The a16z Show - a16z Podcast: The Realities of Aging / When Healthcare Is Local

Starting point is 00:00:00 The content here is for informational purposes only, should not be taken as legal business, tax, or investment advice, or be used to evaluate any investment or security and is not directed at any investors or potential investors in any A16Z fund. For more details, please see A16Z.com slash disclosures. Hi, everyone, welcome to the A6Cency podcast. Since many Americans and others have been or are at home with their families for the holidays, they're realizing more than ever the realities of aging and care. caregiving for seniors. In fact, the over 65-year-old population is doubling over just the next decade and a half or so, but don't homogenize this age group of 65 and above either. So how does this all fit into our current healthcare system? How does it fit into current retail experiences? What are the design challenges, especially if you're optimizing for screenless interaction and data collection in a home? And finally, where do providers and payers come in? Joining us to have this conversation, we have two folks from Honor. Renato Valdez Olmos, who is head of design there, and who previously

Starting point is 00:01:03 founded an activity tracker that was one of Apple's best of 2014. And we have Kelsey Millard, who is head of health system integration at Honor. Among other things, she had previously founded and directed the post-acute care center for research in Washington, D.C. First of all, I think that we're facing a really interesting moment in history, both the fact that people are living longer, although some technologists would argue that we need to still stop and halt aging altogether. We're also in an interesting time where because of the mobility of people, they're not in the same systems. And if you could kind of break down, like, what is the system? I mean, that we're in right now. How does it look? The system today looks like this. There's about 10,000 people turning 65 every single day for the next 19 years.

Starting point is 00:01:42 So there's a huge influx of aging folks. And in America, a lot of these aging seniors are thousands of miles away from their adult children who are also raising families. And so we have this creation of a sandwich generation. A sandwich generation. Yeah. So these are men and women who are starting their own families, but then also have aging parents. They're literally in the middle of caring both for their parents and trying to rear children. People take it for granted. I think of international, you have like a setup where you have extended families all living like five generations in one house.

Starting point is 00:02:13 And here you have a situation where as you mentioned, like where you have a sandwich generation or you have like kids who are in one city and parents and another. And like the home is the center of it all. We actually did a study on caregivers. is, and we found that 57% of them said that they would not be able to suddenly help a loved one if they needed care in their home, that they personally can't. So then our care, you know, the caregivers, the American people, whoever they are in the world, feel guilty that they can't actually provide care to their loved one, you know, in the time frame that is needed. So, you know, the home is really the central place, and it's where the senior wants to be. And we know that, you know,

Starting point is 00:02:51 90% of people want to age in their home. And it makes subtle sense because people have been working for years to get that home and they've watched their kids grow up in that home. The image that comes to mind for me, one of the things I used to always be struck by when I saw, you know, in the Indian community, there's a lot of extended family. I was always struck by how some of the senior citizens would have like a small little suitcase and had all their world's belongings in that one place.

Starting point is 00:03:14 And I always wondered, like, how did you go from this huge home into the small little suitcase? And on one hand, there's this very beautiful kind of like free yourself of your material possessions idea behind it where you don't really need all those things. On the other hand, it's very sad to think about having your own home and then having to leave all that behind. And then literally like have your life be in like a tiny, small little suitcase or a box. So no. It's kind of like it's kind of like reverting to a dorm room at the end of your life. But who wants to leave their space? Exactly.

Starting point is 00:03:45 Nobody wants that. But I also don't think that necessarily. all like all like newer adult children, newer generations of adult children that get to deal with their parents. They don't want them living with them either. Well, I think if it would have been an option, it would be an option. But it's like when you look at the facts, like people tend to stay in cities now, smaller apartments with less financial power.

Starting point is 00:04:10 So there is really no possibility to do that. And if you are the sandwich generation, as you describe, where you have younger children and aging parents, I know a lot of folks. And I'm always struck by this because I was asked myself, like, I play this mental game with myself where if my parents had Alzheimer's, like, I would never put them in a home. I would take care of them because I love them so much. But the reality is if you have a young child and you have an elder parent who you care for it deeply, but they're forgetting critical things like leaving the stuff on and forgetting really important

Starting point is 00:04:37 things or it's actually creating a real palpable sadness in your children, you may have to make tough choices. And I know a number of parents that I've asked this question, especially because they come from the Indian community, where it's almost unheard of to put your parents in a retirement home. They say, like, they had to make a tough choice at a certain point. And it's such a guilt-wrenchingly difficult thing for them to do. I mean, there's so much emotion around these decisions.

Starting point is 00:05:02 So after people get, you know, this batch from a hospital and go back home, like they recover faster in their homes because they're accustomed to that space. It's a comfortable space that they've been living in for years. and it's like they feel relaxed there. It's a much better environment than it's like a post-op facility or it's like a cold, a cold hospital. It's not just physical. It's your dignity, your independence.

Starting point is 00:05:26 Yeah. We want to stay with that stuff. We've worked so hard to accumulate it. And so if you think about what actually is going to help people stay in those places and prevent them from moving to an assisted living facility or a different retirement community or co-op community, it's actually not the health care system. It's actually what is referred to as. private duty or non-medical home care or personal care. These are services that I know that I take

Starting point is 00:05:50 for granted every single day. Like I get out of bed on my own. I can make my own breakfast. I can drive myself. I know when to take my medications. I'm mentally relatively stable as all of us are relatively that. So we're remaking that entire space with not only the way that we employ care professionals. So those are folks who go into the home to take care of them. And then also how families access this. and how families are included in it. So just to break it down for me, so Kelsey, so what you're describing is that this problem, or it's also the reality of life,

Starting point is 00:06:23 that you have parents that are aging or elders, and they're being cared for outside the health care system in the sense that they're being cared for in their homes? What does that mean? I mean, what's happening? So first of all, about 70% of this kind of market as a whole. So this market of non-medical home care is private pay. So that means people pay out of pocket.

Starting point is 00:06:42 Entirely. entirely for someone to come into their home. So, you know, 70% private pay. And in that other remaining 30%, it's either long-term care insurance or Medicaid. So this is, again, a kind of a classic example of, you know, folks who are in the middle income level of America probably don't have enough savings to pay for this level of care, let alone for their own retirement. Totally. Yeah. So then they're in a spin-down situation to qualify for Medicaid to actually get the service reimbursed through an alternative benefit. But then once someone does secure this type of care, the activities of daily living. That can include things like helping them take their medications on time,

Starting point is 00:07:18 bathing them, making sure that they get out of bed and that they know exactly what day it is and what time their appointments are and who's coming next. So all of this support that is around them so that they maintain an independence. And a challenging, I think, thing about aging and each of us as individuals, regardless of the life stage, is that we want a deep sense of independence, yet we also in a deep sense of community. So we have actually this service for my grandmother who lives in Chicago. She can stay in her home. She can stay active in her church. But she has a little help around her to kind of just ease those transitions and walking up the steps and down the steps and things like that. Let's break down aging in general. Like what does it look like when a senior

Starting point is 00:07:59 walks into a drugstore? Like what aisles do they go into? What do they buy? What do they do? Like what's going on there? So we're doing a bunch of research on like senior retail experiences and it was really bad. It's like we went shopping for adult briefs. We walked down the aisle and there's like... And by the way, what aisle is it? Is there a special aisle like the babyhoods? Yeah, this is the adult diapers aisle.

Starting point is 00:08:23 And you go there and there's a whole bunch of, you know, different brands. I would guess there's a couple of brands specifically tailored at women that are pretty much the same brands as like menstrual products. Yeah. For men, it's pretty much all over the place. There's no real brands that pop into your mind immediately. But that whole experience is just very... It's just awful.

Starting point is 00:08:42 There was an older couple sending next to us that was trying to figure out which diapers to get as well. And ultimately, it's like after 10 minutes ended up not going anything because they just felt awkward standing in front of it too long. And then, you know, once you get to the point where you need to get adult briefs, you know, with adult briefs comes diaper rash, for example. But there's no diaper rash cream in the adult diaper section. Which is by the exact opposite of the baby goods because when you look at the baby aisles in the same drugstores, the powder, the rash, the cream, the wash products, the diapers. They're all right there. It's all right there. It's all right there.

Starting point is 00:09:12 It's all right there. You have to walk over to the baby aisle and get your diaper rash cream over there, which further, like, it's like it adds up to the shame. Yeah. And this is like when you look at products for the elderly in general, like almost every single one has been designed without the actual elder. It feels like a very neglected demographic in more ways than one. Well, not just that. It's like, oh, me to do me to do. from the whole process. Like when you have

Starting point is 00:09:42 like these bracelets that look like huge chunks of plastic around people's necks or arms in order to alert the family when they fall, I mean, of course, that's important and that's a really important case. You know, fall prevention is an important thing, but it's kind of degrading, putting a collar

Starting point is 00:10:00 on somebody who's already not very mobile only for peace of mind of adult children, for example. So there's a lot of, there are many really bad products in there. Yeah, for elders is a really different thing. Some of them are better designed than others, but they are out there. But also educating people about what home care is, what the possibilities are, not necessarily honor, but just, you know, what's the aging process? Yes, exactly. It's like what happens when you need a little bit of help, you know, or when you get sick and you need to do this or what solutions are there to your problems?

Starting point is 00:10:31 Like we started a partnership with Walmart where we opened up care education centers inside of specific Walmart stores in Texas. We have Walmart senior products. inside of the stores over there that are available for demo and people can just come in and have a chat with us, have a have a coffee. There's community events happening there as well. We basically help them out with any questions that they have around home care. What's it like designing education for that audience? Like, is it different than any other education training? It requires designers to go the extra mile and to go really deep on the matter and truly understand and build empathy for what you're doing. Because you're not from that necessarily that target. Yeah, yeah, yeah. But we've

Starting point is 00:11:10 fed this into the core culture of honor that in order to solve something specifically, whether you're a designer or an engineer, it really doesn't matter. It's like everybody kind of does. It's like you really own the subject matter of what you're trying to solve. That's very unusual compared to a lot of way a lot of tech companies are set up. Designing the Walmart experience specifically was kind of funny because we went from a completely offline system, right? It's like home care happens completely offline and through the phone. And we digitize the core components of that in a good and scalable way, which where we're at right now. And then the trick was to, you know, take all of that and bring it back into meat space somehow, which is kind of ironic. And by the way, I think that's a trend that a lot of

Starting point is 00:11:53 all companies will be facing in the design world because you have a lot of online to offline type of seemlessness happening. I think you're going to see that over and over again. Like how do you bring the physical into the digital, the digital back into the physical and keep like sort of reinforcing the two. So they're not like these two separate, discrete domains that are sort of interwoven. Oh, yeah. This like meat space, this retail space, one of the things in the healthcare sphere that I think about when I have my healthcare centric hat on is all of the healthcare providers really want insight into the home. They want to know, did that person get out of bed? They want to know is there a rug there that they're going to trip on? Is there fresh food

Starting point is 00:12:28 in the home? Who else lives there? This is, by the way, just like consumer packaged goods in any of the industry. They all want to know what happens inside the home when the quote product, leaves, quote, the store. Yes, exactly. We actually have the good fortune being in the home and seeing that and capturing various data points

Starting point is 00:12:44 within that. So we actually use our technology platform to capture about five different indicators of health. And this actually really allows us to have increased stickiness with the healthcare kind of system, like the hospital and the payers and the clunkiness of it.

Starting point is 00:12:57 But we can capture this data and we capture it on sleep, pain, mood, appetite, and bowel movements. The five. key dimensions. So we actually developed those with our physician advisors. We can relay that information back to the physician or to the social worker or to the discharge planner.

Starting point is 00:13:14 Do you do that through the tech? Yeah. The challenge is really big, actually, because we're now collecting, like, very privacy sensitive and super important information, like, in the home because we have all of these care pros going out with smartphones. But the challenges are, like, right? The HIPAA. Well, HIPAA is not as much as a design challenge is more in engineering.

Starting point is 00:13:35 engineering and security challenge. But it's more designing an experience that's like where the smartphone screen doesn't come in the way of the person-to-person interaction. Like when our care professionals in the home, like we prefer them not to whip out the phone. So how do you design an interface that is fluid, it's contextual, you know, pops up at the right moment. But also works on a person who's never used a smartphone. for their work in their life. Most of our care professionals haven't used phones in order to do their work.

Starting point is 00:14:13 Like there's no sales force for caregivers or no Photoshop for caregivers. So it's like most people in Silicon Valley are very used to having all of these amazing tools in order to do their jobs, right? But our care professionals use Facebook. They use WhatsApp, and that's about it. So how do you design an interface

Starting point is 00:14:28 that collects this super crucial medical information and how do you make that usable for somebody who's never used that before and make sure that it appears at the right moment. You have so many touch points, you know, you have this shift of who comes in. What are some of the design challenges? I mean, there's so many. It's pretty obvious that there's many, many, many different complex problems in the industry as a whole. It's like there is no way that we can approach this with one perfect solution in mind because

Starting point is 00:14:58 that's just going to be impossible. I think one of the biggest challenges that we have as a whole is explaining what home care is in general or what options are available to people who don't necessarily want home care. I mean, there's creating, there's creating a category or creating like a light at the end of the tunnel in an industry that's extremely complex. It's been relatively untouched by technology or by high quality design and has been mostly like a reaction to a growing problem rather than something that's been tackled globally from a business perspective as well as a design perspective. a gross misconception is talking about the elderly in general and just people thinking that, you know,

Starting point is 00:15:37 when you become 65 suddenly you start walking with a cane and have heart can in your pockets. Yeah. That's like, that's it. While there is like such a wide range of diversity in terms of the people that we take care, if there's people on hospice care or in life care that require 24-7 supervision or help, and there's people who just came out of surgery who just need a little bit extra help, you know, a couple of days a week. And they might look completely different.

Starting point is 00:15:59 I mean, that that person who's 65 comes from a. an entirely different generation as somebody who's 90. They have different ways of thinking, different ways of consuming. I'm glad you're putting that out because it sort of helps to not homogenize like elderly as a category. How do you think about, how have you had to adapt your skill set? So I actually started my design career at the Dutch Cancer Institute in Amsterdam. I was part of the team that designed electronic patient registries. And that was a time where designing healthcare was not more than an afterthought.

Starting point is 00:16:28 So it came at the very last step just to make it a little. a little bit more appealing your user-friendly, I would say. For me, as a designer, designer founder, it's one of the most interesting parts is that we get to redesign the way we deliver health care with Tabula Rasa. Yeah, you're starting a stretch. It's also the way we design

Starting point is 00:16:48 that deserves as much critique continuously as you grow. And that is something really important. To me, that, I mean, that sounds interesting as an intellectual challenge, but outside of these walls, how does that really matter? Most of us have been spending most of our professional lives designing applications behind the screens within offices in front of whiteboards. And those methods are very, it's a very cultural process that doesn't necessarily apply to the problems that we're trying to solve on a larger scale here. So you won't, you won't know what a care professional feels like when they're going to a customer unless you actually do that.

Starting point is 00:17:25 Yeah. It's like in situ ethnography in a sense where you're literally not just like basing it when people say. but you're actually watching what they do. Exactly. Well, you get to see the two sides, you get to see the things that we take for granted, like picking up a glass off the table, which is often a very hard feat for customers.

Starting point is 00:17:41 But you also see the side of the CarePro, who also is working to feed her children, usually wants to pick up her kids from school. So it's like to be able to use what we use in real life and critique that and adapt the way we built that product. That's just really important. and it requires like a different level of empathy. It's like I've seen like empathy was like the big word or the big trend word.

Starting point is 00:18:07 Empathy is one of those terrible. It's one of those buswords that everybody throws around, especially like empathy in design. And I agree it's important. Well, it's kind of like it loses, it loses its meaning when you see a designer. It's like who works in enterprise software. I was like, oh yeah, we need to have empathy for our users. Which you kind of do. Because if you've seen that software, it's pretty shitty most of the time.

Starting point is 00:18:26 I mean, it's like our cell phones are 10 times better than what they have to use. I think this is a really interesting idea to pivot on is that when you are starting something from scratch, you're building, you're literally remaking a system through like this new type of software and then the service you're delivering at the same time. You do have a blank slate and you can kind of invent it. But that means when you're doing things in that first principles way, you actually don't, you can't always borrow on like past repeated practices to make that easier and scalable. We have an entire generation that's so mobile native. We have different expectations for what you expect in your user experience. You can't just like, no one can afford to dismiss that. When I think about it, about how bad, like, most apps are in the, I mean, hospital websites. Like, they're terrible. Yeah. You have no desire to do anything. You can't even figure out your insurance plans, let alone anything else. Kelsey, could you sort of break down for us? Who are all the players and like the whole landscape of healthcare? We could be here for 10 hours describing the intricacies of the reimbursement

Starting point is 00:19:17 and payer landscape and provider communities, but we'll kind of try to condense it into just focusing on the provider aspect of it. And why do you pick the provider versus? Because it's more tangible. Most people will say, you know, I went to, ex-hospital and I had a horrible experience because they wouldn't pay for my procedure. Well, in reality, that problem is very complex and it's actually probably their insurance company's problem that that hospital is not in network and therefore the reimbursement didn't go exactly how they had envisioned and then there's out-of-pocket expenses.

Starting point is 00:19:47 So from a consumer standpoint, most people experience the front line where they see the doctor, the nurse, or where actually they get care. So if you look at Medicare or Medicare Advantage, you know, as kind of a starting place, just from a benefit perspective, just keep that in the back of your mind here. About one in five Medicare beneficiaries are hospitalized annually. That's pretty significant. Is that just like a chronic disease or some kind of an attack? It could be any of those things.

Starting point is 00:20:13 And, you know, we have our frequent utilizers who go back very, very frequently to the hospital and oftentimes utilize the ER as a source of kind of primary care because there's been no primary care identified for that individual. Right. So they use their ER as primary care. And, you know, this aligns with bigger trends that we've heard in health care around health care utilization and costs and why it's frankly become such a political topic as of late because of the investment. As forever, but yes. Yes.

Starting point is 00:20:39 More intense now, right? Yeah. Most of the time, if a Medicare beneficiary is in a hospital, they're going to, about 43% of the time, they're going to go to some sort of care provider after that hospital stay. So that could be a skilled nursing facility, an inpatient rehab facility, or a more. generalized home health episode of care, which could include occupational therapy services or physical therapy services as well. If they're out of a sniff... What's a sniff?

Starting point is 00:21:07 A skilled nursing facility. Oh, okay. Yeah, that's cool. If they're also receiving home health, you know, we can also be in the home setting. So we're complementary to every aspect of the kind of true health care delivery system. There's between 40,000 and 50,000 agencies operating locally in the United States. Anything ranging from mom and pop shops to larger companies. or larger agencies that are part of a like a franchisor umbrella.

Starting point is 00:21:32 Home care agencies. Yeah, but they deliver it in the old fashioned way, which is essentially you get referred to by a medical professional. You get this pamphlet or you pick a pamphlet out of like a hundred different pamphlets that all look the same. And they all pretty much offer the same things, which is a very dubious process, very opaque and transparent process about getting a care professional. So once you've decided on which. vanilla pamphlet you go for, you call one of those agencies and you get connected with, you know,

Starting point is 00:22:03 an operator over there, you have some intake appointment and, you know, they try to find a caregiver for you. Machine learning software essentially takes the profile of patients and matches that with the skills and a whole bunch more metadata of our care professionals in order to find the right match. I was just thinking when you were talking about it, even if there's like some kind of Yelp or review system to help you like rate and review, you're still, you're still, you're the burden is on you to have to do all that research and that work to sort of figure it out. It's also like from a user perspective, like the customer is really in a dire situation. It's usually, it's like they need help really fast.

Starting point is 00:22:40 And it's like very stressful, very emotional, emotional time. So it's important that you can give somebody. It's like really great personalized care that's actually tailored to what they need. Yeah. I mean, what's interesting about it as well is that it's a systemic problem because of the fragmentation. that would be so difficult to solve structurally. Because I'm not one to actually substitute software for structural solutions necessarily.

Starting point is 00:23:03 But because the software can play this role where you can cut across all of that, you can sort of solve for that, which is really fascinating. Yeah. And then part of that fragmentation that also works in our, how do you call it, and our advantage is the fact that we have the possibility to not only open up the market, consolidate, and improve the user experience altogether,

Starting point is 00:23:23 but also we have the possibility to grow with newer generations as like a, a trustworthy new brand that grows with them for their needs as they age. Yeah, we call that. We have one of our partners, Chris Tixon, has a thesis, the full stack startup. And, you know, the analogy that he frequently use is this notion of like, you know, in the taxi industry, you could have sold software to the taxi industry. But there was no one there who really could assess and go to the proper procurement

Starting point is 00:23:49 buying process. And so instead, like apps like Uber and Lyft would simply just bypass that by building their own software and kind of going full stack. so they control the user and customer experience end to end. And in doing so, it can build that kind of a brand that sort of provides that continuity. I mean, I can't even imagine trying to sell like software to health care, like a hospital. So it's not to try to provide that. And that's an add-on.

Starting point is 00:24:10 Yeah, that's what we concluded when we started out as well. There are so many problems that we need to start completely from scratch. Like every little interaction needs to be done in a different way on all fronts. If not, it's like we can't keep putting patches on an already broken system. Yeah, but how do you draw on the existing knowledge? Because starting from scratch, doesn't mean throwing all the old knowledge out the window. No. I would say it's a combination of factors since now we have a lot of really talented

Starting point is 00:24:33 folks who come from either the care side or the health system side. But it's like most of the founding team did not have any experience in caregiving whatsoever. That's definitely a benefit to some point, right? Because you don't have, don't have specific biases that people in the field might have had for a long time. I mean, that's actually true for startups in general, right? Yeah. I mean, you have different kind of biases, but it's like not the type of biases. that will make you go like, oh, no, we can't do this this way because the system dictates another way, right? Well, I have to ask, Kelsey, you're an industry insider.

Starting point is 00:25:05 Doesn't a part of you feel like, you know, who are these people who think they can reinvent the shit from scratch and not necessarily, because you bring a lot of insider knowledge? Like, how do you sort of feel about that? I'm kind of curious about, like, how you sort of navigate that. Yeah, kind of riffing on the notion of this HIPAA complexity and being HIPAA compliant. I remember one of my first days at honor. I went to CAM, one of the co-founders and lead engineers. I said, we need to fill out this data security form for this hospital that I want to partner with.

Starting point is 00:25:31 And he looked at that. And I said, oh, do you think we can have this done in like six months, right? Because that was the time frame I was used to from my other employers. And he's like, we could have this done tomorrow. Wow. That really speaks to actually how we can transform the space in a quicker, more reliable manner than kind of the cluckiness of the general system. Why would it have taken six months before?

Starting point is 00:25:52 Oh, well, because you would have been dealing with like electronic medical records. and then you would have had to have an outsource contractor, and then it would have had to go through this data security review and this quality assurance check. And by the way, do we agree on these quality metrics? You know, then physicians are involved, and then social workers are involved, and then nurses are involved, and then legal is involved.

Starting point is 00:26:11 And so you take this constituents, these various constituents, and you add them into the mix, and that's the general cluster. But that's not to say that you're any less secure. It's just that you have like a more direct pipe to it. We are actually hippocomplying. And, you know, fine, I have all. this experience on Medicare and Medicaid and like United Health Group and all the clunkiness,

Starting point is 00:26:30 truly clunkiness of health care. And it's so refreshing to be on this side of the table and really partnering with organizations who are bound by the bureaucratic processes of the health care system because of how they're reimbursed, whereas we are not. When I'm talking to hospital CEOs and other folks that are, you know, truly understand kind of this transition to value-based care, it's awesome. When I think of Medicare, like when my parents were old enough to get Medicare, it felt like a very, like a black box. We're not exposed to it.

Starting point is 00:27:04 And as it is, it's a very confusing, labyrinthing thing to understand. And you come from the centers originally from the centers for Medicare and Medicaid innovation. Talk to me about that. I had the fortune of being on the ground floor of the Center for Medicare and Medicaid Innovation, which was formed as a result of the passage of the Affordable Care Act. And we had this unique authority, and we had $10 billion over 10 years to really transform the way Medicare and Medicaid was reimbursed and kind of to dispel this. Why was that? Why did they have to, why was that mandate in the first place? Was it just not reimbursed very well? Well, yeah. I mean, today, historically, it's been reimbursed not only in a black box, as you alluded to from a beneficiary standpoint, but it incented physicians to actually just get more tests, like order more tests because they got paid on, you know, the fee for service.

Starting point is 00:27:55 side. So I order this, I get paid. I order this. I get paid as opposed to what is the outcome, right? And the value and what's the patient experience? And are we actually fundamentally making healthcare better as opposed to just utilizing more of it so that I can get paid and feel like a really good physician and make a bunch of money? So it's kind of flipping that model on its head and aligning new payment models that actually account for the quality of care based on, you know, maybe 5,000 Medicare beneficiaries that are assigned to you as a physician. And your job is to keep the level of quality the same, but reduce the cost of care year over year on an annual basis. And so we put forth a lot of initiatives that really introduced this notion and worked with a ton of physicians and hospitals to co-create these models that

Starting point is 00:28:41 exist today. But, you know, Medicare and Medicaid, I think they do get blamed for a lot of poor policies that have been designed for a time that made sense then and have never been brought up to speed? What's the shift? Like, what was it then and what's the now? So the then really was the fee for service reimbursement system. And then now is value-based insurance design. And so the now looks like if I'm a physician, then I'm going to have 30% of my Medicare reimbursement at risk, financially at risk, that in order to earn that 30% of the 100%, right? So I'm going to get 70% out of the gates, but I have to earn the extra 30% to make myself whole, then I need to reach these quality metrics and these targets. And so putting

Starting point is 00:29:24 more responsibility and ownership on the physician and really on the community level, because it is so locally driven. And we all talk about healthcare being local. Why does healthcare being local matter? We talk about a lot of things like global to local and there's a lot of values associated with it, but how does that play out in healthcare? So in healthcare, you know, rewind 50 years and there was communities and you would actually, you know, see your physician maybe at the grocery store or at the soccer game. We don't live in that level of society anymore in integration. We don't. we live in an online world. And whether it's, you know, honor taking it to retail, to be in the community, or our caregivers in the community are actually being part of a broader sphere of local resources.

Starting point is 00:30:06 That's what health care actually is. And that's what makes it work when it does work, of course. This is fascinating, again, because this is a recurring theme that comes up a lot in this podcast, which is this idea of software kind of taking us back to a time. Uh-huh. Like that was more intimate where even when FinTech, we had a podcast where we talked about your local bank manager would know your whole credit. history and how to like assess you. And in this world, you can't have that, but you can actually create that through like these other signals and then combine with the software. Yeah. It's essentially trust. It all comes down, it all comes down to trust. How do we

Starting point is 00:30:37 ensure as much trust as possible for a customer base that might want to pick like an agency that has like 10 years of experience? Right. Tying that to a familiar brand actually does instill a lot of trust on behalf of the family and the consumer. So I think continually aligning and also polling those organizations who have created such knowledge about caregiving for these individuals with specific diseases. Those are all mechanisms that really, I think, help, but still nothing really replaces a conversation with your doctor. Yeah. People say we're the Uber for seniors or something, but those are extremely transactional, but we're connecting people to people directly. There's no... It's not just like a pickup and a drop-off. You're caring. It's not a

Starting point is 00:31:22 transactional relationship, healthcare needs to dominate on a local level. That's exactly what people are looking for. So we actually have local partnership folks who just work with hospitals and skilled nursing facilities and social workers and community faith-based organizations so that we are really present and can help people where they need care most and where they are already. Exactly, exactly. So they can stay there. Well, you guys, thank you for joining the A6 and Z podcast.

Starting point is 00:31:49 Thanks for having us. Thank you. Thank you, guys.

The a16z Show - a16z Podcast: The Realities of Aging / When Healthcare Is Local

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.