Healthcare is the next big thing in startups.
It's not just about insurance. Once the domain of big pharma and multinational conglomerates, healthcare is now a $3 trillion industry including innovative biotech startups, preventative care, and wellness apps. Sole proprietors and independents (like doulas and midwives) are helping change the way women give birth. A qualified massage therapist will take your insurance, and apps like ZocDoc are already household names.
Changes in the economy and some trailblazing pioneers have made room for startups to move in. The Milliman Medical Index puts the cost of healthcare for the average American family at $26,944. About 57 percent of that is provided by an employer, who is naturally looking for ways to keep costs down, and the other 43 percent comes out of everyday American's pockets.
Another study shows the cost of healthcare set to break $10k per person, estimating that it will rise to $16k by 2025. As the economy recovers, spending on health and wellness will continue to increase. And as more expenses shift from employers to employees, both parties will be looking for ways to save money and streamline the experience.
A Steady Demand
Health and medicine may have an uncertain future as the AHCA looms, but it's a stable market because there's steady demand. People will always get sick. In response to the AHCA, which has yet to become law, the Congressional Budget Office states:
"The ways in which federal agencies, states, insurers, employers, individuals, doctors, hospitals, and other affected parties would respond to the changes made by the legislation are all difficult to predict, so the estimates in this report are uncertain. But CBO and JCT have endeavored to develop estimates that are in the middle of the distribution of potential outcomes."
A simple "we don't know" might have sufficed.
But the Milliman Medical Index shows healthcare costs stabilizing over recent years, with PwC expecting the healthcare industry to equilibrate in 2017.
They paint a particularly rosy picture for what they call the New Health Economy, a more consumer-centric model in which patients spending their own dollars are more empowered. If their predictions are correct, this is exactly the right time for small businesses and forward-thinking entrepreneurs to step in and start solving consumer problems in the fields of health and medicine.
2014-2016 were the three best years to date for biotech companies to score venture capital; $1.5 billion was invested in biotech in 2015 alone. Companies like toothpaste innovators Livionex, who developed a market-ready antiplaque technology that breaks the bond between plaque and teeth at a molecular level, are changing the way we approach dental care. They came close to topping $3 million in annual revenues for that single gem of innovation.
Or look at Sovereign Health Group, an addiction treatment center that has made the Inc. 5000 list of fastest-growing companies in America three years in a row. How is a center that started as a six-bed facility now ranking amongst B2B ventures, IT startups, and consumer obsessions? 1 in 5 Americans struggle with mental illness each year. By reframing the way we view and treat addiction and creating centers that make people feel comfortable to seek mental help, Sovereign has expanded by 721 percent over the past three years.
The Public Wants Nutrition and Prevention
Here's a novel idea if you're looking for ways to break into the healthcare field. Help people prevent illness. Both insured and uninsured consumers are feeling the squeeze of health care costs, and nobody wants to be sick.
For example, HealthyOut is a classic Silicon Valley tech startup (except that it's in New York) that became so popular it placed on iTunes' top ten food app downloads, without the help of marketing or PR. It helps people make healthy, informed decisions while eating out.
American yoga studios have gained 16 million practitioners in the last four years, bringing an increase of $6 billion in sales to the business of classes and accessories. Meanwhile non-medical wellness services, like doulas, are gaining national popularity, and other services not strictly connected to traditional health care, like acupuncture, are also gaining traction.
These all present business opportunities because they represent burgeoning demand. Tailoring your startup vision to meet these consumer markets before they get as big as yoga is a smart entrepreneurial move.
You Don't Have to Market to Millennials
Health and wellness practically sell themselves. And if your startup is B2B, or a trailblazing biotech innovator, you don't have to try to solve the Gordian knot of millennial marketing.
While other startups are tearing their hair out trying to push fashion on aloof digital natives, you'll be sitting pretty, solving problems, and meeting real needs in a dynamic industry.