A Healthcare Investor’s Manifesto

Healthcare is still broken in the United States.?

This statement is said so frequently it has lost meaning. Each year, investors, executives, and patients bemoan the many challenges that face the industry — rising costs, worse healthcare outcomes, exhausted medical providers, administrative bloat, poor patient experience — yet little changes for the better. This is not the fault of the medical providers, but the misaligned incentives in healthcare.?

Venture capital in digital healthcare is broken.?

Over the past few decades, the majority of healthcare investors have opted for incrementalism versus revolutionary ideas. Are healthcare venture capitalists just bankers masquerading in jeans? We have focused on squeezing those few extra bucks out of the system, optimizing risk adjustment to increase revenue per patient, delivering care in a more polished commercial setting, and bringing pen and paper processes online. By fitting in the system, investors have made money—most notably in the more private equity-esque style of investing—but our returns pale in comparison to other venture capital sectors. More importantly, this style of investing only further locked us into a system that isn’t working.?

To fix the healthcare system in the U.S., we need to revolutionize it. I think the combination of consumerist attitudes and the possibility of AI will force that change.

I’m inspired to look for—and partner with—entrepreneurs who believe the same thing. I’ve worked and invested in healthcare for over a decade and understand the innate challenges in revolution—the structures are deeply entrenched. And there are some good reasons for this. It is an environment where moving fast and breaking things has real human consequences. But many of the other reasons for entrenchment are not good: regulatory capture, administrative bloat, and a lack of incentives to make real change. We need to figure out how to better balance the trade-offs of innovation and conservatism, while also being open to rebuilding from scratch. If we don’t, I believe we are headed towards even higher costs, more disparity in outcomes across populations, and an ever larger administrative machine sucking the lifeblood out of patients.?

But I’m more inspired than ever by our collective ability to change the system for the better. The largest impact and financial returns in the next decades will come from the visionaries who truly want to change the system.?

The consumer’s awakening

Unlike other consumer industries, every person reading this, every person in your life, every healthcare administrator, and every medical provider is ultimately a patient. And? patients are at a tipping point — people in every corner of the U.S. are fed up with the status quo. Now insert the advancements in AI and we have the most interesting time in history to be a healthcare consumer.?

A few years ago, I was skeptical of how “real” the new consumer health movement was, but now find the combination of frustration and the tailwinds behind the trends of functional medicine, preventative medicine, technology, and consumerism to be too hard to ignore. Current consumerist healthcare ranges from bizarre (Bryan Johnson) to distorted (RFK Jr) to inaccessible (Outlive), but the underlying tenets are sound: if you invest in yourself outside of the traditional healthcare system (e.g. diet, sleep, exercise), you manufacture longevity.?

The traditional healthcare system is still unsure how to monetize this reality, but that’s not stopping patients. We're now seeing more patients intertwining functional medicine with diagnostics and paying out of pocket. Companies like Function Health, Prenuvo, and Superpower have exploded in the past few years. Today the price point for these services are high, but they will come down.?

Whether the above companies actually improve a patient’s healthcare is up for debate. But these companies are definitionally giving consumers the ability to better control their healthcare journey. Now let’s imagine our ability to layer in Dr. AI, at virtually zero dollars, and a patient’s ability to control their own destiny and circumvent the traditional systems skyrockets. The once unattainable dream of personalized medicine is now within our grasp — whether you're a Silicon Valley millionaire, a trucker from West Virginia, an accountant in Denver, or a landscaper in Massachusetts.?

The role of technology

Thirteen years ago, Vinod Khosla penned a famous essay, “Do we need doctors or algorithms?” where he said doctors, in their current form, would no longer be necessary in the future. He predicted that in 10 to 15 years, “Doctor Algorithm” would be able to more accurately answer the majority of medical questions versus the average physician — Google’s Med-PALM now scores 85% on the U.S. medical licensing exam. Meanwhile, humans only need to get 60% to practice medicine.

Many industry people whine and belittle the validity of “Doctor Algorithm” or “Dr AI,” but this shortsightedness feels like part of the true sickness that permeates much of healthcare. Dr AI isn’t about to replace the majority of medical providers, but if there is possibly a new way to improve patient experience, improve population health, reduce costs, and improve the provider experience, shouldn’t we collectively be all in? If you’re a venture capitalist or technologist, I wholeheartedly believe the answer needs to be “hell yes.”?

On today’s AI spectrum of co-pilots to a UI-less Her consumer experience, we are very early in the journey of simple co-pilots in healthcare. Most of this technology is being applied to the administrative side, but it’s clear an agentic future, where computers do the work for you, is coming for administrative, clinical, and scientific tasks—and fast. We need to embrace this reality.?

The entire cost structure of healthcare delivery in the U.S. will be rewritten. Imagine removing the middlemen, the waste, and the bureaucracy, and simply having more time and dollars to focus on what really matters. It’s hard to fathom the implications this will have on a patient’s health, a scientist working to discover new drugs, and a medical provider delivering care.

As I put on my investor hat, it’s clear that many traditional healthcare companies that make up the Five P’s will need to either adapt or be left dead on the side of the road. Although painful, it will also force us to be better.?

In 2025, my time, my writing, and my investing will be focused on exploring how the healthcare system can be revolutionized through this lens of consumerism and technology. More now than ever, as a venture capitalist, I believe my job is about helping to drive this revolutionary change. If you’re building something, have a perspective, or are just excited about the idea of rewiring healthcare, please reach out.