Exploring digital health with a journalist turned investor

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I discovered Christina through her reporting covering the health initiatives of the tech giants at CNBC. She is now a digital health investor at OMERS ventures.

Digital health was one of the sectors (along with edtech, fintech, ecommerce) that was booming during the past few years. I’m not a close observer of what going on in digital health in the startups world so it was fun to have this wide ranging conversation. I was curious about the post pandemic hangover and what she’s paying attention to these days.

We also talked about her journalism days, how it compares to her current job, and how she believes startups should work with reporters.

Growing up

She lived in London until she was 22 and later moved to California.

Christina told me, “I didn’t grow up with aspirations to work in tech or venture capital. I don’t think I even heard the word startup until I moved to Silicon Valley. I’m definitely not one of those investors who grew up tinkering with code. I spent most of my time studying humanities subjects, like philosophy and English literature, and I got a master’s in Victorian history. The schools I attended didn’t have many examples of successful founders, and most alumni went into more traditional industries. For a long time, I thought I’d go into academia.”

United Kingdom

On the startup scene: “Its med-tech focus is particularly exciting. We have a UK team at OMERS Ventures, so I live vicariously through them, seeing firsthand how many exciting companies there are these days”, she said. “Quite a lot of health-tech companies we think of as being successful here in the U.S. got their start in Britain or were founded by Brits, such as Quit Genius, Calm, and Big Health.”

On UK’s healthcare system: “It’s a fundamentally different system. For starters, there’s no insurance or payment when you leverage the NHS. No bankruptcy either. There’s some rationing of care that some Americans won’t like, particularly in our “on-demand” economy. There are lots of benefits, too, namely affordability. No system is perfect, but I feel very fortunate to have experienced both.”

Post-journalism venture capital life

Journalists turned investors often talk about how the habits of asking questions, connecting the dots, and nurturing connections from their reporting days serve as assets in investing.

I asked her about how the VC life is going so far and how she looks back on her reporter days.

The similarities: “I meet with companies a lot; I synthesise information from companies and talk to experts to get a sense of potential opportunities and challenges, and I continue to write to process my own thoughts.”

“I don’t agree that investors have to be default optimists,” she told me when I said journalists are default skeptics while investors have to be default optimists. “I do believe, however, that they have to be, by default, curious. Both investors and journalists have that quality in common.”

Storytelling: “Former journalists have this innate sense of the power of storytelling. I spend a lot of time with founders trying to figure out what drives them and if their pitch will resonate with potential hires, customers, etc. I’ve seen hundreds of startups present, and I view storytelling as a massive (and often underlooked or misunderstood) competitive advantage. If you’re a great storyteller who can execute, there’s real power in that.”

She told me what’s different now is that she has far more access to data as an investor than as a reporter.

On working with reporters: “People forget that startups will often decline to provide or cherry-pick data to share with journalists, so they don’t get a complete picture unless they have “sources” willing to fill them in. That makes it difficult to parse which companies are doing well and which are not,” she told me. “We should be more transparent with reporters. Being self-promotional and telling half-truths about how we’re “crushing it” at any given moment leads to these problems in the first place. It depletes trust. Chasing hype will often lead to an invariable crash on the other side. I try to caution companies to be balanced, vulnerable, and real whenever possible.”

The root causes of problems in Healthcare

I was curious to what extent she attributes the biggest problem to the disconnect between the payors and consumers of services.

“This is a really tough and existential question - and I don’t have a clear answer,” she told me. “In some ways, you could say that a big part of the problem is high deductible plans and hefty co-pays, which means patients are often reluctant to seek care. We also see lots of procedures happening in the U.S. that frankly shouldn’t and are driving up the cost of care.”

There’s a dominant view that a big reason behind college costs inflation is universities abusing free money from the federal government to jack up prices.

Similar dynamic playing out in healthcare :

“One big, overarching problem is that health insurers can simply raise premiums, so there isn’t enough focus on taking a hard look at cost and quality. Very few stakeholders in the system are really incentivized to care about that.”

Building digital health products

I asked her what was underutilized in how consumer healthcare products get built.

“Community and content! Both are extremely overlooked in health tech simply because the people who focus on these areas aren’t hired early enough in the journey. I believe a community-led growth model will drive a lot of successful digital health companies in the next decade.”

Examples of companies doing it well, per her, include Oath in maternal health and pediatrics, NOCD and Equip Health in behavioral health, and Jasper in oncology.

Common challenges: “Founders often try to do too much - they target health plans, Medicaid, and employers all at the same time. I prefer a team to pick a lane and really go for it - and if that doesn’t work, commit to an entirely new strategy. “

A lack of deep understanding of the clinician workflows is another one.

“Some of the better technologists I’ve seen have taken the time to shadow doctors, nurses, and providers to get a real taste of how they work,“ she said.

Rise of demographic-specific products

“The hardest demographics to build for are those naturally less engaged in their health and the most critically ill populations. The easiest to build for is the least sick and most engaged - i.e., the Worried Well,” Christina said.

She believes there are some specialties you can target populations who need care and are engaged. She used maternal health as an example. Pregnant women are both hungry for information and overwhelmed with the immense changes they are going through. That was the thesis for her first investment (i.e., Oath Care).

I asked her what the biggest issues for working professionals with kids are.

Parental leave: “The U.S. is one of a handful of countries worldwide with no federal laws around it. I would suggest we start there.”

Subsidized childcare. “I just read that other wealthy countries invest an average of $14,500 a year for every toddler’s care while America invests just $500. I love the idea of an AARP for parents!” she said.

Crises

We have known for years that mental health is a crisis, but it amplified during the pandemic.

Mental health: “Plenty of studies found skyrocketing rates of depression and anxiety, particularly amongst younger demographics. That’s why we invested in Caraway Health, a virtual health solution for college students (our initial focus is women),” she told me. “There’s still a lot of work to do, and some structural inequities will be hard to solve, but I was heartened to see the space get the recognition it deserves this past year.”

I asked her what she considers a brewing crisis not getting enough mainstream attention.

Burnout: “I’m genuinely concerned about how we provide care to a growing aging population when physicians are retiring faster than we can replace them. And making matters worse, we add a bunch of unpaid documentation work to clinicians’ plates and force them to deal with the complexities of insurance. Plus, imagine how hard it is to see patients be vulnerable, sick, and even die and not get the time to process any of that. It’s a really tough job.”

Legislative changes to accelerate healthcare innovation

I asked her what changes she would advocate for if she were a Senator.

• “National patient identifier & an interoperability standard that everyone adopts.”

• “A national licence for providers, so we get rid of this state-by-state malarky.”

• “True parity for mental health - Since 2008, we have had laws to require large health plans to provide mental health benefits that put coverage on an equal footing with physical illness. But the disparities are real. Therapists often don’t take insurance because they get reimbursed poorly compared to charged out-of-pocket prices. People wait months for an appointment, and the mental health epidemic shows no signs of slowing down.”Subscribe now

Post-pandemic telemedicine normalization

According to the American Medical Association, 40% of US patients see doctors virtually, and 85% of physicians use telehealth.

Promising headline numbers for telemedicine growth.

I asked her about the bearish case on telemedicine we might be overlooking.

Need for in-person visits: “It will not work for every specialty. Physical exams, surgeries, and countless more examples of care need to be provided in person.”

Business model: “Hospitals still make more money when patients are seen in person via fees and specialist referrals. We may see more of a swing back to the status quo.”

Access: “It’s not quite the panacea yet for solving health inequities. Many patients in rural areas don’t have access to reliable bandwidth and will struggle to reach a physician via an online consult.”

Relationships: “I know plenty of patients who find it meaningful to see the doctor. I lived next to a gentleman in his 80s for years who got dressed up in a full suit and tie for his visits. It was an important ritual for him and a way to get out of the house and have a real conversation with an important person in his life.”

That last point was particularly eye-opening for me.

GTM pendulum swings

Every sector, from SaaS to fintech, goes through the pendulum between point solutions and bundled offerings.

I was curious how she looks at digital health through that lens.

She told me, “We are in the point solution phase with digital health. There’s been chatter for years about some of these vendors’ potential roll-up, particularly in the employer world. Likely by a private equity firm. That makes sense, but I haven’t seen it happen yet.”

Found this framing particularly insightful :

“Health isn’t about a single organ or condition, so it doesn’t make that much sense to have a vendor solely focused on diabetes or behavioral health. Often, the same person struggling with diabetes is also struggling with a behavioural health condition, for instance,” she told me.

Quantified-self movement

She thinks it is mostly a popular pastime for people who enjoy tracking their movement and are into fitness.

“Lots of exciting developments here, particularly around fields like fertility and sleep. But I think many of us are waiting on biomedical breakthroughs, like blood sugar or blood pressure tracking.”

Appeal to college grads to join healthcare startups

“It’s hard to imagine a more mission-driven opportunity than working in health tech. If you’re smart, driven, and talented, give it a try! We need you. Your work will make a difference,” Christina said at the end.

Secureframe helps companies achieve fast SOC 2, ISO 27001, PCI, HIPAA, NIST, and GDPR compliance. With their guided workflows and one-click integrations, Secureframe automates the compliance process so you can focus on your customers, closing deals, and growing revenue.

Click here to chat with their team. Mention “Sar” during your demo to get 20% off your first year of Secureframe. Promotion available through December 31st, 2022.

Yesterday, I published my wide-ranging chat with with Brandon Chu, VP of Product Acceleration at Shopify, about online writing, what founders shouldn’t learn from Shopify, what his team does, applying product management principles to the physical world, how to grow the size of the Canadian startup ecosystem, the big ongoing changes in the world, and what the startup blogosphere needs more of.

Recent chats with other investors include Cristina Cordova at First Round Capital, Hunter Walk at Homebew and Michael Mignano at Lighspeed Ventures.

Recent chats with journalists include Eric Newcomer of Newcomer and Ben Smith of Semafor.

Recent founder chats :

Building compact, intelligent, retractable solar awning systems with Rohini Raghunathan, CEO at Xponent Power

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