PALO ALTO, Calif. — It’s easy to think, from the headlines, that the future of health care is being forged on Capitol Hill. But the traditional centers of power and influence are losing ground — and talent — to the fertile, sometimes chaotic, environs of Silicon Valley.
What happens when top biomedical scientists and health policy experts head west? What do they find in California? And what lessons do they draw?
To find out, STAT invited five leading voices in California’s health care startup culture to a roundtable discussion at the offices of Mindstrong Health, a startup seeking to use data gathered from smartphones to diagnose and treat mental illness. A sixth interview, with Dr. Atul Butte, was conducted earlier in San Francisco.
Here are the lessons these scientists and entrepreneurs draw from their cross-country migration. And one editorial note: We’d love to hear responses from East Coast denizens working on health care innovation from Kendall Square, Research Triangle, D.C., or elsewhere. Please use the comment box at the end of the article to share your views; we may include some in a future story. Now, on to the lessons:
1. It’s hard to change the world from the NIH.
“My epiphany, if there was one, happened when was I was giving a public lecture about all the fantastic science we were supporting through the NIMH and the president’s BRAIN Initiative,” recounts Dr. Tom Insel.
Insel ran the National Institute of Mental Health for 13 years. At that lecture, he remembers talking about the “beautiful” work being done in stem cells and epigenetics.
“At the end of it, somebody got up and said, ‘You know, you just don’t get it. You don’t understand. My 23-year-old son has schizophrenia and has been in and out of the hospital four times. He’s made two suicide attempts. So our house is on fire, and you’re working on the chemistry of the paint.’”
That hit home for Insel.
“I had left academia to go to the government because I thought I could have greater impact on public health measures — morbidity and mortality. I spent $20 billion of taxpayer money over 13 years and I hadn’t budged the suicide numbers, and I hadn’t budged any numbers on morbidity.
“… So I started looking around and asking, ‘Where’s the real disruption happening?’ … The kinds of things that President Obama was trying to push in the last two years were pretty exciting. But it still felt sometimes like I had gone to war with the wrong army.
“What I was doing was providing lots of additional funding to people whose major goal was to get a paper in Nature and get tenure.”
“What I was doing was providing lots of additional funding to people whose major goal was to get a paper in Nature and get tenure.”
DR. TOM INSEL, MINDSTRONG HEALTH CO-FOUNDER
By 2015, Insel was impatient. He left the National Institutes of Health to lead mental health initiatives at Google offshoot Verily Life Sciences. He then made another leap — to become an entrepreneur. This year Insel co-founded Mindstrong Health. It’s based in the Silicon Valley. And he’s glad to be here:
“If we’re thinking about impact, if we’re thinking about scale and about speed, if we’re thinking about disruption, maybe the place is not in Washington.”
2. The ivory towers of the East Coast aren’t always friendly to entrepreneurs.
“The high priests and priestesses of Boston are the professors of the top schools — and of course the Red Sox .”
So says Mary Lou Jepsen, a former professor at Massachusetts Institute of Technology. She was working at the university when she co-founded One Laptop Per Child, a nonprofit startup to get inexpensive computers to the developing world. It was a runaway success, bringing in billions in revenue, she said.
“Out here, it’s really trying to make things at scale that can transform people’s lives.”
MARY LOU JEPSEN, CO-FOUNDER OF OPENWATER
But then, she recalled, “I got a letter from the president of MIT saying that I had to choose: Be a professor, or do the $100 laptop.
“I thought, Hmm. ‘A bunch of papers and a couple dozen graduate students, or transform lives?’ No contest. I had to leave MIT. To the president’s credit, she said, ‘Get it out of your system and come back.’”
But Jepsen hasn’t gotten the startup spirit out of her system. She went on to found Openwater, a firm building ultra-high-resolution wearable devices for medical diagnostics. She’s also working on brain-machine communication. “Out here, it’s really trying to make things at scale that can transform people’s lives,” she said. “It feels like you have to choose.”
She’s made her choice.
3. The East Coast is big on hierarchy. And that can be stifling.
“I’ll admit they probably started just as many companies in the [Boston] area” as in Silicon Valley, said Dr. Atul Butte, who trained at Brown, Harvard, and MIT. “But they don’t talk about it. It’s taboo to talk about your companies on the [Harvard Medical School] quad. Here it’s the opposite. You talk about it. You help each other. There’s a lot more sharing.”
Butte moved west after his academic training to join Stanford, Apple, and Microsoft, and to co-found three companies. He now directs the University of California, San Francisco, Institute for Computational Health Sciences.
And he’s a keen observer of the coastal cultures:
“Here’s [another] example to show the difference between Boston and the Bay Area for biomedicine,” he said.
“When Harvard and the med school and the hospitals build a building, they move their senior faculty in because they’ve earned it. … At UCSF and Stanford, when we build a new building, we move the junior faculty in, because we’re investing in them.”
4. Government sets policy. But real reform comes from an army of ambitious dreamers attacking the system with new ideas.
“I loved the opportunity to be in government during the time when we had a lot of impact. … But it only does it in health care every 15 years or so. Then we have a whole lot of time [spent on] fighting, and administration, and incremental improvement.”
That’s the view from Dr. Bob Kocher, who spent years in Washington, D.C., as a special assistant to President Obama. He helped shape the Affordable Care Act and co-founded the federal Health Data Initiative, which sought to spur innovation on cost and quality by releasing health care data.
Kocher moved out to California seven years ago — because, he said, “I wanted to keep making health care suck less.” He’s embraced the more relaxed culture; he jokes that he’s built up a quite a collection of jeans. As a partner at the venture firm Venrock, he focuses on early-stage health care IT and services. Kocher also teaches at Stanford Medical School.
“Recruiting here is just so much easier. People are much more open to taking higher risk.”
DR. BOB KOCHER, VENTURE CAPITALIST
And he’s unequivocal in his belief that real change in the health care system will come from the private sector “attacking” the status quo with new ideas.
“Being here you’re actually on the front line of that with the army that does that — both startups and Alphabets,” Kocher said, referring to Google’s parent company.
Back in Boston, he said, the smart young college grads went to work for established companies that paid real salaries. Or they went into public service. In Silicon Valley, he sees young talent flocking to fledgling companies that top up relatively modest paychecks with stock options that might never be worth anything. “Recruiting here is just so much easier,” Kocher said. “People are much more open to taking higher risk. If it doesn’t work for them, [they move on to] the next [company], the next one, the next one …
“This is where the game is actually being played for a while.”
5. The rich make big bets in California.
“Philanthropically, I think more exciting things are happening here than ever happened in New Jersey or Boston,” said David Beier.
He served as chief domestic policy adviser to Vice President Al Gore during the Clinton administration. Now, he’s managing director of the health care venture firm Bay City Capital.
Beier also advises the Parker Institute for Cancer Immunotherapy, funded with a $250 million gift from Napster co-founder Sean Parker. And he holds up Parker as an example of philanthropy done right.
“He spent three or four years studying the field. He knows a lot about it and got the smartest people and … said, ‘Collaborate. Be bold. Be willing to fail.’
“That’s the antithesis of NIH. And it was in part a reaction to the [National Cancer Institute’s] failure to do immunotherapy over the last 20 years. … The government needs to be kicked to do things they wouldn’t otherwise do. Then they’ll be embarrassed into doing the right thing.”
6. All the energy of Silicon Valley comes with a big risk: hubris.
For all his appreciation of California culture, Beier also sounds a cautionary note:
“Silicon Valley is probably more full of hubris of a different sort — the assumption that because you’ve succeeded in one sector, that you know everything about every sector. I see that too much.”
7. There’s another risk: forever chasing the next blockbuster.
“I think health care is not served completely [well] by the ecosystem here because of the mentality of, ‘All we have to do is get it to hit, and if it hits, it will be big,’” said Dr. David Brailer. “That has been the reigning philosophy of so many successes here, but doesn’t always work well in health care, where the arc of adoption can be ultimately successful, but long. It can be concave.”
Brailer was the nation’s first national coordinator for health information technology, under President George W. Bush. He also taught at the Wharton School in Philadelphia.
“[There’s a] a willingness to try, a willingness to accept failure that I haven’t seen in any other market in the U.S. that is a big health care center.”
DR. DAVID BRAILER, CHAIR OF HEALTH EVOLUTION
Now, transplanted to the Bay Area, Brailer has reinvented himself as a health care technology investor and entrepreneur, and the chair of Health Evolution, an industry organization that convenes meetings of health care executives, innovators, investors, and policy experts to map out ways to improve than nation’s health care systems.
Brailer praised what he sees as “a willingness to try, a willingness to accept failure that I haven’t seen in any other market in the U.S. that is a big health care center. Nashville, or Dallas, or Boston, or Philadelphia — [all] have massive health care platforms, but no willingness to broker any form of innovation, [even innovation] that would be seen as, frankly, pretty boring here. So it makes this area very special. …
“It’s a learning culture.”