Annie Lamont, Co-Founder and Managing Partner of Oak HC/FT
How will healthcare innovation and the role of venture capital shape the future of healthcare? Annie Lamont, Co-Founder and Managing Partner of Oak HC/FT, a leading healthcare investment firm, emphasizes the importance of young, innovative companies supported by venture capital in driving change in the industry. She discusses the need for integrated healthcare financing and delivery, focusing on primary care and value-based payment models. Annie envisions a future where healthcare is delivered in homes through technology and virtual care, with hospitals specializing in acute care. Despite challenges, her optimism about healthcare innovation and value-based care models prevails. Explore the future of healthcare with this insightful conversation.
Annie Lamont is a Co-Founder and Managing Partner of Oak HC/FT where she focuses on growth equity and early-stage venture opportunities in Healthcare and FinTech.
Annie currently serves on the Boards of Advise Health Holdings, Brightline, CareBridge, Main Street Health, Modern Age, Quartet, Rubicon Founders, Truepill, Vesta Health and VillageMD. She is a Board Observer at Precision Medicine Group. Annie is also actively involved with Devoted Health, Komodo Health, Notable, and TurningPoint Healthcare Solutions.
Her prior investments include Aspire Health (acquired by Anthem), OncoHealth (acquired by Arsenal Capital Partners), OODA Health (acquired by Cedar), Poynt (acquired by GoDaddy), American Esoteric Laboratories (acquired by Sonic Healthcare Limited), Argus Information & Advisory Services (acquired by Verisk Analytics), athenahealth (NASDAQ: ATHN), Benefitfocus (NASDAQ: BNFT), CareMedic Systems (acquired by Ingenix), Castlight Health (NYSE: CSLT), CLARiENT (acquired by GE Healthcare), Health Dialog (acquired by British United Provident Association), iHealthTechnologies (merged with Connolly to become Cotiviti), Independent Living Systems, NetSpend (acquired by TSYS), Oak Tree (acquired by Oxford), Odyssey Healthcare, PayFlex Systems (acquired by Aetna), PharMEDium Healthcare (acquired by CD&R), Point Carbon (acquired by Thomson Reuters), Psychiatric Solutions (acquired by Universal Health Services), TxVia (acquired by Google), United BioSource (acquired by Medco Health Solutions) and Vesta Corporation.
Annie has been featured on Fortune's Private Equity Power Players list, Barron's 100 Most Influential Women in U.S. Finance list, Forbes' 50 Over 50 list, WSJ Pro Private Equity’s Women to Watch list, Fortune’s Top Investors in Health Tech list, Private Equity International's Women of Influence in Venture Capital list, Modern Healthcare's 100 Most Influential People list, Institutional Investor’s FinTech Finance 40 list, CB Insights & The New York Times’ Top 100 Venture Capitalists list, and Forbes’ Midas list. She was the first recipient of the National Venture Capital Association’s award for Excellence in Healthcare Innovation. Annie was also honored with the Healthcare Private Equity Association’s Russell L. Carson Award for Lifetime Achievement in Healthcare Investing. She also served on the Stanford University Board of Trustees and the Executive Board of the National Venture Capital Association.
Annie received a Bachelor of Arts degree from Stanford University.
Show Notes
Annie Lamont shares background, starting with her early entry into the venture capital industry. [03:35]
She attempts to suspend listeners' disbelief as she shares her vision for health care in 2049. [04:47]
Where should health care be delivered in the future? [08:45]
Will we have a virtual first system? [11:01]
Will technology be responsible for the first line of care? [12:49]
What will be the role of the doctor and nurse? [14:26]
Where will health care innovation come from? [17:54]
How can companies scale and grow to a critical mass to serve communities? [21:29]
What’s the role of insurance companies in 2049? [24:24]
What will be the role of the hospital? [26:10]
Will the healthcare system be more or less political? [28:15]
What will the politics around local hospitals look like? [31:12]
Transcript
Jason Helgerson 00:04
I'm Jason Helgerson and you're listening to Health2049.
Annie Lamont 00:08
Innovation is what the venture capital community does. And I think when you're a legacy company it is very, very hard to disrupt, to actually rethink how things are done to get the talent that's focused on how to rethink things are done and then break things and improve things and break things in healthcare. I'm very much about, people are involved, these are human lives we're touching. So you can't break care delivery and you cannot break that side of it. But I think rethinking some of the approaches to care delivery will really only happen or 80% will happen with young innovative companies supported by the venture capital community.
Jason Helgerson 01:40
Annie Lamont is a highly esteemed healthcare investor, as Co-Founder and Managing Partner of Oak HC/FT, one of the leading healthcare investment firms in the country. Annie brings a wealth of knowledge and experience to the table. Throughout her entire career, Annie has dedicated herself to investing in groundbreaking companies, making her a true authority in the healthcare landscape. Her keen understanding of the industry and where it's going enables her to stay ahead of the curve and identify promising opportunities. Annie's accomplishments extend beyond her investment prowess. Annie has been a trailblazer for women within the financial industry and often serves as an inspiring role model for female professionals. She has been featured in Barron's 100 most influential women in US Finance, Forbes 50, over 50, and the Wall Street Journal's private equity Women to Watch. She has also received numerous industry awards, further solidifying her status as an outstanding figure in her field. With her exceptional experience and exposure to cutting edge ideas in health and health care, there couldn't be a more fitting guest for our show. I'm Jason Helgerson, and you're listening to Health2049. And it's my pleasure to welcome Annie Lamont to the program. Annie, welcome.
Annie Lamont 03:23
Thank you, Jason. Love the intro. Thanks.
Jason Helgerson 03:27
Well, in addition to the intro, there's a lot more to your story. Maybe you can tell our audience a bit more about your interesting background.
Annie Lamont 03:35
Well, I went to Stanford and got out of Stanford at the time when Silicon Valley was really in its nascent state, but beginning to have green shoots. And I was fortunate to enter the venture industry right out of college, in the form of boutique investment bank, venture firm that took Apple and Genentech public in the first three months that I was out of school. So it's been really wonderful, over 30 years and in the venture capital world, and there's nothing more satisfying than working with entrepreneurs and helping dreams come true that actually positively transform the world. So I've been incredibly fortunate.
Jason Helgerson 04:20
Well, great. So very excited to have you on the show today because as I said in the intro, your background and experience and the fact that you see really new ideas coming across your desk from entrepreneurs, or would be entrepreneurs basically on an everyday basis. I think this positions you well to answer the core question we ask all our guests, which is what does health and healthcare look like in the year 2049?
Annie Lamont 04:47
I love this because hopefully I can suspend listeners' disbelief as well as mine in terms of the current state of health care. Let's actually start from the regulatory framework, because that is so much how we finance healthcare, and how we measure it is so impactful in terms of where we're going, and I am affecting people's actual individual daily health. What I'd start with actually is from a government perspective, we really need to look at all the conditions which create poor health and affect our health. When you think about those, like financial buckets, housing, mental health, new food, think about different programs around nutrition, the SNAP Program, employment workforce, all those things actually, at the end of the day, affect our health, and yet, they're all in different buckets. They're not in HHS, they're not CMS when you think about HUD and SNAP Programs, everything is spread out across the government. In my dream world, including Medicare and Medicaid, the fact that Medicaid is run by states and is different in every state, and Medicare is run obviously federally, that if you could put Medicare and Medicaid together, not every head of Medicaid in every state would be happy, perhaps with my saying hat. But I think the reality is, if you look at dual eligibles, and where the sickest are, this convergence and coordination, and how we finance, health care, all really needs to be in one bucket. And if you can put all of those financial resources and link those capabilities together, that would be a good start and incredibly powerful. From an innovation standpoint, and how we have to think about financing at an impacting behavior on the ground with just specifically the medical profession, I am so all in on primary care, or doctors and providers taking risk, and owning a patient for a very long period of time. If you don't and are not responsible for the total cost of care, and for the quality outcomes of your patients, then we're never really going to change the system. And I think that is fundamental, we have beginnings in terms of primary care doctors taking risk on patients that are beginning and it's really just in the Medicare Advantage bucket that people are doing that successfully right now. But I think we need to think of it much more holistically and have a population that is driven by primary care and the doctor side of it, where they're actually financially aligned to think about your overall health over the long term versus coming at it from a payer perspective, that's completely separate from the care delivery model itself.
Jason Helgerson 07:56
Great. So two, I think big themes there. One is the convergence, particularly in the public programs and trying to get greater uniformity across the country and bringing those two giant payers Medicaid, Medicare together. And then the move to value-based payment and aligning incentives and hopefully empowering those primary care providers to do everything they can to keep people out of hospitals, two really big key themes. Let's just say for instance we achieve those things. What could that potentially unlock or mean for actual delivery of care in terms of the patient experience, the provider experience? If we achieve your bold vision for financing, what do you think that would then ripple through to in terms of how services are actually providing carers experience?
Annie Lamont 08:45
Okay, so if you think about how care should be delivered in the future, care should be delivered in your home. We spend very little time in a doctor's office, hopefully very little time in the hospital. And what we should be doing is influencing the day to day behaviors of individuals and supporting them in their homes, and in their daily lives. And so when you think about care delivery, certainly 30 years from now, we will have sensors, we will have prompts, we will have the ability to help people manage their health care day to day. We will have caregiving, most of it virtual, and everything should be about the least cost setting to deliver the care. Obviously it should be about impacting the quality of care, but if you can create something where we are experiencing support for our health care day to day, versus thinking about it as that episodic visit to a provider, then that is where you're going to get the bang for the buck, the impact on our health outcomes, as well as far cheaper support system for health care.
Jason Helgerson 10:03
Right, so this idea of moving more services out of institutional settings, even out of doctor's offices and back into the home and using technology to make that reality a very compelling, exciting vision, certainly from the patient's perspective of the convenience of not having to leave their home for care. How far do you think we go in the next 30 years in the sense of, is our healthcare system in 2049 a virtual first, meaning that the first point of care or where we try to get our services met is virtually in the home? Do you think we get to that point where almost everyone is receiving services in that way, first and foremost? Or do you see more of a hybrid system where individuals continue to go to doctors offices as a first point of care, just interested to see how far you think technology will go in 30 years?
Annie Lamont 11:01
I think it will be virtual first, think about holograms, think about all the technology that can be used, where we can diagnose people, and we can help experience them in a more realistic way. If you think about 3.0 3D, as we think about virtualization, it's really going to take on a different, 3D perspective than it has today. I don't think we're going to obviously eliminate in person, there are elements that one needs, once we get into the stage of actually doing things to people, then you're going to have to see them in person. On the diagnostic side and the prognosis side, I just think that most of that can be done virtually. I think in 30 years, we will absolutely be in a world where we can support people through technology where that is allowed. I mean, that is not so that I don't think in person interactions are valuable. I think today they're very valuable, people having that human connection, incredibly valuable. But I do think through technology, we are going to be experiencing each other in a different way in 30 years.
Jason Helgerson 12:13
And then along those lines, how much of that virtual care is actually provided by humans, just through a virtual portal, versus how much of that you think is actually provided by machines with artificial intelligence and such, advancing obviously at a pretty rapid rate today, but 30 years in the future, even more advancements, how much do you think that first line of care for your average individual person is actually not by a human being but by a machine?
Annie Lamont 12:49
Well, I probably have a different answer today than I had a year or two ago around that. And I do believe that these MLMs, chatGPT, openAI, I think that large language models will change things dramatically. And while I don't think the replacement of doctors is the first thing that's going to happen, I think it'll be more about initially, workflow, automation, efficiency, really more administrative, but I do think that it's going to work its way into clinical more rapidly than people would think right now. And so I think even 10 years from now, there's going to be a number of first interactions that can happen quite successfully with Generative AI.
Jason Helgerson 13:40
Interesting, and I agree with you, I think that my view on the issue has changed as well in the last 12 months. And then my view in terms of the future is even continuing to evolve and feels like almost daily in terms of how much additional change is going to be seen. But all of this suggests that potentially a changing role of the doctor, the changing role of the nurse in the healthcare system, with these advances in technology and artificial intelligence, do you see that the role of the doctor in the healthcare system, let's just start there, do you think that role is going to be fundamentally different than it is today? How will technology affect what they do on a day to day basis?
Annie Lamont 14:26
I think initially technology depending on what kind of a doctor you are, if you're a surgeon, or to replace that will take a long time. Some surgeries can be assisted through robotics, but I do think on the front end, we need to leverage the primary care system that we have. So I think in most cases this will be an augmentation, making doctors more efficient, allowing them to focus on the direct clinical care as opposed to the administrative side of it. I think, on the nursing side, I do think that there are so many nurses in call centers now responding to questions where a lot of that in the future can be done through automation. through Generative AI, and I do think that nurses in person will be more important, nursing in the hospital, direct nursing care supporting those who are truly sick and truly in need of either surgeries or treatments. My hope is that most nurses are actually in that in person function, and the things that we can do with nurses that are knowledge base that can be automated, that that happens, that that becomes a more automated function in the next decade or two that's supported by technology.
Jason Helgerson 16:03
Yeah, I agree with you. One of the things that makes me optimistic about technology is that the World Health Organization came out with a global study that said by the end of this decade, based on the current models of healthcare globally, we're going to be somewhere between 18 and 20 million short in terms of the number of healthcare workers, and that there's virtually no way for us to train our way or educate our way out of that global shortfall. And that the only real way to meet the needs of an aging population, a growing population is automation. And so I think in some ways, my view is that whether some people like it or not, we have to automate, we have to change the rules, and we just won't be able to keep up with demand otherwise. But one of the other questions I've been very eager to ask you about is you said you started your career in venture capital, and in the early very formative period of Silicon Valley, and had been involved in this ecosystem of early stage company, how do you view the role of the private sector, the role of early stage companies in sort of achieving your vision? Do you think the big ideas, the new innovations, the new care models, are they going to be coming from these new companies, these new early stage companies as opposed to say, for instance, your big insurance companies or your big hospital systems, the sort of traditional dominant players of American healthcare and how big of a role do you see this early stage, the sector playing and in creating the new, better world?
Annie Lamont 17:54
Honestly, I think it's the only way we have innovation occur in health care. And I think you can almost prove that out by looking at other countries that are driven by hospital systems, where there's virtually no innovation in Canada, the UK, they're certainly looking to us for the whole model of virtualization home care, and how do we think about the evolution of that? And I think that while venture capital and private equity have gotten, for some reason, a bad name, I think people feel like not-for-profit, healthcare versus for-profit, health care, is highly different. I think the reality is there would be very little innovation without the venture capital community in healthcare. And I will say if you think about not-for-profit healthcare, like in hospital systems, the reality is for-profit versus not-for-profit, there is nothing not-for-profit about a hospital system where every decision is made by a doctor who is actually for-profit. So I think that it's actually a very strange moniker that really is very little different. Other than, certainly there are hospital systems in parts of New York City, where a for-profit may not go. But I think beyond that, if you sat in the boardrooms of for-profit versus not-for-profit hospital systems, they would sound exactly the same. So I'll leave that aside. But I think the reality is innovation is what the venture capital community does. And I think when you're a legacy company, it is very, very hard to disrupt, to actually rethink how things are done, to get the talent that's focused on how to rethink things are done and then break things and improve things and break things in health care, I'm very much about, people are involved, these are human lives we're touching. So you can't break care delivery, and you cannot break that side of it. But I think rethinking some of the approaches to care delivery will really only happen or 80%, let's say happening with young, innovative companies supported by the venture capital community.
Jason Helgerson 20:17
All right. Well, I agree with you and I'm very optimistic that not only are some of the companies that have been created in the recent past that are now maturing and growing, scaling, but also new ones that will come, ones that we don't even see yet. Maybe you see them, but most of the rest of the world hasn't seen them yet, and will also be at the vanguard of innovation. But I think one challenge that a lot of these companies have faced has been that challenge of scaling, that the health care tends to be a service that's provided on a local regional basis and a lot of those nonprofit hospital systems have monopsony power and make it very difficult for new entrants. But that's changing and we are seeing some scaling, we're seeing some success in models in various markets and in types of services and I'm just wondering what your thoughts are on, as you look to the future, the ability of these companies to scale to grow and get to a critical mass in service in communities that they really do supplant, replace, threaten the status quo?
Annie Lamont 21:29
I agree with that. So it's interesting, we actually have invested in very few companies that sell products, software, to hospital systems, for example, because it's a very difficult world to sell into, what we have done is either create providers ourselves that are thinking differently, or I think we've backed 28 payer facing companies that are sometimes providing a service in a different way, or sometimes are principally software that are automating things. But I do think that it is possible to create companies that are not part of hospital systems, and healthcare systems that actually create change. And it could be as models like Aspire was in reinventing palliative care, thinking about it differently, where you're providing, in that case, we're providing virtual care, supporting those who are probably not going to live past a year or two. And they were identified through either their doctors or an algorithm that said that and it wasn't, you're immediately going into hospice care, it was, let us help you and support you so that you don't end up in the emergency room seven times this year. Let us make your life easier, let's support you virtually and in home and make the journey for the caregiver, whether it be a family member or the individual who is dying, let's support you in this journey. So, I think there are companies like that, you don't have to really worry about the local hospital system, because you're just providing a service that's needed and is supportive. We could go on and on in terms of mental health care, and social determinants of health where we're working with payers in various markets. So I think there are many different ways to go about this without actually selling products to hospital systems.
Jason Helgerson 23:41
Gotcha. So the dominant players of American healthcare for the past, however, many decades have been insurance companies and hospital systems. I'm interested in what you think those two actors look like in 2049, let's start with the payers with the insurance companies in terms of what they look like in the sense of, are they continuing to play a similar role? Do they evolve because of virtual care into actually providing more direct services? Or do they contract with organizations in fundamentally different ways? I mean, what do you see is the role of insurance companies in the year 2049?
Annie Lamont 24:24
Well, I don't know if you're familiar with Devoted, but Devoted is a Medicare Advantage plan right now, across many states, essentially driven by virtual care and then linking into local care, they started as payer, and they're becoming providers. And if you think about what United has done with Optim and the number of providers that they have purchased and are now part of their system, I think in the end, I think they're are thinking correctly, that the reality is if you're not integrated, if you don't own a large portion of the primary care and some specialty in America, this taking risk on people's lives, that you're not going to be relevant in 30 years, that that is the way the world is going. I think the payer's see that. And you've got to really integrate care delivery with risk, because that is going to be the most powerful way to take the most cost out of the system and take the best care of individuals. If you're just a payer, trying to impose on people, it’s very difficult.
Jason Helgerson 25:44
Gotcha. So then let's move to hospitals in the sense of, I've personally said that I think in 2049 we might not even call them hospitals, because the fundamental role that they play in the system will be very, very different. And we may actually have a different name for them. But maybe that's a little controversial, but I'm wondering what your thoughts are relative to the role of hospitals and 2049?
Annie Lamont 26:10
Yeah, if we're just focusing on the hospital portion of healthcare systems, I think that the hospital just becomes more and more acute. There's no question that we need great acute care, ICU, general acute care and taking care of individuals, certain surgeries that are very serious need to be done in a hospital environment, we want the best excellent care in America. And so I think what's going to happen is, you're going to have fewer and fewer hospitals, but you are going to have hospitals that are dedicated to the most extreme needs of the population. The rest will be done outside the hospital system and will be supported and even right now, I mean, you have ambulatory surgery care, so many surgeries can be outpatient, don't even need an overnight stay. We're already evolving that every day. I'm always amazed at how many ambulatory surgery centers are continuing to be created, that there is a continual need. And every day in every specialty, we're perfecting surgeries, and allowing people to move out of the hospital setting faster and faster, which is brilliant.
Jason Helgerson 27:28
So one final question for you, Annie, the subtopic that we frequently talk and ask our guests on is the role of politics in health care. And it definitely feels as if health care in some fundamental ways become more politicized, of late as from the Affordable Care Act, but even beyond that. I'm just wondering what your thoughts are. Do you think health care is going to be less political, more political, about the same in the year 2049? And do you think that the political debate of today and the political nature of health care today, do you see that potentially as an impediment to your otherwise very positive view of the future?
Annie Lamont 28:15
That's such a great question. I would say. It's interesting. I think that on the drug side, you're beginning to see green shoots there. There's a little bit of consensus between Republicans and Democrats on that and trying to control drug costs. Now, we do have the most amazing innovation engine in the world. And we all want to benefit from that, both of my parents died of Alzheimer's and absolutely, I want biotech and pharma companies investing in that. And so my view is, we need the rest of the world to pay up, we are subsidizing the rest of the world. So I think the feds are gonna have to take that on and when they negotiate globally, and get to the G20. Like this is never on the table, it needs to be on the table. So, I think that is, let's just put that aside. But I think the thing I see that's most intransigent and most difficult is the stranglehold of hospital systems. If you think of analog, we have wonderful hospital systems in Connecticut and across this country that are doing great work, but I do think there is, if you look at the boards, most of their boards are often local individuals that are protecting the monopoly and that is very challenging. And so I think change is extremely difficult when it comes to moving the dial in terms of how hospital systems are formed. Closing a hospital is, even if there's a hospital 15 or 20 minutes away, closing a hospital is extremely difficult because people love their local hospital systems. So that just creates a cost problem that is very hard. Citizens don't understand that. All they know is they want their hospital 10 minutes down the road, that gives them comfort, and I really understand that. So I think that's going to be probably the biggest challenge is how we think about our hospital systems because they're loving, and other than Walmart, hospitals and healthcare systems are the largest employers across America. So they have an enormous amount of clout from their local boards to also the number of people they employ.
Jason Helgerson 30:47
Yeah, absolutely. Are you optimistic that the politics around your local hospital will have changed by 2049? In the sense that maybe technology or others will have changed? Maybe the perception of how health care could and should be provided and less institutional focused? Or do you think that we'll still be struggling with that issue as a political challenge in the future?
Annie Lamont 31:12
Well, I'm a venture capitalist, so I'm always optimistic. I think that will continue to be a challenge. I do think that hospitals systems and there are many of them that are thinking about being more value-based, creating more arrangements, I think there will be more because of the aggregation of primary care doctors and specialists across the country that are creating a countervailing force to hospitals themselves. And I do think that there are hospital leaders and we have them locally that are absolutely thinking about, what does the world look like in 10 and 20 years? And how do we make sure we maintain relevance and do the right thing by our patients. So I think ultimately, we will get there.
Jason Helgerson 32:01
Well, great. Thank you so much. I appreciated a wide ranging conversation and covering a lot of ground in our 30 plus minutes, but thanks so much. And that was Annie's vision for health in the year 2049. As always, thank you for listening to Health2049. If you enjoyed what you just heard, please subscribe on Apple Music or Spotify and share this podcast with a friend. Thank you and see you next time.
