My colleague Hanel wrote an important post on USV.com yesterday. It looks at mental healthcare solutions and compares them to what has happened in online learning in the last decade. USV invests in both wellness and learning and we believe that the way learning has evolved can teach us about where healthcare can go. Hanel’s post is in keeping with those beliefs.
I particularly like this chart which lays out how mental health solutions have evolved over the last decade and where they may go in the next one:
If you want to understand that chart better and understand our thinking on where mental healthcare solutions can go, please read Hanel’s post.
I’ve written a bit about our portfolio company Nurx since we made the investment back in 2016. Nurx is a great example of how technology is helping to reshape how healthcare is delivered.
With the Nurx mobile app, women (and men too) can find the prescription or home diagnostic test they need, connect to a doctor who can review the request and write the prescription, and get the medication or test shipped to them at home. No stigma, no wait, no travel.
What is amazing to see is the scale with which people are opting to access their healthcare this way. Nurx and their doctors are currently providing healthcare this way to over 300,000 patients a month. That turns out to be over $150mm a year of healthcare being provided by a mobile app and a network of doctors. I suspect these numbers are only the tip of the iceberg in terms of how many people will opt into this sort of relationship for their regular healthcare needs.
The Covid pandemic has certainly been a boost to all forms of telehealth and Nurx is no exception. They have seen a 75% increase in new patient requests this year. But like many things that got a boost in this pandemic, I believe many patients who adopted this approach to everyday healthcare needs will not go back to the old way when the pandemic ends. We are witnessing a sea change in the way we want to access healthcare in this moment.
Nurx accepts insurance and also offers affordable options for those who don’t have insurance. That is a reflection of Nurx’s mission to expand access and improve the quality of care while decreasing cost to the patient. Technology makes all of this possible. At USV we believe that technology can expand access and reduce the cost of healthcare at the same time and we have been investing in that theme for the last six or seven years. Nurx is a great example of our thesis in healthcare.
When I was a young associate in a VC firm in my mid 20s, one of the partners told me I should get an annual physical every year and if I did it in the fall, I should get a flu shot while I was having my physical.
I have done that every year since and this afternoon I will spend an hour with my doctor getting poked and prodded and a needle in my upper arm with whatever mixture of flu vaccine they are giving out this year.
Around the same time, my mother advised me that since I have her fair skin I should find a good dermatologist and have a full body scan twice a year. I have been doing that too ever since.
I have seen the statistics on the relative spending between preventative care and critical care but I don’t remember exactly what they are. I do recall that the vast majority of medical spending in the US is on critical care and a small amount is on preventative care.
That seems wrong to me. We should do more to make sure that we all make the effort and take the time to have regular check-ups, do the required scans (mammograms, prostate exams, etc), and get things that will prevent disease like vaccines.
I suspect that beyond good practice, there are startup and investment opportunities in preventative medicine. It is the kind of thing that personal mobile computing can make a big difference in.
I want to focus on the product because I think it is a game changer for all of us that access the health care system regularly.
The Abridge mobile app (get it here) allows anyone to record a medical visit with a doctor, a nurse, or any other health care professional.
It works like this:
You open the app to see your visit history:
You tell the doctor, nurse, etc that you are going to record the session and hit the record button:
Then you record the session.
When you are done Abridge saves the audio recording of the session and also immediately (in way less than a minute) provides a transcript of the session with the key medical terms called out in bold.
That is me making stuff up this morning. I sure hope I don’t need a knee replacement any time soon.
This is one of those ideas that is so simple and so obvious that you wonder why nobody has done it before.
The team is a combination of physicians and machine learning people from University of Pittsburgh and Carnegie Mellon. It’s a combination of domain experts and technologists who are extremely well suited to make this work and work simply and elegantly.
The tests offerings include: The Full Control Kit, which tests for gonorrhea and chlamydia (throat, rectal, urine swabs), syphilis, hepatitis C, and HIV (blood sample), and is $75 with insurance or $220 without; The Healthy Woman’s Kit, which tests for gonorrhea and chlamydia (throat and vaginal swabs), trichomoniasis (vaginal swabs), syphilis and HIV (blood samples) and is $75 with insurance or $190 without; The Covered With the Basics Kit, which tests for gonorrhea and chlamydia (urine sample), syphilis and HIV (blood sample) and is $75 with health insurance or $150 without. The goal is to make STI testing easier, more affordable, and with fewer awkward face-to-face interactions with a potentially judgmental lab tech or doctor. The tests are available in 24 states and the District of Columbia.
The idea behind Nurx is that too many people put off going to see the doctor because they are ashamed, it is awkward, or it is inconvenient. And this is particularly true for sensitive issues.
Nurx believes that technology (the mobile phone, telemedicine, logistics, etc) can and will change this for most people and that we can all become healthier as a result. Preventive medicine is the most efficient and affordable kind of medicine and we need more of that in society.
Nurx has grown like a weed over the last two years which tells me that there is a large unmet need for this kind of health care and I am excited to see the Company continue to add more and more services as they grow.
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:
What excites us about whats happening in healthcare: 1) tech + humans: data powered humans=better decisions than either data or humans alone 2) broaden access by increasing value & decreasing cost of care 3) outcome orientation: not just care, better delivered, but better care
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.
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.