Healthcare Just Sucks For Technology Startups

Blaine Warkentine | LinkedIn | March 20, 2014

Google, Facebook, Yahoo, Twitter, and rest all compete for online ad dollars totaling something like 180B a year in total market value. Healthcare on the other hand consumes 2.8T or 15 times larger. Meanwhile, the number of pure Health technology companies that have a valuation of something close to a billion (outside of EHR's) is under a single handful.

QUESTION: Does Patient Valued Health Technology Have a Place in Healthcare?

Simple answer: for the moment, not without some serious pain and punishment. Sure, Healthcare is changing. And technology is playing an ever more important role. But for the moment and probably foreseeable future, it does not have a market. Health exchange or not. There is of course daily talk about how Healthcare is becoming consumerized, but that does not (in and of itself) create a market where consumers know, or have the motivation to pay.

The main transaction is and will likely always be the monthly writing of that insurance check in which all of the health risk and leverage goes one stop shop to the insurance company. Pure and Simple. So if you have a product for the Patient to use (which in my mind is true health tech), where you think Payers would benefit greatly. Then the choice inevitably leads to a long and tortuous B2B sales process with an Enterprise, that simply doesn't need you.