Preventing Prevention: Barriers to Venture Capital Investments in Upstream and Community-based Care

A QUASI-RESEARCH PAPER FUNDED BY THE ROBERT WOOD JOHNSON FOUNDATION

I interviewed 40 VCs, health tech entrepreneurs, health care executives, and industry experts and spent hours researching the intersections between health care, public health, and venture capital.

What emerged was a 7 part blog series (each post is about a 10-minute read) on how venture capital works, how the health care system works, and the economic, business, and human barriers that prevent investments in more public health-oriented companies, products, and services.

I’ll just throw you right in… This is where it begins:

An Introduction and Framing

Health care is big business. According to the Centers for Medicare & Medicaid, part of the U.S. Department of Health & Human Services, national health expenditure in 2016 topped $3 trillion, equating to over $10,000 per person per year.

And where’s there money being spent, there’s money to be made, particularly in an industry that is so quickly changing. Venture Capital investments made in the US health care market reached in 2017 a record $9.1 billion, a 26 percent increase over the prior year.

And yet, life expectancy in the US has dropped for two years in a row. Obesity rates, particularly among children and rural areas, continue to worsen. There are few signs that Americans are getting measurably healthier.

These trends are at the crux of every health care debate: We spend a lot. We don’t seem to get much for it, particularly compared to other countries.

Many policy experts long have point to under-investments in prevention as a culprit. Federal action over the last 8 years had an aim of addressing this issue. The Obama Administration touted that the Affordable Care Act would drive shifts in Medicare — which as the largest single health insurer in the country drives much of the health care system — to move our health care system to focus more on prevention. Other legislation, including Medicaid and CHIP Reauthorization Act of 2015 (MACRA), and other executive actions, such as shifts towards “value based payments” made by both the Obama and Trump Administrations, have furthered this narrative.

Meanwhile technologies that have changed just about every other industry seem to be finally, though differently, changing health care. “Digital health”, as it’s often labeled, is booming: The amount of venture capital funds in the field are at an all time high. The development of data-driven, internet-connected products, programs, and services promise to disrupt how health care is delivered by leveraging artificial intelligence, enabling patient engagement, ensuring greater access to information, and facilitating the transformation of primary care.

Or so goes the theory.

Continue reading at any of the below links. The above is pulled from the “Prevention Prevention: Introduction”.