Healthcare startups in the age of the Affordable Care Act: opportunity abounds

By Editor December 9, 2013
Courtesy of Vitals.

Courtesy of Vitals.By Mitch Rothschild, co-founder and CEO , Vitals

People are having babies. They’re still getting older. And they get sick, too. No other industry has quite the demand of healthcare. And with the passage of the Affordable Care Act, the demand is only intensifying. Thirty million additional Americans will be entering the system, putting a strain on already tight resources.

With solutions in short supply, entrepreneurs creating healthcare companies have the ability to make fast friends, often with a sophisticated, well-moneyed market in waiting. This creates opportunity not available to many fledging companies that are forced to face stiffer competition: The ability to just build.

Too often, success for small businesses depends on several factors perfectly aligning—market demand, disruptive forces requiring innovative development, effective marketing, smooth distribution. Rarely does everything fire at once. Yet, with nearly every sector of the healthcare ecosystem undergoing gut-wrenching change, the time has never been better to develop innovative products that take advantage of the opportunities in this industry.

What does each healthcare sector need?

Health Plans

There are about 400 health plans that insure more than 256 million people nationwide. Rarely has anyone ever accused a health plan of being consumer-friendly. That will need to change: Plans are starting to compete directly for new customers on the public and private exchanges. Plans will need to go from a stodgy employer service to a beloved consumer brand.

Think of how car insurance companies use reptiles and cavemen to get the customer’s attention. Health plans will have to play a similar game. To do that, they’ll need entrepreneurs and small businesses that are smart at branding, marketing, and consumer engagement.


– Marketing and branding firms

– PR and event planners

– Consumer website and app developers

Providers (Doctors and Hospitals)

Under the new healthcare regulations, many providers are being re-categorized as ‘accountable care organizations’ (ACOs). These medical facilities are increasingly relying on evidence-based medicine to determine the best course of action. ACO reimbursement is more pegged to outcomes that merely the treatment.

How does it work? In today’s healthcare landscape, you can visit nine doctors for a sore throat and receive nine different courses of action. All have gotten the same fees, even if some of those treatments don’t work. Evidence-based medicine creates a standard way to deal with medical issues based on outcome data. Big data.

Companies that can help ACOs collect, crunch and analyze this data are going to be winners within this new paradigm. Providers don’t have the time, nor the expertise, to deal with data, analytics, and patients.


– Data collection devices

– Analysis dashboards and systems

– Data wonks


When it comes to making health decisions, consumers are often ignorant of their choices. Don’t blame them, though. For the most part, choices have been either largely out of their hands, or the information—like pricing—hasn’t been available. Anything that reduces confusion will be in demand. Think Zillow or TripAdvisor for healthcare.

On the other side, there is a growing demand for physician extenders. There’s only a finite supply of doctors. With millions of patients entering the system, we need alternative ways for people to access basic, routine medical care. This could either be through physical locations like urgent care and retail clinics or through virtual tools that connect doctor care with patients through the computer or phone.


– Comparison and search engines

– Alternative care facilities

– Telemedicine tools

Pharmaceutical Companies

When it comes to drug manufacturers, the key for them is patient adherence. There’s good reason to focus on that, too. Patients who don’t follow prescribed regimens will stay sick or, in the worst cases, be hospitalized. This just costs everyone in the system more money.

How do you do that? Perhaps it’s a device that’s built into an Rx bottle that monitors how often the cap is taken off. Or, perhaps it’s a tracking device like a Fitbit that people wear that can transmit their stats to their doctors. Small businesses that find smart solutions to this problem will be likely bedfellows with big pharma.


– Adherence trackers

– Patient monitors

– Provider-to-pharmacy networks

Think about it: A massive system undergoing disruptive change in many corners. Plans, providers, pharma and consumers all need to find new ways to do business in an evolving environment. It will create the next great class of entrepreneurs.

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Mitch brings two decades of entrepreneurial experience to his role as co-founder, chief perfectionist and CEO of Vitals. Prompted by personal medical experience that could have turned out badly, Mitch helped found Vitals. He designs and oversees the direction of the company and promulgates the Vitals message to the world.

Prior to Vitals, Mitch founded RaspberryRed Marketing, NetWorks, Tuff Rhino,, RUSS CandyBears, and Time Warner Viewer’s Edge. He has also been involved in the rapid growth of Popcorn Indiana, Blue Moon Mexican Cafe and IT’SUGAR.

Mitch has an MBA, with honors, from Columbia University, and a master’s degree from Queens College.