Tom Lee on where he'd like to invest in healthcare

The One Medical CEO also spoke about what is really driving up the cost of healthcare in the U.S.

At Vator Splash Health on Thursday, One Medical Group CEO Tom Lee sat down with our own Bambi Francisco, to talk about how his company is transforming healthcare. 

Earlier in the event, Lee had spoken about his vision for how to give doctors more freedom in how they choose to practice medicine. But the other side is the cost, and specifically the cost of labor. 

Francisco asked him if that was one of the places he was trying to save money, and Lee gave what might be a surprising answer: that a big part of why healthcare is so expensive now does have to do with a ballooning labor force.

"Everybody talks about all this job creation over the last five years in healthcare, despite the recession. That's an actual problem. You're not going to get healthcare savings if the healthcare industry is continuing to hire above the pace of the market. And that has historically been the case over the last thirty-plus years," he said.

Ultimately, it is a "fundamental problem, and a "hidden cost," said Lee.

"When people are saying, 'I can't manage my hospital,' or, 'I can't manage this practice,' that's because they have too many people running very, kind of, slipshod, loose administrative processes that aren't held accountable so they keep ratcheting the price up and, of course, we pay it traditionally, so that's why we have what we have. Unfortunately, unless healthcare has significant changes in their labor force, its unlikely that we're going to get reductions in medical costs."

Later on, Francisco asked him about what areas of the healthcare space he would like to invest in.

"There's so much transition going on in healthcare, it's like how can you not find an opportunity you're interested in? I think the real issue is execution," he said. 

One area he has been seeing a lot of activity is payment, where there has been a "huge shift," but its a also "a market that's hard to pivot."

"I look for a business model that functions in pay-for-service but can pivot to value. I think it's important to be agnostic to the market conditions because we don’t know how long it's going to take and it's going to take a long time for different institutions to really get it," he said. "And, at the end of the day, it's still about business model execution. I still think that's the biggest success factors, independent of the space."

Other big opportunities for innovation are occurring in genomic science, tech-enabled services and "the interface of, let's call it the private-care subspecialty."