Our CEO Rick Bates was recently featured in TechCrunch, where he contributed his opinion on what it will take for “disruption” in the healthcare space, an area traditionally resistant to the disruption that has taken hold in many other industries.
The passage and implementation of the Affordable Care Act created a perfect storm of disruption in the healthcare industry. All at once came massive systemic changes, from the expansion of Medicaid and guaranteed issue to minimum essential benefits and the creation of exchanges.
In the wake of ACA, nearly one hundred companies sprang up to fulfill the promise of Obamacare and make healthcare a consumer-driven, retail industry, where old work rules would be broken, novel business models established and new companies could command billion-dollar valuations in a short span of time.
There was a surge of excitement, and, as of June 2016, the U.S. healthcare space had eight “unicorns” (companies valued at over $1 billion), including 23andMe valued at $1.03 billion, Theranos at $9 billion and Zenefits at $4.5 billion.
But healthcare is a stubborn space. Think of it like a Rubik’s Cube, where every move has a ripple effect, and solving multi-faceted problems is par for the course. In these conditions, innovative models battle strong headwinds — a fact many VCs and founders overlooked as they rushed to build businesses following the patterns of technology-driven disruption that have transformed industries such as shopping, transportation and entertainment. Those companies that approach this three-dimensional problem with only two dimensions — by cutting corners or finding “shortcuts” — have found themselves lost.
To read the full piece, continue on TechCrunch.