Think about how the pieces fit together. Start with the patient - Bill Taranto

From a strategic standpoint, we really try to think about whether this is something that Merck would like to exist in the world – can it advance human health?

  

From an investor standpoint, we look at whether it’s a business that can scale meaningfully. Our investment thesis is based on two principles. One, data is the currency of healthcare so all our companies are data companies. Two, point solutions don’t work in digital health which means that we need to create an ecosystem of integrated companies

We are generally growth stage investors, so we are looking for companies that have paying customers and a path towards scaling to profitability. Given where we sit in the ecosystem, we come at it from a clinical perspective too – what’s the quality of the clinical data.

It’s hard to scale in healthcare. There aren’t many point solutions in health care. Most solutions need to be integrated with existing systems, workflows, reimbursement schema, and regulatory frameworks. Good tech doesn’t always win. It’s about seamless integration and network scale.

The pandemic probably caused some unrealistic expectations on how quickly healthcare will transform, but the reality is digital health transformation is well underway. It will change how we identify care gaps, get those patients the right treatment at the right time, and get them to positive health outcomes. 

Advances in telemedicine, remote monitoring, diagnostics, digital therapeutics, and data analytics allow for more frequent (passive) patient touchpoints with better operating leverage. Put simply, it improves results while lowering costs. It also feeds a virtuous learning cycle whereby better data drives better insights.

Think about how the pieces fit together. Start with the patient. Then who is paying for it. Then how it integrates into the real world of health care delivery. If a solution is missing any of those elements, it’s not likely to be successful.