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If images speak a thousand words the following ones will illustrate the point resoundingly.

A) We spend more on healthcare as a % of our GDP than other comparable countries:

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B) Higher administrative costs is very much one of the drivers of that higher spend:

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C) In fact, our administrative spend as a % of healthcare has only been increasing:

blankD) And to put it in actual dollar numbers, just billing and insurance amount to almost $500B:

blankMany startups are trying to solve this massively imbalanced system. Examples just from the Tau portfolio:

Glidian and Banjo Health are focused on pre-auths i.e., the paperwork involved in getting you approved for medical tests. They are focused respectively on payors and PBMs (pharmacy benefits management, another almost uniquely American institution).

Decoded Health is focused on triage and diagnostics i.e., that you get routed to the right level and place of care, whether it be ER, a specialist or a PCP (primary care physician).

Infinitus automates routine business phone calls, starting with understanding your benefits.

Our portfolio is hardly unique in that sense amongst other digital health investors.

Where are the bigger opportunities? At Tau the top three we see are:

1) Data Overload — Estimates are that the amount of knowledge students in medical school have to learn is an order of magnitude today than half a century ago and half of it gets outdated by the time the four years are up. How can providers ever keep up? How can AI fundamentally help doctors and nurses keep up, shift?

2) Privacy / Safety — How do we balance privacy and safety with the needs of patients, providers (physicians), payors and pharma to communicate with each other efficiently? Does HIPAA need a fundamental rehaul notwithstanding its good intentions and results?

3) Preventive Care — What we have today is sickcare i.e., you have an injury, accident or emergency and healthcare springs into action to fix it. How can we give people the tools to do true preventive care? How can we ameliorate or perhaps even avoid chronic diseases that eat up the bulk of our $3T+ annual expenditures?

The challenges are massive but we remain ever hopeful.


Originally published on “Data Driven Investor,” am happy to syndicate on other platforms. I am the Managing Partner and Cofounder of Tau Ventures with 20 years in Silicon Valley across corporates, own startup, and VC funds. These are purposely short articles focused on practical insights (I call it gl;dr — good length; did read). Many of my writings are at https://www.linkedin.com/in/amgarg/detail/recent-activity/posts and I would be stoked if they get people interested enough in a topic to explore in further depth. If this article had useful insights for you comment away and/or give a like on the article and on the Tau Ventures’ LinkedIn page, with due thanks for supporting our work. All opinions expressed here are my own.

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Amit Garg
I have been in Silicon Valley for 20 years -- at Samsung NEXT Ventures, running my own startup (as of May 2019 a series D that has raised $120M and valued at $450M), at Norwest Ventures, and doing product and analytics at Google. My academic training is BS in computer science and MS in biomedical informatics, both from Stanford, and MBA from Harvard. I speak natively 3 languages, live carbon-neutral, am a 70.3 Ironman finisher, and have built a hospital in rural India serving 100,000 people.

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