INBW26: A Three-Prong Plan to Find Areas of Promise and/or Promising Companies in Health Care

In this episode, Stacey Richter answers a question posed by students from the University of Michigan's Ross School of Business: her three-prong plan for finding areas of promise and promising companies in health care.

WHAT YOU'LL LEARN

✅ Why "promise" shouldn't mean piling up bills at the expense of patients and taxpayers

✅ Stacey's three-prong plan for spotting promising health care companies, starting with "follow the money"

✅ Why it's hard to integrate with an unknown entity, and why doctors tend to favor solutions they help create

✅ The difference between disruptive innovation and sustaining innovation

✅ Why looking for first movers and disruptive companies that have attracted investment from entrenched players is a useful signal

WHY THIS MATTERS

Stacey lays out a practical framework for evaluating promise in health care: follow the money to see who actually benefits, look for genuine innovation rather than hype, and distinguish between companies sustaining the status quo and those disrupting it. Drawing on Clayton Christensen's "The Innovator's Dilemma" and Zeev Neuwirth's "Reframing Healthcare," she cautions that hype cycles are real and that transparency remains a critical, if imperfect, signal of which health care businesses are worth watching.

MENTIONED IN THIS EPISODE

🔗 EP202, with Frazer Buntin

=== LINKS ===

🔗 Show Notes with all mentioned links: Episode Page

🔗 Healthcare Industry Acronyms and Terms

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00:00 Introduction

01:47 Promise doesn't mean piling up bills at the expense of patients and taxpayers.

02:47 "These companies won't change unless there are people working from within to get them on track."

03:53 Stacey's three-prong plan to find promising companies within health care.

04:08 "Follow the money."

05:29 Three things to look for in a health care company or health care area.

06:12 "It's really hard to integrate with an unknown entity."

06:50 "Doctors … like to create their own solutions."

07:34 "The realities [are], people buy what they … create."

09:48 "The hype cycle is real."

10:45 All promising areas and companies have one thing in common: They're innovative.

11:07 Disruptive innovation vs sustaining innovation.

11:45 Clayton Christensen's "The Innovator's Dilemma."

12:23 Zeev Neuwirth's "Reframing Healthcare."

14:48 EP202 with Frazer Buntin.

15:41 "Look for first movers."

15:56 "Look for disruptive companies that have gotten investments from entrenched players."

16:23 Who excels at incremental innovation vs disruptive innovation.

17:10 Stacey's note of caution about transparency and health care businesses.