Health care is a massive part of the U.S. economy — about 20 percent — but it’s not one that we talk about often when we think of venture capital.

But that might be about to change, according to Jeff Tangney, a serial entrepreneur who founded Epocrates, the medical information company, and is currently running Doximity, a Facebook-style app for doctors that is growing fast, with more than one in six doctors already on the network.

VentureBeat had a chance to chat with Tangney about the future of investment in the medical space.

VentureBeat: We don’t hear all that much about investing in medicine.

Tangney: No, health tech hasn’t even really been recognized as a category until the last 10 years. There wasn’t really too much venture investment in health tech, but that’s changing. With the passing of the Affordable Care Act and the recognition that health care is 18 percent of the U.S. economy … some VCs have started looking in.

VentureBeat: What will national health care do for the space?

Tangney: The first changes of Obamacare haven’t really changed all that much yet — the biggest changes are still coming up. In 2014, the insurance exchanges start at a state level. Until then, there’s a lot of uncertainty … which actually favors the venture community.

The medical community is not quick to change over time — venture community is the only one that can react that fast. For example, we just raised a $17M round a few months ago.

VentureBeat: What’s hard about investing in health care?

Tangney: Well, you see a lot of folks sitting on their hands due to regulation.

For example, it’s illegal for a doctor to send an email about a patient. It’s illegal to send an SMS. And the internet really isn’t used in healthcare. It’s a little like a third-world country … where they’re skipping PCs and going straight to smartphones.

Over time that will change.

VentureBeat: What is working … who’s getting VC in health?

Tangney: ZocDoc, HealthApp and CastLight are doing well. CastLight, which creates a very cool employer portal for lower health care costs, raised $100 million earlier this year.

ZocDoc, with does online scheduling, raised $70 million a few months before that. And PracticeFusion raised $34M round to help usher in electronic health records. We’ve raised $27 million at Doximity … so there’s easily $200 million raised in the last year.

VentureBeat: What do you see in the future?

Tangney: Investors who are focusing on health care are starting to place their bets … as soon as we get out of this regulatory uncertainty, things will start to move.

Most people don’t know it, but Sequoia’s biggest investment ever was in an urgent care center … MedExpress, about two or three years ago. They’re seeing this shift to insurance exchanges, where, instead of someone paying  $3,000 for treatment in a hospital, they’re getting essentially the same service for $1,000 in a small health care facility.

VentureBeat: How does the growing self-quantification movement fit into this?

Tangney: Well, I wear a Jawbone wristband, but the knock on Sand Hill Road is that no-one’s been able to turn it into a big business yet.

The question is: Where’s the cross-the-chasm product?

The hotbed of this is San Diego … QualComm has invested a lot, and West Wireless Institute has  put $500 million into quantification. They’re trying to come up with cool new technology that the U.S. can sell to the rest of the world … to the wealthy well.

I have a Sonos headband too. It’s really ugly, really geeky, and measures your sleep patterns. What I’ve learned is that to get a sleep score of 100, I need to be intimate with my wife first. [laughing]

Those are all cool things, but even Nike hasn’t been able to really crack this market yet.

photo credit: Viktor Hertz via photopin cc