Preventing Prevention: An Introduction and Framing and Jargon

I interviewed 40 VCs, health tech entrepreneurs, health care executives, and industry experts and spent hours researching the intersections between health care, public health, and venture capital. What emerged was a multi-part report that I’m calling Preventing Prevention: Barriers to Venture Capital Investments in Upstream and Community-based Care. This is part one.

Funding for this work came from the Robert Wood Johnson Foundation.

An Introduction and Framing

Health care is big business. According to the Centers for Medicare & Medicaid, part of the U.S. Department of Health & Human Services, national health expenditure in 2016 topped $3 trillion, equating to over $10,000 per person per year.

And where there’s big money being spent, there’s big money to be made: Venture Capital investments made in the US health care market reached in 2017 a record $9.1 billion, a 26 percent increase over the prior year.

And yet, life expectancy in the US has dropped for two years in a row. Obesity rates, particularly among children and rural areas, continue to worsen. There are few signs that Americans are getting measurably healthier.

These trends are at the crux of every health care debate: We spend a lot. We don’t seem to get much for it, particularly compared to other countries.

Many policy experts long have point to under-investments in prevention as a culprit. Federal action over the last 8 years had an aim of addressing this issue. The Obama Administration touted that the Affordable Care Act would drive shifts in Medicare — which as the largest single health insurer in the country drives much of the health care system — to move our health care system to focus more on prevention. Other legislation, including Medicaid and CHIP Reauthorization Act of 2015 (MACRA), and other executive actions, such as shifts towards “value based payments” made by both the Obama and Trump Administrations, have furthered this narrative.

Meanwhile technologies that have changed just about every other industry seem to be finally, though differently, changing health care. “Digital health”, as it’s often labeled, is booming: The amount of venture capital funds in this particular field are at an all time high. The development of data-driven, internet-connected products, programs, and services promise to disrupt how health care is delivered by leveraging artificial intelligence, enabling patient engagement, ensuring greater access to information, and facilitating the transformation of primary care.

Or so goes the theory.

Upon deeper investigation, a dearth of them appear to be both aimed at preventing disease and targeting the health care system, be it an insurer or a provider, as a buyer of these services. While new technologies are aiming to help people be healthy, most of them are being sold directly to customers (DTC). Which makes sense: There will always be a market to help people with money live longer.

But it’s our health care system, buttressed by rules and regulations driven by the democratic process, that is supposed to bring forth a sense of equity and fairness.

So this brings us to our basic thesis, the question that this series of blog posts aims to answer:

What’s preventing VC investments in companies that work in disease prevention and health promotion?

The phrases “disease prevention” and “health promotion” are common ones in the field of public health, but they aren’t necessarily used by other parts of the health industry, so we should ask: What exactly do we mean by these phrases?

Terminology in brief or The Struggle with Words

Language can have limits, and in this effort we’ll hit upon a few. To help orient ourselves though as to what we mean by “prevention”, here are some commonly-used phrases to that lay across a spectrum:

  • Acute Care Interventions (surgery, drugs, etc)
  • Disease Prevention (or: The Immediate Prevention or Worsening of a Disease)
  • Health Promotion (tends to focus on behaviors like walking)
  • Wellness (includes elements of spirituality)

In some ways, we know what we mean by “prevention”. But in others, the lines are not so clear: Is a suicide hotline prevention if it prevents suicides? Or is “true prevention” the suicidal tendencies not even appearing? Is providing rides to a doctor’s appointment prevention if once there they are having surgery? Or is this just increasing access (an important goal perhaps) but at the expense of preventing that surgery in the first place? Is providing a data-tracking inhaler prevention since it can help a patient understand when their asthma gets triggered? Or is “true prevention” the reduction of pollutants that trigger asthma?

These annoyingly philosophical questions are relevant as more than just a mental exercise. Throughout the 4 months of interviews conducted that led to this paper, your author struggled to figure out what these commonly used words actually meant and how to weave them into the nearly 40 conversations I had with health insurance executives, entrepreneurs, and venture capitalists.

This is because people investing in and working within health care don’t use these phrases in the same way that someone (like me) with a public health background might. The phrases only take a conversation so far; they keep the conversation in the lofty clouds of the theoretical. To really understand what’s happening within health care you have to go beyond these phrases.

Or as one VC told me, after 45 minutes of talking about everything and nothing, “When a company tells me that they work in ‘prevention’, you have shake your head and ask: Yeah, but what are you actually doing? That is: What specific problem are you trying to solve and how are you going about it?”

And so these phrases point to a barrier in prevention, the first and most esoteric one discussed in this paper: The ability to even talk about prevention.

This points to, and likely helps keep, the distance between people who study these things and the people working on them, the gap between peer-reviewed published papers on health care and the business of health care, the difference between theory and practice.

The term “upstream care” and “community-based care” actually ended up working best as terms. These phrases point to the fact that we’re likely outside the clinical setting trying to help someone’s ailment before it becomes urgent.

So rephrasing our thesis, we get this:

What are the barriers to tradition VCs investing in tech-based companies that help the health care system provide better upstream and community-based care?

To explore this, I interviewed 40 VCs, health tech entrepreneurs, health care executives, and industry experts. I also read a lot and wove in my general understanding of things gained from prior studies (e.g. graduate school) and prior work (e.g. within the Center for Medicare & Medicaid Innovation and elsewhere).

The answers are both straight forward an not. On the surface it’s simple: A basic understanding of how VC works (and doesn’t) and how the health care system works (and doesn’t) reveals the basic market factors at play. Diving deeper, we get a bit more into the weeds of fee-for-service financing, the business of health care, and the issue of churn on insurance companies. Finally, a discussion on the white maleness of the VC world is needed.

But bringing this questions into light, and exploring it in broad strokes still seems useful. I haven’t seen anywhere the intersections of these topics being explicitly discussed through the lens of public health.

So, see below. These are written to be read in the order they’re presented, but each also stands on its own in case you want to dive into just one or two of them.