Sep 23, 2015 · 19m · 20vc
20 VC 074: The Future of Healthcare with Bob Kocher, Partner @ Venrock
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In this episode of The 20 Minute VC, host Harry Stebbings interviews Bob Kocher, Partner at Venrock and former Obama White House healthcare advisor. Bob shares insights on data liberation, payment policy reform, telemedicine, and how venture capital drives innovation to eliminate administrative waste in U.S. healthcare.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 28.3% of the talking time here. How this is scored →
Harry as informed peer 1.7 Guest teaching 3.3 Guest disagreement 0.3 Harry pushing back 0.0
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 12:22 Rejecting regulatory barrier premise
Bob flatly rejects Harry's premise that regulation prevents disruption in healthcare, asserting instead that regulators actively seek productivity and cost-reducing innovation.
Hardest push from Harry ▶ 15:27 Pressing on policy versus private sector impactHarry pushes Bob to compare his political influence with his current VC role, challenging him to evaluate where he truly has the greatest opportunity for healthcare impact.
Biggest teaching moment ▶ 11:23 Revealing healthcare administrative bloat statisticsBob educates Harry on healthcare's systemic inefficiency, pointing out that doctor-to-FTE ratios have worsened to 1:16, with 9 administrative staff per doctor.
Harry holds his own ▶ 8:43 Citing Marc Andreessen software thesisHarry demonstrates industry domain knowledge by invoking Marc Andreessen's famous 'software is eating the world' thesis to steer the conversation into consumer healthcare integration.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Guest Welcome and Episode Transition | 1 | 1 | 0 | 0 | Harry opens with standard background questions regarding Bob's transition from the Obama White House to Venrock. Bob responds cordially, describing how skills in political problem-solving translate to venture capital. | |
| Structural Healthcare Shifts: Data Liberation and Payment Reform | 1 | 5 | 0 | 0 | Bob provides deep policy and economic insights on how the ACA and High Tech Act drove data liberation and payment reforms. Harry listens passively as Bob explains the shift toward risk-based Medicare models. | |
| Healthcare IT Startup Growth and Market Adoption Barriers | 2 | 4 | 0 | 0 | Harry asks about market adoption barriers and whether startup supply matches healthcare demand. Bob outlines how incumbent profitability and hospital consolidation temper the pace of adoption despite increased startup funding. | |
| Consumer Healthcare Integration and Telemedicine Innovation | 3 | 5 | 0 | 0 | Harry references Marc Andreessen's thesis on software to ask about consumer healthcare integration. Bob educates Harry with detailed metrics on Doctor on Demand and highlights how administrative overhead bloat plagues health systems. | |
| Regulatory Realities and Scaling Systemic Healthcare Solutions | 2 | 4 | 2 | 0 | When Harry asks about regulatory barriers to disruption, Bob explicitly rejects the premise, explaining that regulators desire cost reduction and productivity. Harry also queries Bob on his partner David Pakman's behalf and asks Bob to compare political versus private sector impact. | |
| Quickfire Round: Influences, Quotes, and Lyra Health Investment | 1 | 1 | 0 | 0 | Harry runs through a rapid-fire series of personal questions covering books, quotes, and recent investments. Bob offers concise answers highlighting his investment in Lyra Health and learnings from health policy books. |
Statements from this episode (17)
Bob Kocher was one of the key shapers of the Affordable Care Act
“In the Obama Administration, Bob was one of the shapers of the Affordable Care Act.”
Kocher: Building exemplary companies is the key to reforming US healthcare
“My theory of the case was that the way to make healthcare change in America more was to make more companies that show people the way.”
Kocher: HITECH Act drove 90% hospital and 80% doctor computer adoption
“We gave roughly thirty billion dollars to doctors to buy meaningfully used computers and to hospitals, and today we have about 90% of hospitals and, you know, 80% of doctors using computers”
Kocher: Medicare targeted 80% of payments in risk models by 2018
“Medicare announced recently that their goal is to have 80% of payments in risk models by 2018 and that they're moving forward with new types of payment models like bundle payments”
Kocher: Hospitals and insurers are willing to buy from early-stage startups
“They've been jolted enough by the changes in the U.S. Healthcare economy that they're willing to take risks of trying products From earlier stage companies that, you know, may not pass the SOX to compliance, you know, tests that they used to put you through.”
Kocher: Improved ACA margins allowed hospitals and insurers to slow tech adoption
“For the last couple years, quite frankly, the incumbents have done pretty well, and so with the expansion of coverage, there's been a nice uptick in volume of paying customers, and the bad debt that used to plague hospitals and doctors has gone down, and so ma…”
Kocher: Provider consolidation lets hospital systems raise prices and delay productivity reforms
“We've had a lot of consolidation on, on the provider side which allows those systems to raise prices and therefore feel less pressure on productivity.”
Kocher: One-third of healthcare visits can be handled via video
“And it so happens that about a third of all healthcare visits can be handled over video from your home, you know, with a one minute waiting time for 40 bucks, which is about 30% of what it costs to go to a doctor's office and about three hours faster.”
Kocher: Telemedicine patient NPS is 70-80 versus 17 for doctor offices
“The net promoter scores from patients when they use video telemedicine are in the seventies and eighties. When they go to a doctor's office, it's like 17.”
Kocher: Specialist doctor matching yields better clinical outcomes at lower cost
“Matching a patient to a person that's very expert at their exact problem and their exact procedure leads to better outcomes and lower cost because there's fewer complications.”
Kocher: U.S. healthcare has nine administrators for every physician
“So one of the amazing statistics about U.S. Healthcare is that for every doctor there are 16 FTEs walking around behind that doctor doing stuff, and of that 16, nine of them are administrators. That ratio has gone from one to 10 to one to 16 in the last 20 yea…”
Kocher: Hospitals require 0.5 FTEs per bed for billing and collections
“It takes half an FT per bed to bill and collect for patients in a hospital.”
Kocher: Healthcare regulators won't block tech that lowers costs
“Most investors and entrepreneurs at first think that regulatory risk is a big problem and really complicated. Regulators since I was one of them are seeking to make the healthcare system be more productive and lower cost. And so technologies and approaches tha…”
Kocher: US healthcare system contains 30% waste
“The US healthcare system has 30% waste highly erratic outcomes, and unnecessary complexity,”
Kocher: Venrock prefers horizontal healthcare platforms over niche solutions
“And so I prefer ideas that Go after bigger parts of the pie and aren't sort of working on just one type of patient with one type of disease for, you know, one type of thing. And so I prefer more horizontal thinking than, you know, narrow niche-y things.”
Kocher: Private startups, not regulation, will drive healthcare disruption through 2025
“And then over time, you know, there'll be future regulatory changes to you that probably cement some of these changes and push us further forward, but I bet for the next decade the disruption comes from the private sector, and so I feel happy to be here.”