Deal flow management for healthcare

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hi and welcome um my name is bunny ellerin and i run new york city health business leaders uh so today's discussion why so many of you have jumped on is about healthcare investment trends uh where will the money flow in 2022 so now um i would like to introduce my partner in crime for today's session bill carey he's a partner at deloitte and is the tri-state health tech lead he works with a lot of digital health companies thank you bonnie good afternoon everyone and thanks for having me all right so now on to the main event um we would like you to meet our panelists welcome everyone thank you so much for being part of today uh what we want is to just have you each briefly introduce yourselves and kind of you know what areas you you know focus on and stage and then we will get right into the q a so brenton why don't we start with you thanks bonnie happy to to be here in my apartment but been joined by all of you virtually brenton fournioli i am a physician i spent a bunch of time at flatiron health and now i lead alicorp's healthcare fund we're a 100 million dollar fund investing primarily in digital health and new york city based companies and so really appreciate the partnership with new york city health business leader over the years great generally i could go next or um welcome uh everybody and and thanks for letting me join um jared kessel i'm here like retinoma internal medicine doc by training and then i've been doing uh kind of novel health tech and novel health services investing for about 14 years now the most recent six of which have been building and running transformation capital we are a dedicated digital health growth equity fund now investing out of a 500 million dollar fund too um so we typically make kind of 10 to 50 million dollar investments in revenue stage digital health companies that can be a little bit of revenue that can be a lot it doesn't matter anywhere in between kind of 100 million uh in companies that are software technical services or novel clinical insurance models selling into any uh healthcare stakeholder as an end customer and then given the whole team comes from healthcare you know try to be great active minority partners to be as helpful as we can excellent thanks chad uh laura over to you great and great to be here laura marino partner with optum ventures i've been here since we were founded about four and a half years ago at optinventures we manage about a billion dollars and we invest in an affiliated way with united health group we have about 50 companies in our portfolio and look at the market pretty stage agnostically trying to look at the best possible opportunities to bring our healthcare expertise contacts uh commercial connectivity into the companies that we invest in across the spaces that we find most relevant to um to our sole lp which is united health group so you will find us doing everything from sort of insurance innovation through to touching most of the opt-in businesses across care delivery data analytics and technology more broadly great to be here thank you laura and last but not least pete thank you billy i appreciate it uh so pete nice i lead our health tech technology practice here at deloitte advising many emerging growth companies um that kind of in the vortex of convergence between healthcare and technology advising them through their life cycle i'm happy to really support bunny and what i think is a fantastic initiative to showcase really the power of the emerging power of new york and tri-state area from health technology well thank you for that and thank all four of you for giving your time today um so i'm going to start with the obvious um as we talked about earlier there's been a lot of money um being invested in health care over the past 18 months obviously covet had something to do with that but you know particularly digital health right has exploded um and so what are things looking like in 2022 are we going to see the same magnitude of investment are we going to see the same valuations are things are things still flowing as freely and if they are you know where are things you know what are you most excited about and seeing where the money is going so laura why don't we start with you and then our friends can jump in i'm sure we will have a ton of opinions on this one and um i think we are a transformational moment right now so i'll give you my thoughts to start i think uh i think bunny hit on this well at the start looking at sort of the the new york market and i think a lot of the numbers and the growth that you've seen have been mirrored in the rest of the country as well so i think everybody knows the numbers at this point 2019 something like seven billion dollars going into innovation in healthcare digital health overall we were shocked by the 14 billion dollar number in 2020 and then you know the numbers come out closer to 30 billion in 2021 so a huge focus in in healthcare digital health overall larger deal sizes more deals and at least a perceived maturation or a comfortability in putting more money into the the companies and categories that we're seeing in the space we could probably talk for five hours about why that all came together and a mix of things like new liquidity pathways enabling you know different different types of pathways for these companies new entrants from a from a fund perspective and broader sort of vc landscape perspective larger funds raised overall even on the health care side but ultimately just a ton of interest a ton of innovation a lot of entrepreneurs coming into the category i think what what we've seen happen in the last quarter or so is what everyone has observed in the public markets the companies that mirrored a lot of the valuations that we were seeing in the private side at least at an abstract level have had a massive pullback so you have you have companies and the insured insurance innovation space or services space or behavioral space or telehealth space that in many instances are under maybe fifty percent of the price they were at at the peak during covid and i think we've definitely started to see that translate into the the private particularly growth stage uh overall i think jared you kind of pointed this out before um i don't think it's that public to everybody yet because we see it through deals we're looking at we see it through portfolio companies and if you look at the you know newswire right now you will see a lot of rounds getting announced from maybe a couple of quarters ago so i think it'll take a while for it to be obvious exactly what's happening out there but for us um a lot of activity on the early stage side and a lot more conservatism and maybe structure and thoughtfulness on more of the growth side of things with all of that said like the fundamentally good companies and strong companies that look more like platforms we're seeing a lot of access to capital companies companies like pill or dispatch or um or others you know across the space that really look like platforms and really look like uh technology enabled uh uh folks in the category so i will pause there and let others others jump in yeah i mean if i could just add to that briefly i mean what gets funded in healthcare are solutions right organizations that are solving for access affordability dealing with social determinants of health and health equity get funded solutions get funded and you know the reality is the demand for solutions and technology in this industry still far exceed the supply and you know you think about kind of evaluations over the last year i think they're more indicative of the macroeconomic environment and less about you know the true need in health care for solutions and technology um there will be companies that you know don't meet expectations um that that always happens but you know our view is that as long as the the supply exceeds the demand um you know companies will get funded i can help hop in hop in here from the very early stage perspective right we start companies are often the first investors and really at that stage venture capital is following talent uh not not the other way around and there's tremendous talent right now in the digital health sphere i haven't seen this in in our careers and it's coming from multiple avenues right so you have people from outside of healthcare who have been touched by the pandemic inspired to do something about healthcare and fix healthcare and they're joining the fray you have more and more folks who have been part of unicorns or digital health exits they've seen it done they now want to be founders or founding team members i think there's three or four former flatiron colleagues of mine we've invested in there's many folks from brigham and women's who've joined companies as chief medical officers and that's really the third the third avenue where people have worked in academia or health systems payers providers they're seeing what's happening in the startup world and they want to get involved and so i think that bodes well for the capital to continue flowing and then as we looked at the benchmark of wow it's it's unbelievable how much it's increased we have a lot of catch-up to do um you know the 20 figure of 9 billion to 50 billion on health care venture capital in new york you know healthcare's 20 of the us economy so we're we're kind of just getting back to uh to average and there's just so much potential with the transformation happening with value-based care that i think we're going to continue to to see it accelerate well valuations in the mid late public markets go down a little bit up a little bit i don't know but i think uranus continues to see a lot of capital flowing flowing into this this year and over the coming years so jared the next question is going to come to you and we can continue on this topic specifically and laura touched on a little bit as well but whether you're looking at series c a b the the magnitude of the funding in each of the stages has changed on the surface it seems risky that you're giving a young unproven company in some cases very large sums of money but there's clearly something attractive that's commanding 50 100 million dollars around so why are we seeing this and do you believe it's sustainable or well well the first thing i'd say is that i do think that these kinds of larger earlier stage rounds are in addition to the kinds of seed and series a rounds that we used to see not not necessarily replacing that right we led a series a investment in a business called vital that is run by the former founder of mint.com and has an amazing kind of patient experience tool for emergency rooms right you know that was a you know sub 20 million dollar series a in a business that already had traction uh you know in a number of hospitals um we led another series a investment recently we haven't announced yet so we'll talk about it here we want to get ahead of their pr but you know that's a series a and again a business um that has a little bit of revenue it has some revenue traction but where the round itself uh you know is a sub 10 million dollar total round that we were the majority of so those kinds of rounds i think are still happening um in interesting and exciting businesses but what you're also seeing is exactly the premise this question these very large seeds very large series a's um and i do think we're going to continue to see more of them uh and i think the the contributing factors to that are you know it starts with this is still a great market as i think brenton highlighted at the end like we've got a long way to go to solve all the problems in health care and the recent exits both on the m a and the ipo side have shown that you can build very large companies you know yes multiples have compressed but uh you know that doesn't mean these aren't meaningful businesses that should be public and should have meaningful market caps so the path to getting an exit will you know allows you to do some of these larger earlier stage rounds and inherently have some some higher post money valuations and see the path to um you know to to return um and then i think the other two contributing factors one brent mentioned as well but is like as you have great teams um that are starting companies they'll be able to attract that kind of capital early on um and you know as much as uh obviously i love this market i bet my professional career on it it still has some you know occasionally some slow sales cycles as these large enterprises are trying to move the um you know kind of change the direction on their aircraft carrier and so i do think there's a you know a business benefit to funding these companies to elect to give them you know a bit more extended runway um to nail a product market fit you know and get some real evidence inside some of these uh these very large enterprises so um and then the last pieces that i think contributes is a um you know is related to a point a point laura made around you know larger funds um putting capital into this sector and so if you're gonna have you know a billion or two billion dollar fund doing digital health investing um and wanting to not necessarily do everything at a post you know billion dollar valuation then they're gonna go earlier and if they're going to go earlier they can't do it with 5 or 10 million dollar check so they're going to do it with a 50 million dollar check um and so you're going to see a few more of those as well oh maybe just jump into to add on to one of the points made and i think brenton and team have have done this a bit of ali corp as well but you do see a lot of innovation at the sort of startup studio level as well so a lot of large rounds and jarrod hit on this um it's repeat entrepreneurs who have track records and and relationships and team building capabilities that is a little bit different than maybe what we have seen previously because we've only just cycled through probably the first real wave of interesting companies like brad smith has and adam bowler and others in the category so um you know early stage yes but deeply experienced and deeply networked in the in the space more broadly to speed up hopefully those sales cycles that jared talked about is i think another component of some of the larger rounds coming out of coming out of some of those places i guess i would ask a question because you're talking about repeat founders but at least when i look at some of the really big money um that's going to new york startups these are first-time founders they haven't had a they haven't had a company before so is there some risk in investing that much in still fairly unproven entities we invest a lot in person and i would just add they've often operated at um you know whether it's an oscar or a flat iron or city block and they've operated so well and they have a followership within that company they weren't necessarily the ceo and so this is the next step in their career progression so you're seeing a lot of that which are commanding some of these rounds versus you know the founder of that unicorn now starting another thing that certainly uh is going to be a large round but you're also seeing the the trickle down to the deputies who have excelled in those environments and everyone knows which deputies those are um because they've worked worked alongside them yeah i was going to say i mean a lot of the new founders have significant operating experience in health care and and that's what it takes to solve the big issues uh health care is complex it is not easy there's a third-party payer system there are you know multiple touch points in the supply chain and having that kind of nitty-gritty operating experience is helpful and i think that coupled with the ability to build teams talent and likely most importantly focusing on a solution right i mean i think the solution trumps trumps all if you have a technology-based platform or solution that deals with the pending issues in healthcare um people invest because it you know healthcare is is sloppy it's complex and we have a ways to go i think i don't think there's a perfect formula for a team the team is extremely important but we have examples of deeply experienced repeat founders or to brenton's point i don't think necessarily like founder but you know a leader inside of a past startup with deep operational experience at that level others who come from incumbents uh but you also have the first time founders jared and and ire bolton let's get checked someone like a peter foley who i would probably put up against anyone to go after a category like lab testing which is extremely hard to think about especially a few years ago thinking about a pretty incumbent dominated industry and so i i think it's hard to think about it as a perfect formula of has to be this way or another another way i think it's very dependent on uh the space that somebody's going after and what they can sort of aggregate from a team perspective and in different pieces so we don't we don't have a bias in one way or another in that respect that's fair enough um you know talking about new models um obviously over the past you know 18 months uh digital first care is now you know a pretty common refrain right at least among us i don't know in the general public although we have seen a movement towards more individuals postcodes still using virtual care so people always talk about is it going to be virtual only footprint only you know when now that we're getting a little bit more mature um when you're looking at an investment in a digital first company are you are you also looking to make sure that they're going to have some sort of footprint like a physical footprint um or is that not all that relevant i'm just trying to unpack what's going on what in terms of seeing providers but maybe we could start with them i mean i've looked at in our team we have a number of clinicians on our team we look at it first from that clinical standpoint of does this actually work uh ideally does doesn't work better than the stand substantially better than the standard of care and it's good for patients and start from that premise and you have to think about what the population you're treating is what the condition is there are some conditions that are physical in nature the intervention and there's going to need to be a footprint of some sort or a physical workforce and then i think we've seen others whether it's mental health physical therapy with the innovation and remote monitoring others that have been prone to uh virtual only models and so you know we're starting first with does it work and then trying to find the teams that are bringing an efficient scalable model to to that and some conditions are you know more prone in this cycle of innovation than others to that efficient scalable model and really looking for the teams that that can bring those two things together that it works and can work at scale um but it's very easy to do things that can scale well but don't work and also really easy to do things that can work really well with absolutely no scale and so the magic is uh finding it along that along that continuum i guess you know i think we we have more investments that when for investments we've made that do clinical delivery you know we have taken more of an approach of of looking for you know trying to back sort of omnichannel platforms right so that that at the end of the day can um take care of the patients that can be taken care of clinically effectively in a virtual setting virtually and if it needs uh for either the type of uh clinical condition or the type of patient you know needs would be better done in person or it starts in person and then moves to virtual you know after certain criteria are reached uh you know that we have those capabilities so laura and i also work together on a company called groups which we think is a leader uh in um in taking in kind of taking on the opioid epidemic uh and it is a business that that you know at its heart originally was a physical footprint and and certainly always had a plan to add in digital capabilities uh and virtual capabilities um covet only accelerated you know their their approach to that um but i do think it's it's the combination of both that allows them to uh i think be the the best possible uh solution for you know for for the members who need them and for the the payers that they partner with to say hey you know you know we can really help um you know a broad section of your members uh from you know across ages across demographics because we have both these capabilities you know similarly on the primary care side um you know we're investors in a company called vera whole health that runs value-based primary care clinics um this is this is public they're in the process of of taking caslite uh private and merging the two companies together and adding in that technology and against sort of a similar story to to groups of like historically a physical footprint you know lean forward on technology and virtual offering and now has the ability to offer both which i think serves them you know serves them well as they try to partner with payers and employers who you know may have members and employees that are 25 and pretty healthy and and used to doing everything on their iphone and can be taken care of nearly exclusively virtually and may have people near the end of their careers you know who aren't yet quite so comfortable or have enough you know comorbidities and and chronic conditions that they're going to have to go see somebody in person you know for for some of them and you know and may be able to do virtual for for others okay so shifting a little uh and we can move over to you it seems likely that we'll see some consolidation in 2022 for example 30 madison just acquired nercs can you comment on the current m a environment and where you think the most traction will be yes it's really interesting right if you look at the telehealth market kind of at the beginning even before co would write there were a lot of barriers that prevented that subsection from from really optimizing its capabilities um kovic brought a lot of those barriers down and in a very short period of time you know consolidated into you know four or five major players large market participants joined the fray and so i think all organizations kind of recognize they need those capabilities um but when you look at the they'll always be m a right for organizations that look to fill their specific needs but m a um can be expensive m a can take time um and there are you know specific barriers that make m a truly accretive to a business in an environment that puts a premium on speed and so our point of view and we actually have a piece coming out soon around ecosystems and alliances where we believe that there will be more and more partnering between emerging companies in the space and existing uh both healthcare and non-healthcare market participants as they look to you know complement those capabilities they could take the form of you know alliances joint ventures risk sharing arrangements we think that's going to be a healthy component of kind of the overall you know environment around m a you know over the next few years i'm sure that three of you have something to say about consolidation i can jump in and yeah i think i mean it's one of the most interesting things to watch right now we've had enough comments about like valuation changes and um and also you know the capital that's sitting in the hands of some of the sort of category platform plays in the market i think whether we're talking about you know interest of companies like 30 madison and engineer x or or thinking about incumbents in the space or thinking about you know totally other entities out there i think it's going to be a really interesting moment for consolidation because of the macro dynamics of what has happened in the market there's also just i feel like a constant pendulum swing of wanting more innovation and more specialization and and push from various different stakeholders including consumers in the market but we're at a moment right now where the number of silos and the consumer experience whether you're talking about an employer channel a pair channel or a direct to consumer channel frankly is overwhelming right now and so i i expect to see particularly in behavioral health where we have seemingly like 300 000 companies right now um i i expect to see some interesting moves played in the next you know 12 24 months from all types of stakeholders in the space from incumbents through to to well capitalized startups out there totally agree on behavioral health especially that sector where it's a limited supply that is a problem and so there's gonna be consolidation around that and then as you move from mental health to layering and substance use uh horizontally i think we'll see a lot of that but i worry about it right so m a is usually pretty ugly um you can end up with a frankenstein product talent the talent heads for the door um and so that it could be precarious as we just think about what digital health looks like if it's going to become very prevalent my hope is we see some incredible marketplaces form right where yes the go to market channel is saturated but there are some great point solutions that are focused doing good work and that they're able to continue to stand alone and thrive as more marketplaces come come to bear aggregating whether that's supply or demand so i i think we'll see both of those but m a m a isn't easy nor nor typically fun over the long term are there any particular areas that people should be you know focusing on in terms of m a like is it going to be horizontal vertical are you going to see the incumbents um acquiring some of the startups if you do have a new class of buyers which are the companies that have been able to to you know sort of the first big wave of digital health companies getting getting public and having that currency to support their m a efforts and um you know we've already seen them be active signifies been active in m a uh health catalyst has been active in mma you know a number of these others and they will continue to to be so um and i think you know given the trends in health care you're going to continue to see interest from larger players outside of healthcare looking to have it be a bigger piece of their p l and we'll be you know making large deals on kind of choice assets i think we're talking about sort of two different aspects of m a though like all of the positive trends in our sector that are going to lead you know big companies outside of healthcare or partially healthcare in healthcare that are large to to buy the best businesses and then sort of defensive m and consolidation where in a market that uh is more punishing to high-burn businesses um you can't have to laura's number sort of 300 000 point solutions behavioral health all be 300 000 point solutions in behavioral health yeah 18 months from now and and those need you know there there will need to be a shake out there um that will be i think kind of more defensive consolidation that allows some of these companies to combine and extract synergies and survive i think m a is obviously very distracting and not always not always executed well and talent's hard to hold on to and everything like that but when done right can be pretty transformational i think jared i feel like you guys are in ginger maybe like the headspace ginger move was beautiful in my perspective like beautiful consumer brand on the headspace side great enterprise traction on the ginger side i'm sure tough behind the scenes to think about how to integrate the different pieces there but there's a lot of examples we have a lot of examples in our portfolio like able to enjoyable like there there's really really um interesting ways that that these types of transactions can be transformational brent and i totally agree most of the time it's not and it's done uh poorly and talents out the door and things like that but we we have the benefit of watching probably the biggest aggregator ever in healthcare in optum who has grown in many ways by a lot of a lot of different inorganic pathways over the years and um there there is power in in the opportunity around m a i think for both you know the first wave of great healthcare innovators i think here like jared pointed out and also for the broader broader industry great so let's do one more question before we go towards the audience questions and that is uh the the coin term the great resignation that we're seeing within the talent pool employee retention right now is a very big concern across all industries what are some of the types of strategies that your portfolio companies are using to stay ahead uh as it relates to this and this is open-ended so everyone can jump in there are different tactics right virtual poker night on sites off-sites varies by company but i think fundamentally it's can you instill with your co-workers a sense of caring caring about each other personally caring about your customers which often is called mission but truly caring um that is is hard to instill especially in a virtual world and so you know teams are employing these different tactics whether it's let's go shadow uh at a clinic or let's have um people participating customer support with with patients um things of things of that nature to really get close to the customer and close with co-workers that otherwise is rather distant in um in our currently virtual world and hopefully uh we'll be returning to offices at least in some hybrid capacity more and more going forward which which will help but i think it's really that sense of caring and of course compensation has to remain competitive but that's a kind of a transactional table stakes mechanism for it yeah this is a healthcare world right let me know these are healthcare companies so you there's inherently you know hopefully an ability to uh to get everybody aligned around a mission of impact which i think is is much more the case than you know if if this was a business making you know ads on the web like one percent more effective or or something like that so the the you know but but you know besides that um you know at least from from our side of the table as an investor like it's the reality is this is happening and so can we find a way to make an investment thesis out of it and so whether you know we're invested in a marketplace for nurse staffing uh called careb that's a kind of per dm nurse staffing for for health systems um where one of the tailwinds for this business is the great resignation that that's taking place so um there's i guess some silver linings on it from an investor perspective but i uh you know certainly i i empathize with the leaders of our companies who are you know having to to handle it across the board i mean i think being able to communicate the mission is really important you know healthcare has some advantages right in terms of it being very personal and organizations that can you know capture that kind of sentiment around look this is this is real this is personal uh it's not a sleepy industry that's that's lagging uh as was the perception for years i think covet has brought to light a lot of those issues whether it be around mental health or access or you know health equity and you know being able to convey i think there's a forbes article around do you want to make an impact in tech you know go to healthcare um which seemed counterintuitive you know just a few years ago but but i now i think kind of aligns with what we're seeing in the broader you know the border market and the borough society and so being being able to balance the social and commercial aspects of this business and those that can do that in a pretty empathetic way i think you know will succeed in attracting talent because the emerging generation wants to have an impact they want to have an impact to society and you know where to do that better frankly than in healthcare yeah i agree with all of that it sounds um it can sound soft in some ways but especially the company grows um it's very hard to have everybody sort of aligned in the same direction and have everybody's everybody's sort of kpis aligned to uh to a specific goal that is easy to understand and works across everything from engineering to other places and some companies have an easier time with the the clarity of the mission than others especially some of the care delivery companies compared to maybe like an infrastructure company or somebody like that but i think that clear articulation of almost like a north star for a company that that helps you know at various stages there um to just echo what everybody said i think the other piece is i forget which coach at some point said this in a quote but winning is also very important to the growth actually being successful in the company um there's a lot of attention paid to that and there's it's easy to jump from company to company in the current environment so i think um i think there's a lot of pressure on on companies from all different angles including employees to actually have you know high growth and a winning group around the table including the investors you're able to pull in and i do think i do think that part of the culture is in this current environment for better or worse a big component of the calculus okay well we better get some winners right um although i there are bunches in the market so we have so many questions uh so we're gonna start taking questions now um i can guarantee we're not gonna get to all of them but we'll try and get to a bunch all right so first up is nima ruhi and nima tell us who you know where you're calling in from or you know what you're what you do quickly and then ask your question sure thanks a lot i appreciate the opportunity uh and and thank you for to the panel for this great discussion i'm nima ruhi based in new york city co-founder and ceo of blooming health uh focused on the um basically aging in place and healthy aging in place space so the question i have is is basically around the social determinants of health covad has emboldened the importance of stoh impact on health outcomes especially for older adults and the need to digitize the bridge between sqh and healthcare there's been some success stories over the past few years with companies like city block health and unite us i was wondering what the panel thinks in general about investment in this space um and and and in in and what are some of the criteria or or problems basically they are looking for to be solved and the criteria around investment in those problems basically i guess i'll happy to start you know so so i'd say i guess i i continue to think there's going to be more here because we've we've found ways to align economic incentives with incentives around doing the right thing by sdoh um we're in uh full disclosure where investors in in unite us we think that's a a fantastic business and doing an incredible amount of good um but this is you know the hard part of healthcare is figuring out where you know to the name of this of kind of this this whole session like where does the money flow and how does it flow and when will it flow and can you find business models um that that work with how the money flows uh unfortunately i do think that the market continues to move in a direction um where doing uh you know focusing on sdoh you know what that value can be um shared among the buyer and the seller of the technology uh company and and its customers in a way that um helps both companies and and helps the you know the ultimately the patient um the you know i think there's outside of city block and unite us there's a ton of businesses that have elements of this and you know they're not called sdoh companies but like it's part of their business model there's uh you know for-profit pace businesses uh you know well-behealth or innovation on the on the public side like a lot of what a pace model does is around the social determinants for those um you know for for their members uh and you know you might not think of it necessarily as sdoh but but that's what it is and there's a you know a ton of new businesses coming up um you know that have elements of all right you know how do we meet people where they are outside of the four walls of a clinic uh that touch on these issues so i do think there's going to be more capital continuing to head this direction it just might not be called as you know sdoh specifically yeah i agree i mean there's i mean there are health plans that have various discrete activities around uh trying to create those incentives and and allowing the consumer to participate you know one of the challenges is you know getting consumers to kind of understand the importance of some of those aspects right and how it can not only um be a cost saving to them but can actually accelerate you know therapeutic outcomes um and so i think awareness and education is a big big part of you know meeting the consumer where they are it's you know you hear that a lot you can meet them there but getting them to do the things that are important uh for their own health and for their own cost savings you know you know can continue to be a challenge i think companies that are able to execute against that and understand behavior uh will be most successful okay well we have another um oh no i'm sorry i got the wrong person um i'll ask it uh this is from from steve how do you think about employer benefits landscape evolving with so many new point solutions um on the market for relatively new benefits so what yeah i mean they're all going after the employers everybody is going after employers now so how do you see that evolving i can jump in i think what we've seen and this is a little bit of the pendulum i was talking about earlier i think 2017 time frame you had a lot of a lot of um demands from employers for payers for example to move quicker from an innovation standpoint i think the digital health landscape kind of picked up picked up the the ask there and and ran with it but i think what we've seen what we've seen be really effective in the market is actually using the direct employer types of relationships more more as an agitator to the actual the actual payers in the market so you get some of the jumbo accounts out there really interested in what you're doing if you're hitting the market at a time where there's huge needs behavioral health pediatric health um women's health whatever it might be those those voices start to carry really heavy weight in in the market and then i think it creates an interesting opportunity to actually get on with probably a more sustainable business model of being on payer rails and being distributed across a large book of aso clients fully insured and clients etc so we're hearing both from i'd say the investor community and seeing through our portfolio companies um that ability to jump onto those payer rails ultimately to serve the employers in a way that's maybe more scalable than employer to employer which eventually sort of taps out um is probably where we're where we're currently at in that sort of pendulum swing in the market yeah i mean you look at you know large large employers that self-insure right they still have the most incentives right to try to take advantage of these capabilities beyond just cost savings right i mean many of them are looking at it as a retention tool attraction of retention tool in today's today's environment employers um and ultimately government even though there's been some cost cost shifting to consumers ultimately employers you know still are picking up the most significant component of the healthcare debt and so they have the financial incentives to do it and i think you'll you'll continue to see emerging companies target you know those organizations as customers in this bottom line okay all right up next we have rosemary dorset um rosemary will are you unneeded yes hi uh you had a really interesting question tell us where you're from and and then ask your question hi there um i'm rosemary dorsett i currently work at area 23 and ipg health company and um the healthcare advertising and marketing space um my question was about i had two questions so bunny i'm not sure if you're referring to one or another the yeah the one about duplicative uh oh yeah so um and just one because we have a lot of people completely so i'll ask this one thanks for clarifying so the boom and health tech innovation is really exciting um but it does feel from my perspective there are a lot of duplicative solutions being funded and developed and i think that you guys touched on some mergers and acquisitions that were going on for complimentary complementary services or platforms i'm just wondering about how we can prioritize and ensure that urgent unmet needs are being funded and get the opportunities to help those that are on the front lines of health care day-to-day or help patient populations that are underserved underfunded but increasing in numbers and i'm just thinking about specific cns conditions that we're seeing diagnosis rise over time due to different considerations likely environmental that we're going to have to deal with in the long term and how some of these solves can can get the dollars and the talent and the time to shine sure you know i mean i still think ultimately like it is about money flows and like where the opportunities are like in my i guess my view is like we're seeing a lot of me too companies but those me too companies are going after the you know the the problems that have the biggest economic opportunity you know associated with them which you know hopefully has some meaningful overlap with the biggest problems and pain points of of the various you know end customers um you know so you're gonna see more going after behavioral health or more going after cardiology or more going after diabetes you know then you are going to see uh you know going after potentially i guess to one you know one of the examples in your question like a cns you know disease that may have a you know smaller patient you know population associated with it um i guess get given sort of where we are in the evolution of the market like i'm just very happy that there's a lot of opportunity for digital health to go after these big problems first like there may be a subsequent phase where you know we need to find some other um you know economic incentives you know you know like like has happened analogously on the drug side where you know policies can come in place that can help motivate all right well if you develop a drug in uh you know a new antibiotic in some area that's going to have a small market then you'll get some benefits somewhere else in your drug development pathway for you know uh to be able to get a faster review like again but that's a market that's much more mature than digital health where those kinds of levers have been able to come into play to kind of guide dollars toward underdeveloped areas like we're still in very much the first phase of this market and you're seeing the kind of the biggest problems um by number of kind of patients and dollars get the most attention from digital health solutions and you're seeing a lot of me too solutions around the same big ones because they see the opportunity to go win and capture kind of a lot of economic value yeah yeah i think laura said it best right i mean success does bring success we're gonna need we're gonna need some significant winners in this you know very you know market that's in its infancy i mean digital health is still in its infancy um i think as as we get success stories in organizations that are solving some some of the more significant issues in healthcare i think you know founders and innovation will over time you know evolve into meeting those unmet needs i think it's a great point um i think we can't lose sight of the fact that we're still in the you know we're still in the first inning right uh in many ways yeah just just thanks a lot just add on to jared exactly the focus of today's discussion is a bit myopic right just digital health which often is about how do we optimize the care delivery of our current armamentarium of drugs and diagnostics and then you know there's this whole other subset of investors and um more mature capital around biotech uh and other things and so you know alzheimer's a great example we need better drugs we need better diagnostics um certainly the care delivery can be improved but fundamentally the armamentarium there is is inadequate and so i think where we have this kind of scientific or clinical unmet needs we often look to our peers on the biotech side to get those tools in place that we can then help scale on the on the digital health side i was just going to throw in i think everything everything said makes sense like we are a little bit skeptical of like the the fourth version of a company or the fifth version of the company without great innovation in in the actual care delivery or infrastructure or whatever sort of category that we're talking about so i don't want to see the 10th version of dispatch or i don't want to see the 10th version of able to i want to see the next um the next real differentiation from an outcomes perspective with a platform in that space because at the end of the day there are only so many ways to scalably commercialize and once there are you know partnerships behavioral i think it's a great example if you're just if you if you look like ginger you look like able to or you look like lira there are only so many pathways for you to go once those folks are lined up with some of the national payers and employers out in the market so i think it's a really great question i think maybe what's less obvious right now like there is a there's a ton of focus in some of the underserved populations or specialty areas probably the space we're seeing the most activity right now it's medicaid um because of how much focus has been in medicare historically for obvious reasons that jared pointed out um so a heavy focus in medicaid and then you're also seeing like like equip raised announced their fundraise today in the eating disorder space like that's a very specialized care delivery model but a really high need area with not a lot of alternative solutions not high accessibility historically and a huge total cost of care number for that population and you see a ton of investor interest like one of the probably most competitive rounds i've seen in the last 12 months in a space that is very specialized but is going to have extremely strong outcomes because they have the they have the ability and they have the sort of total cost of care numbers to innovate from a care delivery perspective in a differentiated way so i actually think the question is beautiful because there there is a totally different category of specialized investments that look very different than a very low pmpm number for generalized anxiety and depression for example where there's just not as much dollars to play with to innovate from a care delivery perspective and the outcomes i think will look different because of that we have we have one more question which is completely related to this um i don't william kim are you able to ask out alaska i'll ask a gun on his behalf he asked about just what you were saying before bretton like what can big pharma do and what role can they play in supporting innovation in the digital health space um and it's a question a lot of folks ask so i'm curious if you have ideas any thoughts on what big pharma can do um so first of all i think big pharma is already pretty active on this front uh you know the there's increasingly senior leaders uh with you know digital titles innovation titles like they um a number of the uh pharma companies have um corporate venture arms that traditionally have been very focused on like scouring the landscape for the next kind of early stage molecule to in license in and um you know and kind of make part of their uh either development or commercial stage pipeline but increasingly uh those corporate venture efforts on the farm from the uh from those big pharma companies are also doing um having meaningful focus on on digital health innovation um and you know that's i think incredibly helpful like there's a number of companies we've looked at or are investors in where a big pharma company's you know venture arm is a kind of strategic co-investor uh and their ability to help get the access for that business to the right people inside and you know very analogous to laura lee's investments and and co-leads them and syndicates but the way that they can do that inside united which is extremely impactful for companies that that serve you know surf payers the way that those kinds of uh investing entities can do that inside a novartis or inside sanofi or inside johnson and johnson um you know that has been extremely helpful for the development of uh of digital health tools uh and services that are both directly applicable to pharma or applicable uh you know in sort of a broader sense but you know selling into payers and providers but in a way that hey you know if more people are getting access to care and getting on the therapies that they should be ultimately that's good for pharma too and they're you know those corporate venture arms are um are cognizant of that point as well okay well we are we have two minutes left um we definitely have more questions but we have one final question to close out today billy sure so uh this is for everyone on the panel so what is something that's not getting attention today necessarily but something that we're likely to know about in the next six to twelve months where it'll be front and center all the trade secrets come out now oh come on i know keep it that closely give some general knowledge i have a fun one of um web 3 crypto obviously everyone's aware of crypto web 3 the super bowl coinbase ad and all of that healthcare's always been the laggard by a decade to adopt new technologies so i don't think many folks are looking to healthcare to be an early adopter of that but um starting to see a number of companies and kind of the what they call decide decentralized science on the how to fund biotech differently and i expect uh to see more and more of those companies whether they reach their realization and become prominent uh all that remains to be seen but i'm seeing a lot of activity among entrepreneurs in this space and i don't think it's going to exclude healthcare yeah i mean so you know the whole concept of health to wealth has been been around for a while but i i think you're going to see with the consumer being more and more important in a in a digital health world i think you're going to see um even more convergence between finance services and healthcare uh way that you know tries to empower the consumer to manage both and i think a big component of that's going to be you know health equity and some of the inequities that exist in that front i think will be brought to light as a way to manage kind of health to wealth continue okay well we are just at one o'clock i don't want to keep you longer thank you all so much thank you billy for being my co-moderator thank you laura brenton pete and jared uh for telling us where the money's gonna flow and what to watch out for so have a great afternoon and we will see you soon