Healthcare Trends, Where the Money Flows

Mohit Kaushal, MD of Aberdare Ventures wrote a strong piece in Xconomy entitled Healthcare Megatrends, Part 1: Shifting Risk.

Dr. Mohit correctly states that the policy landscape is an accelerant for change rather than a primary driver….at least in most cases. He states that reform under way should result in a more cost-effective and consumer-centric health system. This is a loaded statement and certainly it’s the hope and aim of many efforts underway, but there are massive forces, most notably consumer behavior, that present more than a little resistance.

While identifying macro trends is a requisite component in creating an investment thesis, it’s equally important to identify where the money flows. When you look at the healthcare landscape, there are very few winners to date in the health technology space, if you define ‘winners’ as companies generating wealth. Investors might point to examples like Practice Fusion and ZocDoc. And indeed if you equate raising capital with success, they have both done well. If, on the other hand, you equate success with wealth creation, the verdict is still out.

The angelMD thesis is that a handful of us in the Bay Area, Seattle, Houston and NY are not going to come up with the answer to “who is going to win?’ Rather, we are going to rely on the wisdom of the crowd…and the smartest crowd in this space in our experience, is one comprised of physicians.

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