Patrice Martin

Another large funding round in the virtual behavioral health space. It's interesting to note Talkiatry's focus on a physician-centric care model with W-2 providers, as opposed to most of the other players who are delivering care with 1099 mid-level therapists. However, it's still not clear to me how they are measuring care quality and outcomes, which is the foundation of true value-based care.

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Looking forward to discussing how changing demographics and culture norms are affecting investment opportunities in longevity, health and well-being at The Care Summit today Alongside Cake Ventures' Monique Woodard, Ziegler's Dan Hermann, Oak HC/FT's Billy Deitch and JPMorgan Chase & Co.'s Jennifer Edwards, we’ll dive into the trends shaping how we are investing in the space: - Last year marked one of the most significant social and economic moments in modern times: The number of older adults—those aged 50 and over- surpassed the number of children under the age of 15 for the first time. - In 2020 the 50 plus population contributed $45 trillion to global GDP, or 34% of the total. That equates to about 3x the revenue of the world’s 100 highest- earning companies in 2020. - The U.S. population grew by 24.5 million from 2010 to 2022, and Hispanics accounted for 53% of this increase – a greater share than any other racial or ethnic group. - Women around the world and across all ages drive 64% of consumer spending

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Still feeling energized from last week's roundtable on building successful relationships with hospitals. We invited 7 portfolio companies and health system leaders from Mayo Clinic, Cedars-Sinai and UCLA Health. The founders shared their questions ranging from the strategic to the nuts and bolts of closing partnerships. For example, how do you determine what measures of effectiveness help drive alignment? And how do you get all the stakeholders together to actually drive a decision. Answer: put them all in a room for half a day! “I think we're in a pivotal moment regarding how we assess AI. There are numerous risks currently dominating AI discussions, particularly those concerning bias and other associated risks. However, there's a notable absence of focus on evaluating the proactive value of AI. We need to consider what AI actually offers and what we want it to offer. It's not solely about determining whether it will cause harm; people are apprehensive about how this technology will be implemented. One perspective gaining traction involves ensuring the product's validation process is robust enough to prevent risks to various populations.” -Vladimir Manuel, Medical Director at UCLA Health From Vlad's comments above to perspectives others shared, we heard a sense of excitement for the promise of #AI and other new technologies. But we're also in a unique moment where the risks are not well understood. Still much to do here.

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Someone broke down the estimated costs of a $15 Sweetgreen salad. We need these cost graphics for digital health to help future founders. Especially for tech enabled cos, the greatest cost is labor. Much of the "value created" is in curation and matching, which means the gross margins are reliant on labor arbitrage. Pay someone $X, but get paid $X Y% per visit. The challenge with healthcare is that you often have to pick one of two business models: 1. specialized, low volume, high cost, low gross margin % 2. generalized, high volume, low cost, high gross margin % I'd argue founders should focus on gross dollars over the lifetime of the customer (like Jeff Bezos said) instead of gross margin %'s, but we'll leave that for another time. The challenge is that many tech enabled digital health cos have high cost of goods sold (labor) and moderately high product, design, and engineering budgets. We must build differentiated solutions for patients, clinicians, and clients to be out incumbents, however, we're realizing that companies are ultimately valued on the discounted value of future cash flows. And the high SG&A costs at most organizations might be inbalanced to the unit economics of the business. I'm not sure the math pencils out for everyone unfortunately. But I'm just a guy on the internet, would love to hear the thoughts from those smarter than I (you!). Comment below. --- p.s. I have no idea the accuracy of the graphic and not an investor in Sweetgreen. Cheers. Credit: David Crowther

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