Reform Healthcare with technology

Healthcare can be transformed with technology and better processes. In fact, many international players are trying to disrupt the market, and we believe there are only two ways to do it.

The existing need

The shortage of doctors in Italy and Europe is a serious obstacle to accessing medical care. Over 40% of doctors will retire over the course of the next ten years in one out of three European countries, creating a severe physician shortage. We analyzed that just in Italy, in 2030, due to the difference between incoming and outgoing family doctors (-18.700), we will have 20.000 general practitioners for a total of about 50.7 million patients to be visited. This means that each doctor will have more than 2.500 patients to assist. Currently, the maximum allowed is 1.500. Not by chance, the European Observatory of Health Systems ranks Italy second to last for the activities carried out by family doctors, with only Slovakia behind it.

This situation leads patients to turn to emergency departments, even though more than 70% of them do not require urgent care and could instead go to their family doctor. Therefore, when emergency departments become congested, the number of available physicians is not sufficient to cope with the numerous requests for care. In this case, to fill the gap created by the shortage of doctors employed by the Servizio Sanitario Nazionale, it became necessary to hire “temporary doctors”: which are external physicians who are recruited by hospitals through labor agencies. The public pay offered is significantly lower than that offered to temporary doctors: as a result, an increasing number of doctors are choosing to resign to become temporary.

The increase in the presence of doctors paid on a per-case basis, combined with the shortage of doctors, generates long waiting lists, which in some cases can exceed 60 days for a specialist visit and 120 days for a diagnostic examination, and the situation in the rest of Europe is not better. This is pushing more and more Italians to turn to private spending to reduce waiting times: in fact, in the last 35 years, private health spending has increased by 35% and currently represents 2.2% of the country’s total GDP.

It is estimated that private health care will double in the next 10 years.

The long waiting lists and high costs of private medical care are often insurmountable obstacles for many. In addition, the stagnation of wages in the last thirty years has aggravated the situation, leading to a decrease in the number of people who can afford medical care. All these factors are leading to a situation where more and more people are giving up on medical treatment, with over 4 million Italians not seeking medical care for economic reasons. Public healthcare spending in Italy is among the lowest in Europe, resulting in a reduction of services offered to citizens.

Current market trends

The health market is vast and multifaceted, with a diverse range of players seeking to innovate and disrupt the market with technology:

Trend 1: Direct to Patient models

The service offered by D2P companies is the first step towards significant changes in the healthcare field. With this business model, patients are connected to doctors and receive medical consultations directly on the platform, and not in telemedicine. Additionally, the service includes home shipment of the medication prescribed by the doctor. Thanks to this, it is possible to overcome the problem of lack of synchronicity between doctors and patients, greatly reducing waiting times for medical consultation and ensuring personalized patient treatment by creating tailored medications. In practice, physicians manage patient data as if it were in a repository, making use of chat, photos, and preset questions to provide medical care without necessarily visiting the patient. In this field, Ro is one of the originators: the company offers a wide range of services, ranging from weight loss to hair loss prevention to skincare. Not only Ro, but more and more startups are emerging that specialize in every conceivable area of healthcare, such as Allara, which targets its service for women with chronic hormonal conditions, or Cove and Picnic (both from Thirty Madison’s portfolio) focused on migraine and allergy, respectively.

From a different angle, there are startups that just focus on e-pharmacy, with the aim of simplifying and accelerating the purchase of medicines. For example, Pillpack delivers daily medications to its patients, while Yodawy requires a doctor’s prescription to ship medicines directly to patients’ homes. These solutions offer considerable time savings to their users.

Trend 2: Marketplace and enhanced software

Finding a qualified doctor for one’s health needs is becoming increasingly challenging due to the decreasing number of available professionals and longer waiting lists. To meet this demand, many startups such as Doctolib emerged, offering patients a quick and easy way to find the right healthcare provider. These platforms serve as a marketplace where patients can search for and book appointments with doctors. In contrast, Zocdoc offers an innovative service based on patients’ medical insurance. The platform allows patients to search for and book appointments with doctors who accept their insurance, saving time and money in finding suitable healthcare providers. In summary, technology is revolutionizing the way patients search for doctors and specialists, providing a more accessible, faster, and more convenient search experience.

We also include in this trend startups that offer the same service of connecting patients with doctors but in a virtual mode. Practo and Babylon are examples of this. In the mental health space, where physical contact is often not needed, this trend is increasingly emerging. In the US, there are Path and Meru Health, and in Europe Hello Self and MyOnline Therapy. In Italy, recently emerged Unobravo and Serenis.

Trend 3: Network of curated doctors

The increasing difficulty in reaching one’s primary care doctor has led numerous startups to develop collaborative platforms offering several disciplines with one subscription. These platforms offer patients a team of specialized doctors for an accurate evaluation of their health and the definition of a personalized care plan. Alice, in Brazil, is one of these startups and, after an initial evaluation of the patient’s health, provides a health team composed of doctors specialized in different areas. The startups active in this field distinguish themselves based on their target audience, such as Marley Medical, which focuses on seniors above 65 years old, and Override, which focuses on patients with chronic pain. Their main goal is to provide a complete and coordinated service to patients, with the hope of preventing any health problems and offering a quick and personalized solution through the use of telemedicine. Thanks to these innovative platforms, patients can benefit from timely and targeted care, thereby improving their quality of life and overall health.

Our investment theses

The shortage of nursing staff, the scarcity of hospital beds, and the high average age of doctors represent the main critical issues for the public healthcare system. In the next 5 years, more than 35 thousand doctors will retire in Italy and we struggle to believe that this will not negatively affect patients if there is not a solution in place. The shortage of doctors affects the quality of services offered to citizens, resulting in an increase in waiting lists and a decrease in the effectiveness of healthcare assistance: it is a dog chasing its tail. At the same time, the majority of the healthcare models present in Europe are based on public money, very different from the USA where private insurances are good partners to Startups. This leaves few alternatives, and in the short-mid term (10 years from now) we only see two areas of improvement:

• Leverage technology to minimize administrative and communication costs, leaving doctors with health core-activities;
• Abandonment of the traditional European doctor-centric healthcare model, optimizing the ratio between doctors, nurses, and staff;

Thus, we see two opportunities:

Direct to Patient models to leverage asynchronicity and technology

Instant doctors’ communication, online diagnosis with photos and preset questions, monthly and affordable subscriptions, transparency, and solid brand. We believe that D2P models are a significant opportunity, they can drastically reduce waiting time and make it even more efficient to prescribe personalized treatments. All of this is offered at a lower cost than the traditional medical visit, making treatment accessible to an increasing number of citizens with financial difficulties. It is important to note that in many European countries, the regulation is not in favor: the coexistence of patients, doctors, and pharmacists is hardly allowed, but we are confident that solutions can be found in Europe too. With this model in place, technology is supposed to optimize the interaction between doctor and patient: the first can be supported by AI to make better and faster diagnoses, and the second can receive prompt feedback and suggestions directly home and with the means of a phone.

Network effect and teamwork to reduce time to cure

The shortage of doctors is a well-known problem that is bound to worsen in the future. The search for the right doctor to treat one’s health problems is becoming increasingly time-consuming and often leads the patient to rotate among numerous doctors. At the same time, dealing with different doctors for the same diagnosis is tough and inefficient: both in terms of time and cost. In order to facilitate the selection of the most appropriate doctor, we believe that the creation of a platform that makes a team of specialized doctors available to patients could be an effective solution. Patients could immediately be taken to the most competent team of physicians and the platform would facilitate the sharing of a patient’s clinical information among physicians, so as to obtain a comprehensive overview of the patient’s health situation and ensure faster diagnoses and effective medical prescriptions. In doing this, we still think that doctors should only be placed at the very top of the pyramid, leveraging more and more on staff first and nurses second. Doctors should be consulted for non-standard cases only, and delegation will be at the core of the model.