8 Rules for Building a Health Assurance Company

The opportunity is great, but so is the responsibility. Here’s how to get it right.

The two of us have a refrain we like to recite about the future: Over the next couple of decades, the organization of healthcare online is the biggest opportunity that exists.

Healthcare is at the beginning of a profound transformation, and the changes that are happening are going to create gigantic openings for entrepreneurs and innovators who can figure out how to put consumers first, use technology and AI responsibly, and bend the healthcare cost-curve. The really good news is that this space — health assurance — won’t be dominated by one large company, the way other tech sectors have been. We believe dozens of impactful and valuable health assurance companies are poised to bloom.

What will those companies look like? The most successful ones will blend two different kinds of DNA: the DNA of a tech company that’s not wedded to the old ways of doing things, and the DNA of a traditional healthcare provider that knows how to take care of people.

These companies will be, in short, different from anything we’ve seen before.

If you’re a founder or innovator working in this space, you have to be thoughtful about what you’re building. You need to be mindful of both the breakthroughs and the mistakes of the past. You need to understand what machines can do without forgetting what people can do. And you need to match impact with responsibility.

Here are eight company design principles to keep in mind that will help you get the balance just right.

1. Above all, build with empathy.

Oddly and sadly, empathy is something both the tech and healthcare industries have lost.

Technologists in the 2010s tended to be more concerned with building cool stuff, finding something to “disrupt,” and making money. This is how we ended up with the caustic early years of Uber, the destabilizing influence of Facebook and the hubris of WeWork. Meanwhile, the healthcare industry is filled with practitioners who got into the field because they wanted to help people, and then found that the industry over-values efficiency, procedure and, like tech, making money. The business can suck the passion and idealism out of young physicians.

This must stop. The only technology that will truly reinvent healthcare is technology that prioritizes empathy. Electronic medical records systems are designed to increase efficiency and billing, not foster empathy in the doctor–patient relationship. A watch or wear-able that tracks your vital signs may be a cool bit of engineering, but it doesn’t know who you are or understand your needs.

If you are an entrepreneur or innovator, build to create empathy, not kill it. Think through how your product will make the user feel cared for, or how it will help a healthcare professional be more caring and communicative. Be empathetic: vicariously experience the feelings of the consumers and patients you will ultimately impact.

2. Partner, don’t disrupt.

More than ever, Silicon Valley understands that its culture of “move fast and break things” isn’t the right approach. Technology “broke” some things that were quite valuable, like retail stores, journalism, even democracy, without thinking through the consequences. Breaking healthcare would be an incredibly dangerous proposition.

New technologies should aim to make the industry better rather than work against it. Tech and healthcare must work together to reinvent a system everyone agrees is broken, ending the dominance of fee-for-service “sick care” and replacing it with a health assurance industry oriented toward keeping people healthy and out of hospitals and doctors’ offices.

Assembling the right team is mission-critical. If you’re a founder and look around the room and see a leadership team packed with technologists and MBAs, with maybe a physician on the board, you’re in trouble. Similarly, if healthcare executives hire some coders and instruct them to build technology to make something more efficient, that’s not going to work. Successful health assurance companies will have leadership teams balanced between tech and healthcare — with a health policy expert in the mix, too.

3. Redefine what market leadership means in this segment.

It’s become doctrine in Silicon Valley that digital markets are always winner-take-all. That’s how we got one dominant search company, one dominant social network, one dominant online retailer, and so on. Founders tend to race to get a minimal viable product to market, race to scale, race to hire, race to raise enormous rounds of funding — a race to be the winner. But that race can lead to management mistakes, products that hurt people, and toxic workplace cultures.

In healthcare, we believe a winner-take-all mentality is both unnecessary and dangerous.

Why unnecessary? Americans will spend around $4 trillion on healthcare in 2021. No single winner will take all of that. If you break healthcare down into smaller segments, they’re all still enormous. Take diabetes, one of the markets focused on by the health assurance platform Livongo (recently acquired by Teladoc). The American Diabetes Association says that in 2019, spending on diabetes in the U.S. hit $327 billion. How can there not be room for multiple winners and approaches in a segment that size? How about mental health? The U.S. government estimates that we’ll spend nearly $250 billion on it in 2021. Lots of room for many approaches to reinventing mental health care.

And why is a winner-take-all mentality dangerous? That should be obvious. Unlike with search or social networks or retail, lives are at stake here. Medical products that do harm have disastrous consequences for individuals. In fact, bad products would have disastrous consequences for the whole health assurance movement. It wouldn’t take many tragedies to turn the healthcare industry, general public and policymakers against technology and innovation.

Don’t rush to beat or growth-hack around competition. Build with intentionality and responsibility.

4. Don’t prioritize efficiency.

Health assurance is not about making the sick care system more efficient. It’s about reinventing healthcare and keeping people as healthy as possible so they don’t need sick care.

That means making products that are effective, not efficient. Focus on solving simple problems first, then earn the right to tackle bigger problems. Help people live healthier so you earn their trust and earn their data. Use that data to evolve into an AI company that people trust.

Never rush this process. If you can’t help people, no amount of efficiency will save you. We can’t state this too strongly: build responsibly.

5. Think market-segment personas.

Healthcare is not a giant monolith to attack. Countless segments have very specific needs, and all could benefit from a specialized approach to health assurance. Smart founders must understand that geriatric patients have different needs than pediatric patients; a 50-year-old man with erectile dysfunction has different concerns than a 50-year-old woman entering menopause.

Smart health assurance founders will think about segmentation in new ways. The medical field has long funneled all patients through primary care, as if the same kind of physician should be the health-care quarterback no matter what’s going on with a person’s health. But care should be organized around a person’s dominant condition. New kinds of primary care should address different segments: people with diabetes, women who are pregnant, seniors with dementia. Such thinking about market segments should also engender ideas for better serving markets that have difficulty accessing healthcare, such as people with lower incomes.

Build health assurance services that always put the individual first and act as that specific person’s quarterback, simplifying and streamlining care in ways the current system can’t.

6. Measure success by disengagement.

The point of health assurance is to minimize healthcare. No one wants to constantly think about his or her illness, or about how to stay healthy. Technologists too often measure success by clicks or eyeballs or time spent on a site. Throw those metrics away in health assurance.

The most effective products in health assurance will be the ones that make people almost forget they’re using them. Innovation must remove the patient burden as much as possible.

The same can be said for innovations aimed at healthcare professionals. The sin of electronic health record technologies of the 2010s is that it required more and more attention from doctors and nurses, taking them away from patients. No doctor should be entering information on a screen while in a room with a patient. Successful health assurance technology will free doctors from paying attention to it.

7. Align incentives for payers, beneficiaries and decision-makers.

A big part of why the U.S. healthcare system is broken is that who pays (usually insurance companies) is separated from who benefits (the patient) and who decides on care (doctors). We doubt this can be fixed by technology or entrepreneurship alone. It will need an assist from smart policy.

And yet, we encourage entrepreneurs and innovators to think through how they might better align motivations. A subscription primary care company like Forward gets part-way there. A subscription model is typically paid for by the consumer, not the insurance company, which means the consumer decides on the best service at the price they want to pay. A subscription model also helps align the provider with the interests of consumers who want to stay as healthy as possible. The company isn’t being paid per action, like in the fee-for-service model. In fact, the company makes more money when customers use its services less — and the best way for the company to keep you out of its facilities is to keep you as healthy as possible.

As more companies prove such an aligned model works, more consumers will want to shift to health assurance, and more policy-makers will consider changes that allow health assurance to flourish.

8. Solve for resiliency.

Last spring, as New York City lit up as the world’s Covid hotspot and its hospitals seemed unprepared for the coming surge of patients, New York Governor Andrew Cuomo got on TV and talked about how the state and the nation needed to be able to move resources from hotspot to hotspot as the virus progressed. “New York needed a flood of medical professionals, ventilators and other equipment now. In a few weeks, if pressure eased on New York hospitals but was ramping up in Chicago or Dallas, the staff and equipment should move there.”

It’s a shame that the governor had to propose a kind of responsive resource-sharing that never existed in healthcare at scale. Traditional healthcare has not been a resilient, flexible system, but now it must be. It’s possible if we do more with software, do more to treat people at home, and overcome barriers that prevent care across state or national borders. Companies that step in and find ways to build such resilient care will play a crucial role in the next era of medicine.