Reflecting on a Decade+ of Digital Health
So much has changed since digital health took off a decade ago, and it’s been an exciting and wild ride for everyone in this industry. In this episode, I talk to two of my favorite long-time colleagues in digital health: Chrissy Farr and Malay Gandhi.
Chrissy started her career in this space as a digital health reporter for VentureBeat, FastCompany, and CNBC before becoming a venture capitalist at OMERS ventures.
Malay started his career in management consulting before joining me at Rock Health where he served as Managing Director and CEO before going onto be an EIR at Greylock Partners, an executive at Eviction Health, and now Head of Strategy & Corporate Development at Benching.
Topics covered:
How digital health has changed in the last decade
Their favorite companies, and what they look for
If we should we be working with or competing with incumbents
If there’s a right way to prescribe controlled substances online
Why digital health companies have gotten more negative press
Listen
Transcript:
Halle Tecco: [00:01:00] listeners and welcome to the Heart of Healthcare podcast. I'm your host, Halle Tecco, and today we are lucky to have not one but two guests. Chrissy Farr and Malay Gandhi are two longtime colleagues and friends of mine in digital health. They're both my go-to people when I want another perspective,and I'm so excited to have them both here.Chrissy started her career in this space as a digital health reporter, which is how I met her. She was at a couple of places, Venture Beat, Fast Company, CNBC before becoming a VC about two years ago at Omers Venture. Malay started hiscareer in the space in management consulting before joining me at Rock Health, where he served as managing director and CEO before going on to be an EIR at Greylock Partners, and then an executive at Ation Health and now Benchling. He's also an active angel investor in this space. Halle Tecco: Chrissy, Malay, welcome to the show. Malay Gandhi: Great to be here. Yeah, great to be here. Halle Tecco: Well, I think we should start by taking a trip back in time, and if you could tell me about what you were thinking a decade ago at kind of the beginning of your journey in digital health and what made you jump into this space in particular.Christy, you wanna start? Chrissy Farr: Sure. Yeah. I'm trying to cast my, my mind back. This was, I guess around 2012, 2011 timeframe. I had just graduated from the journalism school at Stanford and, and gone on to this tech blog called Venture Beat, and they had me covering enterprise technology. So that was my. First real [00:02:00] tech beat.
And I remember just thinking, I'm just not that interested in this, in this area. I know it's, there's a lot of money going into it, but, um, not my passion. And kindof from there found my way into this kind of corner of, of the B2B space, whichwas more the health IT area, and convinced my, my bosses at the time that this was gonna be a really kind of growing segment.Um, and as you remember, Right around the time that they were passing all these reforms, like the High Tech Act that allowed for billions of dollars to move into the space just to get doctors to start using electronic, um, and not paper based medical record system. So all of that was happening at the time andyou started to see companies like Athena Health and, and Practice Fusion raise money and, and kind of, you know, private equity and, and venture capital.And it was kind of real dollars starting to flow into the space. So that was. Whatcaptivated my interest and not long after that was, uh, fortunate enough to meet folks like Hallie and [00:03:00] Malay at Rock Health and kind of get stuck intothe, the very early kind of emerging digital health ecosystem that was, that was popping up, and I just remember it as being such a fun time.Yeah, Halle Tecco: and you were really one of the first ones to focus on this intersection. I feel like we were always trying to like get the tech reporters interested and they would write about it if there was like funding news, but they weren't interested in like the trend pieces. And so you're kinda the first person inthis space that was like, No, let's write about what's happening in digital health.Chrissy Farr: And there were so many like fascinating personalities and characters too. Like , you know, you remember like meeting with Jonathan Bush and then Junior from Epic and like all these people had such different POVs on where the space should go. So I, I feel like the funding was probably, you know, the most boring aspect of it when you looked at kind of yeah, all the different colorful cast of characters that I agree.You were emerging at the time, and then this was even kind of a few years before the, the era of Theo and all that, which we can certainly get into. About that. Yes. [00:04:00] Um, but yeah, there was, it was just a fun beat and intellectually interesting. And, um, I'm just grateful that at the time there were, there were folks like the both of you, that, that could help get me educated.
Halle Tecco: Aw. Well, we're glad that you were, that you decided that , that regular enterprise was boring and came into digital health instead. . All right. Malay, tell us your journey and what got you interested in digital Malay Gandhi: health. Yeah, I mean 10, 10 years ago, I think when we were originally supposed to record this, it would've been like 10 years to the day that I had emailed to you.I know, uh, trying to get a job at Rock Health, but the journey to that, to that point for me, having spent the last seven or eight years before that, working in the, in the industry across kind of payers and pharma companies, there's just something that disenfranchises you about that, about, you know, the, he.System found myself just searching for what, what else was out there, what was gonna make, make an impact, and was covering some of that stuff in my consulting career. Failed attempt to work at, um, you know, Caate Health maybe in the year, year [00:05:00] prior. And I ended up taking a sabbatical to take a break and worked at Rock Health for that.Summer. And I think similar to what Chrissy said, you know, it starts with the concept of healthcare and the idea of, you know, something interesting is is happening here. There's companies emerging and the funding, but really stayed for the people. Just met a lot of really interesting people who wanted to make animpact in the industry and didn't feel like I could find that anywhere else.There's something about entrepreneurs that's quite a bit, quite a bit different. Halle Tecco: Yeah, I mean, actually one of the taglines of this show is my favorite thing about working in healthcare is the people, and it feels like we have just a very highly motivated, impact oriented group of folks, and especiallythose that are kind of on the startup side also are just really adventurous and riskseeking and willing to just.Take huge bets. Yeah. There are Chrissy Farr: definitely easier ways to, to make money if that's, uh, if that's what you wanna do in life, . Yeah. But you want like a really slow, hard grind where your company will, will, uh, be in the borderline of, of [00:06:00] total failure and collapse every five minutes. Then, um, do health technology.But at least you can wake up every day and, and think that you're making a difference. Yeah,
Halle Tecco: hopefully. I mean, there are some companies that did the opposite though, so I wanna, I don't wanna start off talking about some of these failure. That's not, doesn't set the right tone. So why don't we talk about some of the biggest success stories in your mind.So since you guys have kind of been working in this space, do you feel like there's a company or a category within social health that you think has made thebiggest impact in healthcare? Malay Gandhi: Yeah, I mean, I think that any, any change requires a level of, as, as you described, the entrepreneurs risk taking. And that's true from the capital side, you know, as well.And you can go back and look at, you know, the, the area under the curve of the, the dollars that have gone into the space over the last 10, 10 years. In some, some will ask questions like they did on Twitter of like, where is, where is all this gone? You know, what's, what's the outcome of it? And I think question you have to ask is, did it drive any change?And then what are the [00:07:00] enduring or lasting companies, From that time, we didn't prepare for this. If I were to think about a company that seems like it capitalized on, you know, a lot of the things that Chrissy mentioned at thebeginning that were changing at that time, sort of like high tech, uh, Affordable Care Act related areas, and then even like the growth of the elderly population and where that was headed.Economic and government spending standpoint. I, I think validate is one I look at pretty closely today. And the reason why it's fascinating to me, I think you can look at the outcomes and the businesses like cash positive, which is obviously like a big deal these days in the way that the market has turned, but really studied what was happening in this space and built a model around that.The quality scores there, you know, the ACOs they work with. Are really high, but it, the thing I look at with that company the most is how long term view youha, how much of a long term view you had to have to start that company and continue to invest in that company. And then what the payoff would end up being from a [00:08:00] pure like investor mindset that it would have happen over a very, very long timeframe of saving money for the Medicare program.So that's definitely one I, I think about just. Um, an impact perspective and how long those like trends take to play out. You wanna believe they're kind of like, Oh, well the law's passed it's next year, but it's really something that will play
out over, took a decade and then it'll be another, um, rounding, but probably likemore decades to come to fully realize it.Halle Tecco: Well, if anyone wants to learn more about ade, we do have an episode with the ceo Farzad. Uh, which is, which is great. And I, I think that's a good example because that's all you're doing as an investor, right? You're kind of making an, you're making a lot of assumptions on a hypothesis, and a lot of stars have to align to have kind of the outcome you want.And in, in this case, obviously there was a lot of healthcare knowledge that helped kind of inform the hypothesis. But when companies don't work, You know, it's easy to look back and be like, what were we thinking? How, how did we get this wrong? You know, why did we assume those variables were gonna [00:09:00] change when we know that healthcare is really slow?Chrissy Farr: Yeah. I, I love that example as well, and it's actually in the Irma's portfolio, so a great company that we're fortunate enough to have kind of regular touch points with and just has a lot of of heart as well as being a, a good business. So, ticks all my boxes. I wouldn't point to a specific company, but I would say, There's just been several trends that I think have been very exciting to me.One of them is all of the work that's been done getting employers to really care about their employees and the digital health companies that have kind of sold into employers in the past decade. It's amazing to me to think that there are companies that exist today that your employer will pay for, um, that will take care of your child's mental health.I mean, that was unimaginable. 10 years ago that that was something that any company would pay for. And now you're seeing that happen, you know, as well as different payer groups, um, start to kind of roll out those offerings as well. SoI think, I think [00:10:00] that's been a real positive and, and we're, we're moving in the right direction.Although, you know, every few years you'll hear a lot of kind of hand waving around vendor fatigue in the employ world. And I think that's true. Yes, too. ButI still think there's something really important, um, about that trend. even happening. Yeah. Um, yeah. In the states where notoriously kind of, we don't offer very much to people regarding their families, their mental health, all sorts of things that you, that you find are pretty standard in in other countries.
Mm. I think the other thing about digital health that's so interesting to me is just like it's pure existence. And what that has done to sort of push the incumbents tothink about. Things like the patient experience for the first time, and not just incumbents, but also some of the large tech players. And you could argue that there's been mixed success there.And that was a lot of what I was reporting on at cnbc. But 10 years ago there were no big tech companies looking at this space. And very few of the incumbents were talking about how do we kind of engage and and delight the [00:11:00] consumer. At all. And now we've seen that all change. And every conference you go to, they're talking about these themes and they're talking about innovation and they're talking about new technologies.And so, you know, I kinda give our space a lot of credit in just even pushing those, those conversations to the fore and, and making people care. So Halle Tecco: actually someone on Twitter asked us to talk. Will digital health compete or complement incumbent healthcare players? And they brought up thePaul Graham quote, When a class of customers is slow and bureaucratic, the thing for startups to do is compete with them, not try to build things for them.So I'm curious what you guys think of that. I mean, we've seen players like One Medical, Oscar Health, these tech enabled services that are trying to compete with the incumbents, uh, whether they're large. You know, hospitals or, or I guess primary care clinics or health insurance companies, what do you guys think of kind of, why isn't anybody trying to take over Cleveland Clinic or Mayo Clinic, or [00:12:00] Aetna or some of these larger players?Chrissy Farr: Yeah. Or Surescripts. I mean, there's so many. Examples here where I've, I think I've seen maybe one company ever trying to take on Surescripts, um, which is kind of shocking. Like, and you think about kind of what a monopoly that has over, uh, e-prescribing. So there's, there's lots of examples of nobody taking one in incumbents across the space.I think there's been a bit of attention in digital health between, you know, do we go big or go home? And go right up against kind of the Cleveland Clinic or, um,kind of name your company in the drug supply chain that has a, a toehold over the industry. Or do we try to, you know, make some aspect a little bit better and collaborate with the incumbents.And I've seen, I've seen both. I think personally I'd love to see, you know, more big vision around this. We get into this trope sometimes, which, you know, I've,
I've written about Malay and I have talked about where, you know, any newcomer into this space, we say, Well, what could you possibly know? How could you [00:13:00] believe that you could do something innovative in healthcare?And I think we forget sometimes that the incumbents are not, are not winning. They're not crushing it, they're not delivering. I mean, look at the state of health systems, the state of health insurers. I wouldn't say that these are companies thatwe should, we should hold up as shining examples of incredible top marks, 10 out of 10 and say that nobody should come in in the space and try to do better.I think we should try, and I think we should push them to think much more about, about the patient they currently do. So I'm, I'm all for kind of bigger visions and, and attempts to kind of really move the space forward, but I, I guess we probably need to be doing a little bit of. Malay Gandhi: Malay. To cite my own writing, which is a horrible thing to do.But I had written something about this seven, seven years ago, and just like looking at the data I concluded serving the industry, I think as Chrissy put it, like making it a little better. It's not really a pathway to a large, large outcome, um, [00:14:00] ultimately for the company. And you could think about outcomeas financial returns, but.Think, we think a lot about what is the impact of that business really on American healthcare? Is it changed in a meaningful way that most people wouldrecognize or understand? I'm, I'm wholeheartedly convinced, like better supporting the industry is not a pathway to, to that large outcome. Again, however you want to.Sort of, sort of measure it, It doesn't mean you don't work with any of the stakeholders in the industry, but when you're designed to really to like modestly improve some large incumbent workflow or process or whatever, I don't think it's gonna lead to a large outcome or significant change. And so I'm, I'm Chrisy Chrissy's camp of the, uh, I guess it was go big in her , uh, framing, framing of it.But I, I would say whether to compete or not. And then I think the question comes back to like, how. Compete or not. Cleveland Clinic is an interesting example. Should you open a better Cleveland Clinic? Should you open like a better hospital? And I actually think there's, I've met [00:15:00] with a couple companies in the last year or two that that, think about that.
But probably the way to compete with Cleveland Clinic is to eliminate heart disease. It's probably in primary prevention. It's not actually in building a better surgical center, but it's in helping people not have the types of issues that are Cleveland Clinic's, bread and butter, and that they charge a lot of.Uh, for, So I think while competing with the incumbents is the right idea, you have to think hard about like how to compete with them. And I, I think about, you know, Sam and can, what the VER team is doing, should somebody compete with the insulin providers? Sure. I don't know if California should be building manufacturing facilities.They should probably be giving somy more money in reversing type two diabetes in people so they don't need insulin in general. Halle Tecco: Yeah, so it's that. It's that, that Henry Ford quote about, you know,we don't need faster horses. Let's not think about doing what they do better, but maybe just making what they do.I. . Malay Gandhi: Yeah, exactly. Halle Tecco: So I, I do wanna talk about the concept of like the new guard in old guard in digital health, because we were all the new guard a decade ago, [00:16:00] and I, I say this all the time, but we were just, we were so gast in so many ways. I remember the first rock health report that we came out with, with the funding.Information and how, how much funding was going into the space and, and people feeling like this just wasn't gonna go anywhere. And this was like peoplewho've been in this space for a long time, they were so jaded and, and I think we were on, we were on the right side of history. We believed in the potential digital health and certainly this industry has made remarkable progress.Now, you know, are we the old guard now? Are , do you guys feel, you know, more skeptical? Do you have more battle scars from. Everything that we faced over the last decade, Chrissy Farr: Holly? I, I feel like I, I did, you know, a 10 year stint in journalism, so I definitely have battle scars. Um, . Yeah. And there were a lot ofexamples over the years of people just not being forthright and there were like
massive violations of, of trust and, you know, there were great companies and there were [00:17:00] terrible ones.And I think I, you know, this was something that I actually have. Been thinking a great deal about, as I've kind of moved careers, but why digital health in particular seems to have attracted kind of more of these negative stories in the press? I mean, I, I can't think of any other sector of technology where we've seen so many kind of, it feels like it's just been near constant for the past 10 years.And I think part of it is just that the sensitivity of what we do, you know, it's thefact that we, we are serving the, the sick and the vulnerable. At the end of the day. It's probably. How broken the, the system is that it's so difficult to make money doing the right thing. I mean, Mala mentioned kind of eliminating heart disease.It is so hard to make money on prevention, much easier to make, make money on, uh, prescribing a pill. And, um, I think all of that has kind of led to some of the kind of, you know, worst examples that we can all, we can all think of. Mm. Um, so I try to, I try to not [00:18:00] be too, too skeptical. Um, even though just having kind of gone through that over the past 10 years, it's definitely made me come out thinking like, this is not like anything else.We have to be so, aware and so thoughtful about kind of the people that we back and the people that we promote, um, and make sure that those are the right people. And I don't have all the answers there, but it's something maybe I throw out to both of you on, on. How do you think through that? Halle Tecco: Well, even just, you know, not recently, but last year and kind of the years.Maybe the last 24 months, uh, when I see some of these valuations of digital health companies and I find myself just being like, these, this is bonkers. I don't know how it, it's possible as an angel investor to have a solid return when the multiple of like. Woo Arr to valuation is just so incredibly high.And then I, you know, I'm like, Oh, am I just being like a skeptical old guard now? Am I just like ? You know, do I need to believe [00:19:00] more? But it does feel like some of the, some of the hype has gotten, again, I feel like things have have settled down a little bit, but leading up until this year feels like some of the hype has gone.
Chrissy Farr: Yeah. And how I am gonna say something of VC should probably never say, but like I saw businesses a lot last year get crazy valuations and raised a lot of money that frankly should never in my mind have been venture backed. Yeah. Like venture Venture implies like a certain type of growth and a certain type of return.and you know, in some ways like these models are not like congruous with people being able to do the right thing on the right timeline. So I think we got like over enamored with Venture as this kind of class of financing and we forgotthat there are other ways that you could kind of build businesses, whether it's to kind of bootstrap them or to look at another type of financing or to be a nonprofit.And all of these things are, are a hundred percent valid and sometimes the right [00:20:00] things to be considering. Halle Tecco: Well, it's, it's supply and demand in a lot of ways. So as more VCswere took on the mandate to do digital health, there were just a lot more dollars flowing in. So Malay thoughts. Malay Gandhi: I would like to think that I'm still an optimist, um, at the kind of category level, like the group level and especially looking, looking forward, but you certainly develop a set of experiences that you've had that inform how you, how you think about any given company or, or a founder or which spaces you like and don't like.I think that the danger. You know, kind of settle into this, this old guard mindsetis when you're not updating those priors. So you've come to believe something, Say for example, like selling software to providers is a terrible idea. Like just, no one's ever built a substantial company in that space.There's a hundred reasons for that, but that may change over time. Yeah. I don't know. The ehr, uh, adoption cycle is now behind them, so it's about the next, next set of problems or. We used to joke that every AI company we saw was really just an Excel spreadsheet, but I think [00:21:00] that has substantially changed.You know, today I'm more optimistic about the role of AI than I ever have, uh, sort of been in the scope of scope of medicine. So certainly like I've become, I would definitely. Classify myself as, uh, in, in the camp of very skeptical now and have more of a base of experience under which that, you know, sort of skepticism, uh, on top of which that skepticism lives.
But yeah, still very, very optimistic, uh, about, about the sector and especially about entrepreneurship in general. Mm-hmm. as being a force for change.Halle Tecco: We'll be right back after the break.So some of these companies that have been big failures as Chris, you said perhaps we [00:22:00] get more scrutiny and attention from the media than other sectors, but at the same time, the companies that we're building impact human health and they're really important. So fair. No, you buy 'em. Outcome health. What sort of damage do you think was done, if at all, by the implosions of these companies?Chrissy Farr: I think, um, a good bit of damage. You know, maybe it's overstated like when the Theranos trial was happening. I, I was just fielding nonstop questions from my peers or former peers in the journalism world about kind of how this has impacted women in digital health. And I would, you know,my answer was, I, I don't think people are in the industry are talking about Theranos that much anymore.Um, it was a long time ago, and there are definitely more recent examples that. Top of mind for investors than Theranos. Um, so I think we can sometimes overstate the impact, but it definitely has caused certainly more scrutiny and, and I think a lot of VCs have looked at certain spaces [00:23:00] and said, You know, I'm not touching this because of these bad actors.And I think. The startup ecosystem needs to do a better job at differentiating themselves from these particular players when these things happen. I think we can sometimes get into this kind of mindset of thinking, Oh, well the industry will will know that, that we are the good guys because of the immense like product and and operational capabilities that we have.But I think we need to also be telling. The story, um, very publicly about how we're different and moving into this next era of digital health with a lot more transparency. You know, the things that have acknowledging our mistakes and the things that have gone wrong, um, along the way, and not just kind of presenting this idea of, of that it's all perfect and has all been easy because it, it just isn't.And, um, . I think that's what the space needs is, is a lot more kind of openness and and honest dialogue really. Any thoughts there?
Malay Gandhi: Yeah, I mean, I think Chrisy [00:24:00] Chrisy said it well about the transparency that's required to operate in this space. With the examples you cited, you know, specifically I think about fairness and the impactthat it may have had or has had.Women founders, I can't, you know, sort of speak to that directly. The other sideof it is, hey, does it, does it cause the capital markets venture and others to avoidtechnical risks? So solving pretty hard medical science problems. And my view on that is definitively the answer is, No, I think companies are funded every single day eventually, and works with many of them that are working on cuttingedge science with extraordinarily technical risk.There's high probability of those companies, um, failing and even areas that sound like science fiction, like a blood test to detect cancers and even locate where that cancer is in your body. Have been well funded and now brought products even in into the market since then. So I'm actually very optimistic that it didn't affect people's ability to take risk on pretty hard technical [00:25:00] problems.I think on the other side, with e Byum, it's actually a quite different thing of the area of like how companies choose to commercialize and the way that they present their commercial model. Um, I actually worry we've taken a lot of the wrong lessons from that over the last few years of saying, Well, if you can get a doctor.You know, to kind of prescribe your product or to, you know, dag diagnose you with something, then you can build a healthcare system for that. You now have access to the gigantic pool of insurance money because we've created one sort of choke point on all of those dollars, which is the physician. And so now we've seen a whole class of companies emerge to rent to you physicians, so you can gain access to, to those dollars.And so I just wonder if there's still like a much broader reckon. On that. I'm not saying that anyone is like, uh, doing, doing anything to what has been alleged about you bio, but it's clearly like kicked off a set of commercial models in that space and there was a group of consultants and advisors and investors who werecoaching many companies to [00:26:00] follow that pattern.And I still wonder how that's gonna play out. Over, you know, like the coming, coming few years of this kind of rent to doctor, to build bill insurance models, like a lot of people have specialized kind of around this. It's become
modularized. So I'm not, I'm not sure actually we've seen, seen the end of it, endof that like particular story.Chrissy Farr: And Mala, I, I definitely have a, a term for this, which is Doc in A Box, and I've been kind of using this for you. Is, is just, you know, to hint at this idea that. We're seeing physicians make millions of dollars, literally just like clicking buttons to prescribe things, and for the most part, asynchronously millions of dollars a year.Oh my God. Yeah. I mean, just by being on these networks, it's crazy how muchtime you can make during that, and it gets into these really existential like deep philosophical questions of how do you define a patient and physician relationship. And what kinds of care kind of constitute a relationship and do we always need to have a physician be involved?Uh, why? How much can a patient kind of do things on their own and, and [00:27:00] should we be thinking less paternalistic going forward, but then in cases where we do need the physician involved and what is that right level of oversight? Sure. And I don't have the answers to all these questions, but I think it's something that we should be talking through as an industry, Halle Tecco: even in, even without technology, even just looking at healthcare services.The issue of pill Mills has exists today, right? So there are physicians that have, have over-prescribed opioids in, you know, Appalachia. This, these are things that have happened even without technology. And do you just think that the technology's kind of accelerating some of this, or enabling some of this to happen at a, a bigger.Malay Gandhi: I think Christie's point is very, you know, salient. I, I think a lotabout, you know, where, where are we using doctors today and sort of health tech and is it the right places for doctors to be there? There's areas where we do it because that's underneath the state practice of medicine rules or the insurance company requires it, or some type of federal, federal thing related to progress.[00:28:00] But in many cases it may not be needed or warranted. And then in other situations, you know, we're not involving doctors, um, in, in people's care whereI think they do need to be engaged. And a, as you said, we've had these challenges outside of the technology environment, but the level of amplificationyou can put on those problems with technology distribution over the.
Nationwide reach and a lot of capital to do marketing and advertising to, to consumers. I think it does beg like a deeper scrutiny of it, and I don't think saying like, well, other people have done it before is ever a very useful argument to make of like, we're not the first to do this. We're just making it more accessible.I don't, I don't really find that yet to be a, to be a very valid argument that's made by some of these companies. Chrissy Farr: Yeah, I think it's, it's really tricky and it kind of gets us into the cerebral question, um, which was another kind of wave of, of negative media stories, but is there a right way to [00:29:00] prescribe controlled substances online?And of course in this case, it was really focused around medications for people with, with adhd. You know, that gets into so many complicated questions. I think a lot of people have taken away that there is a pill mill aspect to this, and there was a lack of oversight in the patients, you know, have, have potentially been harmed in this, in this process, who are prescribed that should not have been.Then the other side of it that we don't discuss is that, There. You know, I, I recently had a friend send me a screenshot because she tried to get a psychiatry appointment at U C S F, and the wait list was a year long. You could not see anyone for a year. So that's the backdrop of what we're up against with, you know, the system as we, as we have it today.So, just saying, you know, Okay, well patients should be seen in person. Doesn'treally solve the problem in my mind, but maybe we've gone too far. So Halle Tecco: Ali Diab asked Why has inflation and healthcare and health [00:30:00] insurance not receded in spite of all the innovation we're seeing and what stands in the way of a Moore's law style improvement in value per dollar Malay Gandhi: of care.I mean, I feel like this has been written about as long as I've been, you know, in healthcare like 20 years. It started, you know, with you Reinhard, it's, it's, the price is stupid, I believe was how he put it. I mean, Americans are willing to bear a lot of pain in this area. And so as long as we have a. System that's fundamentally sits between, um, our insurance companies and, and providers whose incentives are to raise, raise the prices of healthcare.
And our system continues to bear those costs, whether it's us as taxpayers or you know, the government, um, our employers and, and on everyone who contributes to the system. I think costs will continue to go up. I don't think the innovation is directed in any meaningful way at, uh, like reducing long term tructure.Issues in healthcare. An example I would give and I tend to be passionate about is [00:31:00] even when we look at like what we describe as innovation from a policy perspective or what companies are doing, it tends to be very short term cost. Focused. So take quote unquote, like value based care as CMS kind of defines it, they use a cost benchmark about reduction in cost next year.So there's only really one place you can go to move cost in that way, which is the highest risk people, the sickest people, and it's keeping them out of the hospital for that next 12 months. So if they would've had a high propensity to end up in the hospital, can you keep them out of it? Um, effectively is what that amounts to.But while you're doing that and you're investing every extra dollar of resources we have. To, uh, keep somebody outta the hospital. There's a whole generation of people that are just getting sicker and sicker that maybe don't have diabetes or hypertension today, but we don't pay attention to and help them, or people who have undiagnosed diabetes and hypertension or uncontrolled diabetes and hypertension.So I think. , a lot of our focus is effectively like a mortgage. We're trying to like reduce costs in the short term next [00:32:00] year, but mortgaging the health ofmany, many Americans and that wave of people will come sort of next. And so it's great. We, you know, reduced hospitalizations by 10% or something, you know, kind of in a year.But I can bet you the hospitals will increase their prices. By 10 to 12% the following, you know, the following year. And that cost will just come right back. You have to address the structural, you know, issues fundamentally. And until we believe that innovation is about great health for people, not about prevention of catastrophic, you know, events.I just don't think we'll see any significant change. Um, you know, in, in the cost structure, the prices or the inflation that Ali is. Chrissy, what are your thoughts on
Chrissy Farr: that? I mean, I think people talk about the fact that we have a sick care system and not a healthcare system. And to Malia's point, like I, you know, I believe that a hundred percent there is basically no real incentives around prevention.And I think there's a lot of people in this sector that, that think that things like healthy food is not really their problem. [00:33:00] You see very low. Levels of,of training and education in medical schools around, around things like nutritionand food. And yet, you know, a massive chunk of this country is, is overweight or obese.And you think about kind of the impact that has on, on chronic disease and the costs perpetuated by that. And yet so little kind of, of our dollar and, and our time is spent kind of on addressing those root problems. And I think all of that kind of just feeds into what Malay said is we just, we take care of people once they're already kind of, very far down the path, but there's very little to kind of get people healthier and on a, a better path, much sooner in their journey.Well, yeah, it Halle Tecco: sounds like, you know, we're, we're innovating still within. These confines of a system that is not aligned with long term health outcomes for everyone. I'm curious on, on that note, who do you think has been left behind, not [00:34:00] just in healthcare, but in digital health with all the innovation thatwe're, that we're seeing, Who is not benefiting that really could benefit?And then are there groups that you think have benefited the most? Chrissy Farr: I mean, it's a, it's a great question because I don't know that thereare, Groups that have like most clearly benefited in my mind cuz there's still so much work to do, kind of for all of the above. But I would say if, if I had to picka group, it would be people in, in urban dense environments with really good health insurance have benefited the most because now they have access to things like same day appointments and they can see, you know, a network of primary care physicians quite easily.And there is some, some support around kind of just navigating the, the broad. Healthcare landscape. But then even within that, you know, I think about women for instance, I don't think of have benefited very much, um, in many other ways. I think, I think we have, you know, really ignored women when it comes to [00:35:00] maternal health.
Um, fertility care, so many different areas. Children, pediatrics was basically ignored, um, until a few years ago. Rural healthcare, Medicaid, um, so many areas where you see very little funding. Going into to these areas and, and maybe that's starting to change, um, as we've gotten into this new guard. Um, and lots of kind of positive examples we could all point to.Um, but I would say, you know, there's still work to do for almost everyone in the system. Malay. Malay Gandhi: Now, I would go back to this idea of defining innovation as cost reduction, when it really should be about health optimization. And then who gets left behind are people that have poor health but aren't showing up in emergency rooms or hospitals.They don't tend to get noticed by the system, and we don't tend to invest, uh, in, in them. So we, we had ation used to call this, this group of people, the silent sufferers, and I think to Chrissy's, Women bear a [00:36:00] very highly like disproportional burden of that silent suffering. Migraines was an example. We talked about a lot of the third leading cause of disability in the world.There's 36 million people with migraines in this country. It's triple the prevalence in women. And what are most women told when they go to their doctor? And it's not a headache specialist by the way, cause there's only 500 of them in the whole country that can. Migraines. It's that it's probably like a menstrual cramp.So I just think we have a fundamental problem with looking at and measuring health of people. We focus a lot on cost and who are the, I don't know, kind of like the loudest people from that, that perspective, but there's so much silence suffering that's out there, and I think they've really been left, left behind becauseof this relentless pressure to define innovation as cost reduction rather than better health.Halle Tecco: And do you guys think that the incumbents are a bigger challenge to kind of breaking through and serving more people or policy or something else? Chrissy Farr: I [00:37:00] think it's both. It's inertia, it's lobbying. It's just too many dollars in our kind of government. I mean, these are all kind of much bigger issues that we probably couldn't chat about in the next few minutes, but it's just all of the above.
It's um, It's a system that is really looking to make a, make a buck. And the, the fundamental problem I see with that is that this is supposed to be about serving the sick and the vulnerable. I don't see kind of our experience of, of healthcare as being one that kind of allows us always to be consumers.Um, it's not like buying an iPad if you're sick. I mean, you will do anything and pay anything to not feel sick. Yeah. And I think that's something. That we need to account for in this system and, and we need to be really thoughtful about the ways in which we kind of do make money and, and making sure it's kind of aligned towards kind of real outcomes and, and improvements there and, and, and not just kind of Absolutely.Like Mala said, cost [00:38:00] reduction. Malay Gandhi: Yeah. Yeah, this is an area of like, you know, goes back to the old guard, new guard thing. I think as I've spent more time, um, in, in, in this space, I've grown a stronger view that, um, you know, that a mentor of mine always put it as like a stroke of a pen. Um, could have a higher impact than any,like one, one company could, whether it's an incumbent or a challenger of, of some kind.I, I've come to believe that there are some core structural issues in American healthcare that we do need more. Regulatory and policy intervention on including the way that providers operate in their, their local markets. But probably more importantly, an inspiring message from, you know, like the leadership of this country that we care about health, because it's about like the future of.The country, and it's something that we wanna invest, uh, a lot into is people's health in the country. And you've, you've seen this, these types of initiatives in other, in other countries. I just don't see it as a priority from, you know, an American leadership standpoint of an area that we wanna lead the world in as having the healthiest.[00:39:00] Healthiest generations and healthiest people. And I think it's something that does start from, you know, the executive executive branch and policy policy setting that could reset the agenda on it and drive more funding into it to things that actually improve people's health. Halle Tecco: So to close out the conversation, curious what piece of advice youwould give or that you do give to people wanting to break into digital.
Chrissy Farr: Do it . I mean, after all this you might be thinking, Gosh, there are different ways and, and better ways to spend your time, but we really need you. Like we, we need people who wanna come in and, and think and new and in fresh ways about these problems. And I think actually a lot of people who have come in from other industries have been quite successful.in this space because they haven't had, you know, this, this kind of decades longkind of view of things that this is a space that can't change and the problems are too intractable and, and too difficult. Yeah. Um, I think if you, if you design kind of a new kind of healthcare experience that you would want, or, or, [00:40:00] Yeah.A loved one would want or. You know, even if it's just kind of a, a vision of a person that, that isn't you, but somebody who lives in, in rural America that just doesn't have any access to care, like what kind of system would you want to design for them? I think these are all great questions and sometimes having that outsider view is, is, is really the thing that I think can, can lead to, to real changeand impact.Malay Gandhi: Why? Well, I think Chrissy said I've come on in, uh, I think thebig difference, Holly, I think about 10 years ago, how great the community was even back then and how welcoming it was. And I don't know, again, it kept, kept me in the space really was the people. Now I look around today and it's. Yeah, I feel very old.It's so much bigger. , how many people And newsletters and every, everything, podcasts, Um, and everything. Yeah, everything else out there to help people enter the space. And that's my only, of course, come in, do your part to make, make, make an impact. But I think the other piece is like connect. Connect into the community, spend time with.Especially if you're starting a company, spend time [00:41:00] with the other founders who've been working in this space. I think there's nothing better than that kind of like near peer relationship of somebody who's been through what you're about to go through and letting them teach you some, some things about a lot of the hard lessons that have been learned probably over the last, over the last few years.Halle Tecco: Absolutely. I would, I would just add to that, you know, spend, spend time with the people that you're trying to serve. If you. In that category ofcustomers. Um, if you're building something for elderly and you're 26 years old,
go spend time, uh, with your, with your, ultimately the people you wanna serve so that you can really get to understand their pain points.Cause I do think that we find that people who, you know, just have that empathy for the end user are able to withstand the ups and downs and challenges of building a digital health company a little better. . Any other final words? Chrissy Farr: This has just been just a lot of fun. Yeah. Just to kinda spend time Halle Tecco: with the team.It took us, took us a year to get this, [00:42:00] uh, to actually get this recorded. So I'm, I'm thrilled that we were able to do it. It's always great to catch up with you guys. Chrissy Farr: Me too. And anytime I'm, I'm ready. I'm, I'm ready and willing to talk about anything you want. Um, I love the pod, so thanks Halle Tecco: for. Thank you. All right.Thanks guys. Malay Gandhi: Thanks Halle.