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Fixing Healthcarefrom the Ground UpYoungshim Hwang
Healthcare in the U.S. is a mess• 20% of GDP goes tohealthcare• Results produced are nobetter or worse• Personal bankruptcy• Structure ismultifaceted andinefficient
Who pays for healthcare?Private payers(employers andemployees)Private insuranceplans (non-profitand universal)Private providersGovernmentpayer (throughtaxes)Private and/orpublic providersBismarck Model Beveridge Model
Who pays for healthcare?Government-run insuranceand payerPrivateprovidersIndividualpayersPrivateprovidersNational HealthInsurance ModelOut-of-PocketModel
The U.S. uses a combination ofthese modelsNational HealthInsurance Model:MedicareOut-of-PocketModel:UninsuredBismarck Model:Employed under 65Beveridge Model:Native Americans,military, veterans
Obamacare impacts the uninsuredand the employed the most……but keeps the basic structure of theemployer payer model.Private payers(employers andALLemployees)PrivateinsurancePrivateproviders
Startups targeting unmet needs areincreasing02004006008001000120014002010 2011 2012Funding (in millions)Number of dealsHealthcare IT venture capital
Startups sometimes target patientswith ways to be healthy
They also help patients make senseof their records and bills
Some help patients find healthcarequickly and easily
Some target the tiny percentage ofpeople who cost the most
What are the obstacles thesestartups might face?• Legal• Domination byexisting providers• Any challengesstartups must face:funding, gainingusers, high failurerates, etc.
Still, these startups can make adifferenceHealthcare reform is extremely difficult to pass
QuestionsWhat would you bet your money on?Which area of healthcare seems the mostfeasible for a small company to tackle?If these startups are successful, wouldthey support the argument to leavehealthcare to the free market?
Research Paper ExcerptsMuch attention has been given to Obamacare andother government policies concerning U.S. healthcare, andunderstandably so. The healthcare system in the U.S. costover 17% of the country’s GDP in 2010 (David Squires 3)…Despite this, other countries tend to rank higher than theU.S. on many different metrics of health, such as obesityrates, asthma mortality rates, and cervical cancer survivalrates (Squires 4-10)...“
Research Paper ExcerptsPatients are the main payers of healthcare and oftenseen as getting the short end of the stick when it comes tohealthcare, but there are problems that could be alleviatedat the patient level… The catch is that there is a limit to theflexibility of patients; that is, health-related issues aresometimes very high-risk, so people will do whatever isneeded to get better, and most people must rely on theirdoctor’s expertise rather than making a fully informed,more objective decision (Brill).“
Research Paper Excerpts…The U.S. healthcare system is flawed in manyways, and there is no viable catch-all solution. Thus, manypeople have started to ask an important question: canprivate businesses help solve some of theseproblems, even if they start out small?... Is this a viable niche in the U.S. healthcare sector, or arethe current actors (providers, insurance companies,government-run agencies, or even patient mindsets andhabits) so entrenched that there is little room for fledglingentrepreneurs to make their mark?...“
Research Paper Excerpts…Most of the startups described above work withinthe established healthcare structure, which involvesmultiple payers, multiple providers, and multiple insurancecompanies. Iora Health and a few select integrated providersystems are the only ones that specifically omit the role ofinsurance companies where there normally would be one,and use its own methods of payment... [But if] Flex helps atleast a few people become healthier, that is still progress.And the competitive market will decide whether or not it isgood enough to stay, whereas legislation is not nearly asflexible.“
Research Paper ExcerptsTo this end, there seems to be a rising number ofhealth-centered startup incubators and investors who havechosen to take a chance on these innovators… There arebound to be many failures, but there is evidence to showthat success is possible. Google has invested in One MedicalGroup, which is a primary care provider along the lines ofMayo Clinic or Iora Health… Rock Health, Healthbox,Health Wildcatters, and Dreamit Ventures are just a fewother healthcare startup accelerators located across theU.S., and they are receiving hundreds of applications fromentrepreneurs who have ideas that target every corner ofhealthcare.“
Research Paper ExcerptsThere are many different ways to measure success inhealthcare. You might say the primary purpose ofhealthcare is to help people be healthy, but as always, thedevil is in the details. How do we get people to be healthy,and to what extent are we willing to pay for incrementalincreases in health indicators?…Despite their limitations, perhaps encouraging startups toincrementally improve our healthcare system is just whatwe need, in part because it means low stakes for us… It willbe exciting to see how far we are able to go in filling in thegaps where private companies and government oversighthave disappointed us so far.“”