Health

Former Apple CEO John Sculley on the consumer revolution in healthcare

Above: Former Apple chief executive is one of a handful of investors in MDLive, a telemedicine service

Image Credit: John Sculley

This sponsored post is produced by Halle Tecco, CEO & Cofounder of RockHealth.

When Steve Jobs recruited John Sculley to join Apple 30 years ago, he became the first big brand consumer marketer to head a Silicon Valley company. Jobs knew that the PC would eventually become a consumer product and would need the same marketing prowess as other household brands.

Thirty years later, and healthcare has missed both the PC revolution and the Internet revolution. But John Sculley won’t let healthcare miss the new era of consumer-centric wellness and health. He believes that disruptive innovation in this space will be about connecting the dots between high tech, healthcare, and consumer branding.

With decades of experience in both technology and consumer branding experience, Sculley began investing in and starting healthcare companies almost eight years ago. His companies include Misfit Wearables, MDLIVE, Audax Health, and SleepMed.

I sat down with John Sculley to learn more about what he’s doing.

Halle Tecco: Why do you think healthcare delivery in particular is ripe for disruption? What numbers make you optimistic?
John Sculley: Here’s why I’m optimistic about the future of the consumer era of healthcare. Since the end of World War II, employees (currently 95 million workers and their families) have had a tax-free benefit of health insurance. Now with the Affordable Care Act (ACA), employers are quickly moving to self-insured health insurance to offset the inflationary added expenses expected from the ACA. The result is self-insured employers adopting “high deductibles,” meaning every year employees will now have to pay the first $5,000 out of their own pocket before co-pay kicks in. Long waiting lines for doctor appointments, 30 million more insured citizens, and high deductibles are expected to motivate consumers to look for lower cost, more convenient alternatives like walk-in urgent care clinics and telehealth services.

HT: Why has design and user experience been ignored in traditional healthcare?
JS: The healthcare industry has never had a priority on user experience because there has been little competition. Prices have never been transparent. Doctors have avoided being rated by patients. Healthcare missed both the PC revolution and the Internet revolution. It has a real opportunity to benefit now from the cloud and mobility revolution.

HT: What role do you see government playing in the consumerization of healthcare?
JS: State by state we are starting to see adoption of reimbursements for new innovative medical services like telehealth. The complexity and special interest lobbying has discouraged many venture capitalists from investing in healthcare. This is starting to change.

HT: What do you think of Obamacare?
JS: Obamacare’s mandates are designed by lawyers and lobbyists resulting in overly complex, often illogical policies that will likely cost far more than politicians promised. A derivative effect of the ACA is that it’s forcing health providers to seriously look at cheaper and better wellness and sick care alternatives. This is an example of how badly constructed laws and regulations may actually be a forcing mechanism for entrepreneurs to successfully market better, free enterprise alternatives. Hospitals are consolidating and weaker hospitals are disappearing. Doctors are selling their practices to the consolidating hospitals and ACOs. These are just a couple of examples of the many derivative effects of the ACA.

HT: You play the coaching role to many of the CEOs you back. What are some of the biggest challenges you see across your portfolio and in digital health in general?
JS: Our primary goal in the consumer health service companies I back is helping them create an uncompromisingly great consumer experience. As a brand marketer, I’m a big believer in “branding the customer experience”, not just selling the service.

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Want more? John Sculley will be a keynote speaker at Rock Health’s third annual Health Innovation Summit.

Rock Health supports entrepreneurs innovating at the intersection of healthcare and technology.


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