Despite Chaos, Wellness Still a VC Target

Posted on May 3, 2013


Fast Company reported last month that venture capital investments have been cautious-to-non-existent lately. One of the reasons for this is—surprise—uncertainty. Uncertainty. Change. Flux. These are the parameters which continue to define the early 2010s, and which govern more than our work lives.  Living with chaos might be the most essential survival skill at this time.

Three years into PPACA, healthcare has some direction, but many in the industry are still feeling things out—despite what the President says.  This week, he related that healthcare is supposedly ‘simpler’ now, and except for enormous annual increases in the premiums of the already-insured due to—ahem, uncertainty (and covering the cost of the uninsured)— maybe things are, or will be.  Unfortunately, this kind of uncertainty picks my pocket, but I digress.

Venture capital, which drives innovation in countless industries, has favorites when it comes to voting-with-dollars.  Meaty problems that affect large populations, and can therefore, “scale” are particularly attractive.  Healthcare continues to qualify:

Wellness is one place we see opportunity.  Healthcare costs are dragging down the economy and will only get worse with an aging population.  Technologies that track, analyze, educate, motivate and deliver care could be big.

~ Todd Dagres of Spark Capital, responding to promising investment opportunities for venture capitalists

Wellness is a powerful opportunity because it is proactive; it heads treatment costs off at the pass through lifestyle changes.  What I find scary in the above quote is the not-so-strident message that, if untreated, healthcare will squeeze the life out of our economy like a boa constrictor.

I have read more than once the past few years that, if you want to find out where your raise went, check your employer’s healthcare premiums.  Healthcare costs are the prime suspect that wages and earning power have remained flat for years.  Add to that how legacy costs in pensions single-handedly bankrupted Detroit’s Big Auto, and it is easy to see how destructive these costs can be.

Healthcare reform is not an insurance nut to crack, or a facilities overspend concern; it is a human resource problem:  aligning the shrinking care givers to treat the growing patients, while simultaneously motivating people to live right and avoid care.

There is change afoot in the design communities.  Because of PPACA, hospitals are now forced to be more involved locally to support wellness and healthy communities.  Hospitals will need to care if their communities have gardens, sidewalks, and parks because these components positively affect public health.  It will matter if fast food outnumbers grocery stores in a neighborhood.  With more data to guide the right community investments, we won’t need deep pockets to invest in wellness—but it is sure good to know we have the big guns backing our play.