Morning Walk #59
What might the biggest consumer health tech company look like?
Hi. I’m Stepa Mitaki. I’m a product person and an entrepreneur. From 2013 to 2021, I was in govtech field, helping cities use technology to better serve people. In 2021 I switched my focus to healthcare. Currently building Carial to improve primary care.
Morning Walk is a personal weekly newsletter where I share some musings on tech, digital healthcare, working on startups, productivity, and some nerdy stuff.
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🏥 What might the biggest consumer health tech company look like?
Here is a16z making a brave statement on their blog last week:
We think the biggest company in the world will be a consumer health tech company.
That’s a bold prediction. This whole blog post, The Biggest Company in the World, made quite a round in the healthtech community.
The article surely caught the attention of early-stage consumer-focused healthcare entrepreneurs everywhere, which is a good thing. And I’m sure it gave a lot of hope to everyone (myself included) who is building something in this field. It’s a tough market, and some optimism and inspiration can go a long way.
a16z talks numbers and business strategy in this article. Which is fine, but I wanted to take a peak into the future and look at that possible future company from the user experience standpoint. How exactly could it look like, and how might it fit into our day-to-day life?
Possible paths
a16z outlines two possible paths and three possible business models for that company:
A vertically integrated path of building a “payvidor” (a combined payor and provider) that eventually owns most care.
A horizontal path of building a consumer marketplace.
A horizontal path of infrastructure layer that enables all other care delivery companies.
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Option 1: the payvidor (vertical)
In simple words: UnitedHealth Group and Apple have a baby.
Start by imagining that UnitedHealth Group and Apple had a baby, and that baby had the business model of UHG (a vertically integrated insurer and deliverer of healthcare services) but the sleek consumer experience and brand loyalty of Apple
Okay, what does that mean exactly for me as a regular patient and end user Here is even better explanation from a16z:
It could be a company delivering 90% of healthcare, all through smartphones. This company would allow you to:
access the world’s best doctors through your phone
integrating human- and software-driven diagnostics
therapeutics
medication delivery.
Hospitals would still exist for surgery and certain diagnostics and treatment, and home health workers would deliver some physical care. But for most healthcare, you’d hop on your phone, just like we do today for 90% of personal finance or commerce (a new norm which itself may have seemed like science fiction twenty years ago).
Imagine that you’d have an app on your phone that contains your medical history, vitals dynamic, refills delivery schedule, and, most importantly, chats. Chats with everyone that are related to your health. Not just your physician or specialty care doctor but also your nutritionist, fitness trainer, therapist, and just about anyone. And all of them are interconnected. You could share your health data with any provider out there (with your consent, obviously).
Yes, this is an ideal world vision we all want to live in, but I’m optimistic we’d get there eventually. I firmly believe that the majority of care in the future will happen in chat messages rather than in-office visits, and we’ll see a fundamental shift to async-first healthcare delivery. And the world needs a tool for that.
…
Option 2: the consumer marketplace (horizontal)
In simple words: Amazon of healthcare.
Amazon of healthcare—the universal place people go to shop for healthcare services, insurance, and drugs—with trusted reviews, quality metrics, and price transparency.
From a consumer standpoint, it’s almost the same as the first but with a different business model. You probably still get to access your healthcare from your smartphone, and numerous providers deliver it but under one universal user experience. This company takes a cut for being a gatekeeper to assure quality bar and price transparency.
…
Option 3: infrastructure layer (horizontal)
In simple words: Visa of healthcare
We believe there is an opportunity to radically improve consumer payments in healthcare through simplifying bill paying, providing transparency into costs, and offering interest-free financing for consumers.
This consumer experience could be a wedge into streamlining all non-consumer payments in healthcare as well, bringing an industry that conducts payments through fax, mailed debit cards, and manual clearing houses into the 21st century.
As with the Visa, this is the most invisible example to the end user. Just as regular consumers don’t know much about Visa or MasterCard, they probably won’t know much about how this company operates. But if this future company can build brand awareness as great as these two players did in the financial sector, they will be in the golden.
Building this consumer-oriented brand awareness instead of providing an invisible layer that makes everything easier is the key. As a16z points out:
what matters is that consumers know they’re interacting with the company and have the opportunity to feel loyalty toward it. For example, Visa is a consumer company—it isn’t DTC (it distributes through banks) and consumers don’t pay (merchants do)—but consumers still feel allegiance toward the brand.
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Could this be a global company?
This question boggles me a lot. Most of the biggest companies in the world are operating worldwide, especially tech companies. Being able to scale worldwide was one of the keys to the super growth of the tech industry.
But is it possible in healthcare? I still don’t have an answer, but my hopes are high. I would love it if that app or company we just imagined were available wherever you go in any country around the globe.
Although pulling that off will be extremely hard. Healthcare markets worldwide are incredibly different, and I can’t name any other market where its specificity varies so much from country to country. If you build for the US, you need to create an almost entirely new product for the UK, then a different one for Germany, Spain, LatAm, Asia, and so on. But that would be an exciting challenge to crack on.
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Do you want to take part?
I’d love to talk to folks who want to take part in building the future of healthcare. Let’s chat!
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