Parallels Between Healthcare and Newspapers

Parallels Between Healthcare and Newspapers
With Dave Chase of Cascadia Capital

David Snow, Privcap: Today, we’re joined by Dave Chase, a senior advisor to Cascadia Capital. Dave, welcome to Privcap. Thanks for being here.

Dave Chase, Cascadia Capital: Thanks, pleasure to be here.

Snow: Do you see any more mature businesses out there that are capable of adapting to some of the changes you’ve described?

Chase: Yeah. I think there will be some, just as in traditional media, you saw a few organizations make the transition. Actually, I detoured away from healthcare for a while and spent time with a lot of local media companies.

There are a lot of parallels with what you see. What I heard, literally, out of newspaper executives’ mouths…verbatim, what I hear out of a lot of health systems’ mouths.

Snow: For example, what?

Chase: They are very dismissive of new entrants and, especially when they’re small, they either are just blind to them or a lot of it’s classic disruptive innovation.

Snow: No one’s going to buy a car that they saw listed on a free web listing.

Chase: Right, exactly. No one is going to these new clinics that are now—there are over 10 million visits in these retail clinics. You look at a company like ZoomCare, which started out as 28 retail clinics in Portland. They are now Zoom+ Performance Health Insurance. In my view, they’re like a Kaiser Permanente for the 21st century—really optimized for a lot of things Millennials want. Healthcare’s been a pretty risk-averse industry for a lot of good reasons, but that doesn’t necessarily foster a culture that thinks about reinvention. So, I think the incumbents that are going to do well will (a) foster innovation…and unshackle some of their internal people.

One of the mistakes that newspapers made was a zero-sum game mindset. They just looked at their existing industry as it was, particularly when some of these companies were very small and they had the opportunity to acquire, partner or invest in at least 80% of what makes up digital media today, which has now surpassed even broadcast media for the largest chunk of ad dollars. That’s the risk that—because there are a lot of things beyond just what traditional healthcare systems do.

They don’t actually get a vote in the world changing. It’s going to change with or without them. I mean, they can maybe slow it on the margins, but the energy that they might put into slowing on the margins should go toward playing offense.