I think people are being a little too hard on the author. Startups in healthcare are hard. Been there, done that, have the t-shirt (literally, that's all that left). I even made the same fatal mistake - not identifying who the buyer really is. And when I say identifying the buyer, I don't mean it in that hand-wavey, vague way like "doctors" or "insurance companies". The starting point has to be something like "ophthalmologists in small practices (1-10 doctors) in New England who are trying to acquire new patients through social media."
And here's something that's absolutely critical for all engineers trying to build a startup in healthcare to really understand. Healthcare is so alluring because tech people are so idealistic. We think, "Wow, we we can write some code, and then save lives!" And that's sometimes true. But when you are thinking of your customer, revenue model, sales strategy - all that business stuff - the mistake we make is thinking healthcare is different and the same rules don't apply. We think if we can save lives, we can make a business. But the key insight is that you have to take a step back and just treat healthcare like any other for-profit business. Doctors and hospitals care about what generates revenue. Insurance companies want to save money. Pharma companies are looking to advertise to new customers. It's no different than other industries. The psychiatrist's reaction to the sales pitch is the classic thing a doctor will tell when you're not helping their bottom line. As I was reading the post, I could almost predict how she was going to respond.
And if you figure that business stuff out, who knows, you might just build a healthcare business that saves a life or two.
From a business standpoint, saving lives can actually be expensive. The longer someone lives, the more healthcare they consume.
Health insurance companies are very aware of this, which is why they so frequently deny coverage for various life-saving cancer treatments. If you die while waiting for treatment, not only do they save the cost of the treatment, but also the entire cost of ongoing screening / care during remission.
The longer you live the more monthly premiums you pay, so ideally they do want you to live, but they don't want you to use any healthcare services (or use less services) while you live.
No, the moment you are diagnosed with a chronic or life threatening disease, your premiums no longer cover the medical cost. Otherwise what is the point of insurance. Moreover, many regulations prevent them from raising future premiums. So kicking you off the insurance plan or letting you die is indeed their primary concern
This is incorrect. How can they kick you off the insurance plan? Also, the ACA has provisions to prevent one insurer from having to shoulder the costliest patients via some form of cost sharing with all the others.
They can investigate whether you failed to report any preexisting conditions, or otherwise violated terms of your insurance. Things that would seem to you to be a technicality may be to their lawyers a breach of contract. Do you have a lawyer who is up for that fight?
ACA, since 2010, made it so health insurance companies cannot discriminate for pre existing conditions.
If you notice, when you search for insurance quotes on healthcare.gov, it only asks you for age, location, and smoking status. And gender, but I don’t think gender can be used to price the insurance any differently.
It boggles my mind that people keep bringing up pre existing conditions a decade after they have ceased to be a thing. Also, your link doesn’t work.
A better way to put it is that health insurers don't want you to get "sick". So anything to prevent that is usually money well spent. That's why vaccines are so easy to get.
"This is precisely why we need universal healthcare. The incentive structure of private markets don't properly value human life."
Government-run healthcare isn't a panacea that will 'value human life' any more than the insurance companies. You are still a number in a database somewhere.
Most new drugs come out of the US and socialized governments create generics at a fraction of the cost, because they don't have to put any money into R&D.
The US is the back-bone of the medical system for the rest of the world and also has the best medical schools and best quality hospitals (the majority of people with money come to the US for life-saving surgeries..this has to tell you something).
We need to push the true costs of things to the patient, which will force the price down...not replace the existing inefficient layer of the insurance companies with an even more inefficient layer called the government.
This has worked with many cosmetic surgeries, which used to be very expensive, but aren't covered by insurance.
Insurance should only cover rare surgeries that can't use the free market to reduce the costs.
I can't think of anything that the government runs better than the private sector. Healthcare is no different.
> The US is the back-bone of the medical system for the rest of the world and also has the best medical schools and best quality hospitals (the majority of people with money come to the US for life-saving surgeries..this has to tell you something).
This just means American consumers end up subsidizing health care R&D costs for the rest of the globe — purely because our government prevents us from collectively bargaining the way pretty much every other country does.
The people coming to the US for the “best quality” are generally going to doctors / surgeons in private practice, most of whom do not take insurance and can see you immediately. There is an almost entirely separate (and much higher quality) medical system available to those who can afford it. The system the rest of us belong to ranks right behind Morocco and Costa Rica in terms of outcomes (not joking — this is according to the WHO). We come in dead last among “first world” countries.
If American consumers stop subsidizing health care R&D costs, what will happen to the R&D? Will it decrease? Will health care costs in other countries increase as they start to bear some of it?
I assume it will continue because the drug companies need products to sell. It's not like they're just going to close up shop, but it may be the end of windfall profits.
The other problem right now is that it's not profitable to create drugs that actually cure anything. It's far more profitable to research drugs that help control chronic conditions (like diabetes, hypertension or Alzheimers) rather than drugs that can cure a condition outright. This is one part of why nobody researches things like antibiotics anymore.
As stated in a thread above, while it is not directly profitable for drug companies to cure diseases, it is profitable for their insurance agency cohorts. The current system does not totally dis-incentivize cures.
The problem is that those drugs never even make it into the pipeline because they don't get investment in the first place. The big drug companies aren't the ones actually developing new drugs; that's done by biotech startups. If a drug shows promise, big pharma buys the company and pays for stage 2+ clinical trials.
A friend of mine works in pharmaceutical marketing, and the big revelation I got from him was that the marketing departments run the drug companies from the top to the bottom. If marketing doesn't see a billion dollar market for a new drug, it won't even be considered for clinical trials. The VC in biotech knows this, so they won't fund startups that don't have this potential.
There was a HN thread on this recently in relation to antibiotics. [1] Antibiotics are a special case for their own reasons, but ultimately if the potential for insane windfalls isn't there, big pharma is not interested.
Between the MRC and NIHR, the UK's NHS puts at least a couple of billions (Sterling) into clinical research each year, making them the largest clinical research funder in Europe. They're not researching generics. Oh and they were one of the original funders of PubMed Europe.
I can think of lots of things the government does better than the private sector, although admittedly outside the US.
> Objectives. We explored whether the United States, which does not regulate pharmaceutical prices, is responsible for the development of a disproportionate share of the new molecular entities (NMEs; a drug that does not contain an active moiety previously approved by the Food and Drug Administration) produced worldwide.
[...]
> Conclusions. Higher prescription drug spending in the United States does not disproportionately privilege domestic innovation, and many countries with drug price regulation were significant contributors to pharmaceutical innovation.
And
> In the United Kingdom, the pharmaceutical industry invests more of its revenues from domestic sales in research and development than do companies in the United States.
The US pays a lot for medication, but a lot of that money is used for things that are not innovation (eg advertising). Countries that have better free markets for medications don't see less spending on innovation, they see more spending on innovation.
Implementing something like what you describe, IMHO, would have the greatest positive impact on the health and welfare of Americans, of anything this century.
I have a friend who is very high up in one of the largest health insurance providers in the US, and I have often debated over the years with this person that same point, that the insurance layer is what creates the model for inefficiency, and abuse at the provider level ($5 Tylenol pill, $10 Band-Aid, minor treatments and return visits of dubious value, etc.), and that if we treated medical care as an ordinary consumer good, outside of the extreme emergencies that are bankruptigly expensive, things would be a lot better. The person I know at the insurance company doesn’t necessarily disagree either.
Take a look at some of the "universal catastrophic coverage" proposals. The ideas is to BOTH socialize and increase market competition for healthcare at the same time. Universal care if you get cancer or for other chronic/terminal conditions. Then have a real market and competition for everything else. Regulate safety but not pricing or delivery. (Many of these plans also call for universal preventative services that drive down costs for the whole system). The Dutch have something closer to this in practice with "universal long-term care insurance" separated from the basic/primary insurance, but I've heard mixed reviews of how this works in practice.
It’s an interesting concept. The primary concern is that most of the costs for catastrophic medical problems will be incurred due to things like obesity, smoking, heavy drinking, dangerous lifestyles, etc. This creates one of two problems (or both?): either I’m left with the bill for others’ bad choices, or individual agency is under state / democratic control (e.g., salty foods banned, dessert banned, drinking banned, etc.).
Neither of those scenarios are ideal.
If the only question was genetic differences, that’s a risk I think a lot of people would be willing to take (e.g., that I might be healthy until 100 and then die in your sleep, theretofore paying constantly for others who have had medical problems for 70 years straight). I myself would be willing to take that risk / pay for that style of universal coverage, if not for the aforementioned choice part (smoking, etc.) playing so heavily into the cost, in practice.
The costs vs. outcomes analysis across health care systems suggest that your personal lifetime expected return on investment (likelihood * (value/cost)) of a universal health care system with a single large national risk pool will be higher than your lifetime ROI in the current US system.
You are probably underestimating your own unknown non-lifestyle associated risk, along with the risks your offspring represent.
It also costs a lot to detect and judge risk factors, manage individual risk pools, assure compliance, etc. You save a lot of money by simply not bothering to risk-qualify eligibility and this offsets the costs associated with carrying lifestyle risks in a single large pool.
This is a shockingly uncompassionate perspective - is it satire?
Assuming it's genuine, it's also misguided. Almost no-one wants to be obese, alcoholic, etc - accessible healthcare will reduce the incidence of all of these, which in turn will reduce the externalities associated with them.
You also don't need further state control to discourage smoking, drinking, junk food, etc - taxation is the mechanism used globally to discourage undesirable behaviour.
Anarcho-capitalism -- er, "libertarianism" -- at its finest. It's a deeply nihilistic worldview.
Almost all these things are biologically addictive, and furthermore the companies selling them have long known about their addictive qualities and then built marketing campaigns to ensure the public was not aware of the risks.
Taxation is how you recognize the externalities of this behavior while maintaining a free-market system.
We’ve been taxing cigarettes at like 100% or something ridiculous for many years, yet just as many people die from tobacco-related cancers now (if not more) as did when cigarettes were much worse for you (no filters, more chemicals, etc.). Those taxes also did not help to alleviate any of the problems in the medical industry; or if they did, they were obviously offset by something else massive, since cancer healthcare expenditures have risen drastically since their inception.
Also, it’s easy to look at something like cigarettes which pretty much everybody would agree are a terrible idea, and say, “fine, tax em”, but what about when it’s sugar, then butter, then red meat, etc. Let people make their own choices instead, and just don’t put the onus on the rest of us to fix the problems of those choices. Banning smoking in public is acceptable because it’s no longer a choice that only affects yourself; it affects anyone near you in a really terrible way. But taxing cigarettes (or anything else) is no solution.
“Consumer driven healthcare” as the academic researchers call it. It is bewildering why we don’t have diagnostic labs doing email marketing campaigns, for instance. This is driven, I think, by an outmoded concept of the security of doctor’s knowledge. Now, doctors are so behind the ball and play defensive to protect themselves from malpractice. The idea that an individual cannot make educated decisions which are market driven (ie price driven) for most mild conditions is incomprehensible.
With respect to health care, you may be able to make such educated decisions, almost no one else can. There isn't enough signal, and almost no one has the ability to distinguish signal from noise, and correctly interpret it.
What happens is that when given the opportunity, business will pollute the market with proxy signals (like brand trust, or fear based selling) that people instinctively respond to.
These proxy signals will be subject to manipulation by well-capitalized actors and will not in general reflect outcomes or value. They will interfere with the fundamental signal, making it even harder to detect and interpret.
Therefore the market will not work, in the sense of delivering the best outcomes for costs.
(Note that I am strictly speaking of healthcare, where even experts are often unsure of causal relationships and the relative value of various therapies. In general I think markets are a wonderful thing. Here is an experiment to try... take a mild condition treatable by OTC medication, such as the symptoms of colds, allergies, etc, and see how long it takes you to identify, characterize and factor the available therapies, and then map this to available products. Evaluate interactions, cautions, effectiveness, risk, convenience, costs, etc. Now ask yourself, where did you get your information? Who did you have to trust? Why did you trust them? Is the basis for your trust and understanding available to the average person?
I've done the experiment. My conclusion is that healthcare large and small is not like other goods.)
You assume medical bureaucracies are needed to protect from self-harm; ironically the current healthcare state is harmful!
I have firm belief in the fact that the market can more efficiently aggregate medical information but above all else create more rapid responsiveness to care. Bad products and actors are always seeded out over time in a society.
I really wish that all markets worked like that. When they work, markets are an amazing mechanism for pricing, driving value creation, allocating capital, and searching the economic and technological solution space.
But they don't work like this all the time, for all goods.
Tetraethyl lead, which quite probably caused material long-term harm to entire generations, is gone because the bureaucrats banned it. The free market would never have phased it out organically in a reasonable time-frame, we know this because it didn't. The market participants fought for its continued use and obfuscated the issues to their advantage.
GlacierMD was explicitly an attempt to filter, aggregate and make available high-quality health-care information (i.e. improve the quality of the signal, which is necessary for efficient market functioning), and it did not find a value proposition in the market.
> GlacierMD was explicitly an attempt to filter, aggregate and make available high-quality health-care information (i.e. improve the quality of the signal, which is necessary for efficient market functioning), and it did not find a value proposition in the market.
Except it doesn't -- what GlacierMD was trying to do is something that's currently done by humans at scale. Which he would have known if he understood the market better. This is a centralized function that is performed much higher up the chain and ends up in clinician / patient hands in the form of clinical guidelines.
This is maybe a useful tool for researchers to be used as one input in the development of clinical guidelines. But the functionality it delivers can be done manually (and will continue to be for liability reasons). In this case, the market worked. The author should be thankful he was able to get out of it only $40k in the hole.
I’m not trying to be divisive, but allow me to counter that all markets need consumer advocacy. High fructose corn syrup has been substituted in certain soft drinks now because of the diligence of consumer activism. I take it as a mathematical certainty that bureaucrats take longer to respond than the fluidity of market economics. I just find it appalling I can’t order my methotrexate medication without having to physically see a rheumatologist, with the man-hours to get that script embarrassing for a digital society.
The government runs a lot of things better than the private sector. Even in the US, the government loosely or strongly manages Police, National Defense, Garbage Disposal, Water managenemt, Power Management, Internet infrastructure, Education, Telephone, Mail and many more. Any service that every citizen needs to live a healthy life is better and more cost effectively run by the government.
Telephone and internet are usually run by private companies no? I think the post meant that the few government run alternatives that exist tend to be better (cheaper, faster, better service etc).
I didn't claim it was. Only that our present standards incentivize fee-for-service and not outcomes-driven, as exemplified by the author's inability to sell his outcome optimizing software. ACA tried to remedy that with preventative care standards, but the current administration is actively dismantling it.
Your model works for cosmetic surgeries because they are cosmetic - optional and not life threatening.
When calculating price, the cost to produce a drug is the last thing on pharmaceutical companies' minds. The question they ask is how much are you willing to pay for something that allows you to continue living. The factors they actually consider: the patient's perceived cost-benefit of continued suffering, the credit/insurance-worthiness of the treatment cohort, and whether the company faces competitive pressures from others selling the drug on the market.
Nothing better depicts the situation than what goes on when pharmaceutical companies merge or acquire the rights to rarely used drugs[1].
The only way to structurally combat this is with the monopsony power of a single payer system.
>I can't think of anything that the government runs better than the private sector. Healthcare is no different.
Government run care has the highest satisfaction rate of any healthcare coverage[2].
> I can't think of anything that the government runs better than the private sector.
Then you are not very good at thinking. There is no theoretical, practical or empirical evidence that this should be true. If you _feel_ this should be true, you should really investigate where that feeling comes from.
Basically your post is just ideology without argument or evidence. All evidence shows that free markets in health care are terribly inefficient. If that doesn't align with your ideological priors, well, adjust your reality.
I am on the fence between Single Payer and your proposed solution of "push the cost to patient to force the price down". I do think the same but the appeal of universal healthcare is similar to the appeal of things like fire department. We don't really always need it but when we do, we don't want to worry about it.
Honestly, as long we get rid of the mafia middleman a.k.a insurance company except for real catastrophic situations, I do agree that costs will plummet. Price transparency is another key aspect.
The problem with the fire department is the freerider problem - if I pay for the fire department’s “protection” but my neighbor doesn’t, and his/her house is on fire, the fire department has to save my neighbor’s house in order to save mine, so the neighbor is not incentivised to pay.
Healthcare doesn’t have this issue (except in emergency services), so public healthcare also doesn’t solve that. It solves problems such as the principal-agent problem, asymmetric information, improves collective bargaining, ...
Hard to say. These are all internationalized firms with a variety of global operations centers. I know GSK does a lot of their research in North Carolina. But that is beside the key argument, which is that the US pays more (in aggregated cost and volume) to these firms, such that the total revenue for a product line during the patent lifetime justifies the cost to both bring the drug to market and pay for a variety of failures that didn't make it to market. I'm not sure if this is true, but it does seem plausible. And even if it is true, it still might be better to, say, fund more university based research instead, or have lower per-unit costs and pay innovation bounties or any number of other schemes.
I have worked in government (twice) and large and small companies, now working in the private sector for the last 20 years. There are structural inefficiencies and perverse incentives in both domains, though they are very different in style and visibility.
>Most new drugs come out of the US and socialized governments create generics at a fraction of the cost, because they don't have to put any money into R&D.
This is a completely false right-wing talking point. It takes 10 minutes to uncover how just totally bullshit this is.
Don't ever repeat again or anything remotely like it (aka the rest of your post).
The government never sees a return in any form on the money taxpayers put forth. But private companies do. Just waiting like vultures to snag whatever makes it through the proof of concept phase and claim credit.
>I can't think of anything that the government runs better than the private sector.
ISP's? Roads? Social services? Schools? Emergency Services?
Your second link has a pie chart that claims that pharma companies spend around 200x as much on advertising as clinical trials. Do you believe that is true?
This has been known for a very long time in pharma circles. Marketing budgets are several orders of magnitude higher than R&D budgets. An extra dollar spent on marketing has much higher returns than an extra dollar spent on R&D. Most of the real "hard science" R&D is paid for with NIH grants.
There are definitely lots of problems with the pharmaceutical industry, several of which are mentioned in that BBC article. But making hyperbolic claims that they essentially don't do any R&D isn't helpful.
>pharmaceutical company spending on marketing far exceeds that of its research budget
Imagine living in a society where supposedly rational, intelligent people hold opinions that don't withstand the test of a few keystrokes; opinions that quite literally aid in the needless death and suffering of others while also just generally being a complete waste of time.
In the context of a claimed difference of "several orders of magnitude" (i.e. >1000x), a difference of 1-2x rounds down to 1.
If you follow the citations for that Wikipedia claim (a very very basic step) you will see that they don't provide any evidence for an order of magnitudes difference.
I'm not usually in the habit of shilling for Big Pharma, but since you've taken such a condescending tone I'll make an exception and point out that according to that exact Wikipedia article you linked, literally the same paragraph on the topic mentions that the majority of marketing spending is on free samples. Unless you think that drug companies should raise their prices in order to fund more R&D (which would have the same effect as reducing free samples) this doesn't seem very objectionable.
Just my opinion, but I don't think "private markets" are incompatible with a proper valuation of human life?
It's a bit macabre, but, to me, "dead people don't pay taxes / generate GDP" seems pretty interchangeable with "dead people don't pay insurance premiums / contribute to a risk pool".
To me, the problem is that billed medical costs (what the hospital charges you) have come unhinged from realized medical costs (what the hospital spends on helping you, including salaries, supplies, etc).
If that world is alien-sounding, it's similar to how the billed education costs at universities have come unhinged from realized education costs. In both of those environments, the ballooning costs seem to be propped up by well-intentioned but fundamentally "unnatural" source of funds, in the form of government subsidies.
These have been exploited by profiteering and accounting optimizations, over the course of literal decades. If your surgery costs 2k to perform, the hospital will happily charge you 20k, collect 3k in insurance, and write off the remaining 17k as un-recovered medical expense, for which the government will reimburse some portion.
The more obvious solution to me, would be to take a hard look at how these subsidies are actually used (/gamed), and steadily reduce/focus them over time, so that hospitals don't have an incentive to inflate costs. The source of the problem isn't anything fundamental about "the private market", it's rather about the current set of public incentives that have distorted the private market into it's current form.
So, this is why, at least in the US, EU and a few other countries, we have orphan drug policies.
If you don't know orphan drugs are drugs that could be a life saving medical necessity for rare diseases that do not have a large enough base of users to make the drugs affordable. I'm not talking about Shkreli "affordable", but it's literally not feasible to spin up manufacturing, or final trials, or educational materials for doctors affordable. So governments offer massive subsidies or cost investments for some of these drugs that often only help TENS of people, not hundreds, or thousands or millions.
What's missing is a similar policy for funding otherwise for-profit efforts like the authors.Educational tools and products are often seen as less valuable but I believe they could be immensely helpful.
Now as to the authors original flaws? Well, his product has a clear sell-through referral potential, but it's not really functional to do so with prescription drugs. That being said, selling this product to a CVS or a webmd as a feature could be really good, or major hospital networks, or heck even pharma companies. But all of that is often year+ sales cycles, you can't just luck into that.
Universal healthcare won't help you there, since it also requires a stringent cost-benefit-calculation, e.g. the British system is very (in)famous for this.
That is for approving new treatments, not for ongoing lifesaving care, so is an apples to oranges comparison IMHO.
The drug needs to have a proven benefit, which usually comes down to how much longer does it give you, if it's only marginally better than the existing treatment, but orders of magnitude more expensive they work with the manufacturer to bring the cost down to where it can be approved.
A lot of what was written about the UK system during the ACA debate was outright falshoods or misrepresentations (e.g. the infamous "death panels", whilst ignoring the Kafkaesque nightmare that can be the US system).
Tell you what, I'd take the NHS over what you've got any day of the week, as would the vast majority of people in the UK.
There isn't a "british" system because health is devolved. There are four separate systems, one each for Scotland, Northern Ireland, Wales, and England.
> requires a stringent cost-benefit-calculation
There are lots of problems with the English NHS, but this is almost never one of them. Unless you have particular examples?
Ah, but then you have all these with the ever-increasing demand for profit and the issues caused by that incentive on top of it all. Is that an improvement?
An honest question, what value does the government assign to the human life in your opinion?
In my experience the elites from countries with universal healthcare seek treatment for themselves and their families in countries which have private options, while the majority of the population is stuck in long waiting lines and substandard care.
In Micheal Moore's Sicko Slovenia was mentioned as role model because its universal healthcare. Well it just happens that if you need a thumb operation you only have to wait 13 years there to get your turn. [1]
Wouldn't the rational response be to asses both pluses and minuses of public and private healthcare, recognize that not all health related problems are the same and build a better system from first principles rather than shoot blanket ideological responses?
At least in the above scenario the hospital has a financial incentive to treat you (part of why we perform loads of unnecessary surgeries in this country).
I’m for a public system I just think it is very difficult to do correctly, and if we go into it with idealism instead of extreme pessimism we will fail to secure it against those who prey on exploiting public money.
What is the proper value of human life? Does it change over time?
And is the budget-wise national-healthcare-system administrator qualified to make that determination for you?
And, if they do not want you to get better while waiting on line (most people do bet better for most things, except, broken legs, without treatment) or want you to die while waiting on line, why are the lines so long?
In any case, even in Singapore, with arguably the best-balanced system in the world, things are complicated, when people's lives are on the line...
No it isn't. Even in the UK the much vaunted GP will reject any health initiatives unless they help improve their bottom line. And the initiatives are from the NHS and are free!
> But the key insight is that you have to take a step back and just treat healthcare like any other for-profit business. Doctors and hospitals care about what generates revenue. Insurance companies want to save money. Pharma companies are looking to advertise to new customers. It's no different than other industries.
This is one of the most concise and effective arguments I have read for Medicare-For-All, Single Payer, etc.
I'm all for removing the broken system we have today, but a single payer system doesn't remove the challenge that the entrepreneur faces - it just changes it. Under single payer, you are now trying to sell to a large government organization, with all the pain and red tape that comes with that.
Not necessarily. Doctors can still have individual discretion over their choice of IT service provision (etc) under single payer.
The only thing single payer does is eliminate insurance company opportunism. It doesn't suddenly convert the entire healthcare system into a dystopian concrete monolith.
Although if it did it would make OP's job far easier, because if you could prove there were cost and health outcome benefits on a national scale you would be able to convert the idea into a viable business with a single corporate sales pitch, instead of trying to sell to every doctor individually.
In fact the real resistance would come from pharma. Single payer or not, evidence-based prescribing of empirically proven best-in-class drugs would undermine pharma's entire business model.
> because if you could prove there were cost and health outcome benefits on a national scale you would be able to convert the idea into a viable business with a single corporate sales pitch, instead of trying to sell to every doctor individually.
As someone who ran a healthcare business in Canada, I can tell you that this is absolutely not the case. Single payers are outrageously conservative buyers... sure, you may convince them in 5-10 years, but no startup can spend 5-10 years burning cash without making revenue. Particularly since, unlike with drug discovery, there's no guarantee that you'll be the only one selling this if the single payer eventually approves it.
What actually happens is that the single payer orients itself to big, slow companies that more closely resemble it, thus devastating small businesses and rewarding large, established players. It is damn near impossible to create a startup that sells to a single payer healthcare system.
That's a shame, in the UK we've seen some medical companies do very well by selling to GP surgeries and Primary Care Services (e.g. Egton who provide the online prescription and appointment booking service PatientAccess).
Providers are still basically private businesses (at least in primary care), so it is possible to sell to them. The problem is that each province runs its own system, unlike the UK where the NHS is universal across the country. So your addressable market is limited unless you can tailor your product to fit all 10 provinces. In practice it's very difficult, which is why almost all of the electronic health record software is owned by one of 3 large companies.
> As someone who ran a healthcare business in Canada, I can tell you that this is absolutely not the case.
Correct me if I'm wrong, but doesn't Canada have publicly funded providers? I'm all for single payer, but with a completely privatized provider network. Make the free market compete for the government's dollars. Technology should theoretically reduce costs because it more automation generally means higher profits.
You are wrong. The single payer in Canada is each province's respective health insurance plan. Anything listed on their "schedule of benefits" can only be paid for by the province.
Providers are actually in many cases like contractors... most family doctors, for example, bill for services rendered and are otherwise free agents (unlike in the UK).
Presumably the government will be incentivized to try to save lives in a way that simply doesn't exist for doctors and insurance companies trying to make a profit.
What happens in reality in systems like that is that doctors are lectured to avoid prescribing expensive exams, things like MRI or PET scans, even sometimes not telling patients they should do them if they could afford to pay them on their own.
At risk of identifying myself, I work in this industry (or should I say, I work in the medical field) and yes... it's insane. And of course, you get that privileged peak behind the veil, you get to see how the sausage is made as it were.
It is truly humbling because there is no easy solution, there are no unified APIs; you couldn't use them even if there were, because your medical records are highly sensitive. So forget about poking around production to solve a bug, you've got to do it through observability.
You can't move fast and break things because your downtime will get the regulators involved, because peoples livelihoods are at stake. You will get official complaints through various official bodies who can and will sanction the business.
In short, it's not a fucking joke and it takes a lot more time and a lot more money to do something serious here, and for good reason.
Note that I'm not talking about low-key wearables like Fitbits that monitor your pulse, I'm talking about doctors, triage, etc.
>I think people are being a little too hard on the author. Startups in healthcare are hard.
They are hard, but this case isn't really healthcare-related. He tried pitching his product to practices without showing how it could increase their revenue, or decrease their costs. Without that, his product is just another cost-center with some marginal (and ambiguous) healthcare benefits.
This. Been through two medical device companies that pivoted from clinical trials to product and the major hardships came from not fully understanding the money trail. In the UK the 'Cathedral' of the NHS means that the benefits may not be felt by the your customer.
And here's something that's absolutely critical for all engineers trying to build a startup in healthcare to really understand. Healthcare is so alluring because tech people are so idealistic. We think, "Wow, we we can write some code, and then save lives!" And that's sometimes true. But when you are thinking of your customer, revenue model, sales strategy - all that business stuff - the mistake we make is thinking healthcare is different and the same rules don't apply. We think if we can save lives, we can make a business. But the key insight is that you have to take a step back and just treat healthcare like any other for-profit business. Doctors and hospitals care about what generates revenue. Insurance companies want to save money. Pharma companies are looking to advertise to new customers. It's no different than other industries. The psychiatrist's reaction to the sales pitch is the classic thing a doctor will tell when you're not helping their bottom line. As I was reading the post, I could almost predict how she was going to respond.
And if you figure that business stuff out, who knows, you might just build a healthcare business that saves a life or two.