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.
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.
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.
The trends of liquidity, interoperability, 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?