Sick care ain't Uber

Technopreneurs are learning to tread lightly when it comes to getting into the sick care game. While the principles and practice of entrepreneurship can be generally applied to most industries, biomedical science and health commercialization has some unique challenges.

They are:

• A highly regulated industry. Bioscience and healthcare, because it involves treating patients, is one of the most highly regulated industries in the United States. The US Food and Drug Administration (FDA) has a primary mission to protect the health and safety of patients, and, in so doing, has imposed stringent rules and regulations that require inventors to demonstrate safety and efficacy before a drug or device can be manufactured or sold in the United States. The process is often uncertain, subject to constant change, lengthy and expensive and sometimes interferes with the pace of innovation.
• Unique policies and procedures designed to protect human subjects during technology research, development, and commercialization. New drugs and devices often need to be tested in human subjects to demonstrate safety and efficacy. That requires a series of Phase 1, 2, and 3 clinical trials that are often expensive, complex, and not successful. In addition, human subject research is subject to ethical and legal requirements overseen by institutional review boards, regulatory agencies, and administrative bodies charged with protecting the rights of research subjects.
• Complex payment and reimbursement schemes that involve not just the patient, but the government, employers, and other private third party payers. Public and private third party reimbursement schemes create perverse market dynamics for those seeking payment for products and services.
• A high dependency on intellectual property protection. Biotechnology, biopharmaceutical, and medical device ideas are highly subject to intellectual property scrutiny, and few will get to market without appropriate patent protection.
• An industry that is not subject to free market dynamics. Third party reimbursement, employment based insurance, government oversight and regulation, and the politics of healthcare access interfere with traditional consumer driven markets that frequently result in unintended consequences when it comes to cost, access, quality, and the patient experience.
• Difficult financing models that require large amounts of capital over extended periods of time. It is estimated that it takes about $1 billion and 10–15 years for a new drug to get to market.
• Healthcare offers an extremely high risk environment where few products make it market from the scientific bench to the patient. Only about 10 percent of bioscience products get to market because of the clinical trial, regulatory, and financing risks.
• A complicated conflict of interest landscape, particularly as it applies to physician–industry interaction and collaboration.
• A process that requires handing off the research, development, and commercialization of ideas to multiple team members with various skill sets. Bioscience and life science technology commercialization has been called the most difficult relay race in business. It requires complicated, interdisciplinary business development and scientific teams to collaborate around the world.
• An extremely turbulent and unpredictable healthcare system with unforeseeable insurance, financing, delivery, payment, and access threats and opportunities.
• There is category confusion. As the digital health industry gains ground, companies have bandied about all sorts of terminology. Some sell digital medicines. Others sell digital therapeutics.?One company that went public last year ?describes itself as an “applied health signals” company. They are all seeking the minimal viable category to capture the white space and the green money.

The US Affordable Care Act is but the latest attempt to increase access, reduce costs, and improve quality. Like other major healthcare reform and financing efforts, including Medicare and Medicaid passed in 1965, the landscape will continue to evolve and the laws will undergo substantial modification and revision based on political power and the popular will.

Sick care is an industry that is highly resistant to change and there are many barriers to adoption and penetration of technologies. Healthcare is in its infancy and is a totally different story altogether.

Uber recently brought its first physician, Michael Cantor, onto its leadership team as Uber Health’s chief medical officer. The ride-sharing giant launched its healthcare arm in 2018, leveraging its existing infrastructure to tackle nonemergency medical transportation. One can make a strong case for why companies outside the healthcare space are effective disruptors. They aren’t entrenched in the bureaucracy and momentum of the old guard, so they can shake up the market without sabotaging their existing interests.

Despite, these issues, there are several examples of businesses that are trying to Uberize sick care.? They had better be careful because Uber has lost a lot of money and many of their executives have been shown the door.

In fact, since COVID, the phrase "Uber of healthcare," a once-aspirational analogy for a single, winning, disruptive force in healthcare, has officially died.?

You're hired! Well, just not full time. Many firms are filling their ranks with "part-time employees, temps, independent contractors, and outsourced positions," Insider reports — and remote work is the driver. The move away from traditional full-time employment is a money-saver for companies, which can forgo expensive benefits by leaning into workers' desires for more flexibility. Still, there's evidence that at least some gig workers would prefer full-time employment, and a risk that "as companies invest less in their workers, they'll get less out of those workers," Insider notes. One economist called it "the Uberization of the workforce."

The industry's anticipation of the "Uber of healthcare" was akin to the world's waiting for Y2K: The hype was there, the result was not. Uber was founded in 2009. In summer 2021, competent healthcare leaders know they need a different prototype for this analogy to possibly hold weight.?

Although "Uber of healthcare" was on the decline for years — with fewer minds finding the analogy compelling, appealing or exciting — its official cause of death in summer 2021 was the combination of ride-hailing companies' soaring prices, longer wait times and frustrated customers. The analogy worked when the experience, measured by convenience, cost and access, was unmatched.?

But to call any healthcare player the "Uber of healthcare" today means its customer experience involves a dawdling looking-for-driver page, a 23-minute wait and five cancellations before the 1.7 mile ride that costs $38.45. To be clear, this isn't necessarily worse than the average experience in healthcare, but it is what the industry wanted to get away from.?

Here are some similarities and differences between the two.

On the other hand, ride sharing for patients is expanding, but faces some challenges.

The problem with Uberizing sick care is 1) it does not reduce aggregate costs, and 2) it does not necessarily improve quality. In other words, the value proposition is faulty.

As recently stated, we need to shift our focus from disrupting markets to creating them, from?“The Hacker Way” , to?tackling grand challenges ?and from a?reductionist approach ?to an?economy based on dignity and well being . Make no mistake: The “Uber Economy” is not the solution, it’s the problem.

While these are all significant barriers to success, they are also big opportunities to innovate. Since change creates market gaps, savvy bioentrepreneurs and scientists fill them with new ideas. But, to do so, they will need to navigate some treacherous waters.

Sickcare ain't Uber. Or is it?

Arlen Meyers, MD, MBA is the President and CEO of the Society of Physician Entrepreneurs on Substack