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About UsVenture Growth is not Healthcare Growth
March 20, 2022
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Move fast and break things – this is the famous motto of Facebook’s founder and CEO, Mark Zuckerberg. It worked well, until it did not, when they moved too fast and broke the public’s trust.
This is the nature of growth in business; it is subject to different levers and constraints that change as a company advances from startup to grownup. Each industry is different. The trajectory of growth in the hospitality industry is different from that of the healthcare industry. This may sound obvious enough at face value, but many hard truths turn into convenient lies when they are implicitly assumed to be true.
Take, for example, the venture capital growth model in healthcare. We love it, to the point of obsessing over it. Every proposed digital interface is anointed the savior of healthcare, the one missing tool that will solve a pressing issue in dire need of saving. But like most fairy tales, these stories prove too good to be true.
No app, digital platform, or single innovation will save healthcare. Growth as we understand it in venture capital does not apply to medicine. Healthcare is hopelessly decentralized for a reason, the trajectories for growth present too many constraints for unbridled expansion. A healthcare system in Chippewa Falls, WI is different from one in downtown Memphis, TN.
This is what many venture capitalists advocating for a growth at all costs mindset in healthcare fail to understand. In medicine, there is more that divides than unites patients. Patient care cannot grow beyond a certain point without adapting to the unique needs of different patient populations.
In contrast, growth in the digital consumer space has few constraints and an abundance of levers of growth. One tweet from a celebrity can send an app in the digital consumerism space from startup oblivion to the center of all public conversation. But this is the digital space. Healthcare is quite the opposite, with few levers and many constraints – even in the digital healthcare space.
But we seem to overlook these differences, ignoring the constraints and emphasizing the levers in healthcare. This is why we see commercials with celebrities endorsing healthcare systems. They appear promising, but they do little to move the needle. In healthcare, a patient finds little in common with a celebrity.
Since a consumer and a patient think differently, the associated behavior is different as well. These subtle differences dictate the levers and constraints of growth. After all, a business is nothing more than the collective behavior of its patrons. And when we fail to understand these differences, we assume that we can replicate growth trajectories from the venture world into healthcare. This initial misunderstanding creates erroneous logic that leads to misguided solutions.
We think healthcare is a problem of access, that if we improve access to care, then we can improve patient outcomes. But it is a problem of limited supply; we have too few clinicians in healthcare able to address the clinical problems of so many. But in conflating demand with supply, we create solutions that fail to address existing problems, while investing in nonexistent problems healthcare never had to begin with.
These solutions fail because we fail to understand the issue at hand. Healthcare is not a digital consumerism space, and improving healthcare digitally does not mean improving healthcare through means of consumerism like in other industries.
No healthcare venture capitalist will admit as much. They have too much to gain. But the returns garnered by an investor are not from successes gleaned in patient outcomes, but in returns on financial outcomes. Again the growth trajectory is different.
If we want to improve healthcare, then we need models that improve on patient care. It is that direct, but that complicated. The growth trajectory for improving patient outcomes is quite cumbersome – we have physicians delegating to medical assistants, we have pharmacists parlaying physicians against insurance plans, and we have patients waiting to be seen, and once seen, waiting to be understood – until the process is repeated over again.
This is the complex nature of healthcare. It has its own growth trajectory, and it cannot be replicated by other models of growth. And truthfully, we still do not fully appreciate what it takes to both improve clinical care and scale that quality of care consistently. Only after we understand what growth truly means in healthcare, can we develop scalable solutions.
Perhaps then we will be able to capitalize on more than the financial upside in healthcare, and actually address what matters – the patient outcomes.
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