There’s long been chatter about the analogies between financial services and healthcare. Both are massive, regulated markets with technological adoption challenges, legacy oligopolies, and tons of customer pain – and even fear. Both exhibit opportunities at the data and infrastructure layer, as well as in new B2C and B2B products, reports VC firm Andreessen Horowitz.
But most of the wildly successful fintech companies haven’t done much in the healthcare sector. Why? The unique laws of physics of our $4 trillion healthcare system, primarily a result of third-party payor (e.g. insurance carriers, self-funded employers, and government entities) and esoteric regulatory dynamics, make healthcare a hard market for a generalist company to go after. For this reason, our bet is that dedicated, healthcare-specific fintech companies will win in this space – although many lessons learned from general fintech can certainly be applied.
What big, hairy problems could these vertical-specific fintechs tackle? One way to answer this question is to look at the most important incumbents in healthcare financial services, and unbundle their components to identify opportunities for substantive improvement and areas of unmet need. Read more.
