As a VC it is cliché to say we are looking for great entrepreneurs with big ideas that solve huge problems in massive markets…that said, we ARE really excited about the healthcare space, how it is evolving and the opportunities this is creating for entrepreneurs. In mid-2009 First Round had not yet invested in Truveris, Medico or Mango Health and we had just partnered with DNA Nexus. I wanted to learn more about the healthcare industry and where it was going. In the process, I met Jay Parkinson who had been building the future of consumer-centric healthcare since he got out of medical school. We had a great conversation about how consumer facing technology would impact healthcare and how it is delivered. The following quote is re-created from my notes after my first meeting with Jay in 2009:
The only thing rising faster than the cost of healthcare in this country is the average weight of a 5th grader. Bottom line, when it comes to medicine in America, we need lower costs and better care…for everyone… period. We need to change the way care is delivered… we need more doctors to start companies… we need more people to engage with their primary care physician and stay healthy… not [just] with emergency room care; if this happens we can reduce the burden on the whole system, doctors can make a better living and provide better care and HDHPs will make sense to individuals (HDHP = high deductible health plan).
Three years later, and it’s now election season. Politicians and pundits are looking for answers to the same questions. Some focus on reducing costs, while others focus on care delivery and accessibility. The debates are passionate, the plans are confusing, and the ultimate impact on individuals is intimidating because no one knows what will really
happen or how much it will really cost. The system is burdened with inefficiency and at this point patients are shouldering more and more of the costs. The pace of cost increases is not sustainable. If we do not find innovative models of care delivery that help people get easy access to the care they require and that help them stop paying for the care they do not consume the system will break.
No matter where you are on the political spectrum, listening to the healthcare debate, you have to be tired (and confused).
I have personal opinions on the policies, but after watching the founders of our portfolio companies navigate the healthcare system, try to take care of their employees and manage costs, I find myself thinking that all I want, for myself, my family and for our founders, is simplicity. When I have a problem, I want to be able to reach out, quickly, by email, phone or text, to someone who knows me and my unique medical history. I want to be assured of a caring and personal diagnostic response from that person. If necessary, I want to be sent on to a trusted specialist who will step in and address the issue. Last, I want to pay for the care that I consume and for insurance against required (catastrophic) care that I cannot afford.
Because we agree with the founders that doctors + communication + your neighborhood + the internet just makes sense, I’m really excited to announce our new investment in Sherpaa, a company fundamentally changing the way healthcare is delivered and consumed.
When a business signs up for Sherpaa, employees get around-the-clock access to a doctor, via email or phone, for any health question, need or concern. Sherpaa is designed to simplify the health care experience by providing every member a personal health guide. This dedicated doctor will manage your care or set you up with the appropriate specialists in order to expedite diagnosis and recovery. The Sherpaa service does not require a change in insurance plans and works nicely as an additional employee health benefit. Additionally, Sherpaa can serve as the catalyst for moving to a more cost efficient high deductible health plan without the additional burden of forcing each individual employee to navigate the healthcare system alone, determining eligibility, coverage levels and tracking deductibles throughout the year.
Please join me in welcoming Cheryl, Jay and the rest of the Sherpaa team into the First Round Capital Community. We look forward to working with them to change the health care industry and are excited to be joined by a great group of co-investors including OATV, Collaborative Fund, and John Maloney.