A rising star at Andreessen Horowitz explains why companies that make drugs will start delivering healthcare in 2020

Lydia Ramsey

Dec 23, 2019, 18:52 IST

A rising star at Andreessen Horowitz explains why companies that make drugs will start delivering healthcare in 2020

Andreessen Horowitz general partner Julie Yoo thinks 2020 will be the year pharmaceutical companies get into the business of providing medical care.
"The next generation of therapeutic companies are going to have to build competency around care delivery and logistics," Yoo said.
Yoo focuses on investing in all the ways healthcare is paid for and provided to people.
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In 2020, pharmaceutical companies will start to play a bigger role in how their treatments get administered.

That's according to Julie Yoo, Andreessen Horowitz's newest general partner on its Bio Fund. Yoo was brought on to the team in October to focus on investing in all the ways healthcare is paid for and provided .

As more complex treatments that rely on individual's cells get approved, hospitals may not have all the tools needed to administer those treatments, Yoo said. That's where the drugmakers come in and provide the services needed to administer the treatment in addition to the treatment itself.

"The next generation of therapeutic companies are going to have to build competency around care delivery and logistics," Yoo said.

To date, Andreessen Horowitz has launched two biofunds, which in total have $650 million to invest in startups focused on the intersection of biology and technology, like diabetes startup Omada Health and Freenome, a company developing a cancer-screening blood test. The firm has also made some bets on healthcare companies like health insurance startup Devoted Health.

Yoo joined Andreessen Horowitz earlier in 2019 as a partner after nearly a decade working at Kyruus, an enterprise software company she cofounded that helps health systems match and schedule patients with doctors within the system.

Earlier this year, Yoo was featured on Business Insider's list of the 25 rising stars in venture capital.

An end to one-size-fits-all primary care

In 2020, Yoo also expects primary care to have its moment in the spotlight.

So far, venture-capital and private-equity investors alike have taken an interest, pouring hundreds of millions in funding into primary care. Health systems are trying new approaches to paying primary-care doctors, and the federal government is introducing new ways to pay for care for some Medicare patients as well.

In particular, Yoo expects an unbundling of primary care.

That is, rather than a general approach for all patients, models will form that are specifically built to care for seniors 65 and older, women, or those on Medicaid. Others may be more tailored to whether patients need more continuous care or more hands-off services.

Re-evaluating HIPAA in the age of AI

When it comes to health data, Yoo expects 2020 to be the year when lawmakers start to reevaluate some of the protections in place, such as the Health Insurance Portability and Accountability Act, the 1996 law that is meant to protect the privacy of patients' health information while allowing health systems to share it with business partners.

"I do think that there will be proposed legislation around redefining the roles of HIPAA," Yoo said.

That's coming in light of Google's work with the health system Ascension that raised questions about how patient data was being used.

When it comes to using patient data to train artificial intelligence, that wasn't necessarily a use the law anticipated more than two decades ago, she said.

What's next for digital health startups

As more Americans go uninsured and as more Americans who are insured get exposed to high out-of-pocket healthcare costs, Yoo said she anticipates a different kind of price-transparency conversation going on in 2020. That might involve more consumer-facing models that provide healthcare services for a cash price.

Finally, Yoo predicts some of the more mature digital health companies that have gone public or gotten to scale will start acquiring startups. That'll be a change from the usual acquirers of traditional healthcare companies or even tech giants like Amazon.

"Now that there are a cohort that are at scale such that they can be the acquirers," Yoo said.