Why would health care look to startups for answers?

Several executives speaking at a recent 25th anniversary celebration for a health care informatics lab spoke hopefully about solutions that might be forthcoming from startups yet to be founded. This struck me as odd. A hospital is a huge enterprise (I learned that Children’s for example, has more than $2.3 billion/year in revenue). Health care is 18 percent of U.S. GDP (compare to 4.5 percent for Singapore where people failed to realize that they needed to take opioids 24/7 and also inhale medical marijuana).

When an industry is this big, why wouldn’t it be the biggest tech companies, e.g., IBM and Amazon, that deliver solutions? The current Epic system is clunky, but why wouldn’t the Epic research lab be the place where useful innovation happens? IBM and AT&T were slow-moving, but IBM Watson and AT&T Bell Labs were the main sources of useful innovation in their day, not a handful of engineers in a garage.

What has changed that we think it will be the startups that inherit the Earth and that fix what ails us? The availability of venture capital such that nobody capable of accomplishing anything wants to work for a straight salary anymore?

Separately, a friend who is plugged into Silicon Valley told me about the latest trend. VCs will try to fund a company around a bunch of former employees of a single big company, e.g., Xooglers (former coders on the Google plantation). This protects the VC from downside risk. No matter how lame the idea is or how poor the execution, even if the startup is a complete failure it will likely still be acquired by, e.g., Google, simply because the big company wants this set of employees back and they are known quantities. The VC fund will at least get most of its money back.

2 thoughts on “Why would health care look to startups for answers?

  1. Big companies today are just conglomerations of thousands of acquired startups. They don’t do anything or hire anyone directly.

  2. > IBM and AT&T were slow-moving, but IBM Watson and AT&T Bell Labs were the main sources of useful innovation in their day, not a handful of engineers in a garage.

    HP and mini computers
    Apple and desktops

    ?

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