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Investors from Khosla, McKesson and Mayfield gave their perspectives on the topic
Last Thursday, Vator and HP held the first of four events centered around the advances in healthcare. Taking place at HP Headquarters in Palo Alto, this event centered around the future of clinics, and how local clinics can become hip to a new generation.
The first panel centered around venture capitalists who are investing heavily in technologies advancing the way we receive care and other services from walk-in clinics, urgent care clinics, to virtual care clinics using telemedicine.
Led by moderators Archana Dubey (Global Medical Director, HP Health Centers, HP) and Bambi Francisco Roizen (Founder and CEO, Vator), the panelists included Dave Schulte (Managing Director, McKesson Ventures ), Michael Yang (Managing Director, Comcast Ventures), Ursheet Parikh (Partner, Mayfield Fund), Scott Barclay (Partner, DCVC), Alexander A. Morgan (Investor, Khosla Ventures) and Casper de Clercq (Partner, Norwest Venture Partners)
Francisco started things off by asking the panelists their opinions about what they see as driving the future of clinics.
“When we think of the future of clinics we think of new ways to access care, whether it’s on a mobile device or its CVS or Walgreens or on-site clinics. And it’s also what kind of care? It’s not just a pill anymore, it’s wellness and services. So when you think of the future of clinics, what gets you excited? What does it mean to you and what gets you excited about the opportunities there?” she asked.
Schulte answered first, calling himself, "probably the decidedly low tech person on the panel." His answer revolved around the ways that clinics can make things easier for patients, even without the use of technology.
"What gets me excited about clinics and where to make investments and where there are opportunities are things that significantly lower the cost and improve convenience or access. I think technology will be an enabler to those but I don’t think its necessarily the requirement," he said.
"We’ve recently invested in an infusion center business and it’s a really simple thesis: it’s 30 to 40 percent lower cost to give an infusion in a retail setting than it is in a hospital and it’s more convenient for patients and they’re doing this in process redesign and patient center design ways. There’s some technology but it’s mostly thinking about what does a chronic patient, who gets six to 12 infusions a year, average infusions of two and half hours, what will meet the needs of their life? In this case that means evening appointments, weekend appointments, it means infusion suites that have couches or TVs for children and family members to join them during their infusions. It means a desk so that people can take phone calls and do conference calls during their infusions. So it’s thinking about a retail setting in the true sense of that means. Really small things, like calling a patient an hour before their infusion and saying, ‘We’re just confirming that you’re going to be here,’ and then they start mixing the drug and prepping the infusion suite 15 minutes in advance of the patient arriving so there’s no wait time in the lobby. This is an example of something that we’re excited about."
That isn't to say that Shutle doesn't see any role for technology to play in the future of clinics.
I think there’s all kinds of technology components that will change the future of clinics, but some of it will also be workflow redesign and some of the technology, like AI and machine learning, will be applied to back office things like making prior auth more easy for the referring physician and for the patient. Scheduling continues to plague the clinic experience, the retail/patient experience. Why we can’t make scheduling easy? That is probably a technology solution.”
Parikh then gave his answer, in which he cited evolving business models that have the power to make things easier for the provider, who can then, in turn, give better care to their patients.
“To the point on what is going to drive the cost from 18 to 20 percent to eight or nine percent. Nobody in the existing ecosystem wakes up thinking, ‘How am I going to have my revenue cut in half? Or, ‘How am I going to do twice the value?’ That is what we see as one of the biggest opportunities. So, essentially, reinventing the care model and becoming some sort of care provider. Then finding a way to have very, very high use engagement, along with a way of either plugging into the existing ecosystem or creating a new business model that creates that," he said.
"One company that we have not invested in that I’m a big fan is Forward. If you are a patient at Forward it’s life changing, not because the doctors are that much better but scheduling is in seconds and you can see how that’s a better patient experience. I go and see them six times a year and I don’t spend more than five to 10 minutes in the clinic each time I go there. That tells me that it’s actually costing them a lot less to have an engaged healthy patient than this model where I call in first, go get a physical, get a prescription, get a bunch of labs done and then go back again. In summary, reinvention of the care delivery model is the biggest opportunity for me as an investor."
"I took a field trip to Forward and it was phenomenal," said Dubey, noting that their focus on provider’s time allows them to give better care to patients in a more efficient way.
“I think the right way to think about it is like, how do you find the balance for all those opportunities? The doctors love it, the patients love it, the nurses love it and the CEO and the chief operating officer love it, I think it doesn’t have to be one or the other," said Parikh.
While Khosla is an investor in Forward Health, Alex Morgan did not discuss the company in his answer, instead discussing ways to improve healthcare without directly investing in it.
"A healthcare investment is, ideally, not always but ideally, an investment in creating more opportunities for improving heath. That’s intrinsically a social good, it’s a good thing to feel good about, and if you don’t invest in something that is successful, well you missed out on making money but you maybe helped them with some advice and maybe they did something good in the world, so it’s sort of a win-win situation with healthcare investing. You want an investor who thinks about this and who works as hard as you do; ideally wakes up and thinks about it, goes to bed and thinks about it, wakes up at 3 in the morning because they had a thought. You want somebody who cares about this," he said.
He also pointed out the ways to invest in healthcare and wellness without even investing in it directly.
"The flipside of that, as Ursheet mentioned, it’s 20 percent of the economy and it’s a part of the economy that really, on most the key returns on investment that we have, there is not a worse outcome. So a dollar in, in terms of improving health and wellness, into traditional healthcare, you can put a dollar into road improvements to reduce accidents, whether it’s an investment into things like autonomous vehicles, which are going to have a huge impact on quality of life because accidents affect young people disproportionately, all kinds of things can do with a dollar not into healthcare may actually, in the current system, will probably have a better return on wellness and health, so that means there is an enormous opportunity to do wonderful things, to make money and to help lots of people."
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