How Fintech is Reshaping Our $4T Healthcare Industry

In this episode, you’ll hear directly from 6 founders trying to reinvent the healthcare system with the help of Fintech. They’re tackling everything from the lack of price transparency, the complexity of billing, getting clinics paid on time, mental health support for the masses, virtual first-care, and the millions of Americans about to lose access to Medicaid.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:03Steph Smith?

  Welcome to part two of our series about the emerging intersection between healthcare and fintech. If you're just catching up, in part one, we chatted with A16Z general partners Julie Yu and David Haber about the current state of healthcare, which, hint, is not very good, but also how advances in fintech are creating a unique opportunity to solve some of the industry's grand challenges. So today, in part two, we wanted to place you right in the action, where founders are already building. You'll hear directly from six different founders who break down three key things. Number one, the key challenge they're facing. Number two, the catalyst for deciding to dive into one of the most notoriously difficult

• 0:48Steph Smith?

  industries to fix. And number three, their vision for doing so. Here is a sneak peek.

• 0:54Speaker 01

  Nobody knows the price of healthcare. When we say nobody, we mean nobody.

• 0:59Speaker 02

  It's unaffordable, opaque, and it's becoming a leading category for viral memes as a result.

• 1:06Speaker 03

  Around 50% of every dollar that is being invoiced is being uncollected. It's unheard of.

• 1:11Speaker 04

  Healthcare, broadly known and understood to be among the worst consumer purchasing experiences.

• 1:17Speaker 05

  We have definitely talked to some clinics where if they don't get paid one month, they like literally can't make payroll.

• 1:24Speaker 06

  What is actually being unwound is the backbone of healthcare for a very large portion of the country. I think it's going to just blindside and surprise a ton of people.

• 1:33Speaker 02

  When providers and payers don't agree on what's right for a patient, it's really the patient that suffers.

• 1:37Steph Smith?

  The purpose of this episode is not to be exhaustive, but to get you up close and personal with the change that, despite the healthcare industry feeling so impossibly complex, is indeed happening. As a reminder, the content here is for informational purposes only, should not be taken as legal, business, tax, or investment advice, or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any A16Z fund. Please note that A16Z and its affiliates may also maintain investments in the companies discussed in this podcast. For more details, including a link to our investments, please see a16z.com/disclosures.

• 2:22Steph Smith?

  Let's start by talking about one of the biggest problems in healthcare, the lack of transparency around price.

• 2:30Steph Smith?

  Everyone seems to have a story about some crazy medical bill. But here is the surprising thing. Nobody knows the price of healthcare, sometimes not even the providers. Here is Chris Severn, co-founder and CEO of Turquoise, a company building software that gives people the cost of healthcare in advance.

• 2:52Speaker 01

  In our corner of the world, what we care about is nobody knows the price of healthcare. When we say nobody, we mean nobody. Patients don't know the price. Providers often don't even know the price of their own services. Payers, employers, and the list goes on and on.

• 3:07Steph Smith?

  In fact, Chris started building Turquoise because of his experience as a healthcare consultant, getting to see just how broken the system was.

• 3:16Speaker 01

  So in my former lives, I was a healthcare consultant and I lived for five years in these payer provider reimbursement contracts. I became an expert in them and all their nuances and complexity. What I didn't realize at the time is that those were a secret. And so when you think about innovation and maybe why there aren't more startups doing this, it's because there was this information asymmetry granted to those of us that worked with these contracts before January 1st of 2021. And so that consulting experience is 100% why we were able to hit the ground running.

• 3:53Steph Smith?

  Although that paints a dire picture, things are changing. New laws have been passed in the last few years, like the Price Transparency Act or the No Surprises Act, which make pricing more transparent.

• 4:05Speaker 01

  This is very similar to a lot of other new technology life cycles, where this isn't new technology, but it's a sudden event in US healthcare. And we have access to these prices and the data is really big. And as any new technology matures and as this healthcare pricing data matures, the barriers go down to access it. It becomes cheaper, more widely available, more user friendly. We're seeing that happen day over day at Turquoise.

• 4:34Steph Smith?

  But it's not quite smooth sailing yet. Though these new laws require providers to share prices, those costs are specific to each patient, geography, coding system, and insurance product.

• 4:46Speaker 01

  These new laws mandated every provider, every payer in the United States, to disclose the price of healthcare. And these prices are complex because it's not just like when you go to a restaurant where everybody sees a menu. First of all, we don't know what's on the menu. And second, depending on what insurance you have, you pay something different. So you can imagine that if we all went to dinner together, but we all paid a different price, it gets really complex.

• 5:12Steph Smith?

  Healthcare pricing is still so complex that even turquoise can only give an estimate, although Chris hopes that that changes. And that is just on the consumer side. The B2B side brings its own set of complications.

• 5:25Speaker 01

  On the B2B side, there's a whole litany of issues that make it slightly more complex than just saying, hey, here's a big database. Go browse around the price of healthcare. Some of the nuances that I'll just point out is that geographically, some healthcare prices are agreed by one medical billing and coding system. And then you cross state borders and they use a different medical billing and coding system. So it's really apples to oranges when you make those comparisons. Some prices are really a formula. And so you're comparing like, you know, Y equals mx plus b, like some complex formula

• 6:05Speaker 01

  to another provider that might just have a straightforward named fee schedule price.

• 6:10Steph Smith?

  It turns out that high school calculus still does come in handy. And given these fundamental shifts, here is how Chris envisions the future of medical billing, a world where you can look up the exact price for care upfront, prepay for it, and then never see a bill again. And as a result, healthcare providers will compete on things like quality, access, and trust.

• 6:34Speaker 01

  It'll get to the point where, as a patient, you'll be spoiled by the providers who spoil you, right? And you'll come to expect that level of financial experience everywhere you go. You know, you'll be at dinner at a bar. People do actually talk about this stuff, I've learned, at dinners and at bars. It's like, wow, you got this crazy medical bill. And someone at dinner will be like, what? Why'd you get a bill? Like, are you still using a provider or an insurance company that sends you a bill? It'll be similar to if someone were to bring up, like, non-electronic medical records. Like, your office has, like, folders of paper? Why? And I think that's where we'll be at in about three years.

• 7:13Steph Smith?

  Chris did a great job of highlighting how regulation is enabling consumers to get access to healthcare prices, and how this can eventually change how consumers interact with providers. But price visibility is just one piece of the puzzle. Billing is another.

• 7:32Steph Smith?

  While the number of scientific papers published each year continues to grow, those advances do not seem to be making it into the consumer's pocket. One significant barrier? Billing. Medical billing is so complex that even people who can pay struggle to do so. Here is Florian Otto, co-founder and CEO at Cedar, a company that's trying to simplify the billing process, discussing the lack of innovation and how that's hurting all parties involved.

• 8:01Speaker 03

  The medical piece is very different, I think, from the administrative piece. On the medical piece, I think there have been amazing innovations over the last 50 years or something. I mean, we can just compare right now on which kind of robots are in the operating rooms. You have positron emission tomographs, you have MRIs everywhere, so it's really amazing on what you see there. When you see on the administrative side, I think it's still completely stuck in the eighties, right? So you literally have the fax machine still there. You're still having checks being mailed right and left. And you still have something like prior authorization, different parties trying to fight over literally what is good for the patient or not.

• 8:43Steph Smith?

  Not only does this complexity result in a painful experience for patients, but it's actually hurting the revenue of healthcare providers as well.

• 8:52Speaker 03

  Around 50% of every dollar that is being invoiced is being uncollected. It's unheard of. You have never heard that in any other industry, that only 50% of everything that gets billed gets paid. It's completely crazy. And when you enable it, make it easy for patients to pay, that amount increases.

• 9:12Steph Smith?

  In fact, Florian's own personal experience dealing with the complexity of a payments process is exactly what inspired him to create Cedar.

• 9:21Speaker 03

  Yeah, impetus for starting Cedar was my wife had a really bad billing experience based in New York. She fainted on the street, was admitted to the emergency room, and then we had a terrible billing experience. So swiped credit card for the copayment, needed to pay $250 for the copayment, so far, so good, but was not the right time actually to pay when you are concerned about what's going on with a loved one. Then a month later came the first invoice, was everything was written in strange codes, it was really tough for her to pay. Another month later came the imaging center bill, and then half a year later, a debt collector called her because of a bill from the lab company that she never received. So overall, what was really interesting, she basically just had never taken me back

• 10:04Speaker 03

  to that hospital because she lost trust in us. So if the billing is so messed up, she also lost trust in the medical side.

• 10:14Steph Smith?

  We all know that Florine's experience is not an isolated one. Unfortunately, multiple surprise bills, invoices occurring six months later, and incorrect charges being billed are problems that Americans are becoming far too familiar with. But it does not have to stay like this, and companies like Cedar believe it won't. With recent advances in machine learning, software is emerging that actually personalizes and simplifies the billing process.

• 10:42Speaker 03

  We know what is the insurance plan. That's also another data point. So that in first, is it a blue color? Is it a white color plan? Then, of course, we know what is the demographics of a certain patient, because we have date of birth, right? And then we have past payment histories or past engagement history. So we know whether they defaulted already on certain invoices or not. Together with that, you can come up with basically a hypothesis on what is the best outreach. And that's, of course, what these machine learning algorithms are doing. We use these multi-armed bandits, they're called. And then, based on how the patient clicks through the app, that gives us another set of data, which is engagement data. And together with this engagement data, then, of course, the follow-ups are different.

• 11:26Speaker 03

  I mean, it's the same when you shop on Amazon. They get you to check out the shopping cart in a nice way. And we use these same algorithms that basically nudge the patients throughout this process and personalizing all of these cascades.

• 11:42Steph Smith?

  And the simplified experience isn't just something consumers want. It's actually something that healthcare providers need and also are pushing for.

• 11:51Speaker 03

  The second thing is, of course, for a hospital right now, margins are extremely thin. So when you consider a health system, for example, of a billion dollars in net patient service revenue, they probably get around 50 million from patients directly. If you right now increase that by 30%, that gets you 65 million. So it's a delta of 15 million dollars to the bottom line. It's 1.5% additional margin, right, out of a billion dollar. And when you before Cedar only had a margin of maybe 1% or 2% or 3%, getting additional percent or percent and a half is, of course, very impactful.

• 12:28Steph Smith?

  While simplifying the entire payments process in healthcare is easier said than done, companies like Cedar are beginning to slowly chip away at this problem. Their method? Personalization.

• 12:40Speaker 03

  So that means basically using modern technology to personalize the billing experience and give patients the same experience that they're expecting from the healthcare system that they're experiencing at any other consumer-facing industries like when they hail their Lyft or they book a trip on Expedia or watch Netflix. When you basically right now go to the healthcare system, everybody gets the same invoice after 30, 60, 90 days with the same amount of codes. Nobody really understands that. And this one-size-fits-all solution is not really the best interact, right? Because for some people, the problem to pay is maybe understanding their English. For another one, it might be they don't have the money to pay.

• 13:22Speaker 03

  For another one, it might be they're not always at their home to get the bill. So what we basically are doing is we want to reach the patients where they are with the methods of communication on what applies to them. So for example, some patients might get where convenience probably matters. They might get a text message at 8:00 AM in the morning with a call to action, one click to pay. Another patient might get an email in Spanish at 4:00 PM with the call to action, pay as little as $50 every other week on a payment plan.

• 13:56Steph Smith?

  In the bigger picture, personalizing payments is just the first step toward a larger goal of ensuring that both healthcare providers and patients can focus on what matters most: the quality of healthcare provided.

• 14:09Speaker 03

  Nobody should not go to the doctor because they're afraid of how much something costs or that they are not able to pay for something. That is really something that totally breaks my heart. In a country like the US that is so wealthy, it just can't be that people do not go to the doctor because they don't have the money for it, or they're afraid because they don't have transparency on how much something will cost.

• 14:32Steph Smith?

  As Florian touched on, the broken payments experience doesn't just hurt consumers. It's also a mess for providers.

• 14:42Steph Smith?

  We've entered a stage of healthcare where in order to receive care, healthcare providers often need to get multiple approvals or referrals, driving up costs and extending the payments process. But how did we actually end up here in the first place? Here is Jade Chan, CTO of Juniper, a company simplifying revenue cycle management for recurring health clinics, reaffirming how misaligned incentives between patients, payers, and insurance providers have resulted in an extremely complex healthcare payment system.

• 15:13Speaker 05

  Yeah, I think the more I've sort of learned about healthcare, the more I'm really starting to see that a lot of issues stem from misaligned incentives in healthcare. And I think that is a lot of what drives the most pressing issues in healthcare and fintech today. There is sort of this natural relationship between patients, providers, and payers. And I think they're all sort of not aligned to succeed together sort of in the current setup. Like, patients find it hard to get care. It's hard to understand your own insurance coverage. It's hard to get insurance coverage. You know, you cannot be incentivized to get care early, could potentially lead to unchecked issues, sort of ultimately higher costs for everybody in the system.

• 15:59Speaker 05

  Providers find it hard to get paid for their services, right? There's a lot of nuance and detail in the process of submitting, tracking, triaging claims. And payers are sort of naturally incentivized to create cost structures that are difficult to navigate and sort of also leading to higher costs for everybody in the system.

• 16:19Steph Smith?

  This misalignment generates all sorts of externalities, including a serious pain point for recurrent care clinics as they struggle to get paid for the services that they're providing. Recurrent care clinics address everything from mental health to neurodiversity support to physical therapy. And one example of this is within autism clinics. And the opportunity to build for this niche is actually what inspired the creation of Juniper.

• 16:46Speaker 05

  Yeah, I think there's a growing field in recurrent care, right? Like, I think mental health, it's just sort of become increasingly popular. Juniper is actually sort of currently really focused in the autism space. Within recurrent care, we do want to expand into other areas. But right now, most of our customers are sort of autism clinicians and providers. And we did choose that sort of pretty intentionally. One, I think it is a canonical example of recurrent care, right? Patients who receive care, like, receive very, sort of, the same session over and over at high frequency. And also, two, it's actually where we thought we could have one of the biggest sort of impact. There has been a lot of legislation passing around the 2008 mark.

• 17:31Speaker 05

  I think Medicaid started covering a lot of these services for autism. And a lot more people and children were being diagnosed with autism. That means more people are aware and can get care. But the number of clinics haven't actually necessarily scaled with that. And so our focus is like a pretty big mismatch between patients who need care and the care available in the United States.

• 17:53Steph Smith?

  And with this increasing attention, recurrent care clinics, like autism clinics, are trying to scale. But to offer more services, these clinics need to ensure that they're actually getting paid.

• 18:04Speaker 05

  Right now, we're sort of really focused on helping clinics get paid for their services. That in turn, I think, helps clinics offer care to more patients. And then it also helps ensure that there can be more clinics and that the clinics can grow. We have definitely talked to some clinics where if they don't get paid one month, they like literally can't make payroll. There's like sort of very real concerns that go into revenue cycle management for a clinic. And on paper, you know, they might be billing a lot that month. But if their claims are delayed for X number of days, they literally struggle to make it week through week. And so I think We are sort of focusing on the clinic right now, helping them get paid for their services.

• 18:48Speaker 05

  And then by also then helping them offer more care for the patients.

• 18:53Steph Smith?

  While Juniper is focusing on automating the billing process for these clinics, that is only one part of the problem. Clinics are also burdened with the administrative processes that are unnecessarily complex and reduce the time spent with patients, another problem that Juniper hopes to solve one day.

• 19:10Speaker 05

  Yeah, I kind of see Juniper as like a one stop shop for recurrent healthcare, for sort of clinics and patients. So like on the clinic side, like you're like, I want to start a clinic. Juniper can help you with, you know, registering your NPI numbers. It can help you with like setting up all of your stuff to make sure that it's best practice, that it's sustainable, sort of use the knowledge that we've accumulated to help you get set up for success. And then sort of you can then use Juniper, you know, as a platform to manage your sort of scheduling, you know, your data and as a billing platform and sort of all of that is there. For the patient, which we haven't even necessarily explored yet.

• 19:50Steph Smith?

  While recurrent care clinics are struggling to get paid for their services, emerging practices like mental health care clinics can't even accept insurance in the first place.

• 20:00Steph Smith?

  One in four Americans have a treatable mental health condition like depression, anxiety, or PTSD. Yet, most still don't have access to care. Why? Because the infrastructure to actually let therapists accept insurance for mental health appointments is still on the way. Here is Andrew Adams, founder and CEO of Headway, a company that enables therapists to accept insurance, discussing the lack of infrastructure in the mental health space.

• 20:28Speaker 04

  So the natural question is, if providers want this, they don't want to say no. So if therapists want to say no, you can't afford me. If payers are really looking to invest in this more, build out their networks, why isn't it happening? And we see at its root, I'll again return to the one word I returned at the beginning of this, we see an infrastructure problem. We see a health insurance that was built around the medical system. And in the medical system, medical doctors have been consolidated into large hospital groups, where there's free billing admins manually filing insurance claims for every one doctor. Therapists are totally different. Therapists are these offices of one.

• 21:08Speaker 04

  Who don't have billing admins and so don't accept insurance, which is where we come in.

• 21:14Steph Smith?

  For Andrew, the impact of this problem is one that he's experienced firsthand. With no insurance coverage, Andrew was unable to afford a therapist in New York City. And this experience ultimately inspired him to build Hedway.

• 21:27Speaker 04

  I'm someone whose life was totally changed when I saw a therapist when I was out in California. Saw someone that really helped with depression I was going through at the time. And then when I came in here to New York as part of settling down, I tried to find another therapist again. And I totally failed. I couldn't find anybody whom I felt I could afford. Which at the time meant accepted my insurance. And turns out that wasn't a unique problem to me. That was the problem that kept people kept on talking about. That's the number one problem. One in four Americans have a treatable mental health condition like depression or anxiety or PTSD, but most don't get care. And the number one reason is price. Meanwhile, most therapists don't accept insurance. And if they did, therapy would be accessible. It'd be a $20 or $30 copay.

• 22:09Steph Smith?

  Though Andrew's experience is far too common, the future actually looks promising. With mental health awareness growing, payers and therapists are both actively seeking a solution. And the result is a growing opportunity to build the connective tissue between payers and therapists.

• 22:28Speaker 04

  Every payer in the United States right now, every health plan in the United States right now is scrambling to invest in their mental health care offering because it's something that can drive top line and bottom line results. So from a top line perspective, because everybody's talking about mental health care,

• 22:44Speaker 04

  that means now they're talking about with their employers. And their employers are the customers of insurance companies. So it's a real top line driver. Plans, health plans, win, lose, upsell their potential customers depending on if they have a good mental health care product or not. So they're scrambling to really looking to thoughtfully invest in mental health care. Providers also want to accept insurance, too. They don't like having to say, hey, Andrew, hey, Lauren, I know I could really help you. I know I could really help with the depression, the anxiety, the PTSD, whatever might be going on with you. But sorry, I don't accept insurance. They don't have to say no.

• 23:20Steph Smith?

  Headway is one of many companies filling this infrastructure gap. But with any infrastructure layer, the challenge often lies in distribution.

• 23:30Speaker 04

  So we have a model where for therapists, it's one, it's the party of friends, a one click magic tech experience where money just appears. To payers, we look really familiar to start. We look like something they've seen before and they know how to work with, a doctor's office. In fact, we are the largest provider group, AKA doctor's office of therapists in the United States of America. So that was core to our ability to solve the distribution challenge for our infrastructure offering, is to look familiar to payers. So we have, and we look behind the scenes, because we are behind the scenes, the largest behavioral health provider group, largest doctor's office entity in layman terms. So we look familiar there. But to providers, the therapists, the clinicians, who are those solo practitioners who need

• 24:13Speaker 04

  something new, we look like the consumer grade payment experience where money just appears.

• 24:19Steph Smith?

  Though it's still early days, Andrew believes that a world where mental health benefits are covered by a majority of insurance providers actually isn't that far away. Soon, visits to the therapist will be treated the same as any visit to a medical facility.

• 24:35Speaker 04

  We have a vision that mental health benefits powered by Headway is in the back of every US health insurance card. We truly want to power a new mental health care system that ensures that we go from a world where most Americans right now with a treatable mental health condition don't get care. We want to create a world and create a new mental health care system where they do get care.

• 24:58Steph Smith?

  So far, we've shared four challenges in healthcare that founders are tackling. But healthcare is no monolith, and one particular demographic is about to face an entirely different problem.

• 25:11Steph Smith?

  Here is Jimmy Chan, founder and CEO of Propel, a company building software for low-income families who use the social safety net, discussing how millions of Americans are about to lose access to its central Medicaid services in just one month. And the craziest part? Most of them don't even know about this yet.

• 25:32Speaker 06

  Yeah, I think the most pressing issue that I see is actually one that's happening this year. It's that there are between 5 and 14 million people that are expected to lose their Medicaid coverage once the COVID public health emergency officially expires in May. That is going to leave millions of people without healthcare. And so while experts and policymakers are calling this the unwinding, just kind of this terrifying term, when you think about it, like what is actually being unwound is the backbone of healthcare for a very large portion of the country. There's a survey published last year by the Robert Wood Johnson Foundation that found that 62% of Medicaid members or those with family members enrolled said that they had heard nothing about future Medicaid read terminations. And so I think it's going to just blindside and surprise a ton of people.

• 26:16Steph Smith?

  This lack of information stems from the fact that there aren't enough companies building software for low-income communities. Why? Because founders tend to solve problems that they experience firsthand. And founders often aren't the ones relying on the social safety net. Instead, it's the families who are living paycheck to paycheck. And as a result, there is this huge opportunity for companies to build software for this underserved demographic. And that's exactly why Jimmy started Propel.

• 26:46Speaker 06

  Yeah, I was previously a product manager at Facebook where I led the Facebook Groups team. Before that, I was a PM at LinkedIn. But before that, I was a little kid who grew up in a loving family that also had some financial challenges. And so after going to college on a financial need scholarship and learning how to code, Spent a lot of time thinking about who tech entrepreneurs are, especially in consumer software where people building things that are used by millions. And that there's this common wisdom that people who start tech companies generally solve their own problems. That to me was one of the core explanations for why the tech industry was so tilted towards solving the problems of the middle to higher income parts of our population. And so the kind of secular trend that I thought was really underappreciated was the fact that in this day and age,

• 27:30Speaker 06

  essentially, all low-income Americans have access to a smartphone and access to a data plan. That people are native users of the internet, they're comfortable using apps, they're comfortable putting their information online, they're comfortable navigating all sorts of different processes and programs through their phones. It just was that there are way fewer companies thinking about building world-class experiences for low-income families in particular.

• 27:53Steph Smith?

  Though progress has been made, the lack of awareness around recent changes in Medicaid shows that we have a long way to go. But Jimmy hopes that one day, things will look a little different and that millions of low-income Americans will have instant access to critical healthcare information.

• 28:10Speaker 06

  I would love America's Safety Net to be a place where you can sign up for one thing and then you should get all the things you qualify for, right? The single sign-on for government benefits has been almost a white whale in this industry that is really, really difficult to do because of just the bureaucracies and the siloing and the fact that everything's run by a different type of organization. But I think it's actually within reach in many ways to get closer to that kind of single sign-on experience where somebody applies for, qualifies for one program, and then we can easily connect what are the other things that person might qualify for and might be able to utilize because of their existing enrollment in that first program. And that I think for this to really succeed, it needs to go between programs. You might qualify for a program like SNAP focused on food purchasing,

• 28:55Speaker 06

  but that that has clear implications on public health and on individual health. And so that determination really ought to be able to also say, and this person not only qualifies for Medicaid, but also here are the like five things that they should get without further sign up, without him providing more information.

• 29:11Steph Smith?

  Despite post-pandemic benefits lapsing, it's important to remember that the healthcare industry has taken strides, one of the most notable being the adoption of virtual care. With the right incentives and technology in place, it's not hard to imagine.

• 29:25Speaker 02

  Half-priced healthcare that's twice as good clinically and emotionally.

• 29:30Steph Smith?

  That was Fay Rottenberg, CEO of Firefly Health, a company focused on providing value-based, virtual-first care, hoping to provide a lower-cost, high-engagement offering. Like many other founders trying to disrupt healthcare, Fay recognizes that the core issues driving the industry ladder up to misaligned incentives.

• 29:51Speaker 02

  The process of accessing and paying for healthcare services is just so confounding. It's unaffordable, opaque, and it's becoming a leading category for viral memes as a result. I think that the fundamental mismatch between providers and payers historically has really created a lot of conflict. And when providers and payers don't agree on what's right for a patient, it's really the patient that suffers. And certainly when the easiest, but not the best way to remove costs from the system is either to deny care to patients or push more of the payment burden onto patients, that's exactly what will happen. So I do think that that is probably one of the biggest issues.

• 30:30Steph Smith?

  And the result of these inefficiencies is a healthcare system that is intentionally designed to provide transactional, in-person care. But times have changed, and the vast majority of healthcare problems in America are now driven by chronic behaviors, a challenge that a single trip to a medical facility just can't solve.

• 30:51Speaker 02

  It represented, you know, really a way to do this, to provide continuous engagement and address the drivers of the vast majority of death, disease, and costs in this country, which are driven by behaviors, which cannot be treated in any single visit, often don't require a physical facility. And yet, our health system was not built for that. It was built for, you know, the 20th century, when most things did require a visit. They could be solved in one single visit or one procedure. And that's just not the case today, when, you know, there's just such a chronic condition burden on everyone.

• 31:29Steph Smith?

  While we still have a long way to go, the industry is slowly changing. Investment in value-based care quadrupled during the pandemic, while new hospital construction remained unchanged. Firefly is one of many companies working at this frontier.

• 31:45Speaker 02

  Yeah, for me, Firefly really represents the tip of the spear. And the tip of the spear in terms of the best way to remove, I love to say removing bloat from the system, unnecessary costs, unnecessary procedures, unnecessary buildings, unnecessary visits, really just waste, be it, you know, physical buildings and expenses, waste of people's time, and just optimizing for what matters, which is outcomes, experience, and, you know, as a result, cost savings. And so, you know, we used to say we were reconduing the healthcare system. So removing everything that did not result in better outcomes, better experience, lower costs,

• 32:28Speaker 02

  added the impetus and really having everything driven through a longitudinal relationship with a care team that you trust is the basis for that. And for me, Firefly represented not only incredible white space and realize Firefly was founded well before the pandemic, when people were not talking about virtual first primary care.

• 32:49Steph Smith?

  Yet, removing the bloat from a multi-trillion-dollar industry is easier said than done. Firefly is approaching this challenge by focusing on providing lower-cost, high-engagement offerings.

• 33:01Speaker 02

  The mission is half-priced healthcare that's twice as good clinically and emotionally. And so what does that mean? Is it means that we're providing radically better care at a lower cost. And we're really doing this at the core through our virtual first primary care, that longitudinal relationship with a care provider. But we also have a health plan that we built around our primary care delivery and our network that enables us to pass back those savings more directly to employers and members. So we're always generating exceptional savings, but historically, they were really only going back to large incumbent plans. And we still do that. We still have partnerships with plans.

• 33:46Speaker 02

  But we also have another packaging, which is as a health plan that enables us to pass those savings more directly to employers.

• 33:55Steph Smith?

  The impact of Firefly's model is already clear to see. Think about how many times you visit a doctor each year. For most, that number is probably somewhere between one and 10 times. For Firefly Health members, it's 45.

• 34:10Speaker 02

  And so when average members are engaging with us 45 times a year, which is an astounding stat. Like, that's how you improve chronic conditions. That's how you keep people out of the ER. It's how you build trust and a relationship so that you earn the right to navigate them to those higher value providers.

• 34:26Steph Smith?

  All of this shows that the value-based healthcare market is growing, and it's also growing fast. As consumers seek alternatives to in-person care, opportunities are popping up everywhere. And one such opportunity is helping consumers navigate complex healthcare decisions.

• 34:43Speaker 02

  I think Juan is understanding the implications of any decision. So I have no idea, like, am I supposed to go to this specialist or this specialist? Why? You know, you get a name, but you don't know the why behind that. And no one wants to know that they're just being referred to someone because it's either the doctor's best friend or it's the lower cost option. You want to understand, you know, why is it the best option for me? Am I actually going to be able to see them? Are the outcomes good? Do other people like it? And by the way, you know, how much is it going to cost me? And to be able to fold that into, you know, this holistic experience and really converge, you know, that care coverage, you know, the way that you are receiving care, finding care, and then paying for care into one place and one team

• 35:27Speaker 02

  and having, you know, one team that you go to for everything, be it your primary care, your specialty care, or your navigation to other providers, and your coverage, your health plan benefits. I think that that is something that we consistently heard and have really tried to solve for.

• 35:42Steph Smith?

  And Fay believes that these improvements will result in a fundamentally different healthcare system, a system where improving healthcare outcomes is actually the interest of everyone and where each patient has their own personal concierge care team.

• 35:57Speaker 02

  Yeah, I mean, I think that the biggest thing, if we're talking about five years, it's that everyone has their own personal quarterback, concierge, care team right here that is their guide, that they know they can access, you know, the best care instantaneously, and they understand what that means from a financial perspective as well. That they're confident that, you know, at any time, they can access the best care, be it virtually or physically, get that response within one minute, and it's actually going to translate into meaningful savings for them.

• 36:32Steph Smith?

  So what do you think? Can we rebuild this broken system? Where do you see the biggest opportunities for disruption in healthcare? Let us know what you think by emailing us at [email protected]. We'd really love to hear from you. And if you'd like to learn more about how fintech is revolutionizing healthcare, be sure to check out part one or head on over to a16z.com/healthcare-needs-fintech for more resources. We'll see you next time.