A leading voice in demystifying the complexities of the healthcare industry, Nikhil Krishnan, the founder of the "Out of Pocket" newsletter, offers a unique blend of humor, wit, and sharp analysis. His work aims to make the business of healthcare accessible to a broader audience.
On the Complexity and Absurdity of Healthcare
Learnings:
- Healthcare is intentionally opaque: The industry is filled with jargon and acronyms that create a high barrier to entry for outsiders and even those within it.[1]
- Money flow in healthcare is often illogical: Unlike other industries, the financial incentives in healthcare can be counterintuitive and don't always align with patient outcomes.[2]
- The US healthcare system is a hybrid mess: It combines elements of government regulation and free-market competition in a way that creates significant inefficiencies and disadvantages for both new businesses and vulnerable patients.[3]
- The principal-agent problem is rampant: The person choosing a healthcare product or service is often not the end-user, leading to misaligned incentives.
- Perverse incentives are the norm: Many business models in healthcare are not defined by patient outcomes but by who is paying the bill, leading to a system that can be resistant to cost-saving innovations.[4]
Quotes:
- "U.S. healthcare is a joke. Let's make it funny."[2]
- "To learn about any part of health care you have to swim through acronyms and people saying 'interoperability' a lot."[1]
- "It's just, like, jargon everywhere. It's hard to figure out which players do what. No one is really upfront about their business model."
- "Usually as you dig deeper, you start uncovering things and figure out, 'Oh yeah, that's why that happens.' Healthcare is the opposite."[2]
- On the Medicare acronym MACRA: "I was like, how is there an acronym within an acronym?”[5]
- "…the US isn't sure if it wants the government to make decisions or free market competition to adapt to consumer interests. Currently, it's the worst of both worlds. It's regulated enough to make it difficult for new and small businesses to compete, while also free market enough to gouge the vulnerable.”[3]
- "Home health startup actually visiting a patient's home for the first time." (a tongue-in-cheek caption for a meme, illustrating his humorous approach).[5]
On Digital Health and Innovation
Learnings:
- There are five main business models in digital health: Krishnan identifies and analyzes the common business models that digital health startups typically fall into.[4]
- Many new entrants underestimate the industry's complexity: There's a common "six stages of health tech grief" that founders experience as they grapple with the realities of the healthcare system.
- Successful digital health companies often become competitors to incumbents: Simply providing tools to existing players is often less effective than building a full-stack solution that challenges the status quo.[6]
- The 'consumerization' of healthcare is a major driving force: As patients bear more of the financial burden, they are becoming more discerning consumers of healthcare services.
- Crowdsourcing is an underutilized tool in healthcare: There are significant opportunities to leverage collective intelligence for everything from symptom triage to finding the right doctor.[7]
- Building a new Electronic Health Record (EHR) is a common but perilous path for startups: Many have tried and failed to disrupt the entrenched EHR market.[8]
- Value-based care offers a promising, but challenging, alternative: Aligning provider reimbursement with patient outcomes is a key area for innovation.[9]
- Biopharma is ripe for disruption through technology: There are significant opportunities to improve the efficiency of drug discovery and clinical trials.[10]
- Startups need to focus on a specific, painful problem: Trying to solve all of healthcare at once is a recipe for failure.
- The venture studio model may be well-suited for healthcare: The longer product-market fit timeline in healthcare makes the studio model of incubating multiple ideas a potentially more efficient use of capital.[7]
Quotes:
- "One of healthcare's original sins is that every solution deployed has been a custom solution for the end user.”[4]
- "I don't think selling tech to large incumbents is going to move the needle.”[4]
- "If we want to fix the system, we need people that are constantly asking why things are the way they are."[11]
- "I expect the next group of successful digital health companies will be competitors to the incumbents as opposed to tools for them, AI included."[6]
- "The time between starting a company and finding product-market-fit in healthcare takes much longer than traditional tech companies."[12]
- On medication adherence products: "there is a 'graveyard' of adherence companies."[8]
- "Most startups don't even know if their own business is working. Maybe just focus on that first."[8]
- On new EHRs: "This is the modern equivalent of putting your enemies head on a stake to warn you."[8]
On Communication and Education
Learnings:
- Humor is a powerful tool for education: Memes and a conversational tone can make complex topics more engaging and understandable.[5]
- Accessible language is crucial for broadening the conversation: Simplifying healthcare jargon allows more people to participate in discussions about improving the system.[1]
- Writing like you talk makes content more relatable: A conversational style can break down the formal barriers that often exist in healthcare writing.
- Demystifying business models is key to understanding the industry: Explaining how companies make money provides critical insights into their motivations and priorities.
- Curated communities can foster innovation: Bringing together people who are passionate about healthcare can lead to new ideas and collaborations.[2]
Quotes:
- "I do think I'm marginally funny, and that bar in health care is very low."[5]
- "We are all about teaching people how the business of health care works and where the industry is moving by using humor and accessible language."[1]
- "My goal is to write about healthcare in a thoughtful and approachable enough way that people don't feel intimidated in getting involved in the space."
- "Everything at Out-Of-Pocket is meant to be understandable at any level of health care experience and entertaining enough that you'll actually get through the end of the article."[1]
- On his newsletter's mission: "to make the business of healthcare more easily understandable and (hopefully) entertaining."[4]
- "OOP helps you laugh instead of cry at healthcare." (A testimonial featured on the Out-of-Pocket website).[13]
- "This looks unprofessional, what do the pictures mean?" - Nikhil's Dad (A humorous testimonial on the Out-of-Pocket website).[13]
On Patients and Providers
Learnings:
- The patient experience is a viable business model: Companies that prioritize a seamless and user-friendly patient journey can gain a competitive advantage.[14]
- Empowering independent physicians is crucial for innovation: Making it easier for doctors to start and run their own practices can lead to more patient-centric care.[7]
- "Time toxicity" is a significant and often overlooked burden on patients: The time and effort required to manage one's own healthcare can be a major source of stress and is a real cost.[15]
- Crowdsourced patient communities can provide valuable support: Patients are increasingly turning to online forums for practical advice and emotional support that they may not get from the formal healthcare system.[7]
- There is a need for better tools to help patients choose the right doctor: Relying on brand names is not always the best way to find high-quality, cost-effective care.[12]
Quotes:
- On the difficulty of finding the right doctor: "I have friends that have gotten surgeries at brand name hospitals simply because they equate brand name with 'the best', when the reality is that a better/more cost-effective choice is the doctor that's done that surgery a million times."[12]
- On the value of online patient communities: "This is the empathetic and practical part of care that doctors simply can't give without living with the disease. Narratives often work better than checklists."[12]
- "It's time to start betting on the independent physician and building the tools and ecosystem to support that."[12]
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