
How to Build a Healthcare Unicorn? - saumik
https://www.linkedin.com/pulse/dont-do-healthcare-startup-kaushik-tiwari/
======
CptFribble
The private insurance system we have in the USA creates such a tightly-packed
nightmare-maze of adverse incentives that the only non-government solution is
for a company to grow so large it can fully vertically-integrate, from private
medical schools all the way to hospitals, labs and clinics, then once it has a
total monopoly, convert to a non-profit and slash prices across the board.

Anything else is a half-measure doomed to failure. The AMA limits how many
doctors can graduate, medical schools charge enormous prices, limited supply
and huge debt means doctors can command incredibly high fees, so hospitals
send massive bills to insurance companies and sue the non-payers and yet
remain barely solvent. Insurance companies add a profit margin and charge
$10,000pp+ annual premiums to employers, who pass on some % to the employees.

Any one part of this is integrated with the whole and can't be easily fixed.

\- Hospitals can't just charge less to insurance, because every part of care
is so expensive.

\- Care is expensive because doctors have debt to pay off, and we can't pay
them less or else med-school enrollment will fall of a cliff because why rack
up $400k in debt if you won't be earning 6 figures after you graduate? Not
when FAANG will pay new grads $120k plus for half the school-time, and most of
the students going to med school are smart+motivated enough to get those jobs.

\- Insurance companies are making billions, so they aren't going anywhere
anytime soon short of massive government policy shift

\- Medical device and supply manufacturers make bank for the same reasons,
American syringes can cost a fortune because all the prices for everything
have been dialed up to 11.

On top of all of that, there's the infinitude of nitpicky soft and technical
problems that would require a successful-startup's worth of effort and luck to
solve, like HIPAA, coding nonsense, and many others.

Honestly sometimes it feels like the only way to "improve" the USA healthcare
system really is just to pass Medicare for All and drop a bomb on the whole
thing.

~~~
neuro_image2
'doctors can command incredibly high fees'

Doctors in Canada and Australia charge as much or more than US doctors (within
the context of a universal healthcare system). This is the most absurd
scapegoating. If you want to look for excessive expenditure, I encourage you
to look at:

\- The enormous glut of administrators including absurdly well paid CEOs which
has expanded non-stop for the last 40 years.

\- The absurd profit margins and profiteering by the medical insurance
industry.

\- The relentless rent-seeking by 'accreditation and certification' agencies
like state medical licensing boards and subspecialty boards.

\- And at this stage we don't even need to begin talking about pharma and
device companies.

~~~
wolco
Canadian Doctors have less freedom to order tests, capped fees. So you see
strange workarounds. One strange rule is a doctor can only bill for one
medical issue per day. So if you go in with a broken arm and the flu you only
get to treat one condition and are forced to make a second appointment.

So Canadian doctors order whatever tests they are allowed and don't order
tests you actually need. It is 1000% easier to get a cat scan than an mri even
when an mri would provide more details in certain cases.

If they are allowed a certain test than they will say it's extremely
important. If you point out other tests that could helpful those ideas are not
well received.

The whole thing has become some strange lineitem exercises where doctors are
gaming the system because the government keeps changing the rules to pay them
less so they find ways to fight back.

There was a strange case where a doctor would give patients a drug to induce
labour and give birth early. This allowed them to get over the quota of
deliveries per month but there was a rule if the patient gave birth early they
could go over the quota. After hundreds of early births the death rate was
much higher for this one doctor.. this doctor was working for his own
interests.

~~~
elliekelly
> There was a strange case where a doctor would give patients a drug to induce
> labour and give birth early.

It also allowed him to bill for Saturday deliveries which paid a higher rate.
The story is well worth a read for anyone who missed it.

Edit: This article[1] just provides a summary. This article[2] was the
original investigative reporting.

[1] [https://www.thecut.com/2019/07/paul-shuen-toronto-medical-
ma...](https://www.thecut.com/2019/07/paul-shuen-toronto-medical-
malpractice.html)

[2] [https://torontolife.com/city/greed-betrayal-medical-
miscondu...](https://torontolife.com/city/greed-betrayal-medical-misconduct-
north-york-general/)

~~~
pkaye
Seems like people find a way to game everything. Yesterday I was reading
elsewhere about what happens in long term care facilities where patients are
kept around for unnecessary procedures until the insurance runs out and which
point they are pushed back to the hospital under pretense of some emergency.

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stewbrew
“consumer first healthcare”

As an European, I'd say that patients don't enter the health care system as
consumers. You don't consume a stent because it's hip among friends. Also, you
shouldn't get some medical treatment or not because you can afford it or not.

The article starts talking about patients but ends with consumers. Now, let's
find the error.

------
motohagiography
Love how they frame it as WWI trench battles. Have said this before, but
healthcare is the Afghanistan of tech. It's the graveyard of empires, where
giant or well capitalized companies go in thinking they can solve and conquer
it, then leave a decade later having made no progress, wondering what
happened.

Have fun storming the castle!

The basic problem to solve in healthcare is identity for physicians, patients,
circle of care, and all the service providers in between. Privacy is the
effect of that. The reason it's important is that dis-intermediation is only
possible when you solve this problem. Every other solution is sustaining the
business models of ensconced players, which just perpetuates how broken the
system is, which is what makes it look like the graveyard of empires.

~~~
Ididntdothis
"It's the graveyard of empires, where giant or well capitalized companies go
in thinking they can solve and conquer it,"

A lot of companies and individuals make a lot of money in the current system.
They have no interest in changes. What does "solving" mean? Usually companies
want to make money so the problem actually has been "solved". A lot.

~~~
motohagiography
Arms dealers do fantastically well in Afghanistan too. The unicorn technology
solution would mean real improvements in service levels, costs, and outcomes
for patients. A platform disintermediates (or reintermediates) a business.
There is still no Walmart, Costco, Amazon, AirBnB, or Uber for healthcare. The
players are protected and in effect collecting political rents.

The U.S. healthcare system does not resemble any other system in the world
because it's an anomaly of perverse incentives and protectionism. It's
unreasonable to ask any serious person to provide a moral defence of it, but
in terms of investments, there are no sustainable multi-billion dollar
startups that support the status quo because the status quo is an artifact of
legislative market distortions. There is no growth in the current system.
Unless you fundamentally break it, the upside isn't interesting.

~~~
adolph
In this recent EconTalk episode [0] the guest describes an ongoing experiment
(a business) in breaking it.

0\. [http://www.econtalk.org/keith-smith-on-free-market-health-
ca...](http://www.econtalk.org/keith-smith-on-free-market-health-care/)

~~~
barry-cotter
> Keith Smith on Free Market Health Care Nov 18 2019 Entrepreneur and
> Anesthesiologist Keith Smith of the Surgery Center of Oklahoma talks with
> host Russ Roberts about what it's like to run a surgery center that posts
> prices on the internet and that does not take insurance. Along the way, he
> discusses the distortions in the market for health care and how a real
> market for health care might function if government took a smaller role.

------
elpakal
A totally self interested article with little substance. big health
insurance's biggest customers are not consumers but businesses who provide
health plans to their employees

~~~
swtrs
Bingo. I'll say the unicorn is the group that can bend hipaa such that
customer data can be more easily exchanged between providers. There is already
a group making a product that most health insurance companies utilize for this
and they dont know it.

Before I left the industry I saw many dropping third party analytics and
building their own solutions in need of more m&a dollars from declining
membership nationally.

~~~
1996
What if you do not want your information exchanged? Or recorded at all?

Information wants to be free so much that it leaks!

Given experian experiance, I would prefer the option to keep a thumbdrive with
me. If I lose it? My fault. Exams can be redone. Printouts can be provided.
But you can't fix a leak.

~~~
nradov
Healthcare providers are unwilling to plug in a thumbdrive from a patient
because it could contain malware. Secure online exchange is the only practical
approach to health information exchange. Most providers will allow patients to
opt out, but this puts your health at risk. Doctors often need to see your
historical chart in order to make an accurate diagnosis and prescribe
effective treatment. You can't always just redo an exam, test, or imaging
study.

~~~
1996
I want to opt out of any collection of data - not just the exchange of data.
Because the best way to make sure nothing will leak is to have no records in
the first place.

I accept all the risk. But there is no freedom to do that - leaving the
thumbdrive aside, by just bringing papers that I would keep - not them.

~~~
nradov
Healthcare providers have to keep records both to deliver effective care and
protect themselves against malpractice liability. It is unreasonable of you to
expect them not to do so. Those risks aren't yours to accept.

------
patchtopic
Perhaps they should step back and see what the successful healthcare system
(read: longer lifespan) countries outside the USA do ..

------
DoreenMichele
A genuine revolution in so-called _healthcare_ needs to fall outside of the
fields of medicine and insurance.

It won't be easy to get traction because actually eating better and exercising
etc get dismissed as "not really healthcare." Nevermind that study after study
after study say diet and exercise play huge roles in many deadly medical
issues, including heart disease and cancer.

It's vastly easier to get traction with insanely expensive _orphan drugs_
(drugs for so-called _orphan diseases_ ) and organ transplants. If you have
certain conditions, people are vastly happier to turn you into Frankenstein
than to preserve the function of the organs you were born with.

It also is tough to become a unicorn. Stuff that actually gets you heathier
tends to drive health-related expenses down. People looking to get rich quick
hate that. This is part of why utterly insanely priced drugs and surgeries
have so much more traction.

------
Twixes
America doesn't need a unicorn, it needs universal health care. The health
care market – contrary to cloud services, car transport or short-term
accommodation – can never be _free_ and businesses involved exploit that. More
precisely, they exploit people who simply have no other choice but to use
their services. Only the government can stand up to that greed and actually
act in the interest of people's health instead of own profit, while limiting
inefficiencies.

------
gforge
Please stop viewing health care as one single entity. It is equal to saying
that all IT is the same. It is a huge beast that quite often lacks margins.

~~~
kaushikktiwari
Great that you bring up margins--wrote about how the insurance ecosystem is
what eats up the dollars
[https://news.ycombinator.com/item?id=21710050](https://news.ycombinator.com/item?id=21710050)

------
tehjoker
Stop trying to profit from human misery!

