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Share to FacebookShare to TwitterShare to LinkedinThe way we access healthcare is undergoing a profound transformation in part because technology has opened up new pathways, affording us access to healthcare services at the click of a button. Trend-riding investors and founders alike are at risk of making seriously bad bets in the new “click” healthcare universe. It’s instantly more exciting and easier to pitch — after all, building the “Uber of Healthcare” does have a great ring to it, doesn’t it?

Those with deep and real experience in the trillion dollar healthcare sector will tell you that the future of consumer healthcare lies in a hybrid model — “click and brick” healthcare systems — combining the convenience of digital platforms with the trust and comprehensiveness of face to face care. To have a real impact and generate better financial returns, investors need to examine hybrid click and brick healthcare solutions.

Dr. Rushika Fernandopulle knows this all too well as the Co-founder and former CEO Iora Health, a click and brick healthcare company that had a 2021 exit to world renowned One Medical at a 7x revenue multiple. One Medical was later acquired by Amazon at a 4x revenue multiple. Dr. Fernandopulle aptly summarizes, “The most successful delivery models of the future will be organized around the patient’s needs, not our own silos. The reality is that patients have some needs best met virtually, and others that are best met in person.”

In contrast, investing in the sexy click-only models leaves founders and investors victims to trend and exposed to gaping holes where patients need in-person services. Click-only models neglect how central the in-person experience remains to the most human and critical aspects of a healthcare journey. Looking a doctor directly in the eyes when your child is being examined and getting vaccinated to protect against the next pandemic just can’t be done with that sleek iPhone.

Technology alone can never solve all the problems in healthcare anywhere, but especially across rural America and emerging markets (home to 80% of the global population). These are huge areas of opportunity — the promised land, really! — for those looking to build, invest, or scale healthcare businesses. Both offer opportunities to leapfrog traditional models with hybrid click and brick systems that are built from scratch. The Lancet, one of the world’s longest standing trusted medical journals, has reported that in emerging markets more people are dying due to lack of access to quality healthcare, not lack of access alone. “Clicks” can help address the access problem, but founders and companies truly breaking ground in this area will be laying “bricks” to solve for quality.

Investors and founders need to focus in equal measure on quality infrastructure — clinics, labs, hospitals, and training facilities. There will always be a limit on the impact “medtech” or “healthtech” (the “click”) can achieve without parallel investments in the “brick.” Click and brick healthcare systems that invest in building reliable high quality infrastructure and then layer that infrastructure with technology are the healthcare systems of the future.

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But technology alone isn’t enough. As the International Finance Corporation (IFC) Global Sector Specialist for Health Charles Dalton puts it, “Healthcare should be a functional system, and digital technology alone cannot provide all the solutions; we require a hybrid approach.”

The click is in fact often just the first step in the patient’s journey to good health. Executive Director of Telehealth.org and co-author of Telehealth Success: How to Thrive in the New Age of Remote Care Dr. Aditi U. Joshi explains key “click” value-adds, “Telehealth can effectively assist with triage: 1) to assess which level of care an acute patient needs, 2) remote chronic care management either through devices or a remote visit care pathway, 3) asynchronous triaging through self reported checklists. AI’s potential is to take data in one of two ways: 1) a chart with the symptoms presented or 2) an ambient ability to hear and process a patient’s symptoms. The goal of AI is to use that data to triage the patient’s symptoms and also provide a differential diagnosis.”

Some of the greatest opportunities in the “click” are beyond traditional telemedicine or e-pharmacy models in AI. Vinod Khosla, founder of Khosla Ventures and one of Silicon Valley’s most prolific healthcare investors, shares his view: “The greatest opportunities to reform our system are not in telehealth, which by and large has failed to live up to its promises, but in AI incorporated into scientific discovery and medicine. AI-designed drugs, AI recommendations based off of terabytes of patient data, and AI doctors and nurses will finally deliver hyper-personalized effective prophylactic and reactive medicine, as well as remove barriers to access and allow patients to speak with their care teams 24/7.”

The click alone has limitations. Dr. Shikha Anand, medical doctor and seasoned C-suite executive serving across top US health tech companies, highlights: “New technologies have increased the power of in-home monitoring exponentially but still have limitations in complex medical decision making.”

The Brick Remains The Foundation of Any Healthcare System If you are adding consumer healthcare to your portfolio, remember the patient at the center of the journey. As Dr. Jeremy Lim, Senior Advisor, Boston Consulting Group, notes, “Patients don’t want either convenience or assurance; they want both. The 24/7 convenience of ‘clicks’ and the trust engendered by ‘bricks’… are what healthcare systems need to provide.”

Human connection, empathy, and the physical touch of a provider remain crucial to healing and well-being. The emotional comfort that comes from knowing a physical healthcare facility is available, if needed, is irreplaceable; moreover, the provider has more data to make an accurate diagnosis if she/he can perform a physical exam. Physical exams, diagnostics, surgeries, and emergency care are only a few examples of healthcare experiences that require a physical interaction. Google Health Senior Product Manager Dr. Fred Hersch, an expert in leveraging design-led technology to enhance healthcare access particularly in resource-limited settings, understands that: “At the end of the day, the delivery of care is a human endeavor. We have an opportunity to interweave well-designed technology into patient journeys to create a seamless experience that meets patients where they are.”

The Future of Consumer Health: Hybrid Click & Brick Models The fact is that most patients still want to be seen in person, despite the proliferation of telemedicine — a 2023 NIH study found that 71% preferred in-person medical visits to telemedicine; “The primary reasons for selecting an in-person visit were: more accurate diagnosis of the disease, more accurate and better examination of the patient by the physician, and more accurate and better treatment of the disease.” Even younger “Gen Z” consumers “actually prefer convenient in-person healthcare within the four walls of brick and mortar.”

In an experience economy, the real potential lies in blending the two approaches with click and brick models that offer patients the ease of digital health tools that are underpinned by in-person services when necessary. As Dr. Megan Ranney, emergency physician & Dean of the Yale School of Public Health, points out, “The hybrid approach offers patients, healthcare providers, and communities the best of both worlds.”

Click and brick healthcare systems meet patients where they are, and allow for a seamless end-to-end solution to their healthcare needs. Vertical integration of both the click and the brick allow for providers to ensure the quality of the patient experience and to own the economics of every step of the patient journey.

As Google Health’s Dr. Hersch adds, “With the rapid advances in AI, the winners will be the so-called ‘click and brick’ providers who have baked into their DNA the ability to integrate new digital technologies into hybrid journeys.”

Investors and public sentiment are beginning to see past the click-only trend, especially in emerging markets where the opportunity is so rife for investing in healthcare innovation that works. For example in India, following a decade where billions of dollars has been invested into fashionable click-only consumer health tech, the harsh truth is coming out — no money has been made and no problems have been solved. This is largely because the fundamental problems of healthcare in India (similar to rural America and other emerging markets) relate to the lack of basic quality infrastructure.

People are catching on to this emperor’s new clothes situation. A popular Indian daily recently reported on “The Pointlessness of Indian Healthtech Startups,” reporting that consumer healthcare brands that have raised billions — famously Pharmeasy and 1mg, among others — initially built single digit margin digital health businesses with low retention rates, failing to understand their end users. Some of these businesses ended up in bankruptcy, while others are salvaging their investments by pivoting to invest in “brick” to offer more comprehensive solutions and improve their economics. In direct to consumer markets, pure play digital health models, most famously Babylon, have often experienced low retention rates, because once the patient needs to see a doctor — which inevitably at some point she does — she may never return to the telemedicine provider.

Why Click & Brick is the Future: It Solves the Consumer’s Needs & Offers Better Financial Returns Ultimately, to build a successful business anywhere, you have to be solving a real problem for the consumer, and in countries or regions where the biggest problem is the lack of quality infrastructure, technology alone will never be the game changer that’s promised in startup pitches everywhere,some wish it could be.

From a pure investment perspective, the economics of the “brick” is much more compelling than the economics of the “click” — in markets where providers are marketing directly to consumers instead of third-party payers, pureplay healthtech businesses are often single digit margin businesses. Vertical integration with the “brick” can generate gross margins in excess of 50% — and combining the click and the brick only accelerates the efficiency of the system and investor returns.

Even though venture capitalists have invested more than $15 billion in telemedicine since 2020, there haven’t been many exits in consumer health-tech. Rather, some of the biggest recent exits in consumer healthcare have involved companies with actual physical clinics and hybrid models: One Medical (sold in 2022 for $3.9 billion to Amazon, a 6x revenue multiple), Oak Street Health (bought by CVS in 2023 for $10.6 billion), Lifestance (2024 IPO at $7.5 billion market cap, a 20x revenue multiple), and Premise Health (acquired in 2018 by OMERS Private Equity for $1.1 billion, an estimated mid-teens EBITDA multiple).

Longtime healthcare investor investor Sander Duncan, CEO and Founder of Sespe Health Holdings who has worked with hybrid companies like One Medical, Positive Development and Oula Health, sums it up: “Though the click and brick model might not seem revolutionary on paper to a venture investor pursuing flying cars and deep tech, we often see the most favorable risk/return profile, less scaling risk, and a clear sky opportunity to build impactful companies in huge end markets with a hybrid model that meets patients needs.”

The corollary emerging market exits are still unrealized, also creating opportunity for investors and regional operators. Traditional “brick” healthcare systems at scale in Asia trade at multiples 2-3x more than healthcare systems in the west, simply due to excess demand and lack of competition. By accelerating access to high quality healthcare with the “click,” the opportunity grows even bigger. Businesses such as Ping An Good Doctor (China), Praava Health (Bangladesh), and Doctor Consulta (Brazil) successfully are scaling click and brick healthcare systems, often more quickly than their U.S. counterparts due to excess demand, less competition, and less onerous regulation.

By blending digital and in-person care, click and brick healthcare models meet rising patient demands while maximizing investor returns. Scalable, efficient, and patient-centered, this hybrid approach brings the future of healthcare to life.

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