Fixing a $4 Trillion problem: Bundling Health & Healthcare

An idea for solving an ever-growing healthcare problem by rethinking healthcare from first principles.

The U.S. spent nearly $4 Trillion in healthcare in 2022. Our healthcare spending alone is larger than the total annual expenses of every other country on earth, besides China. This has grown from 5% of GDP in 1960 to nearly 20% this year.

It gets worse. Compared to other developed countries, our return on $4 trillion results in worse health outcome. We are among the highest in death rates for treatable conditions, maternal and infant mortality, and suicide rates. We have the highest rate of people with multiple chronic conditions, and an obesity rate nearly twice the OECD average. Many of the reasons for this is because healthcare only gets involved at the time the patient is sick. This is a flawed way of thinking and will not result in improving the health of our citizens. This has become a national crisis, but as with many complex & inefficient systems, everyone seems to be complacent with the current state of healthcare. We need to fix this — the health of our country literally depends on it.

This post will discuss some of the high-level problems in our healthcare system, a few examples of innovative companies I have been inspired by, and an idea of re-thinking healthcare from first principles, which I refer to as ‘Concierge Health’ that can revolutionize how we bridge the gap between “health” and “healthcare” by providing an team-based digital-first approach that puts personal trainers and nutritionists at the forefront of a patient’s health and provides an A+ experience for customers that people have come to expect from companies like Apple and Tesla.

The main problems in our Healthcare system

There are many problems in our healthcare system today and it’s difficult to address all of them, but here’s the main themes:

  1. A Volume-based business: we have a traditional fee-for-service model which incentivizes healthcare providers to focus on the quantity of care rather than the quality or outcomes. This means for every service you are provided, the provider bills your insurance and makes money. This can lead to unnecessary treatments and higher costs without necessarily improving patient health. This is why a doctor at the urgent care the other week suggested I get a COVID test, when it was very obvious I only have a cold. No harm in getting a test (besides the annoying swab up my nose), but basically free revenue for the urgent care.
  2. Fragmented healthcare systems: There’s thousands of healthcare “systems” with different rules, coverage, etc. based on your income, age, and other factors. This means different prices for everything, administrative costs, etc. The cost of your inhaler can be wildly different if you’re a 27-year working at Facebook vs. a 67 year-old living in a rural town, vs. a Military vet. This fragmented system leads to significant complexity, which is reflected in our varying costs and quality.
  3. Principal-agent problems: The buyers and the users are usually not the same people, and the two groups have wildly different priorities. For the most part, there is no consumer that is “buying” their healthcare. There are middlemen in all aspects of healthcare that are making our decisions for us.
  4. Limited focus on preventive care: The US healthcare system tends to prioritize treatment of existing conditions over prevention, leading to increased healthcare costs and poorer health outcomes in the long term. If you’re Aetna health insurance, you understand that employees leave companies after 4 years so you have no incentive to invest in their long-term health. At the end of the day, when everyone turns 65, they go on Medicare anyways. This is a fundamental reason why Medicare will reimburse my 66-year old dad for his gym membership, but no health insurer while he was employed for 40+ years reimbursed him for going to the gym.
  5. Data Issues: Data is siloed, in different systems and formats, and no one has any incentive to share data. This makes it difficult to make educated choices, locks patient into going to only certain doctors, and has created an environment where we don’t even know where all our health data is located.
  6. Government Intervention vs. Free Market: We have a weird mix of government decision making vs. free market competition and because of this unclear prioritization it has made our system complex.

For all these problems, there are many people that are working to improve the state of the healthcare system. The challenge is that you need to think from first principles, while also creating a wedge into how the legacy system works. Capital has grown the past decade into healthcare from investing & significant M&A activity. There have been a few companies that have been an inspiration to me in trying to change healthcare.

A handful of examples of Innovative companies

Over the past decade, several companies have emerged to address some of these problems. These companies have sought to improve access to care, streamline processes, and enhance the overall patient experience.

1. Oak Street Health Group: primarily targeted seniors and other vulnerable populations, specifically Medicare patients. By focusing on this niche, they were able to address the unique healthcare needs of an aging population, which often includes managing multiple chronic conditions and coordinating care across various healthcare providers. Their Value-based care business model meant that they get paid a fixed fee by Medicare for every patient they have, and then Oak Street takes on the full financial risk of that patient. Which means that they are incentivized to focus on sustainable health outcomes for their patients, because they bear the full cost of the patient. Oak Street Health delivered exceptional patient outcomes such as 51% reduction in hospital admissions, 42% reduction in 30-day readmission rates, and 51% reduction in emergency department visits, with an NPS of 90. While their patient outcomes were excellent, the profitability of their business model was unclear. Oak Street health grew from 2 clinics in 2013 to almost 170 clinics in 2022 across 21 states with roughly 160k patients. Oak Street Health was acquired by CVS for roughly $10B this year.

2. One Medical: a primary care provider that focuses on a membership-based model, offering patients access to same-day appointments, virtual consultations, and an easy-to-use app for scheduling and communication. They initially targeted young professionals and tech-savvy individuals seeking more convenience and a better patient experience. In addition, they offered extended hours and same-day appointments to accommodate the needs of their busy clientele. While these were the promises early on, anecdotally I have heard that the patient experience has degraded, such as patients having to wait months to find a time to meet with their primary care physician. One Medical was acquired for roughly $4B by Amazon.

3. Crossover Health: another primary care provider that primarily serves self-insured employers. They offer comprehensive care to employees, focusing on preventative care and population health management. Crossover Health’s model combines onsite and near-site health centers with digital-first care delivery, aiming to reduce healthcare costs for employers and improve employee health outcomes. Their model of on-site or near-site health centers, along with telemedicine and digital health tools, appealed to employers looking to provide accessible and convenient healthcare options for their workforce. This approach promises to reduce healthcare costs for employers by emphasizing preventive care and reducing the need for more expensive care down the line. They use a direct primary care model, which eliminates fee-for-service billing and allows clinicians to focus on patient care instead of administrative tasks. They are a private company that has raised a reported $281M across 4 different rounds of funding since 2013.

4. Forward Health: membership-based primary care provider that targets tech-savvy consumers seeking a more personalized and data-driven healthcare experience. They use advanced technology, such as body scanners, genetic testing, and wearable devices, to collect and analyze patient data. Forward’s model appeals to those looking for a proactive approach to healthcare, with an emphasis on prevention and optimizing health. Forward is also a private company that has raised a reported $225M across 4 funding rounds and was founded in 2016.

5. Iora Health: initially focused on serving seniors with complex healthcare needs. Similar to Oak Street Health, they targeted the Medicare population and developed a value-based care model that emphasized team-based, relationship-centered primary care. Their approach includes health coaches, who work alongside physicians and other providers to help patients manage their health and navigate the healthcare system. Iora was acquired by One Medical prior to the Amazon acquisition for $2.1B.

6. Devoted Health: a Medicare Advantage plan provider focusing on seniors’ healthcare. They aim to offer a higher quality of care by combining insurance and clinical care with a technology-driven approach. Their care model includes a strong emphasis on primary care, care coordination, and preventive services. Devoted Health also supports telehealth and offers a concierge-type service called Devoted Guides.

These companies have taken a direct-to-consumer approach where they prioritized the patient experience, provided a team-based approach, and in certain instances took advantage of a new business model (e.g. Value-based care) to differentiate themselves from legacy players. However, the promise of revolutionizing healthcare has not been met by these companies yet. Take the total number of customers for all of these companies combined and you’re not even covering 1% of the population. With the exception of Devoted, Oscar, and Clover these other companies haven’t ventured into the next phase of becoming a “payvidor”, which I believe is necessary to scale. For the latter group of companies, although they have developed a payvidor approach, they haven’t created the systems to focus on the most important aspects of preventative care - exercise and nutrition. These companies have also mainly targeted the Medicare Advantage plans. All of these companies have fallen victim to the standard thinking in healthcare which does not integrate “health” with “healthcare”.

Re-thinking healthcare from first principles

If you were to ask someone to define “health” they would discuss topics like exercise and nutrition. If you were to ask someone to define “healthcare” they would discuss topics like doctors and hospitals. There is a fundamental disconnect between “health” and “healthcare” and I believe this insight is what’s largely contributing to worsening health outcomes in our country.

If we were to think about healthcare with a blank page, the building blocks would include exercise and nutrition, but that is missing from our healthcare system today.

A common-sense approach to fix this is by creating a team-based approach that integrates personal trainers and nutritionists with primary care physician and other medical specialists.

By re-thinking healthcare from first principles, we can break free from the traditional reactive model and develop a proactive approach that addresses the root causes of illness and chronic conditions. This approach would involve continuous patient monitoring, personalized care plans, and a greater emphasis on nutrition, exercise, and sleep. Executing on this vision, may result in creating the largest company in the world, as written by Daisy Wolf and Vijay Pande.

Concierge Health: Bundling Health and Healthcare

This idea may seem radical to a lot of people and there will be many simple questions like: Can this scale? Are we going against human nature of convenience? Can we incentivize people to take ownership of their health?

While these questions are worthwhile and legitimate, before reading this section, I encourage you to drop all your preconceived notions and think through the lens of “if this model can work, how transformational can it be and how big can it get?” I believe in order to radically change healthcare, we need to be willing to take a chance on experimenting with new models. The health of our country literally depends on it. We cannot afford to not try new ideas.

As I mentioned before, “health” and “healthcare” are disconnected. Let’s fix this by bundling them and call it: Concierge Health. This goes well beyond only having a concierge doctor and focuses on a more comprehensive approach. A disruptive healthcare solution that combines a team-based, digital-first approach with a focus on preventive care and personalization. The key components of Concierge Health include:

  • Team-Based Approach: Concierge Health’s care team will include a primary care physician, a personal trainer, a nutritionist, and any other necessary specialists. This collaborative approach will ensure that all aspects of a patient’s health are considered and addressed, resulting in a more comprehensive and proactive healthcare experience.

  • Digital First Approach: Concierge Health will leverage digital tools to create a seamless, convenient patient experience. From scheduling appointments and tracking workout progress and meals to engaging with their healthcare team, patients will have access to a suite of digital resources designed to make managing their health simple and efficient.

  • Scalability: Our digital-first approach allows us to scale efficiently by using these tools to manage communication, scheduling, and logistics. With the majority of interactions taking place online, healthcare providers can maintain a large ratio of patients to providers, optimizing resources and delivering a high-quality experience.

  • Personalized Care Plans: Each patient will receive a customized care plan that includes tailored workout routines, meal plans, and sleep recommendations based on their unique health needs and goals. By following these personalized plans and engaging with their healthcare team, patients can expect to see improved health outcomes, such as weight loss, increased energy levels, and better management of chronic conditions.

  • Preventive Care and Monitoring: By emphasizing preventive care and continuously monitoring patients’ health data, Concierge Health can identify potential health issues before they become serious. Monitoring data from wearable devices such as an Apple Watch, Oura Ring, and digital scale allows us to monitor and work with customers on a weekly basis to make adjustments to their workout and meal plans.This proactive approach reduces the need for reactive medical interventions and helps patients maintain better overall health.

  • Patient engagement: Concierge Health encourages patients to take an active role in their health by offering personalized workouts, meal plans, and regular check-ins with their care team. Leveraging technology and personalized communication, we drive proactive engagement from the patient, helping them feel supported and motivated throughout their health journey.

  • Clinics of the future: locations across the country located in customer concentrated areas. While most of our work and communication will be digital, it will be necessary for patients to come into the office for certain things (eg. Blood testing, scans, etc.). Create an Apple-store-like experience, similar to how Forward Health has successfully executed on.

These components come together to create a world-class experience that consumers have come to expect in the free markets when we use products everyday from Apple or Tesla. It will take some time to create all the components — you need to start with a “wedge” into the market by focusing on a niche group of consumers with similar problems. I think one way to approach this is to follow the ‘Tesla Master Plan’ — enter the high end of the market, where customers will pay a premium (e.g. out of pocket cash pay), and then drive down market as fast as possible to higher unit volume and lower prices.

Initial Go-to-market strategy: Targeting Venture-backed Founders and Affluent Patient Populations

Concierge Health’s initial target market could be venture-backed founders who value convenience, personalization, and a data-driven approach to their health. These individuals often have demanding schedules and require a healthcare solution that can adapt to their needs. By offering a cash-pay model with premium services, Concierge Health can provide a tailored experience that meets the unique needs of this niche market. To better understand how Concierge Health’s approach caters to the needs of busy, venture-backed founders, let’s walk through a hypothetical example with a founder named Mark.

Step 1: Onboarding and Initial Assessment

Upon signing up with Concierge Health, Mark will complete a comprehensive health assessment that includes information about his medical history, lifestyle, personal goals, and any existing health concerns. This assessment will help his care team develop a personalized care plan tailored to his unique needs. We will connect to his wearables through APIs to begin gathering data.

Step 2: Introduction to the Care Team

Next, Mark will be introduced to his healthcare team, which includes a primary care physician, a personal trainer, a nutritionist, and any other necessary specialists. He will have the opportunity to discuss his health goals and concerns with the team, ensuring that they have a clear understanding of his needs and priorities.

Step 3: Developing a Personalized Care Plan

Using the information gathered during the onboarding process, Mark’s care team will create a customized care plan that addresses his specific health needs and goals. This plan will include:

  • A workout routine designed by his personal trainer, which he can access and track through a dedicated app
  • A meal plan created by his nutritionist, complete with recommended foods and portion sizes
  • Sleep recommendations to optimize his rest and recovery
  • Any necessary medical interventions or specialist consultations, as recommended by his primary care physician

Step 4: Ongoing Communication and Monitoring

Every week, the team is monitoring Mark’s progress with his meals, workouts, and wearables data. Communication happens primarily through the app and his plans get adjusted every week based on this data + any feedback from Mark. At the beginning of every month, Mark will have a Zoom or in-person check-in with the team to discuss how things are going. He can ask questions, share updates, and discuss any concerns or adjustments needed to his care plan.

Step 5: Continuous Improvement and Adjustments

As Mark progresses with his personalized care plan, his healthcare team will make adjustments based on the data collected and his feedback. For example, if Mark’s workouts are too challenging or not challenging enough, his personal trainer can modify his routine accordingly. Similarly, if he’s struggling with his meal plan, his nutritionist can suggest alternative options or adjustments to help him stay on track. If Mark happens to fall ill or any other issues occur, the team understands everything about Marks history, they know details of his current diet, and workouts, and they have lots of data to help diagnose and solve problems.

Step 6: Measuring Progress and Celebrating Success

Throughout his time with Concierge Health, Mark will be able to track his progress and see tangible improvements in his health. His care team will celebrate his successes and work with him to set new goals as he continues on his health journey. By providing a comprehensive, personalized, and proactive approach to healthcare, Concierge Health empowers Mark to take control of his health and focus on growing his business with the confidence that his health is in good hands.

This model is nowhere to be found in any other healthcare company. It’s time to bundle our “health” and “healthcare” to truly achieve better health outcomes.

But in order to make a huge impact, you must scale beyond the affluent population.

Scaling Beyond the Cash-pay Model

As I mentioned earlier, if we combined the total number of customers from Oak Street, Crossover, One Medical, etc. we still only cover under 1% of the population. So, how do you target the rest of the population. First, here’s a breakdown of how people get coverage. Of the roughly 327 million people in the US, the breakdown of insurance is as follows (keep in mind people can be dual-coverage, hence the numbers will total to greater than 327M):

  • 178M employment-based (an additional benefit to initially targeting venture-backed founders and an affluent population is that your initial customers are influential people - CEOs, executives, etc. and can be champions for your product as you look to scale to employees in their organizations - this follows the B2C2B model)
  • 58M on Medicare
  • 58M on Medicaid
  • 33M direct-purchase (11M of which are marketplace coverage)
  • 9M on TRICARE
  • 3M on VA and CHAMPVA
  • 28M uninsured

To truly revolutionize healthcare, you need to scale this across the country and extend the benefits of Concierge Health to a wider range of patient populations across these segments. The way to do this is likely becoming a “payvidor” – a provider and a payor. This would involve creating our own health insurance product, enabling us to have more control over the services we offer, reimbursement structures, and ultimately, our ability to target different patient populations.

Creating a Health Insurance Product

Developing a health insurance product would allow Concierge Health to gain distribution into employers, Medicare, and Medicaid markets, which covers almost 300M people (90% of the total population) By owning the health insurance product, we would have the power to decide on reimbursement policies, enabling us to cover services like personal training and nutrition consultations that traditional insurance companies may not reimburse. This would help us maintain our integrated, team-based approach to healthcare while expanding our reach to a more diverse patient population.

Exploring Alternative Models

In addition to creating a health insurance product, there are other models that Concierge Health could explore to scale beyond the cash-pay model:

Direct Primary Care (DPC): This model involves charging patients a monthly or annual fee for access to primary care services. DPC practices generally don’t accept insurance, which allows them to bypass the complexities of insurance billing and focus on providing high-quality care. This model could be combined with our existing cash-pay model to offer an alternative payment structure for patients who prefer a subscription-based approach.

Value-Based Care: This model focuses on providing high-quality care that leads to better patient outcomes, rather than on the volume of services provided. By adopting a value-based care approach, Concierge Health could potentially partner with existing insurance companies or self-insured employers to offer our services to their members. In this model, we would be financially rewarded for improving patient health, further aligning our incentives with those of our patients.

Self-Insured Employers: Partnering with self-insured employers could be another avenue for expanding our services. In this model, we would contract directly with employers who fund their employees’ healthcare, offering our comprehensive, team-based approach as a benefit to their workforce. This would allow us to reach a broader audience while maintaining our emphasis on personalized, preventative care.

By considering these alternative models and developing our own health insurance product, Concierge Health can work towards its goal of revolutionizing healthcare not just for affluent populations, but for patients across a diverse range of backgrounds and needs. This will allow us to truly create a transformative impact on the healthcare industry as a whole.


Concierge Health represents a bold new approach to healthcare that bundles “health” and “healthcare” by integrating preventive care, personalization, and a digital-first model. By initially targeting venture-backed founders and affluent patient populations, Concierge Health can establish itself as a premium healthcare provider that offers an exceptional patient experience and gain influence with influential people to help scale.

As the company scales, it has the potential to disrupt the traditional healthcare system by expanding its reach to other patient populations and exploring alternative payment models. By doing so, Concierge Health aims to redefine the way we think about healthcare and address the systemic issues that plague the US healthcare system today. There is no other way I can think of that results in better health outcomes that integrating exercise and nutrition into how we think about healthcare.

With a focus on continuous improvement, patient engagement, and seamless communication, Concierge Health has the potential to create a paradigm shift healthcare, setting a new standard for the industry and truly revolutionizing the way we approach health and healthcare.