YC Research: Universal Healthcare

You can see this borne out in the fact every developed country with a universal healthcare plan gets cheaper prices, often for the same or better outcomes than the USA. Including number of doctors per capita, which disproves the "shortages" myth. Domestically in the USA, Medicare squeezes doctors far more than other insurance companies. A "medicare for all" would do even better.

After the libertarians and anarcho-capitalists try to claim superior economic knowledge eventually they must admit simple supply and demand drives prices down in a single payer system.

But then I get the following objection: what about all the R&D that we do? Perhaps all that expensive health care in the USA results in better procedures and medical equipment, better trained doctors etc. ?

To this I say ... OPEN SOURCE DRUGS! http://magarshak.com/blog/?p=93

If you can introduce a patentleft movement in drugs the same as you have done in software, then innovations can come from anywhere.

And failing that, we can always do this compensation model: https://qbix.com/blog/index.php/2016/11/properly-valuing-con...

One reason for the inflated chargemaster prices (e.g. $100 for a tylenol) is that payers (Medicare is a big one) simply negotiate by saying "I'll pay you 50% of your chargemaster". Then when the hospital updates their chargemaster, they tack on another 20% and the payer comes back and says "I'll pay you 25% of your chargemaster".

It's a vicious cycle where the chargemaster prices have no bearing on reality.

I did YC fellowship with a healthcare startup in the clinical trials space. I am one of Watsi's biggest fans(zero hedge) and excited to see them go after this.

Here's some hard things I learned over 8 months entrenched in industry, meeting everyone from Hospital execs to drug development experts.

* The top of the funnel is screwed by food environments in the USA. Completely preventable metabolic syndrome accounts for a large percentage of clinical trials research.

* One of the unfortunate realities in the USA is that a lot of our advanced drug research is financed by metabolic syndrome related drugs. There's 8K clinical trials a year and a non-trivial percentage are from metabolic syndrome related problems.

* We have a patent system that encourages developing drugs that interact with a small number of enzymes and molecules that we already know and understand how they operate. Low, if not zero risk.

* The rules around patenting pathways, treatment methodologies, research tools, and assays are flawed/seem poorly designed. As an outsider looking in, these things seem like a paralyzing bottleneck for the industry. These need to be looked at much closer.

* GPO Squeezing. The manner in which GPOs squeeze medical device companies to create an artificial monopoly and drive prices up has to be examined in a much closer way.

* Ground game & Synthetic chemistry- The reason startups in the pharma space get acquired based on my dicussions with R&D folks at multiple Fortune 500 pharma companies is two fold. 1/ The drug companies have enough sales reps to push product fast. There's massive room for some sort of disruption here to allow small scale medical device and pharma startups to push product. 2/ This one's tough, but the large pharma companies have enough money to do all the synthetic chemistry to go from lab to scale. That's changing though. What used to be a $400M requirement has shifted to a $100M requirement, but we'll see how this evolves. It's a lot different from software. The know-how is extremely well hidden behind private walls.

* Aggregated healthcare and genomic data has little value. There's 68,000 genetic marker tests on the market and 8-10 new ones come out each day. Knowing what they do and/or how they create proteins that block/assist efforts is a monstrously tough problem that isn't waiting for computation, but is waiting for actual experiments on humans.

* The mathematical complexity of drug discovery is hard. Even if the data is maximized, the throughput of discovery is low. We have 7Bn people, 15K diseases, and 3Bn genetic base pairs. Bonferonni Corrections and Family wise error rate abound. We're not waiting for super computers or for an ease of aggregating data.

* The tricky part of selling to hospitals is that you have to create ROI within 6 months.

If anyone here is building a healthcare venture or drug discovery venture and believes I can help, don't hesitate to reach out.

Godspeed.

It would mean that the US uses its leverage to push drug prices down to marginal costs, which would almost be the last domino in payers willing to pay for something like the value of new drugs. But drug development doesn't make sense if you can only charge marginal costs.

The downsides of such a policy are going to be felt long-term; nothing is as simple as "we pay less and they get less".