00:00until recently it was nearly impossible
00:02to figure out what something cost
00:04what words come to mind when you think
00:06of buying something with the click of a
00:09how about just tapping your card to pay
00:11or your credit card being paid off
00:13automatically or even your credit card
00:15company automatically detecting fraud
00:18when I think of those things the words
00:20that come to mind are things like
00:24and these are affordances that the world
00:26of fintech have granted us
00:29now let's do another exercise what
00:32happens when you think of the healthcare
00:36I assume that seamless is not the word
00:39popping into your head
00:40and you're actually not alone if your
00:42contract terms like confusing clunky or
00:47but what you may not know is it's not
00:49just the consumer that's hurting
00:52every year medical debt is increasing
00:54billions are lost in unpaid claims
00:57hospitals are in the red service prices
01:00can range up to 30 x
01:02there must be a better way
01:05well in this episode we talked to A6 and
01:08Z General Partners Julie Yu and David
01:10Haber who highlight the emerging
01:12intersection of healthcare and fintech
01:15and how changes in regulation and
01:18Technology may actually enable Founders
01:20to pave a better future
01:23they talk about exactly where Healthcare
01:25breaks down and how the three-party
01:27system of payers providers and consumers
01:30can actually be re-examined through the
01:33lens of fintech and if you'd like to
01:36learn a lot more about the fascinating
01:37intersection of healthcare and fintech
01:40our team just came out with a microsite
01:42which you can find at a16c.com
01:45Healthcare Dash meets Dash fintech and
01:49of course you can find that link in our
01:51show notes as a reminder the content
01:54here is for informational purposes only
01:55should not be taken as legal business
01:57tax or investment advice or be used to
02:00evaluate any investment or security and
02:02is not directed at any investors or
02:04potential investors in any a16z fund
02:06please note that a16z and its Affiliates
02:09may also maintain investments in the
02:11companies discussed in this podcast for
02:13more details including a link to our
02:15investments please see a16c.com
02:28so today we are talking about the
02:30fascinating and emerging intersection of
02:33healthcare and fintech and we have two
02:35people here who know a lot about both of
02:38those spaces and so Julie and David I'd
02:40love if we could just start there if you
02:42could introduce yourselves and talk
02:45about why you're interested in this
02:46space in particular and how maybe your
02:48backgrounds both as investors but also
02:51builders in your respective spaces has
02:53led you here well it's great to be here
02:54I'm Julie you a general partner at honor
02:56Healthcare team we focus on all things
02:58technology as applied to healthcare
03:00broadly speaking Healthcare fintech as
03:02we'll talk about is obviously a huge
03:03part of that we believe there's massive
03:05Market opportunity which is obviously
03:07one of the reasons that I'm excited
03:08about it but I would say the the primary
03:11source of my inspiration of passion for
03:13healthcare fintech comes from my
03:15entrepreneurial career prior to this so
03:17I was a co-founder of a company called
03:19kyrus we built a scheduling oriented
03:22product a software product that was sold
03:24to a large provider organizations
03:26whereas scheduling is obviously a very
03:28sexy area have health care we always sat
03:30right adjacent to What's called the
03:32revenue cycle in healthcare so you know
03:35sort of how the the payments are
03:36processed how claims are are submitted
03:38and I was always like sort of peeking
03:40next to me at the revenue cycle space
03:42thinking gosh that's where the action is
03:44at right like that's where the
03:45transactions are that's where the
03:46payments flow that's really where the
03:48rubber hits the road in terms of you
03:50know all of the weird incentive
03:51structures that drive the seemingly
03:53irrational behaviors of Health Care I
03:54always aspired to sort of expand my
03:56product into that zone we never quite
03:58quite got there but when I came into
03:59this seat I was very very motivated to
04:02explore that opportunity set from an
04:04investment lens thanks so much Steph for
04:06having us on I'm David Haber a general
04:08partner here at entry soon yeah join the
04:10firm a little over a year and a half ago
04:11is a GP on the fintech team but had
04:13spent you know the prior decade both as
04:15an investor and an entrepreneur had
04:16started a fintech company called Bond
04:18Street which was in the small business
04:19lending space we financed a number of
04:22practices at the time and then ended up
04:23selling the business to Goldman Sachs in
04:252017 enhancing a variety of strategy was
04:28there before trying the firm one of my
04:30sort of core beliefs I think both in
04:32life but but specifically in investing
04:34is that opportunities live between
04:36fields of expertise and I find myself
04:38really enjoying kind of spending time at
04:40those intersections it's one of the
04:41reasons I've always loved fintech
04:42because I've always viewed it candidly
04:44more is more horizontal than is it
04:46vertical it's just been an amazing kind
04:47of collaboration spending time with
04:49Julia and the rest of the bio and Health
04:50Organization you know kind of going deep
04:52on this intersection and I think
04:54again the depth of both of our
04:55experiences and the operating platforms
04:57behind us to kind of look at this
04:59problem space through both lenses I
05:01think having both perspectives of deeply
05:03understanding kind of the healthcare
05:04side and understanding kind of the
05:06fintech ecosystem and the infrastructure
05:07and how that sort of enables new
05:08business models I think is really
05:10opening up kind of a ton of
05:11opportunities in space and and why we're
05:14so excited to kind of spend more time in
05:15this category absolutely and I think
05:17with Healthcare in particular many
05:20people would agree you know Julia used
05:22the word irrational but I think other
05:24people may apply to terms like clunky
05:26maybe even broken but to your point
05:29David they may not know the depth of
05:31that particular industry and they may
05:33not understand why it might be broken
05:34and so maybe we can kick things off
05:36there Julie where do you think the
05:38Health Care System breaks down the most
05:40yeah you're absolutely right that it's
05:41pretty much all broken or I mean the
05:43other way that people oftentimes talk
05:45about it is that it's actually working
05:46as designed um and a lot of that you
05:49know sends back to the way that payments
05:51are designed and and processed
05:53exacerbates I think a lot of the
05:55challenges that we experience as
05:56consumers I often take the the system
05:58view to the space I'm very Enterprise
06:00focused and the companies that I
06:02primarily spend time with and when you
06:03look at it from the system lens you know
06:05the the core Trifecta of stakeholders in
06:08our Healthcare domain very simply put
06:10would be the following so one is you
06:12have obviously the providers the actual
06:14doctors and nurses and all of your care
06:16providers and services companies that
06:18actually deliver care they're obviously
06:20a key stakeholder you've got your payers
06:22which are you know largely other
06:24insurance companies private insurance
06:25companies government funded insurance
06:27and then you know arguably even
06:28consumers to some degree are payers
06:30themselves for the out-of-pocket
06:31component of what we what we pay for
06:32health care and then of course the third
06:34party being the patient themselves and
06:36so the point there being that the people
06:38delivering the service and receiving the
06:40service are not the people paying or you
06:44know sort of privy to the payments flow
06:45of those services and that very
06:47bifurcation is what causes so much of
06:50the incentive misalignment that we
06:52experience in our Healthcare System
06:54today when a provider delivers a service
06:57and I think like probably rightfully so
06:58like they don't necessarily care about
07:01the cost of things as long as it's the
07:02right thing for the patient but that's
07:04where you start to land in the territory
07:05of these surprise bills you know these
07:08prices that end up much higher than you
07:09had anticipated and you know when when
07:11price is not a factor in the initial
07:13decision as to where to send the patient
07:15obviously there can be a ton of you know
07:17lack of transparency and uh and just
07:19surprise you know down the road when
07:21when those bills actually come to roost
07:23and then similarly on the consumer side
07:24you know a lot of us you know think
07:26about how do we shop for care how do we
07:27make sure that we're getting agency in
07:29the process of determining where we
07:31should get a certain service and yet
07:33until recently it was nearly impossible
07:35to figure out what something cost and it
07:38was both the price of that service as
07:40well as the mix of services that would
07:43actually be required as part of a
07:44certain encounter so there is a little
07:45bit of legitimacy there where you know
07:47based on your diagnosis you might not
07:49actually even know the full breadth of
07:50services that you need but all of those
07:52factors contribute to the overall
07:54obfuscation of you know what things
07:57actually truly cost what ultimately gets
07:58built for and then you know lastly how
08:01they get paid for and that's you know
08:02the payer side of the equation is equal
08:03parts sort of obscure and obtuse in
08:06terms of the rules that each individual
08:09plan product you know within the carrier
08:12Universe operates under in terms of
08:14determining what something should be
08:15reimbursed for under what circumstances
08:18so it's not the case that if you get the
08:20same exact service from different
08:22providers in different locations that
08:25you're necessarily going to get the same
08:26price which is kind of crazy that payer
08:28angle is I think the kind of the
08:29overlaying Dimension that creates all
08:32this uncertainty and again results in in
08:34this poor user experience for for all
08:36parties involved yeah I mean it feels
08:38like there's a bunch of actors a bunch
08:39of incentives that all go into this
08:41funnel and then the output of that is
08:43what everyone experiences and maybe
08:45actually what would be helpful to set
08:47the tone it feels like listeners maybe
08:49don't need this reminder but if we
08:51started with a couple statistics of
08:52where we are now like almost as if the
08:55output of that funnel of those actors of
08:57those incentives are there any facts or
08:59statistics that either of you have run
09:01into that again kind of just set the
09:03foundation or almost like the reality
09:05that we're in within Healthcare yeah I
09:08mean I'll just start with like the the
09:09headline number of healthcare costs and
09:12Healthcare spending in our country
09:144.3 trillion dollars every year which is
09:16roughly about 20 of GDP is spent on
09:18health care and I think the key thing
09:20there is not necessarily how much we're
09:22spending because you know if if we were
09:23spending that much and getting amazing
09:25service and amazing outcomes then we
09:27would all want to pay more for it
09:29because we were getting value but I
09:31think the the challenge in our country
09:32is that our health care outcomes are
09:35actually getting worse I don't know if
09:36you guys saw the stats recently on life
09:38expectancy you know decreasing over the
09:40course of the last couple of years
09:41obviously largely driven by the pandemic
09:43but the yield of Any of of a given
09:46Healthcare dollar spent in the U.S is
09:48far far lower than all other developed
09:50nations in the world which is a sad sad
09:52State of Affairs so I think that's
09:55probably like the headlines that you
09:56know that we should start from and then
09:58you know related to what I said earlier
09:59I'll probably call out additional stat
10:01which is you know just the
10:02administrative waste and bloat in our
10:05system due to the fact that we have this
10:07complex Trifecta of payer provider
10:09patient results in a tremendous amount
10:11of spend that is completely unnecessary
10:12and or just pure administrative overhead
10:15so you know the stats that we see are
10:17roughly about a third of every dollar of
10:20Revenue collected by a hospital is spent
10:22on administrative tasks required to
10:25collect it you know meaning really
10:26you're only seeing roughly about a 70
10:28yield on on every dollar that you're
10:30actually supposed to get paid for your
10:31services purely based on the work
10:33necessary to file the claims to get a
10:36claim status to negotiate those claims
10:38and then you know ultimately get paid
10:40that in of itself sort of you know
10:41illustrates the amount of just embedded
10:44overhead in the healthcare system that
10:46results in you know these sort of cost
10:48structures that are unsustainable over
10:50time I think the other big Trend that
10:51we've seen certainly over the last
10:52decade is just you know dollars shifting
10:54towards the patient and their
10:56responsibility for sort of paying for
10:57health care and I think the status that
10:59it's grown to something about 50 of all
11:01health care costs you know something
11:02like 370 something billion dollars a
11:04year kind of patient-led responsibility
11:08half of Americans you know carry medical
11:10debt today 20 of them don't believe the
11:12lab would be able to pay it off so this
11:14is a huge cost for bankruptcy a huge
11:16cost for stress and other you know
11:18issues Beyond just their physical health
11:20the financial health impact that this is
11:22having on you know everyday Americans is
11:24pretty significant and so look it's a
11:26it's one of the biggest industries in
11:27the country it's also one of the biggest
11:29problems and so it's one of the reasons
11:31why we're so excited for you know
11:33entrepreneurs excited to tackle these
11:35big challenges yeah and I'm so excited
11:41sitting with me as it does seem like the
11:43system is really working for any of
11:45those three parties that you mentioned
11:46Julie I mean hospitals are inefficient
11:48medical debt is increasing that's
11:50impacting the consumer who has to
11:52sometimes pay that debt billions are
11:53lost in unpaid claims every year and so
11:55again it's it's not like of the three
11:57parties someone is winning right it's
12:00it's a mess all around and so maybe just
12:03to really reiterate this question like
12:04what is going on here is it the rails of
12:07the payments that we're using is it just
12:09the incentive structure that is
12:10misaligned between three parties that
12:13all have different goals what really is
12:16underpinning this reality that we're in
12:18today yeah yeah I think each individual
12:20party would certainly not take the blame
12:22themselves but I think there's been a
12:24lot of pressure on on the sort of the
12:26payer provider access of that Trifecta
12:28that I described earlier that I would
12:30say is is really driving uh sort of a
12:33lot of that breaking point so you know
12:35to be honest when you look back at the
12:36last couple of years it was a super
12:37tough couple of years for all Industries
12:39let alone you know Healthcare but in
12:41particular provider organizations really
12:44really suffered during that period of
12:46time and you know you remember like we
12:48shut down the world right in 2020
12:50meaning like no one could go in for any
12:53kind of service you know the majority of
12:55healthcare spend prior to the pandemic
12:56was physical in-person visits where you
12:59were physically going to a hospital
13:00going to a clinic getting those
13:02in-person services and obviously all of
13:04that was shut down except for you know
13:05covert related things and so literally
13:08you know Revenue lines went to zero for
13:10a lot of service lines for these major
13:12Hospital systems and Clinics hospitals
13:14you know arguably were much more on
13:16their heels whereas if you think about
13:18the way that insurance works right like
13:20during those same years we were all
13:21paying the same levels of Premium
13:23dollars to our health plan but our
13:25utilization went way down right so so
13:27health plans were actually sitting on a
13:28tremendous amount of cash and obviously
13:30there's regulation around the level of
13:31profits that health insurance companies
13:33can make on the core business but you
13:35know in essence you know those companies
13:37were in a much much different and much
13:39more positive financial position than
13:41the provider said market so I think
13:44there is a Groundswell of pointing the
13:46fingers at the entity that you know is
13:48sitting on a lot of capital that did you
13:50know sort of benefit from the
13:52underutilization that we experienced
13:53over that course of time meanwhile you
13:56know last year I think it was literally
13:5750 of hospitals were in the red I think
14:00there's a lot more Focus these days on
14:02the pain of the provider you know versus
14:04necessarily the pain of the pair whereas
14:05you know I think there's many many ways
14:07in which both sides certainly suffered
14:09through all this but I think that's
14:10where you know you saw like I just read
14:12a headline recently about how the payer
14:14provider Contracting Dynamic it can be
14:16very hostile and you know in these
14:19contracts come up for renegotiation
14:21every couple of years it's always this
14:23sort of game we've actually talked about
14:24this on our podcast where it's kind of
14:26this Dark Art of you know contract
14:28negotiation where you know the the
14:30provider sort of assumes that whatever
14:31rate they contract will get negotiated
14:34down by the payer and so they inflate
14:36the price that they present and those
14:38contract negotiations and it just
14:39spirals upwards and that's actually what
14:41a large portion of the driver of the
14:43increase in price year over year and
14:45health care has been is simply just that
14:47Contracting motion so no basis in
14:50reality of actual cost structure of the
14:52providers or you know arguably some of
14:54that might have been wage inflation
14:55related in the last couple of years but
14:56really there are other existential
14:59factors that kind of contribute to that
15:00so that Dynamic that sort of hostile
15:02relationship has been probably you know
15:05one of the primary drivers of some of
15:06the nefarious behaviors that you know
15:08result in this continuous bloat on the
15:10on the system side and obviously that
15:12probably contributes to a lot more
15:13systemic costs but in many cases the
15:16consumer also gets stuck in the middle
15:17because they're still paying a decent
15:18percentage out of pocket and that number
15:20is increasing over time too yeah it
15:22feels like one of the maybe main
15:24complaints from the consumer is not just
15:26that they're paying more but they don't
15:28have that transparency into what's
15:29happening between these other two
15:31parties that are part of the system but
15:33a lot of the Dynamics that we've talked
15:35about so far aren't necessarily new the
15:37healthcare industry has been slow moving
15:39for quite some time it's been if we use
15:41that term again broken in for quite some
15:43time but it does feel like maybe certain
15:46things have changed more recently or at
15:48least there may be certain unlocks that
15:50allow Founders to maybe step in and
15:52build within this intersection of
15:54healthcare and fintech and so what gets
15:56you excited today about perhaps new
15:59openings within this Arena and what may
16:01have changed over the last few years
16:03it's rare that people talk excitedly
16:05about regulation but Healthcare is one
16:07of those domains where I think
16:08regulation can be a Tailwind for
16:10Innovation and category creation there's
16:12lots of historical examples of this I
16:14think the most traditional example that
16:16a lot of people point to is electronic
16:17health records you know did not really
16:19exist in adoption major adoption until
16:22uh the meaningful use law came into play
16:25where the government literally paid
16:26Financial incentives to doctors to adopt
16:29digitized Technologies for medical
16:31record storage so that was really the
16:33sea change that you know drove you know
16:34so much of the digitization of our of
16:36our infrastructure layer of healthcare
16:37similarly right now we have a number of
16:40regulatory Tailwinds that are driving
16:42payment reform payment related reform I
16:44should say and so you know we have
16:46things like a price transparency law
16:48that went into effect over the last
16:50couple of years that forced uh hospitals
16:53and insurance companies to publish their
16:56contracted rates it was hugely
16:58controversial there's still lawsuits in
16:59play people are still pushing back but
17:01the fact of the matter is we now have
17:03you know thousands of hospitals and
17:05hundreds of payers who have published
17:07all this data obviously they're
17:08publishing it in forms that make it very
17:10very difficult to parse and so entire
17:12companies exist to actually you know
17:14process that data where investors in
17:16turquoise Health that's one of those
17:17players and actually make it actionable
17:20in the context of their contract
17:21negotiations and the way that they
17:23engage with both providers and patients
17:25but that's obviously a huge driver of
17:27change in terms of how we think about
17:28what used to be assumed to be opaque now
17:32just being out there and you know people
17:35not having a place to hide when it comes
17:36to comparing prices between two
17:38different providers who again are
17:39providing the same service but at widely
17:41different prices so that has been a
17:43massive change that is only just
17:45starting to play out I would say so I
17:47think we have still years for it to
17:48really seep through the system and
17:50address a lot of the challenges that we
17:51described earlier you mentioned lawsuits
17:53and some pushback just because I feel
17:55like listeners might be curious what is
17:57on the other side of that like it seems
17:59like maybe an obvious reform that we
18:01should be able to see how much something
18:03costs if we're paying for it or someone
18:05is paying for it for us so what was on
18:07the other side of that yeah I think
18:08there's you know again I have some
18:09degree of sympathy for these you know
18:11businesses like effectively what we're
18:13doing is taking proprietary contracts
18:15and Publishing them on the web right so
18:18you know there's been a lot of pushback
18:20from the parties to those contracts
18:22which are the payers and the providers
18:23who say those are our you know it's
18:25proprietary data and we should not be
18:27forced to publish such data in a public
18:30forum because those are that's that's
18:32our competitive advantage in our Market
18:33is that we're able to negotiate special
18:35rates with with our counterparties and
18:37you know we we lose all of that
18:39Competitive Edge if we're to put it out
18:41there so that's the trucks of most of
18:43the pushback from the incumbent lenses
18:46is really that sort of propriety the
18:48counter argument is that there had been
18:50previous laws that required you know
18:52things like estimates like upfront
18:54estimates for consumers if you called
18:56your hospital if you were you know sort
18:58of mandated to be able to present a an
19:00estimate prior to coming in for a
19:01certain procedure or a certain set of
19:02services and you know from a consumer
19:05lens like those never really got
19:07implemented or enforced in a way that
19:09was reasonable in my opinion I remember
19:12you know my past life we when that law
19:14went into effect in the state of
19:15Massachusetts we actually did a bunch of
19:17like secret shopper calls to hospitals
19:19to see what that user experience was
19:21like and you know you basically got told
19:22like oh you'll get a call back and you
19:24know an undetermined amount of time it
19:27was generally like one monolithic number
19:29and there was no explanation as to what
19:31the range of assumptions that went into
19:32that number were and again you get the
19:34call back like a week later when you
19:36might have had the procedure like two
19:37days after that call so the whole
19:39implementation was really poorly
19:40executed so I think the argument Summer
19:42Side is like listen you guys promised
19:44this to us years ago the form of that
19:46just didn't address any of our concerns
19:47about limiting the amount of financial
19:49exposure that we might have related to
19:51healthcare services so you know those
19:53are kind of the the siren calls on both
19:55sides of the argument and so it sounds
19:56like we now have more transparency but
19:58it also sounds like there were a couple
20:00other regulation changes that happened
20:02alongside that yeah just maybe one more
20:04I would call out which we've talked
20:06about before is just all of the the
20:08movement towards value-based payment
20:09models so this notion that you know a
20:12lot of the reason that um you know
20:13Healthcare business models were not
20:15resilient during the pandemic was that
20:17they were entirely fee for service
20:18oriented meaning you only got paid for
20:20the specific services that you delivered
20:22and therefore again if the service was
20:24not delivered you didn't get anything
20:25value-oriented models tend to be much
20:27more bundled in nature so either getting
20:30you know a sort of a set upfront rate or
20:32price for a set of services related to
20:35an encounter so like a value-based
20:37orientation around a need for placement
20:39surgery would be rather than charge for
20:41every individual you know a Doctor Who's
20:43involved in the procedure the
20:44anesthesiology all the pre-visit post
20:46visit stuff you'd actually just get
20:47charged one bundle for the entire
20:49journey and and then the providers at
20:52risk right so if they go above that
20:54budget they are you know paying out of
20:56pocket effectively to cover the
20:57remaining cost but if they stay under
20:59that budget and keep you out of the
21:01hospital and avoid errors and all that
21:03kind of stuff then they get to pocket
21:04the difference and so it aligns
21:06incentives for the provider and the
21:08patient in terms of you know staying
21:10within certain bounds but also creates a
21:12lot more resiliency around the payment
21:14flows into the provider practice because
21:15they're not just relying on Individual
21:17Services getting getting billed and paid
21:19for so there's been a whole set of
21:20Regulation around driving adoption of
21:23those payment models you know Medicare
21:25Advantage I think has been the most
21:26prominent form of that it's very early
21:28days in terms of adoption across our
21:30industry but um but it is uh you know a
21:33very very promising means to align
21:36incentives in a fun way different way
21:37that results in much more transparent
21:39behaviors absolutely and maybe before we
21:42jump into the fintech side just wanted
21:44to clarify the no surprises Act and the
21:46cures act feels like those also were
21:48pretty fundamental to maybe changing
21:50this incentive structure that you've
21:51talked about so far yeah the no
21:53surprises Act is very closely tied to
21:55the transparency act which basically
21:56limits the ability to do surprise out of
21:59network billing for patients and you've
22:01probably read and you know lots of news
22:03articles these incidents where you go
22:06get a surgery in an in-network Hospital
22:08the actual surgeon is in network but lo
22:11and behold the anesthesiologist is out
22:13of network and all of a sudden you're
22:15getting you know a bill for just that
22:17slice of the service at a rate that's
22:19you know outside relative to what you
22:20would have had to pay had it been a
22:22network doctor as part of that procedure
22:24this act limits the liability on the on
22:27the side of the patient and the provider
22:28in in those situations and then the
22:30cures act it's a little bit orthogonal
22:31to fintech but certainly related in that
22:33it has a provision around or the main
22:36provision that people care about is
22:38patient data access enabling patients to
22:41readily access the their full medical
22:43record data and then you know sort of
22:45limit the the cost of access so it used
22:48to be the case that you know you'd have
22:49to potentially pay a couple hundred
22:50dollars somebody to get access to your
22:52own medical records on paper you know or
22:55even like a CD-ROM now there's a whole
22:58you know this is a great example of a an
23:00act that actually incentivized a whole
23:02bunch of startups to come out of the
23:03woodwork and create apps that allow you
23:06as a patient to basically collect all
23:08your medical records from multiple
23:09providers in a single swoop and really
23:11you know sort of have agency over them I
23:12think the way that it relates to the
23:14fintech universe is that a lot of
23:16insurance adjudication acts require
23:19access to Patient data to approve you
23:22know certain reimbursements this act
23:23allows much more data liquidity to
23:25support those decisions versus the
23:28traditional way of doing it which is
23:29faxing literally medical records back
23:32and forth and having nurses look at them
23:33in a manual fashion it does have sort of
23:35an indirect impact in in the fintech
23:37world absolutely and I think it's it's
23:39kind of crazy to even reflect on the
23:41fact that some of the system is still
23:43running on faxes on CD-ROMs like that's
23:46some it's like surprising but at the
23:48same time I guess it aligns with
23:50um you know the broken nature the clunky
23:52nature that people see on the other side
23:54you talked about these regulations as
23:56Tailwinds but another Tailwind for
23:58Founders can be new technology and so
24:00David maybe you can take this on how has
24:02maybe the fintech infrastructure or
24:04technology that has been built up over
24:06the last couple years or decades maybe
24:08fundamentally changed and can be
24:10introduced into this new world
24:12yeah the other thing I would just add is
24:14I think it's important to kind of
24:15emphasize that obviously we just lived
24:17through a global pandemic right and that
24:20threat the entire kind of healthcare
24:21ecosystem and so I think a lot of the
24:22questions that entrepreneurs ask
24:24themselves when they're embarking on
24:25building businesses will I be able to
24:27sell them to you know historically
24:29slow-moving incumbents right and I think
24:31the pandemic created a sense of urgency
24:33because everybody went remote because
24:35you know both the provider repair
24:37systems sure or you know challenged in
24:39different ways the willingness and sort
24:41of urgency again to adopt new
24:43technologies I think is an interesting
24:44kind of you know tailwind and
24:46opportunity for Purdue entrepreneurs and
24:47I think a really unique income by now
24:49obviously an unfortunate one better but
24:51the reality certainly one of our core
24:53Theses at a16z has been that every
24:56company is going to become a fintech
24:58company and Julie and I have been
24:59rifting that you know either every
25:01Healthcare company's already offend that
25:02company or is certainly going to become
25:04a fintech company and I think a large
25:06part as you mentioned that's been
25:07enabled by new fintech infrastructure so
25:11you know our partner Alex rampel has
25:13written quite a bit about you know
25:14fintech really becoming kind of a third
25:16leg of business model stool right if you
25:18think about historically most you know
25:20technology companies the core kind of
25:22modernization mechanisms were either and
25:24you would sell advertising to generate
25:26revenue or it was sort of transactional
25:28in nature maybe you're paying a
25:29subscription or buying a product I think
25:31increasingly fintech is is becoming kind
25:34of that third stool which can become
25:36embedded within kind of all different
25:38types of technology companies as a way
25:40to drive engagement or retention or
25:43certainly a modernization there are
25:45companies delivering kind of banking is
25:46a service sort of enabling you to offer
25:48new card products or embed lending or
25:51embed payments all of these are
25:53basically Primitives that can kind of be
25:56transactional points of intent right you
25:58know anytime a consumer is sort of
26:00transact them there's an opportunity to
26:01bid a financial product to you know
26:04finance that transaction or you know for
26:06a small business owner accelerate the
26:08working capital right we'll probably get
26:10into this but a lot of the providers in
26:13the country are small businesses at the
26:14end of the day and they're delivering
26:16services and then ultimately waiting you
26:18know up to 90 days or longer to get
26:20reimbursed by these big insurance
26:21companies they've already delivered the
26:23service right to the patient and that
26:25can create a lot of strain you know just
26:27in their own working capital and ability
26:29to their you know to pay employees and
26:31one of the biggest reasons small
26:32businesses die and saw this intimately
26:34through Bond Street uh was just working
26:36capital and so one you know just
26:38tangible example for how I think a
26:40really interesting kind of opportunity
26:41at the intersection of fintech and
26:43Healthcare that we've invested in is a
26:45company called Juniper they built
26:46effectively building software for highly
26:49recurring health care and so their
26:51Insight was that areas like Behavioral
26:53Health today they serve some of the
26:55largest autism clinics in the country
26:56period these are practices where
26:58patients are visiting their provider
27:00over 100 times a year right the the sort
27:03of recurring nature of that experience
27:05creates the opportunity to automate a
27:07lot of the back end workloads you know
27:09more significantly they would argue that
27:11that a one-ounce kind of elected
27:12procedure and so again they build
27:15technology that essentially submit you
27:17know health insurance claims
27:19programmatically to the insurance
27:21companies to the payers they take on
27:23kind of the revenue cycle management and
27:25deal with again all of the denials and
27:28adjudication that comes with submitting
27:30those claims and it really empowering
27:32the provider to get reimbursed by the
27:34payer get paid by the pair
27:36and what's really unique about that
27:38again having built a small business
27:39lending company is that because of the
27:43position they said they really
27:44understand the entire kind of working
27:45capital or cash flow life cycle of that
27:47practice right they're effectively
27:49processing a hundred percent of their
27:51revenue right through their system every
27:53patient that walks through the door
27:54they're submitting the invoice to the
27:56payer and they're seeing statistically
27:58when and how much and at what rate you
28:01know those services are being reimbursed
28:04by the insurance companies by the way
28:05they get paid three to five percent just
28:07for that right for delivering that
28:09technology and improving efficiency we
28:11historically has been a very manual you
28:14know process for a lot of these
28:15providers with you know a couple of
28:16folks in the back office but again from
28:18a fintech perspective if you understand
28:20statistically the probability of
28:22repayment and the timing of that cash
28:25you can extend credit right so you can
28:27advance working capital to the small
28:30business owner to the provider and let
28:32them get paid tomorrow right or the same
28:34day for delivering that same service
28:36because you know based on all of their
28:38historical data and all of the you know
28:40practices in your network the
28:42statistical probability of getting
28:43repaid and that's a really important and
28:45I think a great model for a lending
28:47business because importantly again
28:49you're not getting getting you know
28:51negatively selected right they're not
28:53cherry picking a specific invoice that
28:56you're trying to essentially what's
28:57called factor that that they believe
28:59they may never actually get reimbursed
29:01and ultimately you as the lender are
29:02taking you know of that that credit risk
29:05you're seeing a hundred percent of their
29:08revenue and 100 of the data and
29:10statistical probability of repayment do
29:12you can extend you can choose yourself
29:14to kind of push credit or factor it
29:16entirely right and just deliver that as
29:19a value proposition to the provider that
29:20look you know if you work with juniper
29:23you don't have to wait 90 days to get
29:25reimbursed you can continue scaling your
29:27business serving your patients which is
29:29really why you started this you know
29:30practice in the first place that was the
29:32other key Insight from again small you
29:34know Bond Street was that most of these
29:36entrepreneurs started their businesses
29:38because they were passionate about their
29:40product or their service or their craft
29:41not because they wanted to be the CFO
29:44you know of their business and so I
29:46think the ability to sort of abstract
29:48away a lot of that Financial complexity
29:50and drive efficiency for these small
29:52business owners is just it was funny I
29:53was an angel investor in the business
29:55before joining a degree Center and in my
29:56first conversation with the founders I
29:58was like it's awesome that you guys are
30:04yeah you're in the payments flow you're
30:06saying they're working capital life
30:07cycle and it's been amazing to watch
30:09them kind of come up to speed on the
30:11fintech side and you know six months
30:12later Chris stopped and see it was like
30:14dude you're totally right we're we're a
30:16Healthcare company and a fintech Avenue
30:18exactly and I mean this is the
30:20intersection that both of you have been
30:22working on exploring and I think you
30:24mentioned this earlier David but there
30:26is this like unique perspective when you
30:28have the expertise from both sides so
30:30you understand what these providers need
30:32and want and I love that you pointed out
30:34that most of them they want to provide
30:36they want to operate they don't want to
30:38be in these deep complex payment
30:40workflows and to be dealing with
30:42invoicing and so I mean I think that's
30:44one very clear area where you've
30:46identified a problem that these
30:48providers have and we talked about you
30:50know there's the provider there's the
30:51payer there's the consumer and So within
30:53that ecosystem maybe it'd be great to
30:57hear from both of you what other gaps
30:58you see where Healthcare and fintech can
31:01intersect and solve a problem for one of
31:03those three parties yeah I'll actually
31:05key off of a couple themes that Dave
31:07mentioned that I think are super
31:08relevant to a lot of healthcare Fender
31:10companies that we see one is the notion
31:11of how do you get into the full data
31:14flow of finances running through the
31:16system for a given party such that you
31:19can effectively you can underwrite risk
31:20in a different way than any single
31:22player who's sort of in the end time
31:24value chain of healthcare payments and
31:25then the second piece being you know how
31:27do you take product that exists in other
31:29places and then make it understand
31:31Healthcare so one example that sort of
31:33covers those two themes in a completely
31:34different space than Juniper but with a
31:36lot of the same sort of rationale is a
31:38company called thatch that's actually
31:39doing this in the employer sponsored
31:41Healthcare space so if you think about
31:42like what David was saying about like
31:44SMB like you know business owners and no
31:47one going into this business to want to
31:48be a CFO same thing with a company right
31:50like what's the number two line item in
31:52their p l outside of payroll it's
31:54typically Healthcare expense right
31:55because you have to cover your health
31:57insurance benefits for for your employee
31:59Base by law but again none of these like
32:01we didn't get into you know we weren't
32:03Founders because we wanted to like pay
32:04Healthcare expenses for our for our
32:06employees and yet like as a Founder
32:08you're basically faced with having to
32:09choose like you have to pick your poison
32:11basically of like what health plan do
32:12you provide for your employee base or do
32:15you provide an igra product that you
32:16know just give them cash to go shop on
32:18their own you know those are pretty
32:20non-trivial decisions to make and have
32:21like real everything from like tax to
32:23administrative implications and so what
32:25Thatcher's doing is basically creating a
32:27card that has all the characteristics
32:28that you would expect of a card but it
32:30also understands Healthcare in the sense
32:32that they've coded it in such a way that
32:34it can pull from your Healthcare savings
32:36account your HSA account the payments
32:38are tax advantage or the spend this tax
32:39advantage there's a whole like layer of
32:41logic that needs to be codified into the
32:43card such that it understands what it
32:45can be used for under what circumstances
32:46and sort of you know treat those
32:48payments One Way versus you know other
32:50payments that you might be making
32:51outside of those rails and then you know
32:53because thatch is then in the flow of
32:55all of the healthcare expenses that the
32:57employees or the consumers are taking on
33:00um they can then again have just a
33:02better sort of underwriting chassis to
33:04then suggest better Healthcare benefit
33:06products to the employer such that every
33:09year they can optimize their spend they
33:10can optimize the categories that they're
33:12covering you know de-prioritize things
33:14that people are not utilizing you know
33:15this notion of sort of The Last Mile
33:17utilization data around Healthcare
33:19benefits is kind of a Holy Grail problem
33:21where you know we all sort of get
33:23coverage for our Healthcare expenses but
33:25it's very very difficult to track
33:26exactly what benefits are being used
33:28over time I think that's another sort of
33:30spin on some of the same themes
33:31absolutely it feels like in both cases
33:33there's an element of data transparency
33:36that we alluded to earlier which you're
33:37giving in this case the company access
33:39to that information so that they can
33:41utilize it more effectively are there
33:43any other themes that you'd call out
33:45here in terms of how Founders can look
33:47at this industry and say huh there's
33:49this data opacity let me solve that or
33:53any other gaps that you see that are
33:55maybe also just waiting to be addressed
33:57so many so we actually wrote a piece um
34:00a few months ago called pay writers
34:03unbundled and so what we did was we
34:05looked at the biggest companies in the
34:07healthcare space and even in like
34:08markets in general most of them are
34:10large insurance companies that also have
34:13a provider can put into their business
34:14so they're called pay Riders because
34:16they're sort of vertically integrated
34:17across insurance and Care delivery
34:19services and we sort of did a breakdown
34:21of what are the drivers of their of
34:23their business models what are the kind
34:24of key components of them what are
34:26opportunities to basically do what
34:27they're already doing 10x better as a
34:29startup and directly compete but then
34:30also articulated a number of underserved
34:32areas that you know those incumbents are
34:34not really paying attention to where
34:36there's sort of white space opportunity
34:37for startups and so you know a couple of
34:40examples there core Insurance products
34:42are you know obviously a place where
34:44there's a lot left to be desired in
34:46terms of everything from user experience
34:47to the cost the set of services that you
34:50get as part of an insurance plan but we
34:52also recognize especially from you know
34:53seeing insured Tech play out outside of
34:56healthcare it's a really hard hard
34:57business to build and a really hard
34:59business model to get right and so that
35:01said you know we think there's a huge
35:03opportunity for sort of Neo carriers so
35:07um upstart health insurance products to
35:10be built in a tech native fashion that
35:12number one does focus on user experience
35:14number two does use data in novel ways
35:17whether it be on the underwriting side
35:19whether it be on the consumer engagement
35:20side whether it be in terms of how
35:23insurance carriers interface with their
35:25providers and maybe be helpful versus
35:27being belligerent as they traditionally
35:30might have been that we we believe is a
35:32it's a hard and very non-trivial type of
35:34business to build but certainly one
35:36that's right for opportunity and we have
35:37a few in our portfolio like devoted and
35:39Firefly that are pursuing business
35:40models like that and so that's an
35:42example of where again you would be sort
35:43of competing with incumbents but you
35:45know trying to emphasize user experience
35:48cost structure efficiency using
35:50technology another article we wrote
35:52which had the title Healthcare fintech's
35:54biggest prize was the financial
35:55operating system for healthcare and the
35:58core kind of ethos was you have a lot of
36:01patient data right living in practice
36:03Management systems or in an EHR that are
36:06often unbundled or kind of separate from
36:09you know the cash flow life cycle of
36:11these providers so both understanding
36:13kind of cash in and cash out in terms of
36:15expenses and there's a huge opportunity
36:17to kind of reconcile or kind of
36:19synthesize both sides of that that
36:21equation and again the example with
36:24juniper is just sort of we talked about
36:25a piece of it right both in enabling a
36:28provider to kind of more efficiently
36:30process claims understanding the kind of
36:32full cash flow life cycle of our
36:34practice but the implications and sort
36:36of wedge for for starting there I think
36:39are pretty significant because you could
36:40you know both extend into the consumer
36:42facing experience you know get on to
36:45scheduling and you know estimating sort
36:47of uh you know Healthcare expenses
36:49getting to payroll and other expenses
36:51for the provider enable again the small
36:53business owner to you know to forecast
36:55their cash flow and improvise their
36:57business analytics for them uh again to
36:59kind of run run their practices more
37:02and I think this analogy again doesn't
37:04just exist kind of the small business
37:06level but at some of the largest kind of
37:08Health Systems level and it was a great
37:10graphic nature you can you can talk
37:11about which was like the the pilot sort
37:13of Flying Blind but you know not not
37:15understanding kind of their own you know
37:17cash flow icicle even for some of the
37:18biggest provider networks in in the
37:20country yeah we were as done in the
37:23market work that we did on that one we
37:24sort of assumed that like the large
37:25Enterprises have their act together and
37:27it's really kind of the smbs that you
37:29know need some of these tools but you
37:31know it turns out it's a relatively
37:32Universal problem this notion of kind of
37:34a system of record a source of Truth for
37:36the finances of of healthcare providers
37:38and you know that and that has such you
37:41know significant implications on like
37:43broad swaths of Workforce right as David
37:46mentioned earlier just like yeah a lot
37:48of these CFOs were saying like there are
37:50months where we don't know if we can
37:51make payroll and you know these places
37:53that manage staff of hundreds of
37:55providers sort of flying that blind is
37:57is quite incredible so certainly believe
37:59that there's a massive opportunity there
38:00and I think those are also great
38:02examples where you can take software
38:04oriented products that you know sort of
38:06manage Financial Insight but add on
38:09Financial Services products to you know
38:11contribute to the financial health of
38:13the practices that are using them so
38:15that you have that sort of bifurcated
38:16software plus fintech Revenue stream
38:18Dimension that you see outside of
38:20healthcare as well you know something
38:21that's coming up as you guys are
38:23highlighting the vast amount of
38:24opportunity here is that a founder or
38:27potential founder might say you know
38:29what maybe I do have background in
38:31fintech but not Healthcare or vice versa
38:33and that might sound intimidating to not
38:35really understand let's say if you are
38:37coming from fintech to understand the
38:38like complexity the Deep complexity that
38:41exists in this world and so how would
38:43you think about that how would you think
38:45about what problem is worth solving
38:47depending on a Founder's background or
38:49how they can further get immersed in
38:51this really interesting intersection
38:53simply put if you're from Healthcare go
38:55find her David Haber and if you're in
38:57fact go find your Julie you
38:59um but in all seriousness I think like
39:00first of all we should acknowledge like
39:01it is a very like each individual space
39:03is super hard let alone like the
39:06intersection you know there's just a lot
39:07of esoteria that makes it really
39:09challenging to know just off the cuff as
39:12you know as David mentioned we truly do
39:13believe in this kind of intersection
39:15thesis and we think that the only way to
39:17get it right is really to have hybrid
39:18DNA on the founding teams of these
39:20companies such that you truly have
39:23expertise on on both sides of the of the
39:26aisle so to speak I think both
39:27Healthcare and fintech entrepreneurs are
39:29often Kindred Spirits right I think a
39:31lot of like on each side you know both
39:33got in because there was some overarch
39:35often overarching mission right behind
39:37kind of the business and problem that
39:39they were trying to solve both
39:40Healthcare and financial services are
39:43highly regulated Industries and so it's
39:46not that you're coming from you know
39:48building a DC you know e-commerce
39:50business you know into Healthcare
39:51necessarily or coming from on the
39:53fintech site from a place of
39:54understanding Capital efficiency and you
39:57know and Regulation and now implying
39:59some of those insights to the to the
40:01healthcare space and fintech has a
40:03tendency to sort of intersect across a
40:04lot of different categories and it's
40:06becoming you know very much of a
40:07business model I think you've seen that
40:09play out over the past you know five
40:11plus years in areas like vertical
40:13software where again you know companies
40:15have started by solving kind of a
40:16software workflow in lots of different
40:18categories and then have become kind of
40:21layering and financial products as a
40:23I think people are now recognizing that
40:25that same Playbook and opportunity you
40:28know exists in the healthcare side
40:29partnering up is really matching with
40:31somebody who kind of understands those
40:32live problems whether it is from the
40:34provider whether it is from the pair
40:35whether it is from the consumer and
40:37taking again a lot of the same playbooks
40:39that exist in fintech which we're very
40:40happy to help with and begin to apply
40:42those in healthcare I think is a huge
40:43huge opportunity and yeah one more thing
40:45I would add to that in terms of the
40:47investor lens which is going to sound
40:48self-serving but it's really a serious
40:50thing that you know that I would think
40:51about if I were a Founder in the space
40:52is the capital requirements of these
40:54companies tend to be pretty unique if
40:56you're building an insured Tech business
40:58in healthcare there are regulatory
41:00requirements around cash reserves and
41:02you know what kind of financial profile
41:04you need to have as a business to be
41:05able to stand up and head state by state
41:07as well and so it's it's pretty complex
41:09landscape that you have to have
41:11investors who understand that and
41:13properly fund you so that you have
41:15enough Runway to meet the same set of
41:17Milestones that you know you might
41:18otherwise take less Capital frankly with
41:20with other types of business models I
41:22think there is a you know both you
41:23unique playbook for the for the founders
41:25but also even for us a unique way that
41:27we look at investment opportunities that
41:29sort of have these characteristics yeah
41:31I feel like if I was a listener to this
41:33conversation I would have taken a few
41:34things away one the healthcare system is
41:37broken I don't think anyone needed a
41:38reminder of that but two there is
41:41somewhat of a why now things are
41:43changing regulation has changed the
41:45technology has changed fintech
41:47infrastructure has changed and so there
41:49is an opening potentially or several
41:51openings and gaps for Founders to tackle
41:53but also Julie I think what you pointed
41:55out is really interesting that this is
41:56like a tough intersection to address as
41:59a Founder there may be specific Capital
42:01requirements and so given that a16z is
42:04focusing on this intersection we're
42:06funding companies in this space you two
42:09have studied this space just wanted to
42:11give you the opportunity if there are
42:12any gaps that you still see and you you
42:15know if a Founder is listening and wants
42:18to raise their hand and step up and say
42:19Hey I want to fix this problem anything
42:21that you'd like to highlight there in
42:23terms of what what you're looking for
42:24could be this specific problem that
42:27you'd like to see solved or the type of
42:28founder that you'd like to see get
42:30involved yeah I'll put out one that I
42:32consider sort of a grand challenge of
42:34healthcare from an insurance perspective
42:35and I think it's there's some specific
42:37examples right now in the market that
42:39are are unsolved that I think need to be
42:42solved just on the basis of trend so the
42:44biggest class of insurance coverage in
42:46our in our country is employer sponsored
42:48right so we you know us three we all get
42:51insurance through our employer most
42:52people have some sort of health benefit
42:54through their employer the sort of fact
42:56of the matter is is that churn right
42:57they'll pull the the turnover in a given
42:59employee base tends to be a few years
43:01right like every few years people change
43:03jobs and therefore the period of time
43:05that you are on a given Health Plan is
43:07relatively finite It's relatively short
43:09but there could be there's a lot of
43:12expenses a lot of examples of expenses
43:13in healthcare where you might have a
43:15very high upfront cost that doesn't play
43:19out from an Roi perspective for a very
43:20long period of time and so if I'm at
43:22your insurance care carrier and I'm
43:24going to eat that cost I'm actually not
43:26going to want you that cost unless I'm
43:27going to have you on my plan long enough
43:28for me to see the ROI right and that's
43:30what results in a lot of these seemingly
43:32not understandable like sort of blockers
43:35on the insurance side as to why they're
43:36not covering syrz and so a couple of
43:39examples that are prevalent right now
43:40ozembic and these sort of Miracle drugs
43:43that result in weight loss they're
43:44expensive right thousands of dollars a
43:46month employers are you know really
43:48struggling with how to think about
43:49supporting these drugs in terms of
43:51coverage right there's been a widespread
43:52adoption amongst folks who are willing
43:54to pay out of a pocket but obviously
43:56that's not affordable for the vast
43:57majority of Americans if I'm an employer
43:59and I'm going to be willing to you know
44:01sort of foot the bill for thousands of
44:03dollars per year for this drug but you
44:05know when it comes to weight loss
44:06obesity metabolic Health oftentimes you
44:08know the potential heart attack that I
44:10avoided down the road like I'm not going
44:12to see that benefit for many many years
44:13you know beyond the time Horizon that
44:15you're going to be an employee for me
44:16that's one example another really
44:18interesting example that we encounter
44:20given that we invest in biotech
44:22companies on the other side of the house
44:23from my fund is these sort of one and
44:26done therapies right so we've heard
44:28about these like sort of Miracle gene
44:29therapy drugs where with one procedure
44:32one injection you cure a disease that
44:35otherwise might have been fatal and
44:37these these drugs can cause upwards of a
44:39million dollars right so very
44:41non-trivial expense but very you know
44:43obviously significant impact to life
44:45expectancy and life quality but again an
44:47individual carrier who pays that fee up
44:50front you know again might not see the
44:52benefit or the ROI might not be there
44:53for the period of time that the the
44:55employee is on their plan so I think
44:57there's this huge problem around how do
44:59you properly underwrite these kinds of
45:01products as if people sort of switch
45:03between multiple Health Plans is there
45:05some vessel or chassis that you could
45:07you know sort of use to follow people as
45:10they move from health plan to health
45:11plan that distributes the load of that
45:13financial burden across multiple
45:15carriers so that you know no single one
45:17has to Bear the full burden so it's a
45:19very non-trivial problem but it's
45:21increasing in prevalence in terms of
45:23those kinds of products that have that
45:25characteristic to them and I mean we've
45:27spent a lot of time with incumbent
45:28insurance carriers they have not figured
45:30this out yet you know I do think that
45:32there needs to be a consumer-centric
45:34type solution that solves for this that
45:36the consumer is aware that they are
45:38carrying certain benefits across you
45:40know multiple years and multiple health
45:41plans and so I would love to see that
45:43that problem solved in some way shape or
45:45form probably in Partnership frankly
45:46with startups and incumbents but
45:48probably requiring a different type of
45:50data model and you know just funnily
45:51different approach from the consumer
45:53lens that is so fascinating and Julie
45:56just as a clarifier is that also why
45:59most insurance companies won't cover
46:01preventative medicine because of that
46:03same Dynamic yeah it's a great Point yep
46:06exactly right and that's where I think
46:08Medicare Advantage you know has shown
46:10the promise of doing it in a
46:12value-oriented way with regards to
46:13preventative care because Medicare you
46:15know seniors tend to be on the same
46:17Medicare Advantage or Medicare plan for
46:18much longer obviously because they're
46:20not changing employers it's really just
46:22their own individual plans you have much
46:25more incentive to invest in preventative
46:27care that you know again will accrue
46:29benefits over multiple years because
46:30those people tend to be stickier on
46:32their health plans well I mean I think
46:33that's clearly such a big and important
46:36problem to be solved David what about
46:37you does anything jump out there as as
46:40again this like Grand Challenge that you
46:42think if solved could really
46:44fundamentally change this ecosystem yeah
46:47I mean we've we've talked a lot about
46:48you know provider issues and obviously
46:51challenges that patients have I think we
46:53talk less about the pairs um and one of
46:56the big kind of initiatives that we have
46:58focused on certainly on the on the
46:59fintech side that Julie and I have been
47:01beginning to work on on kind of this
47:02intersection is just building deeper
47:04connectivity to all the incumbent
47:06institutions in fintech for too long
47:08kind of the technology fintech ecosystem
47:10and the kind of large incumbent
47:12traditional Financial Services ecosystem
47:14were kind of parallel universes and I
47:17think that was really a mistake because
47:18I certainly saw this
47:20the culture of these institutions are
47:23changing very quickly right their their
47:25recognition that they're not going to
47:26build everything in-house or that they
47:28can't and their willingness to adopt
47:29third-party Technologies is just
47:31accelerating and yet so much of the
47:34workflows of these institutions even in
47:36a place like golden which is probably
47:37one of the more Progressive kind of tech
47:39forward large financial institutions in
47:42are still like human driven processes I
47:45mean thousands and thousands of folks
47:46sitting in Salt Lake City or Dallas or
47:49Bengaluru processing trades and you can
47:52imagine that the healthcare system is in
47:55a similar place or likely even further
47:56behind and one of the opportunities that
48:00we see here at Andreessen is just
48:02being a bridge right between kind of the
48:04entrepreneur and that started ecosystem
48:07into these large incumbent institutions
48:09and then just helping both us and the
48:11entrepreneur build authentic kind of
48:13non-transactional relationships with key
48:15decision makers you know folks who are
48:17running these kind of really important
48:18divisions and business units and that
48:20can obviously radically accelerate kind
48:22of the market or relationship building
48:24for these smaller companies who often
48:26and I found this very difficult to
48:28navigate you know these large
48:29organizations even people within an
48:33institution like Goldman didn't
48:34understand kind of the broader surface
48:35area in the pockets and the different
48:37business units and how they fit together
48:38yeah maybe just for the audience it'd be
48:41helpful to know how big these companies
48:42are like how many people work at Goldman
48:43and then Julie like how many people work
48:45at United Health Group like how many
48:47employees are we even talking about I
48:49mean golden was I think now like
48:50something like 45 000 employees the last
48:53one's like over 40 billion in Revenue
48:54yeah the United Healthcare is
48:56significantly bigger than that
48:59um literally the biggest publicly traded
49:01Healthcare company I think it's like
49:03half a trillion dollars at this point
49:04market cap it looks like the latest
49:06numbers I have are 380 thousand
49:08employees I remember a lot of those are
49:10there's like the administrative side of
49:11uhg but there's also they have a lot of
49:13doctors and clinicians this is not a UHD
49:15stat but um we were speaking with
49:17another large National Health Plan uh
49:20you know payer and um talking
49:22specifically about their call center
49:23operations because a lot of you know to
49:24David's Point like a lot of these
49:26fintech operations manifest in in the
49:28form of call center agents this place
49:30had 30 000 call center workers across
49:33their Enterprise right so I mean just
49:36imagine and this I mean this gets to the
49:37point that you know we're making here is
49:39that these organizations now recognize
49:41that they need to engage with innovators
49:42to be able to fundally transform their
49:44businesses and both you know reduce the
49:46cost structure through technology but
49:48also just better engage consumers right
49:49because at the end of the day their
49:51business is heavily reliant on member
49:53engagement that being the means for them
49:55to manage the costs of healthcare
49:57delivery by you know doing the proactive
49:59things as you were saying stuff and you
50:01know just getting ahead of potentially
50:03High Acuity high cost encounters I think
50:06there's this sort of special window of
50:08time where the stars are aligning in
50:10terms of you know what the innovators
50:11are working on what they're great at and
50:12what they're much better at frankly than
50:14you know the incumbent players and also
50:16what the incumbent players are
50:17recognizing that they need as a
50:18superpower to to move forward yeah I
50:20mean I'd say you know for any fintech
50:22entrepreneur who are Healthcare curious
50:23or Healthcare entrepreneurs or
50:24penteculars you know come hang out I
50:26mean Julie and I are often hosting
50:28dinners again at this intersection in
50:30New York in San Francisco and in other
50:32parts of the country so we'd love to
50:35um yeah we're really excited about the
50:36space if you if you couldn't tell and uh
50:38we think there's some massive businesses
50:41we're excited to hear from you amazing
50:43and both of you have written extensively
50:46you and your teams on these topics and
50:48more so we'll share a bunch of those
50:50links in the show notes as well so that
50:52people can go and dig a Little Deeper if
50:54they are interested to awesome thanks so
50:57much amazing thank you this is great
51:01thanks for listening to the a16z podcast
51:03if you like this episode don't forget to
51:06subscribe here on YouTube to get our
51:07exclusive video content we'll see you
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