Bio Fund III, the Year of Primary Care, Novel Coronavirus, and the Fight Over EHR Data

a16z editorial

Posted February 26, 2020

This post first appeared as an issue of the a16z Bio Newsletter. Subscribe to stay on top of the latest trends in bio and healthcare.


  • Bio Fund III: Why bio isn’t the hot new thing—it’s everything
  • 2020: The Year of Primary Care? Why primary care is getting unbundled and what that means
  • Novel Coronavirus: What we know/don’t know, where it’s too early to tell, and where tech comes in
  • The Fight Over Electronic Health Data: What the “letter heard around the healthcare world” means for trends in liquidity, interoperability, and portability of healthcare data

Bio Fund III

Vineeta Agarwala, Jorge Conde, Vijay Pande, Julie Yoo

Marc Andreessen once said a16z would never do bio. And yet last month, we launched our third bio fund.

Why did we change our minds so dramatically? Four years ago, when we launched our first bio fund, the idea that software would make an impact in drug discovery sounded like science fiction; the idea it could transform the patient experience in healthcare a fool’s errand. Fast forward to 2020, and it’s not just accepted but broadly embraced, igniting an explosion of new startups and big investments from established incumbents. Tech, biotech, and our healthcare system are merging—into what we call simply “bio”. And whether for pharma, hospitals, or investors, bio is now officially the hot new thing.

But bio is not the next hot thing—it’s becoming everything. Software is now affecting not just how we do one thing—cloning DNA, or engineering genes—but how we do it all across the board, blurring lines, breaking down traditional silos, changing our processes and business models. In other words, technology today is enhancing all our existing tools and data, affecting every decision we make, from research to development to deployment—and how we access, pay for, and experience healthcare. Read more here. 

Vineeta Agarwala is a General Partner on the Bio + Health team, focused on biotech, digital health, and life sciences tools/diagnostics.

Jorge Conde is a General Partner on the Bio + Health team, focused on therapeutics, diagnostics, life sciences tools, and software.

Vijay Pande is the founding General Partner of a16z Bio + Health, focused on the cross-section of biology and computer science.

Julie Yoo is a General Partner on the Bio + Health team, focused on transforming how we access, pay for, and experience healthcare.

2020: The Year of Primary Care?

Julie Yoo

Primary care in the U.S. is at a breaking point: long wait times, physician shortages so severe we’re having regulatory reform conversations about how to mitigate them, and low reimbursement rates have created a vicious cycle of demand outstripping supply. Patients’ basic healthcare needs are just not being met by the traditional primary care system, and utilization rates show it. That consumer exasperation, plus the uptake of value-based care payment models—like the much anticipated CMMI Direct Primary Care program—are strong forces for emphasizing primary care as a means of reducing risk of high-cost episodes.

As a result, we’re beginning to see the unbundling of primary care. Some lower-acuity volume has shifted to alternative sites of care: urgent care clinics, retail clinics, virtual clinics (including those driven by large employers like Amazon), even clinics owned by payors themselves. At the same time, demographic-specific services have emerged, with a focus on senior populations (e.g., Humana’s recent deal to scale the volume of its PCP clinics for Medicare members), low-income populations, women, men, even specific ethnic populations.

These new care models and payment paradigms hold the promise of transforming the way we enter and engage with the healthcare system from the ground up, with tech as the superpower helping to personalize the engagement, scale cost-effectively and across geographic barriers, and maintain consistent service level and quality. Which means it’s one big segment of the market where we’re actually (finally!) seeing patient-centric models emerge and gain steam, despite its traditional role as the underdog of healthcare. 2020 could go down in the books as the Year of the Reimagination of Primary Care.

Julie Yoo is a General Partner on the Bio + Health team, focused on transforming how we access, pay for, and experience healthcare.

Novel Coronavirus

The recent outbreak of the novel coronavirus (formerly known as 2019 n-CoV, now known as SARS-CoV-2)—which causes the newly named disease “COVID-19”—is an ongoing and fast-developing news cycle with lots of information and misinformation. So in our podcast show 16 Minutes (which you can subscribe to here), Judy Savitskaya, Julie Yoo, and Sonal Chokshi share an overview of what we know/what we don’t know (or where it’s too early to tell), and focus on where tech comes in.

Topics covered include everything from what is a virus and categories of coronaviruses; to origins, spread, how bad is it, and what ‘R0’ means; comparisons to SARS and MERS; the definitions of pandemics; how PCR tests work; missing business models; and more. More broadly, what are the practical implications of coronavirus for the healthcare system given how it works today… and where we might go in the future?

The Fight Over Electronic Health Data

The trends of liquidityinteroperability, and portability in healthcare data are among the most important for addressing many of the structural silos—and high costs!—of the healthcare system. Not to mention patients’ rights to access their own health information, which is why the ONC (part of the U.S. Department of Health and Human Services) proposed draft rules to make it easier for them to do so. But recently, one of the largest vendors for electronic medical records, EPIC, sent a letter to hospitals urging them to oppose these proposed government regulations that aim to make it easier to share medical data. What are their claims, what’s going on? Julie Yoo and Sonal Chokshi break it down in 10 minutes in our news show, 16 Minutes. After we get through this fight, what’s the bigger discussion about medical data we should be having next?

Listen to this segment.

Market News

Jay Rughani
  • Another momentous year of new medicines approved in US.The FDA approved 52 new drugs last year, the 3rd highest in the last 25 years (59 in 2018, and 53 in 1996). This is in contrast to the previous decade (2001-2010), in which the FDA approved only 229 new drugs (~23/year)—a time the industry believed itself to be in a productivity crisis due to a lack of “blockbuster” drugs in the pipeline.
  • Consumers seem to be driving the biggest disruption in healthcare. Care delivery companies are continuing to seek ways to engage the patient at their preferred point of service, and in a low cost way. These two forces—patient engagement and price transparency—are driving forces behind big industry changes such as the convergence between retail and healthcare delivery (WalgreensCVS and Walmart); the evolution of the retail pharmacy model; and the rise of telemedicine.
  • Tech giants are making diabetes part of their healthcare strategies. With consumer responsibility paramount to any real change, tech companies are looking to use their well developed understanding of the consumer to enter this space. Key partnerships like this include Apple <> DexcomAmazon <> LivongoIBM <> Medtronic.—Jay Rughani and Venkat Mocherla, Market Development

Jay Rughani is an investing partner on the Bio+Health team, focused on AI & data products across healthcare and life sciences.

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