Silicon Valley Is Too Focused On Taking the Easy Path in Health Care (cnbc.com)

Silicon Valley investors are increasingly looking at health space, but they are mostly eyeing for opportunities on the fringes of the traditional health care system to avoid long and complicated regulatory cycles, an analysis on CNBC shows. As a result of this, these start-ups will not help low-income and chronically ill patients who need innovation most. From the article: Founders often talk about about how challenging it can be to break into the multi-trillion dollar medical sector. Health care startups face regulatory hurdles, long sales cycles and a high burden of proof -- and that means it can take more than a decade to make a return. As a result, many venture-backed entrepreneurs are looking instead at opportunities on the fringes of the health care system, such as cash-only health services that don't require insurance or tests and apps that aren't regulated by the U.S. Food and Drug Administration. For tech investors, these opportunities hold the chance of an outsized return in five years or less. That often valuations on par with consumer Internet start-ups. [...] Many entrepreneurs acknowledge this, but justify their approach by promising to focus on more at-risk groups once they've nailed the product.

Comments

Re:Brilliant

[elrous0]

While I might normally be inclined to agree with you, I have to point out that regulation in the healthcare industry is there for a very important reason. When you're dealing with human bodies and human lives, you need a very carefully regulated system to prevent someone's mistake from turning into a disaster that costs a lot of lives or causes a lot of harm.

For example, those annoying regulations that require extensive clinical trials and testing of new drugs are there for a very good reasons. They're in place to prevent disasters like what happened in West Germany and the UK in the 1950's, when the drug Thalidomide was okayed for sale without adequate testing.

The long game's too risky

[rsilvergun]

There's an excellent chance we're going to move to single payer in the next 20 years. The big money isn't in care, it's in being a middle man that skims 10% off the top. A shift to single payer gets rid of most if not all of those middle men...