🔮 Sunday Commentary: Can we escape healthcare’s scarcity traps using exponential technologies?
Today’s commentary is written by EV member Vishal Gulati, a specialist VC investor focusing on companies transforming healthcare using exponential technologies.
Throughout the pandemic we have just lived through, one of the running themes has been scarcity. From PPE to ventilators to beds and then vaccines, antibodies and antivirals. This is not to mention all the scarcity generated by diversion of resources towards Covid-19. In the UK, we now have a massive backlog of elective surgeries and even cancer patients struggling to get access to scarce resources. But healthcare scarcity is not just a Covid-19 phenomenon; if you look deeply enough, you’ll find a scarcity of doctors, hospitals, beds, and drugs in every country and every society—whether they spend less than $1000 per person per year (🇲🇽) or $12,000 per patient per year (🇺🇸).
Meanwhile, in many industries, exponential technologies have virtually eliminated scarcity. Even when people complain about not being able to find something to watch, both in terms of actual amount of content and its wide distribution, it is hard to say that there is scarcity of media entertainment. Will exponential technologies lead to such abundance of healthcare? The most common answer to this question is ‘No, healthcare is special’. This sounds like the familiar ‘Hollywood is special’, ‘Bookshops are special’, ‘Travel booking is a relationship business’ type special pleading but there is, indeed, a stronger case for exceptionalism in healthcare than in many other industries. Not because healthcare can never follow the exponential abundance model, but because the current model of healthcare can not and should not be scaled exponentially to abundance. Much of our existing health system consists of intervention that if merely scaled will not be very beneficial (because these interventions are not very effective or are too expensive). Further, having too much healthcare can be directly damaging (because the side effects of some interventions are too significant).
This makes the challenge for health systems to incorporate exponential technologies even harder. What we need in healthcare is not just a system capable of exponential abundance, but also novel interventions which are able to be scaled without harming people. Invariably, these innovations don’t originate from the centre of existing healthcare systems but from the periphery, and some of them are almost accidental. (Large parts of the Human Genome Project was funded out of the ‘peace dividend’ accrued in US Department of Energy budget following the unexpected end of the Cold War).
One good example of an exponential technology which is now rapidly moving from the outside to the centre of healthcare is genomics. In the early days, when I worked at the Wellcome Trust in 1999, most people either ignored genomics as a crazy idea or derided it as not ‘real science’ because it did not have a hypothesis. Over the last two decades, several medical applications of genomics have emerged and are now making their way into adoption. DNA sequencing is proving to be a base exponential technology which has a wide range of applications across many domains. During the pandemic, one of the technologies that came to everyone’s attention was detection of viral variants. However on a day-to-day basis in clinics around the world, genomics is used to achieve better health outcomes for patients in many different ways. Some of these are shown in a non-MECE table below.