Obamacare Offers New Ways To Invest

The Affordable Care Act is changing the health care landscape, and venture capitalists see new ways to invest in the industry's future. Host Scott Simon speaks with Annie Lamont, a health care venture capitalist, about the future of health care.

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SCOTT SIMON, HOST:

While there is widespread frustration over the rollout of the health insurance exchanges, some people see opportunities. Venture capitalists are thinking a lot about what the health care industry may look like in the future while they invest today. Annie Lamont has been a health care venture capitalist for over 30 years. She's a managing partner at Oak Investment Partners. And we asked her what opportunities she sees coming up in her field.

ANNIE LAMONT: There are a number of opportunities in health care. There's insurance reform, payment reform and delivery system reform. I'll give you an example: Castlight, which provide consumers with the ability to actually shop for their health care. If you think about Kayak - allows you to shop for airlines. If you were going to have a colonoscopy, you could go on the Castlight website and determine whether one hospital that was 10 miles from you or another that was 12 miles from you could possibly have a spread of $1,000 versus $3,000 in cost, and make a choice between the two.

SIMON: Well, some people would encounter a statistic like that and want to invest in the hospital and others would want to invest in the search engine technology. So, I'm trying to figure out what you find most promising.

LAMONT: From an investor's point of view, we're interested in technology and those things which help the existing stakeholders improve care and lower costs. So, as we think about efforts, we think about companies like Radisphere, which would allow a hospital to actually determine what the quality of a radiologist's services was, what the turnaround time was. So, enterprise services that are wrapped around a provider's services.

SIMON: Is your area of focus because you believe, you know, what's the old classic Willie Sutton line: why do you rob banks? 'Cause that's where the money is.

LAMONT: I would say it's more where the need is. For many years, we had invested in pharmaceutical companies, some device companies. With the advent of the Internet, it was time to bring technology, information technology to health care. You know, hospital systems, payers, physicians' offices were really in the dark ages of technology. I mean, back then, we were literally just wiring up physicians with the Internet in order to get them online. And I think our view is that with better information and information sharing, there's a better coordination of care. If you think about patients which bounce around to different doctors and then have the same diagnostic tests repeated three times, that doesn't help the patient. That only adds cost to the system. And when you have miscommunications between hospital systems and physicians, then you have poor care.

SIMON: Is - forgive me for putting it in a simplistic way - is health care the new real estate?

LAMONT: I do think there's more innovation and investment going into the area. Some of that will be unwise. It always is in venture capital. We're investing in early-stage companies. Do I think it's a bubble? No, I don't think it's a bubble. I think there are so many ways that we can improve health care delivery today that it's worth a tremendous amount of investment in systems and information to do so.

SIMON: Annie Lamont is a health care venture capitalist with Oak Investment Partners. She served on the board of the National Venture Capital Association. Thanks so much for joining us.

LAMONT: Thank you.

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