Healthcare is the parasite of our economy — but we can change that.

Ever increasing healthcare costs is sucking the talent and the value out of our economy.

Imagine a top student in high school, straight As in everything. This student could have been a 10x top software engineer or a top finance manager. The 10x software engineers will probably have gone to contribute to human technological advancement and massively increased efficiency and productivity of our economy. Through automation, now our economy is more efficient and hence able to produce more goods and services, increasing the standard of living.

However, instead, this student chose to enter into Medicine. The first thing to understand about medicine is that the unit economics just does not work out. The work of a single doctor while extremely important, only benefits a small number of patients. The work is neither scalable or everlasting. It is a one-off transaction.

The lack of scale and the lack of everlasting-nature of the value created by doctors means that the number of doctors required by the healthcare system will need to scale proportionately to the number of patients received by the healthcare system. In the context of decreasing birth rates and an increasing aging society, the society is headed for a crash landing. The demand of healthcare will increase, meaning that the economy will need to direct more of its talent into healthcare. More of these top 10x software engineers will now become doctors in the healthcare system. This means a significant opportunity cost of the losing productive efficiency through technological advancement that would have been driven by a software engineer.

In this sense, the greater demand of healthcare will drive the talent away from the high value margin sectors (tech and finance) and into the low value margin sectors (healthcare). What this means is that our economy is eventually become less and less efficient, technological advancement will slow and the standards of living will start to stagnate.

This just shows how healthcare is the parasite of our economy. Moreover, the problem here is that we are dependent on this parasite. Without healthcare, our entire population will collapse, no one will be healthy enough to work in any industry. It is an essential parasite that we cannot lose, but it is a parasite that is slowly destroying our economy and society.

We cannot allow this to continue, and we can change the trajectory of healthcare and provide an alternate vision for our future.

What if we can completely revitalize the unit economics of healthcare workers. What if a single healthcare worker now generates more value that a software engineering team? What if more people entering into healthcare actually generates more value and efficiency in our economy?

A new vision of healthcare, is healthcare that drives our society forward. It is healthcare that empowers other sectors in the economy to strive to greater heights. And it certainly cannot be one that pulls the economy down.

So how do we revitalize the unit economics of healthcare and increase its value margin to be greater than that of all other sectors?

First is to reframe our thinking about the healthcare pipeline. The healthcare pipeline starts from basic science research. Understanding the basic scientific mechanisms allow us to develop drugs to target and fix these mechanisms when they go wrong. After the development of drugs, we then deliver to the patients via various healthcare providers, eventually resulting in the benefit experienced by the patient. In this pipeline, we can match the respective steps to what it would be in a tech company:

• Basic science research -> R&D department
• Drug development and testing -> Product team
• Hospital and healthcare systems -> Platform Infrastructure
• Doctors and pharmacists -> Sales team
• Patients -> Customer

One perhaps rather surprising thing is that doctors are actually sales people. Doctors recommend different products and drugs to the patient which then allows the patient to decide which treatment they want to receive. It is certainly not pleasant to think about doctors as sales people given the underlying implication that they are motivated by driving profits regardless of the patient benefit. However, in fact this is exactly what we see in some healthcare system where doctors overprescribe treatments in an attempt to drive profits. This however, gladly does not occur in the NHS where the profit incentives are abstracted away into the governmental and corporation level.

Improving the unit economics of healthcare means to first start in the R&D department. I mentioned in a separate article that the future of medical research will be digital. Virtual research powered by supercomputers has the potential to drive experimentation time from years to just seconds. An acceleration of research department accelerates the drug development pipeline which will significantly decrease the cost of drug development, hence driving supply and putting a significant downward pressure on prices. A way to think about this is that the same number of researchers can now generate much more value and much more research output that can eventually turn into drugs. Put it in another way, for the same research output, we need less people, hence we can redirect these talent to other sectors in the economy to drive technological innovation and economic efficiency.

At the current point, I do not understand enough about healthcare infrastructure or the work of a doctor to know how to drive the unit economics in those departments. However, it is interesting to note that healthcare has one of the highest and most insane infrastructure costs per value generated. This may be due to healthcare administration inefficiencies that I do not understand. The same could be said about the doctors (sales team). The amount of training required to be in the sales team is ridiculously expensive, moreover, the amount spent on the sales team per value generated has become increasing unsustainable. Clearly, this needs to change in the future. Perhaps I would gain a better understanding after spending more time in medical school.

I do envision a future of healthcare where healthcare professionals are highly valued, with high value margins and drives the economy forward being an empowering force to enable humanity to strive for greater heights. I hope that there is a future where all sectors will push for greater investment in healthcare because it would eventually come back to benefit them.

I would like to add that the current trajectory of the technology sector is not bright either. Healthcare lacks in practical efficiency and unit economics. Technology lacks in the sense of compassion, humanness and the focus on the intangibles.

Increasingly, we are seeing technology companies starting do embark on more and more morally questionable things. Riding on their large capital surpluses, these tech companies can afford to do morally questionable things and still get away with it. We are entering into a future where technology is no longer about generating value and efficiency for the economy, but a function to maximize value extraction regardless of the intangible costs. It is a dangerous path to tread on and it would be sad to see technology which would have so much potential, generate net harm in our society.

The logical and practical nature of technologists can help the economy to maximize the scarce resources on Earth. But sometimes it is because of this very nature that results in them forgetting that they are human too, and as a result sacrifice their humanity for the eternal pursuit of practical optimizations. This is an extremely concerning topic that would perhaps be better addressed in another article.

I would like to build a future of healthcare technology which takes the compassion and humanness of healthcare at the center of the culture. ‘Technology for good’ is crucial to the success of the hybridization of healthcare and technology and any company that wishes to provide an alternate future for healthcare should never forget that. We shall strive with the heart of a doctor but think like a logic of a software engineer. There is a world where compassion and efficiency and co-exist. We often underestimate the power of our humanity. Investing in people will always yield greater payouts that any practical sacrifices. The work of someone who is inspired and touched due to our compassionate actions can far outweigh what any of our practical imagination can conceive of.

Perhaps, the practical focus should be on maximizing productive and utilitarian efficiency rather than maximizing financial efficiency. Ensure all processes are efficient as possible, and provide the greater value and benefit to the patient as much as possible. There is no need to look at the money. If process and value efficiency is achieved, we should have the faith the financial efficiency will follow.

To quote from Govindappa Venkataswamy whom I deeply admire: “ Do the work and money will follow” — Chapter 2, Infinite Vision