Nearly every corner of healthcare can still be made better. That was the starting point for a wide-ranging Fireside Chat between StartUp Health co-founder Unity Stoakes and Bob Kocher, Partner at Venrock, physician, and one of healthcare's most experienced investors. Bob helped shape national health policy during the Obama administration, spent years at McKinsey, and continues to practice medicine today, a vantage point he draws on directly when evaluating founders.

Bob opened with a contrarian take: AI will make healthcare better, but not cheaper. Venrock just released its 10th annual Healthcare Prognosis, a survey of hundreds of health tech experts on where the industry is really headed, and the results don't line up neatly with the hype. 

"AI will work in the system and system incentives that exist for the people in healthcare," he said. Because most care is still paid fee-for-service, AI-driven productivity gains, like faster documentation and more virtual visits, translate into more activity, not lower prices. In his view, only value-based care arrangements stand to benefit from AI without simply generating more billable volume.

Rather than list where opportunity exists, Bob named where it doesn't: ICU care, ambulatory surgery centers, and generic direct-to-consumer telemedicine are, in his words, already done well. That leaves what he sees as real openings, including value-based specialty care, geriatric behavioral health, and medication titration and deprescribing, an area Venrock has worked on directly through its investment in StartUp Health community member Devoted Health, where teams spend significant time figuring out how to get patients off medicines they no longer need.

For Bob, AI features alone rarely create a defensible business. "Anything you create in AI, AI can be created by other people in AI probably quicker," he said. He's drawn instead to companies that are full stack, that bear real risk, and that have survived long payer contracting cycles, the kind of durable moats that features alone can't provide. He points again to Devoted Health as an example of a growth-stage company positioned to apply AI well, precisely because it already has an installed base and real distribution to push new capability through.

Before he gets to market size or defensibility, Bob says there's one thing he wants to understand first: why did this founder quit their job to start this company. "Every founder I've met was doing something different before they started their business," he said. "It is a scary, giant leap of faith to go start a company, and it's like having a child. You have to bring it to life and bring people to it." For Bob, that "why" is often the clearest signal of whether someone has the conviction to keep going when building a company gets hard, which he describes as one of the hardest jobs there is.

When a founder pitches him, Bob said he's listening for two things: why they left their prior career to start the company, and how big the effect size of their innovation actually is. "You have to be able to see from Jupiter that this is a better approach," he said. Everything else, including defensibility and competition, comes after that first filter.

He points to StartUp Health community member Virta Health as the clearest example. When CEO & Founder Sami Inkinen first pitched him on reversing Type 2 diabetes, Bob had never encountered the claim, not in medical school, not in residency, not even at Joslin Diabetes Center, one of the top diabetes centers in the world. "He's like, 'Well, here's the data,'" Bob recalled. "And I'm like, 'Oh, it's a big effect size.'" It's the kind of outsized, well-evidenced claim he says makes the rest of the diligence conversation almost secondary.

This is only part of the conversation. When we opened it up for questions, Health Transformers asked Bob about cost containment, wearables, dementia care, and early disease detection, and StartUp Health members were in the room to ask their own. Join the community to get the full Q&A and a seat at the next Fireside Chat.