get a lot of incoming pitches from entrepreneurs working in our target areas as a result of making our playbooks public.

She starts off her series with a post on the unbundling of health care and compares it to what has happened in financial services.

Naomi ends this post with this observation:

these observations seem to indicate some unbundling of the existing large, monolithic systems in healthcare towards a more open, local, independent and transparent model, with control residing with individual users. And ultimately, this could change the way healthcare is delivered to consumers.

“A more open, local, independent and transparent model, with control residing with the individual users” sounds exactly what we like to invest in at USV so expect to see more investing in health care from us and more posts from Naomi. You can find her posts on USV.com and/or follow Naomi here.

Video Of The Week: Nurx

Our portfolio company Nurx provides prescriptions via an app on your mobile phone.

The initial offerings are birth control and HIV prevention medications, but they will add other prescriptions in the future.

This news report talks about their launch in Texas this summer which was extremely successful.

Monthly Match: Planned Parenthood

The House is planning to vote today on a bill that will repeal Obamacare.

Included in that bill is a provision that would prohibit Medicaid from paying for services from Planned Parenthood.

Planned Parenthood is an organization dedicated to women’s reproductive health and more broadly women’s healthcare.

It does fantastic work and provides treatment for women who cannot get it otherwise.

Our monthly match efforts are designed to combat the efforts in Washington to undo things that are near and dear to us.

And Planned Parenthood and low cost/free women’s reproductive health care is one of those things.

So today, we are launching a $30k match offer for Planned Parenthood.

Amy, Susan, Joanne, Brad, Albert and I will collectively match $30k of donations made to Planned Parenthood.

Our match offer will end when we reach $30k of collective donations or Friday night at midnight pacific time (May 5th).

Here is how the monthly match works

  1. Go to our match offer page and click the big Donate button
  2. Select any amount (min is $10) and click the big Donate button again
  3. Enter your payment credentials and click the big Donate button again
  4. Click the big Tweet Your Donation button
  5. Once you have done all of that your donation will automatically be matched
  6. If you don’t have Twitter, forward your email receipt to [email protected]

I hope you will join us in supporting Planned Parenthood on this difficult day for all who care about women’s reproductive health and women’s health more broadly.

The Machine Will See You Now

Siddhartha Mukherjee has a good long read in The New Yorker about machine learning and medical diagnosis this week.

In it, he explores whether machines are going to replace radiologists, dermatologists, etc or help them do their jobs better.

He concludes with this observation:

The word “diagnosis,” he reminded me, comes from the Greek for “knowing apart.” Machine-learning algorithms will only become better at such knowing apart—at partitioning, at distinguishing moles from melanomas. But knowing, in all its dimensions, transcends those task-focussed algorithms. In the realm of medicine, perhaps the ultimate rewards come from knowing together. 

We are very excited about the possibilities of using machine learning to help diagnose medical conditions early when they can be treated successfully. We have made a number of investments in this area and I expect we will make many more.

I believe that this is the future of medicine and the sooner we get to it the better off everyone, including the practitioners, will be.