433. Founding VC Firms Apax, Greycroft, and Primetime, the Keys to Unlocking Investment Value in Healthcare, and Why the Aging Population is the Biggest Opportunity in Tech (Alan Patricof & Abby Miller Levy)

This episode discusses the strategic investments in healthcare and technology targeting the aging population, spearheaded by venture capital pioneers Alan Patricof and Abby Miller Levy.

1. Demographic Shifts: The aging population is rapidly increasing, presenting significant investment opportunities in healthcare and technology.
2. Investment Strategy: Primetime Partners focuses on startups that enhance the quality of life for seniors, leveraging demographic trends to guide investment choices.
3. Challenges in Market Penetration: Reaching the senior market effectively requires innovative marketing strategies due to its fragmentation.
4. Regulatory Landscape: Positive regulatory changes are aiding the growth of businesses in this space, although challenges persist.
5. Future Outlook: The discussion forecasts increasing importance of this sector, with potential for significant impact on global healthcare markets.

1. Introduction

Abby Miller Levy and Nick Moran introduce the episode's focus on venture capital in aging-related healthcare. They provide background on Primetime Partners. Abby Miller Levy: "Welcome to the podcast about venture capital, where investors and founders alike can learn how VCs make decisions and reach conviction." Alan Patricof: "Thanks for inviting us. Great to be here Nick."

2. Venture Capital Evolution

Alan discusses his history with founding VC firms and the transition to focusing on the aging population. Alan Patricof: "I founded Apex in 1969 and Greycroft in 2006, noticing the need for private investment advice among high net worth families."

3. Investment Focus on Aging

Abby details the strategic focus of Primetime Partners on aging and related sectors, emphasizing the untapped potential. Abby Miller Levy: "We formed Primetime to invest in products, services, and technologies for the fastest growing part of the population, not millennials but baby boomers and beyond."

4. Challenges and Opportunities

Discussion on the specific challenges and opportunities in reaching and servicing the aging demographic in healthcare. Abby Miller Levy: "It's challenging to reach this fragmented market, but the potential for impact and profitability is significant."

1. Identify Investment Opportunities: Focus on sectors with demographic tailwinds, such as products and services for seniors.
2. Understand Regulatory Changes: Stay informed on regulatory changes that could impact investment areas.
3. Develop Targeted Marketing Strategies: Create marketing strategies that effectively reach the aging population.
4. Evaluate Technological Innovations: Look for startups that leverage technology to improve the quality of life for older adults.
5. Plan for Long-Term Trends: Consider long-term demographic and economic trends in investment planning.

Alan Patricof & Abby Miller Levy of Primetime Partners joins Nick to discuss Founding VC Firms Apax, Greycroft, and Primetime, the Keys to Unlocking Investment Value in Healthcare, and Why the Aging Population is the Biggest Opportunity in Tech. In this episode we cover:

Launching a Horizontal Fund Focused on Ageing Population
Investing in Businesses Catering to Aging Population
Healthcare Investment, Regulation, and AI's impact
Reducing Healthcare Costs Through Prevention and Engagement
Healthcare Innovation, Monitoring, and Diagnostics
Reaching Older Adults in Healthcare, Including Marketing Strategies and Challenges

People

Abby Miller Levy, Alan Patricof, Nick Moran

Companies

Primetime Partners, Apex, Greycroft

Books

None

Guest Name(s):

None

Content Warnings:

None

Abby Miller Levy
Welcome to the podcast about venture Capital, where investors and founders alike can learn how VC's make decisions and reach conviction. Your host is Nick Moran and this is the full ratchet.

Nick Moran
Alan Patrickoff and Abby Miller Levy join us today from New York. Alan and Abby co founded Primetime Partners, an early stage venture capital firm that incubates and invests in the people and companies that transform the quality of living for older adults. Alan, of course, needs no introduction. Prior to primetime, he founded firms Apex in 1969 and Graycroft in 2006, and Abby was founding president of Thrive Global alongside Ariana Huffington and was SVP of strategy and growth for Soulcycle. Alan and Abby, welcome to the show.

Alan Patrickoff
Thanks for inviting us. Great to be here Nick. Awesome. Great to have you both. Maybe we'll start with Alan.

Nick Moran
Alan, give us a little more color on your backstory. Founding two VC firms and why you decided to do this under a new banner. Well, when I started in the business and it was December 69, so let's go. 1970, there really was no venture capital industry and I had recognized a need in high net worth families for some advice in the private investment area, which inevitably everybody got to, but in a very backhanded manner since almost everyone was focused virtually entirely on public securities at that time, including the family that I had been working for, not mine. And I had gotten intrigued with the few private investments that we were making and got more involved with that because no one else was really interested in.

Alan Patrickoff
So I decided to go into a business advising families on their private investments and bringing deals to their attention and helping them bet ones that people brought to them and they didn't know what to do with. And started out with two and a half million dollars, built it up over many years from New York to California to Europe to Southeast Asia, to the point where it was a really multi continent firm with a lot of people working for it. We had twelve offices and we had inexorably morphed into a private equity firm, which is inevitable because at that time when I left, was running close to $10 billion from my first fund of $2.5 billion. It got to 10 billion, but it was almost all private equity. No one had really interested in doing small deals and I decided to take off and do something else with my life.

I spent three or four years pro bono working for the World bank and the IFC, helping the developing world. Then I decided in 2006 it was time to start a new venture firm and I started again small 75 billion with the idea of staying small. And over the next 1615 years, we also got bigger and Graycroft became more of a growth firm and had less interest, although some in, in the venture, business ventures, all deals, it becomes very difficult to do when you get up to $3 billion in management. And so I had been thinking a lot about what are the things I might do before my life business cycle ended and my wife had Alzheimer's for twelve years. And I had been living through it and learned a lot during that about aging and wellness and going to conferences and read studies and realized that the fastest growing part of the population were the people over 60 and were going to be certainly, and that we were just getting into this concept of longevity.

And my son one day would go to Harvard Business School with Abby, said, you know, Abby, youre talking about this aging, ageless economy and the opportunities and youre doing nothing about it. Abby who you know, because Abby was the president of Thrive and I had invested in thrive on behalf of Graycrop because I had invested in Ariana's previous company, Huffington Post, and he said, you ought to talk to Abby. Next day, we got together, we had breakfast, the three of us, and it was so clear that we both spotted this incredible emerging trend that was kind of white space, I would say. I don't want to say you're never the only one. Everybody, to a certain degree, had trickled into the space, but we both had this very focused attitude of creating a firm that would invest in products, services, and technologies that serve the fastest growing part of the population, not the millennials, but the baby boomers and all the other ages, other categories that go along with that.

And about a month or two later, Abby and I formed prime time. And the name conveys what we are doing. We're going after people in their prime time, and I will let Abby take it from here. But what we did is create a kind of unusual firm. And Abby can give you the background of where we think it's distinctive.

Nick Moran
Perfect, perfect segue. And then, Abby, can you tell us just a bit about your background? We've touched on a few things, but how that led you to founding the firm here with Alan. Absolutely. But first, I need to give Alan the proper props because he's being a bit modest.

Abby Miller Levy
Alan is often his moniker as the father of venture capital France gave him the Legion Donner award for bringing venture capital to France. He was in the first class of awardees by the national venture capital association as the kind of leaders in the space. So I am definitely the beneficiary. Abby, you could throw in what the title of the speech I gave upfront a month ago. I think it's better coming out of your mouth, Alan, than mine.

Alan Patrickoff
What the f, am I still doing this? That's pretty good. Exactly. So when I got the idea for starting this fund, which I'll come to in a second, and my friend John Patrickoff told me that my former investor in my former company was interested in the same space, it was a no brainer to combine my background in marketing and ops with Alan's 50 plus years as an investor to apply that complementary skill set to what we believe is the biggest mega trend globally that investors should be taking a look at, which is aging. But as I mentioned, I spent most of my career in operating roles, starting after McKinsey and business school, which are kind of the educational part of my career at leading product at a company called Oxo International, which was a small business at the time.

Abby Miller Levy
It's now a billion dollar consumer products company. And I spent about seven years working with a variety of brands, always on business growth and marketing before joining Ariana Huffington, as Alan mentioned, to start threat global, after being a founder for a few years, joined Soulcycle to run our digital at home business, which, you know, involved taking out Peloton, which was really fun. And then while I was there, started a personal project, a deep dive of research into what happens in this country in our sixties, seventies and eighties and beyond. And so trying to really understand the landscape across healthcare, financial services, housing, workforce, etcetera, for an aging population driven by my own experience with my father. And so that brings us up to date till spring of 2020 when Alan and I decided to launch primetime.

And as listeners will recall, spring of 2020 is also when the world stopped due to COVID. So it was a really interesting time to fundraise, launch a fund and begin investing. Amazing. So id love to jump in on the thesis and some of the details here before we do that, Alan, if you had to pick one thing that youve done differently this time when launching the firm and the funds, aside from thesis, of course, whats the biggest difference? Whats the biggest change you made when launching primetime from the previous two?

Alan Patrickoff
Well, I think Im right giving the credit really to Abby. But however its happened, we have launched what we call a horizontal fund and every other fund that I know of, I'm sure there's somebody who'll send me a note who maybe is listening, will say, you know, me too. We decided to launch a horizontal fund. And you think about it, everybody starts a fintech, a consumer fund, a healthcare fund, a climate fund, you name it. They focused on an industry.

Abby and I, we're going to focus on the market rather than what discipline people are doing. So we are a horizontal fund and we call ourselves a horizontal fund, which means that we don't care if you're in fintech or healthcare or your consumer or climate or whatever you are. If your customer, your consumer, whether it's business or an individual, if they're, I say over 60, Abby says over 50. But, you know, an older person, it's like porn, you know, when you see it, an older consumer of some sort. We want to talk to you.

So our portfolio wallet has a greater, much greater concentration in healthcare and secondly, in fintech. It also has done a couple of consumer deals. And if someone came up with a climate company that only took care of climate for older 60 people, we would look at that, I assure you. But we are across the spectrum, so I'd say that's different. Everything else before was kind of focused on industries.

Nick Moran
Very good. And then, Abby, quickly, broad strokes on stage checks, willingness to lead deals versus co invest. Absolutely. You get us an interesting point where we raised a $50 million seed to series A fund and deployed that capital in 39 months into 36 businesses. We're in the process of both raising and investing fund two.

Abby Miller Levy
And the shift there is really, you know, minimal. Same team, same thesis, same approach, but with higher concentration because we've learned so much in the past four years of what works and doesn't work that we can have greater conviction. So fund one was 50 million, you know, into 36 businesses. Fund two will be closer to 60 to 75 million into 20 to 25 businesses, which means the check sizes will be larger. So seed checks of one to one and a half million and series a plus check sizes of two to 3 million.

And we're happy to lead. But in every one of our deals, we really believe in putting together the right syndicate. We've co invested with 80 other funds. In fact, two thirds of our deal flow, you look at about 600 businesses a year. Two thirds of our deal flow comes from other venture funds because of our subject matter expertise.

As Alan alluded to, all the vertical funds flip us deals because they say, hey, what's primetime? Think about this, because when you can go deep on a thesis, you really have an advantage in terms of diligence. Very good. So the US population is older today than it's ever been. The number of Americans age 65 and older is projected to increase from 58 million in 2022 to 82 million by 2050.

Nick Moran
And the 65 and older groups share of the total population is projected to rise from 17% to 23%. So there's some obvious tailwinds. Based on these demographics, what would you say is the biggest headwind, or what's the biggest challenge to building a fund focused on this thesis? I think the biggest. First of all, we talk about the tailwinds for 1 second before going to the headwinds.

Abby Miller Levy
I think it's not just the demographic shift, it's the implication on every area of our economy. And so we get often asked this a lot. You know, hey, do you have regulatory headwinds? And we have regulatory tailwinds. That is because Medicare is growing at 8.4% a year, going to be 50% of our federal budget by 2060.

Secure Act 2.0, which pushes pressure on employers to offer retirement savings accounts, 401s. There's a lot of really great support for building businesses in this space because we are so unprepared as a global society. And so if I flip that around, if I see what the tailwinds are. Sorry, the headwinds are, which is that for now, the majority of businesses are relying upon enterprise or corporate contracts to grow. There isn't really yet an advanced direct to consumer market.

And that's not because older adults aren't online. Two thirds use social media. They are 60% of the global spending adults 50 plus. It's not because they're not spending. It's not because they're not online.

It's because they're not aggregated in the same way. You know, if you're a marketer looking to reach someone 20 to 25, Instagram, TikTok, you know, you know exactly where to go. These are just newer audiences to reach. So I would say that's one of the things we're seeing with our companies, is that those that are going direct to consumer are really having to build new marketing playbooks. A business like Carwell, which is d two c, and it's an e commerce business focused on family caregiving.

They're figuring out new ways to reach this audience, and it just takes more time when it hasn't already been built before. But we're seeing that shift. We're seeing that shift, you know, before our own eyes. But I would say that's one of the things that we've encountered and our businesses are working through. I would agree completely with what Abby said.

Alan Patrickoff
I could throw in one other thing, which is what she's saying is it's tough to reach the consumer. So most of our portfolio is really enterprise related. Conversely, I would say, like in the enterprise area, the thing that I've learned, almost everything starts with a pilot, and it's frustrating, pisses me off, frankly. And sometimes when the pilots, even when the pilots are successful, the health plans or whomever is involved wants to delay. So it's not where you can get a customer and the next day you're in business and on a commercial basis.

So it takes a little longer. But we have lots of companies gotten through the pilot stage, but you have to live through that. It's part of it. It's called pilotitis. We've seen it, too.

Nick Moran
I mean, let's talk more about healthcare. We look at businesses. We look at the codes closely. How much time do you spend thinking about future codes that will be introduced? Abby, you had mentioned regulation before, and are there any ties with the legislature and any efforts to sort of positively impact healthcare reimbursement and codes for Medicare and or Medicaid?

Alan Patrickoff
I would say, I'll let Abby answer, but I'd say the regulatory bodies are our friends. I mean, every day there's a new code that comes out, and that creates an opportunity for someone. And we've been the beneficiary of that in many instances. Absolutely. And I would also add that the enterprises aren't any further ahead of us in understanding this.

Abby Miller Levy
I was recently with the head of strategy of a very large Medicare advantage payer, and they're on their back feet, reacting as much as anybody. But one of the things that's a bit different about our focus is that we go beyond just the investment world. We do spend a lot of time with being a thought leader and connecting with other thought leaders, especially on the topic of aging. Government bodies, community based organizations, philanthropy, these are all very involved in the topic. And so one of the areas where we're seeing a lot of push on regulation is family caregiving.

You may or may not be aware, but there's about 50 million unpaid, untrained family caregivers in our country. These are not professionals. These are family members taking care of family members. And largely due to a push by philanthropy, most notably Melinda Gates at pivotal, there has been increasing pressure for figuring out how to train and pay family caregivers. And so one of the things I think is really interesting is not just reacting and making sure that we're close enough to understand the codes, but also being aligned with organizations that are pushing the thinking.

I was just at a two day offsite with a small group of leaders in the space, including the head of policy from AARP and AARP is the juggernaut in the space and understanding what their agenda is and helping to shape that agenda is something that, while not core, everyday actions from a venture fund, actually becomes something that is on our agenda. So when you asked Alan what's different between this fund and his other funds, in addition to being a horizontal fund, I would say it's the level of thought leadership that primetime has both sought out and is being asked for relative to pretty much most other venture funds that Alan and I have been a part of or associated with. Love to hear that. Just in my own personal experience, spending time with family members that are older, I hear words like invisible and overlooked and not cared about frequently. So elevating the exposure and the focus on this group is really important.

Nick Moran
Curious to hear still on the healthcare point, many issues in healthcare are pretty well documented and discussed. What do you think is the biggest issue with the US healthcare system that far too few people are talking about? How long is this podcast? I think one area that we're very interested in that is not often talked about is post acute care or kind of care for older adults once they're out of hospitals. This is typically for the polychronic.

Abby Miller Levy
They're in and out of nursing homes, hospitals, their home, and this whole fragmented world of home care, hospice, nursing homes. It's very fragmented. Typically the domain of either small business or PE venture hasn't historically had a role in this part of healthcare. And COVID changed that because they brought telemedicine into a reimbursable paradigm. And thus venture capitalists said, wait a second, we think we should figure out care in the home.

This is not just a, this doesn't have to be a low margin. I mean, it often is, but it doesn't have to be a low margin business owned by home care agencies, which we have no part of. So I think that's an area that is broken. It is fragmented. But technology is starting to impact this space.

And so that's where I think venture is starting to get interested. The second space is dual eligibles. Dual eligibles is the crossover between individuals who are old enough for Medicare 65 plus, but are low income and qualify for Medicaid. And this population is growing from 11 million Americans to 30 million Americans over the next 20 years. And it is a very complicated problem to solve because you have two government systems that don't interact, Medicare and Medicaid, partially responsible for one human's life, one human's healthcare.

And you can imagine how many challenges that invokes. And so this is also an industry, this area of Medicaid and seniors, that is starting to attract some technology, attract some vendors, and therefore attract some venture interest. You know, we're seeing tremendous amounts of venture dollars invested into AI first companies. Are you aggressively investing into AI companies? Why or why not?

Alan Patrickoff
I'll take a shot at that. We can get a chance to think about her, her reaction. I was on CNBC two weeks ago, so my position has been made public. We are not investing in AI companies. Let's put it.

We have not seen an AI company that's dealing with our area. However, and my general comment was, which is for everybody, unrelated to primetime, I've been through so many cycles of so much excitement and irrational exuberance about so many areas of our society, particularly in technology, everybody gets excited, things get way overpriced, then there's some period of great disappointment and collapse. And I don't think AI is going to be any different. Some of the. I think the excitement around AI is deafening.

I mean, it really is. And I really do believe it has enormous prospects for every area, including our area. But from a pure, straight AI company, it's not for us. I think the valuations we're going to see, there's going to be a lot of dead bodies around and there's going be a few winners. But I just.

I'm not the type to invest in something at 83 billion free money with no revenues, no matter how exciting it is. I just, you know, that's not my world. However, that all that said, AI is creeping into our area. And maybe Abby will say it's more than creeping, but we have at least, we just put out a newsletter to our investors just because we know they're all interested. And lo and behold, at least ten of our companies in some way or another are already using AI in what they're doing, and they range from all different aspects of the markets they're serving.

So AI is going to be something that's going to have huge impact, certainly in the biotech area. With that we're not in, we don't do anything that requires FDA approval. No biotech, no pharmaceutical, no devices. But it's going to have enormous impact in those areas and in our areas, it's going to help people do things more efficiently. I mean, I was on the phone the other day with one of our companies which produces software for rehab centers and nursing homes, senior facilities to help them reconcile.

Just, we talked about coding so they don't take 57 days to get paid, but they have a technology of how to reconcile coding and they can get paid in 20 days, which has enormous impact for cash flow. AI is having an enormous impact already in them, and they may bring this down to ten days pretty soon because they can speed up the whole processing. So that's a good example of where we're going to benefit from AI in our companies and we're going to have a lot more than ten that benefit from it. Will we see a shift in the healthcare system from being tech enabled or AI enabled to human enabled? Eventually the tech is providing the majority of the diagnoses and the humans are assisting with the final 10%.

Abby Miller Levy
I don't think so. I think there are certain jobs that AI is going to do in our healthcare system. It's going to do workforce automation and it's going to help on data accuracy, personalization, staffing, efficiencies. All of that is already happening. But I was at, as I mentioned, an offsite a couple of days ago with some leaders in healthcare and this, you know, someone who ran a state healthcare organization said, you know, you know, privacy fraud, age bias in AI.

There's a huge World economic Forum report on age bias in AI. We are not going to get to the point where AI is making decisions on patient care, I believe, for a very long time. But in the meantime, it's having tremendous, it's a tremendous accelerant for a startup to be able to bring that kind of product improvement experience, improvement to end users and enterprise customers. To me, it's like Excel and PowerPoint. It's going to be just part of your business tech stack and see where it applies.

Nick Moran
Alan, what do you think will happen to Google's ad business? In an LLM first search world, I. Think they're going to be affected just like anybody else in the marketing businesses. I mean, you're going to, you don't have to spend too much time on chat, GPT or any of the other services that are already out there and proliferating. And by the way, already starting to compete with one another.

Alan Patrickoff
Prices are going to come down, people are going to start recognizing the costs associated with these, with the magic one. And I think Google is going to have to obviously employ AI. They are already, and you see them invest in companies that are using AI as a platform. So it's going to have an impact on Facebook, Google, you name it, it's going to have an impact on everybody. Sure.

Nick Moran
So transition to fintech a little bit. Consumer debt rates are at all time highs while saving rates have plummeted. How close to a crisis? Are we and will the aging population be able to service the debt that has accumulated? It's a beautiful, sunny Monday here in New York, and I'd love to be an optimist, but I've recently been in conversations with leadership, as I mentioned in some of these organizations that say this is a crisis, it's a mathematical crisis, that it's definitely could have been avoided or on a different trajectory if there had been changes 20 years ago.

Abby Miller Levy
But now we're going to need to really make some painful choices on Social Security. We definitely looked at a few startups that are trying to help with the mathematical equation, trying to help consumers defer Social Security, which there's a bonus for doing if you push your Social Security out to start at age 72. We've invested in a couple of retirement savings businesses that are trying to encourage and make it easier for small businesses to offer 401 ks, given the global trillion dollar retirement savings gap we have. But as much as I'd love to be an optimistic, this is something that only our policy leaders are going to have to reallocate capital to be able to fix. Nick, let me go back to something I don't want any of your listeners to think Abby is boasting when she says, I was with these people at this conference or with those people at that conference.

Alan Patrickoff
Abby usually pops in and tells you this, but I'll say it to myself, one thing we did very differently when we started primetime is we both, in addition to wanting to make a lot of money out of this, we decided we really wanted to be thought leaders. So when Abby says she was here and she was there, we hired, which is unusual in my career, we hired a marketing pr firm from day one, which took a disproportionate share of our management fee because we had to pay for it to get us out there as thought leaders. So if you want to know one thing we've done differently, we made it so that we're on every new show we can, we get in every magazine we can, we want to be at every conference. And Abby, believe me, is not named. I mean, she's exhausted.

She just got back to the Annenberg conference. I think she's probably going out to the Milken conference. We had. We were co sponsored the AARP conference in Boston. And by the way, none of these places are in the same place.

I was in Washington at another conference. I'm going out to Arizona next month. But it's resulted in things like the COVID of Business Week saying longevity. The COVID of the Economist saying longevity. We were written up in the FT.

We were in the time we wanted to make primetime known for what we stand for and to elevate the subject that we're involved in. So we really have worked hard. Abby, more than me, has got to be exhausted from getting back on one trip, and she does. But that's what's made our fund so different, is that we really have exposure to a lot of people in this business. And it's very important to us.

Nick Moran
I love it. Now all you need is Deon Sanders as your spokesperson. So on the positive side, the US education. In the US, education levels are increasing. Older adults are working longer.

Poverty rates have dropped sharply, and more adults can meet their daily care needs. On the negative side, life expectancy is stalled. Obesity prevalence is increasing in alarming rates. There are wide economic disparities between different populations. Expanding caregiving gaps, as you mentioned before, Abby, and the overall tax base will decline as older people, you know, age.

So what opportunities and threat or threats have you spent the most, most time analyzing? And which do you think present the best opportunity for tech versus government to make a meaningful impact? That's easy. We gotta slow down the increases in the cost of care. And, you know, with Medicare, as I mentioned, it's about a trillion dollar expense growing at 8.4% a year.

Abby Miller Levy
Small changes to slow down that growth on a big number have a very big impact. And so one of the areas, for example, we're very interested in is hospital visits. Hospital visits cost twenty thousand dollars to thirty thousand dollars a year for older adults, or each occurrence does. And with a Medicare advantage budget of around $90,000 a year on average per member, that's a big piece to go for an Ed visit and think about all the ways we could stop those emergency room visits fall prevention and detection, medication compliance and reconciliation. Using AI to have risk stratification, to have other ways of contacting someone when we think that they're likely to have an adverse health event.

Educating family caregivers. Why not to call the eD? And having other ways to do it. So businesses that provide immediate, tangible cost savings versus healthcare businesses, as you know, as an investor that promise over three to five years, there'll be a reduction in, in the medical expense. There's no patience to wait those three to five years, especially when the average health plan member churns every three years or switches every three years.

So that is one area that we are seeing a lot of traction in our portfolio and in the space is being able to reduce hospitalizations and really drive down the cost of care. So I think that's a very interesting space. There's a second interesting space of opportunities, which is we actually have quite low utilization of our healthcare benefits. In other words, we are very much a sick care business, not, you know, country, not a well care. And that with all of the social determinants of health, supplemental benefits that health plans provide, you know, they're only utilized by two to 5% of the members.

And so what can we do to make sure that those benefits like home modification, you know, to prevent falls and food as medicine, to make sure people are properly nourished, and transportation to get to doctors appointments, and fitness and strength, and all of these things that are important parts of preventative care, how can we increase utilization? And so we've seen a real growth in our own portfolio, businesses like duos in our portfolio and get set up. That drives health plan participation and engagement, because at the end of the day, most of healthcare, you know, will require behavior change by individuals. All the potions and medicines and this and that are very expensive. A much less expensive route over the long term is making better choices.

So we're seeing a lot of use of technology to drive that kind of engagement. So I would say those are the two things, prevent hospitalizations, drive engagement. And those are two big areas of opportunity. The health plans that I have learned, Abby probably knew it before I did, the health plans will spend anything, virtually anything, to provide a supplemental service if it will save them one day in the hospital. Because, I mean, I'll use as an example, we have one company that does balancing balance training.

Alan Patrickoff
It sounds so silly, you know, why don't they go to the gym? But if they can create better balance for people and they don't fall, the hospitals, I'm sorry, the health plan will spend 500, I think it's 500, $600 a year to give them at home teleconnectele medicine training, which you would call, you know, gymnastics, perhaps. But if they can spend five or $600 and prevent one fall, because what happens is a fall, then an ambulance, then get to the hospital, then you get a hip replacement, then you get pneumonia when you're in the hospital, then you get sepsis, and then you die. And honestly, it's a very high mortality rate, so it's worth it. And high cost of the payers.

It's worth it. So worth it to them to spend a little bit of training and assistance. Abby mentioned getting into the, getting your doctors, make sure you comply. All those things are worth the health plan spending the money, so they don't have the worst result. Are you finding that the self insured employers are motivated as well, or will it start with the payers?

Abby Miller Levy
I think they're motivated by slightly different things. On this topic of engagement, both are equally motivated, because engagement is not just around preventative health, it's also around churn. And so they're trying to figure out how to increase their retention because it's really hard to control costs of a population that is switching so frequently. So that is one similarity between the two audiences, but the commercial audience, and they're also. Everyone's worried and concerned about the polychronic, most expensive patients, and you don't have to be older to be one of those patients.

And so I think that group is where the value based care is really coming in in a much bigger way, is to say, you know, how can we very proactively manage this very expensive population? And that's the starting point of the value based care models. Do you think, like in this world, with increasing workforce mobility and people switching jobs more often and subsequently switching their health plans more often, do you think the payers have become less motivated to focus on long term health outcomes and more so on short? Absolutely, and I think that's been documented in a variety of reports. But I also think that there's an understanding, and this is where AI actually does get kind of interesting.

There's an understanding that there's going to be a lot more pharmaceuticals because the pace of life science developments increasing. We love pharmaceuticals because the pharmaceuticals keep our audience alive longer and use our products longer. But what I was actually saying is the self insured employers and the payers are aligned and that they don't love the pharmaceuticals in the sense of they're just getting really expensive. And the same thing on the surgical interventions and all these innovation in surgery and life sustaining surgeries is quite expensive. So I think we're in for a bit of a.

I wouldn't say it's going to be a reckoning, but I think there's going to come a point at which all the innovation in the life sciences is going to be undigestible on the insurance side, because all it does is just increase. Yes, it's wonderful for consumers, but increases the cost of care dramatically. So we've looked quite a bit at RPM solutions and various biometrics to monitor patients at home. We've looked at 35 companies in the area. 35.

Nick Moran
I've got the perfect one for you. Good, by the way. Well, we kind of made one investment in the area, which is doing very well, but honest and truly, it really has been most successful in the real estate area in monitoring more than it has been in senior living, although we have pushed them into senior living and they are active in that area, but that is not their primary. What does that mean, the real estate area? So what Alan's referring to is, and I'd be curious, your version of RPM.

Abby Miller Levy
There's kind of the remote patient monitoring, there's kind of the monitoring of one's own vitals and kind of the human that piece of it. And then there's another piece which is environmental monitoring. So particularly around fall prevention detection, there has been this sense of how do we monitor the environment for that specific use case? And we invested in a business called Butler. It's butler without an e.

That was a commercial application for commercial real estate using a heat sensing technology. All AI driven came out of MIT and they had the idea of, well, couldn't we apply this heat sensing technology to senior living or the home to monitor for false. And so that is what we refer to as it actually started as a commercial real estate solution being applied to an aging topic. And one of the things we would love is we would love lots of businesses to take their technology or their approach and ask themselves the question, what role could this have in an aging population? Because that's absolutely in scope.

And I think that's how we're going to build a much bigger longevity economy is applying, you know, most other technologies to this topic. But Nick, what was your question? What were you thinking about in regards to RPM? Well, I'm trying to find the question, but I'm thinking you talked about the sick care system versus the healthcare system. I also feel like we have this episodic and reactive system instead of a proactive, perpetual system.

Nick Moran
And so I'm just curious if the future you do see more perpetual monitoring instead of going in for an exam once a year or going in once you've already fallen, you know, there's a lot of more continuous monitoring, prevention of issues. This feels like an area tech can help with. Nick, there is proactive, and we're involved in several areas, not necessarily just in the room, but taking the room by monitoring people's gait and monitoring their times in the bathroom. All those things are predictive. And if you're careful, you can spot trends in advance.

Alan Patrickoff
We have invested in two companies, one called Kintsugi on the west coast, and the other called Isaac health on the east coast. Isaac more focused on Alzheimer's. Kintsugi more, I guess, concerned with depression. I say Abby can correct me, but it's using telemedicine to discern changes in speech patterns, changes in human behavior that may be indicative of a change in their health condition and spot it earlier and be able to take preemptive steps. And what Alan's referring to is an area we're very excited to around diagnostics.

Abby Miller Levy
And so if you think about COVID everyone became a self tester. We all, I mean, we think about. We all learned how to do diagnostics at home, and we're seeing a lot of innovation in that spot. And one of our portfolio companies, that's actually a longevity business, longevity clinic, the quarterly blood draw biomarkers. That's a big space.

And so where do we see this going? Synergenics does it quarterly for their clients. We think that being able to track your data on a more frequent basis, and this is not just the oura ring or a Fitbit or an Apple Watch, that's great data, but really at the biologic level, is where we're going to be able to look at the trend patterns, see aberrations, and be able to really have a predictive algorithm to warn people to escalate things and to deal with prevention. But it's going to come from diagnostics, and that's why Kintsugi is so great, because it's an ambient voice based biomarker for depression. And Isaac Health has their model of how they're diagnosing dementia.

So I think we're going to see a lot of innovation on the diagnostic side that is going to coalesce with this change in human behavior that COVID was a huge accelerant of. You know, Dick, as I'm listening to ourselves talking, we probably hit 15 name companies that we've invested in. So when people ask us what tag. Them in the social post, you know. Exactly where we left the name of our, of our ride company out, which is safe ride, which in that case, subsidized by the hospital by a health plan, which is, you know, sounds so easy.

Alan Patrickoff
Someone's got to go to the doctor, got to go to the hospital, you know, are they going to get there? You know, are they going to fall on the way to getting there? Are they going to time for the appointment? This is a company that specializes in, you know, picking up the patient from the doorstep and checking conditions at the same time, taking them to the car, taking them to the appointment, dropping them off, making sure they get in, because everybody's not capable, and then being there on time. They have a 99% reliability.

It's not like your Uber, which you, which says you'll be there in three minutes and gets there in ten or never. This has to have a very high reliability factor. So all of these areas are serving, if you heard what we said, they're all serving older people. Yeah, 100%. And some of these solutions almost seem like they make too much sense not to work.

Nick Moran
But one of the challenges we've run into is when you're working with the payers that are super motivated to reduce high acuity issues, you also have to engage the population and make sure they're compliant. So it's almost a two level sale, right? You get the payers, but then you also have to get the population. You know, how much is behavioral change and, you know, resistance to new workflows and new behaviors, how much of that is a consideration and a challenge with dealing? When you're dealing with the population that.

Abby Miller Levy
You'Re focused on, it's really about the channel in some ways, less the population. We found the end user to be very open and willing to engage as long as you can reach them. Frankly, reach them usually telephonically, sometimes over text, and sometimes in person knocking on doors. And the issue with the channel is how willing are they to experiment and allow startups to use those means to reach the end audience. When we started the fund in 2020, you heard from the payers, we're never giving our lists to vendors.

We manage our customer relationship, our patient relationship. And you're nodding because you know that they actually can't reach their own audience very well. And so they are now allowing startups and giving those patient eligibility files and ability to reach out and do the marketing on their behalf. So it definitely depends on the channel, those that are more or less willing to do that. But we are definitely seeing a shift.

One actual myth, though, that I think this audience might be interested in is there, is this myth that, well, if I can reach the adult child who is the family caregiver for their older parent, that is my marketing channel. And what I'll always say to a founder who says, listen, our target is the adult child. I will ask them if they have a living parent, and I will ask them, are you able to convince your parent to do anything? And the answer is, of course, no. So why do founders think that they can build a business for the adult child to ultimately influence the behavior of the older adult?

In our experience, unless that older adult has already admitted some diminishment of independence because they have dementia or Alzheimer's or some reason why they cannot maintain their independence. That is not really the target market. The target market is the older adult. How do you reach that population if you're going straight to the six year olds or the 70 year olds? Do you have to go through different channels then?

Nick Moran
Abby? Yeah. The channels that are working really well right now are affiliate channels. A lot of our healthcare companies sell through financial services players like life insurance or retail banks, wealth advisors, retirement advisors, because they already have a trusted relationship with the individual and the same thing digitally. You know, who has a trusted relationship?

Abby Miller Levy
If someone's a part of an affinity group or an email or a blog or, you know, a big issue with reaching this audience is trust. And that is because the trust has been so violated by all the fraud attempts and the email marketing and the, you know, all of the sense of preying upon, you know, older people digitally. That's real. And thus the upside. The silver lining of that is that marketers who can find trusted brands and relationships to be their proxy are definitely doing it.

So we find affiliate and obviously referrals, but affiliates working really well for this audience. I got to share this. When I told my mom I was going into business, she's now 71. She was so deflated. In her world, it's God.

Nick Moran
And then her doctor. So, like the PCP, you know, is the ultimate hero in my mother's life. I'm curious, with the amount of noise and distractions and pharmaceutical reps and such that are, you know, targeting physicians, is that also a part of kind of the channel focus and the way to get through to customers? It's interesting because the healthcare system has very low np's and very low trust. So I'm so happy that your mother has such a wonderful relationship with her PCP.

Anything your doctor says she'll do, I. Would say that is not as prevalent as one would like. But the. There are some areas of healthcare that I think are really working. First of all, there's healthcare influencers.

Abby Miller Levy
What we're seeing, I don't know if you've seen the rise of these authors. You know, whether. Whether it's David Sinclair, Peter Attia, Andrew Huberman. A lot of people are starting to get information in sources other than their pcps. In fact, people joke about Doctor Google, but the majority of Americans are using content online to inform their decisions.

And so very well thought out. I'd say expert content marketing strategy is something that we're seeing a big role on. Role for. We're seeing less on going through the MD channel, just to be, you know. To be blunt, if we could feature anyone here on the show, who do you think we should interview and what topic would you like to hear them speak about?

Maybe I'm just in a policy frame of mind, but I still think that getting folks to take a look at the macro trends around venture. So I know that oftentimes the podcasts we do are micro on being a fund manager or a founder. But this question of where is this industry going, I think is one that is, I wouldn't say we're at a critical point, but I think starting to work on the more governmental or macro lens on the macroeconomics of venture. You know, academics that study this, you know, the venture capital industry, those are the types of people to get their perspective on. Where is this going?

I think that would be super interesting. I don't, honestly, I think I have to give it more thought. I'm going to refer to my book, but I'm sorry, I don't really, I'm not doing it for that reason. One of the things I say in my book, which I believe in very strongly, the reason I've been able to live this long in this healthy, in this shape, is that I've had a very multidimensional life. And so when you ask that question, you know, I'm friendly with philosophers, I'm friendly with politicians, I'm friendly with historians, and by the way, vendrick Appellate.

Alan Patrickoff
But that's really not number one on my list. So, you know, I'm involved in theater. I'm involved in music. I think that. So when you ask me this question, I'd have to really deep into all the areas I'm in.

I mean, I could say, you know, have Joe Biden on the phone, on the desk. Probably now, the most interesting person I think you could probably have would be Anthony Blinken. I know all these people. I mean, I've lived such an active life and moved around alone that I know almost everybody that I would say would not be someone in the venture business. I would pick someone who would bring some insights into the world we're living and have a thoughtful viewpoint on how we're all going to live longer and make life and have an interesting life.

Nick Moran
Awesome. Remarkable. And then aside from your book, is there another article, book or video that you'd recommend to listeners? It's a book called this chair, a manifesto on ageism. And I think if you really start to understand our inherent age bias, I think that there are some really great lessons for how you run your business for opportunities for investment and then for how you create around you an environment that is age inclusive for your own benefit and for the benefit of your loved ones, you know, you know, full stop.

Abby Miller Levy
It was a book I read before starting the fund. And it's not fringe or niche. It is a really important part of day to day living. Perfect. Do you have any habits, tactics or techniques that are a secret weapon for Alan?

I'll tell Allen. Allen walks everywhere, and it is a secret weapon not just from a wellness perspective, but also he bumps into people. We always joke, you know, who, when we walk around New York together that, you know, neither of us can walk, you know, two blocks without bumping into somebody. But I think it's also just an outlook on life. And granted, we're in New York.

If you're in a suburban environment, it's a little harder to have that same experience if you're a listener. But I think it's really indicative of just an outlook, but also a way to get things done. So that would be a habit that, Alan, is your habit and is a hallmark of you. I mean, I have a very positive outlook on life, and I only know the word yes. And I think that's a good way to, that's a secret to longevity and living a happy life.

Alan Patrickoff
And I just got my wife 50 years, died three years ago, and I got remarried a few months ago, someone I had known alone. Congratulations. So he definitely said yes. So, I mean, I think if you think of long, you know, long term, wake up every day and not don't say I'm depressed, but say I'm excited about, you know, what I've got on my platform for today. I think that will be a helpful lesson for longevity.

I walk. I walk every place humanly possible. I just did 8 miles with my wife yesterday on country, and this morning I didn't because I've been working all day. But tomorrow morning I'll be walking. It's 07:00 with a trainer getting ready to see if I can do this marathon.

Nick Moran
Well, best of luck to you with the marathon. I don't think there's a point that's better to finish on than that. She is Abby Miller Levy, and he is the legend, Alan Patrickoff of Primetime partners. Thank you both for spending the time. This was a true thrill.

Abby Miller Levy
Thank you, Nick. Thanks.

D
All right, that'll wrap up today's interview. If you enjoyed the episode or a previous one, let the guests know about it. Share your thoughts on social or shoot them an email. Let them know what particularly resonated with you. I can't tell you how much I appreciate that.

Some of the smartest folks in venture are willing to take the time and share their insights with us. If you feel the same. A compliment goes a long way. Okay, that's a wrap for today. Until next time, remember to over prepare, choose carefully, and invest confidently.

Thanks so much for listening.