For most of its history, healthcare was the industry that tech left behind. It adopted more slowly, scaled with more friction, and attracted less capital than nearly any other sector. Julie Yoo, General Partner at Andreessen Horowitz (a16z) on the health and bio side, spent years defending her deals in the partnership.

"When I would bring my health tech deals to the partnership, I was slightly embarrassed," she told the StartUp Health community during a recent fireside chat hosted by co-founder Unity Stoakes. "These ones don't have as great growth. Their gross margins aren't as great. They're just slower. They looked worse on paper than any of their tech counterparts."

That era is over. Today, Yoo's consumer and enterprise partners are competing for seats at the table when health tech deals come through.

The shift is not cosmetic. Health tech companies founded since 2022 are reaching $100 million in ARR at a pace that rivals the fastest-growing companies across the broader technology landscape. Unit economics have moved from "technical services" territory to something that looks far more like pure software. And the caliber of founders entering the space has increased meaningfully.

"The form factor of the businesses being built in our space are much better set up to take advantage of the influx of capital," Yoo said.

Yoo has made a consistent argument over the past two years, one she now says the data is beginning to confirm: healthcare will benefit from AI more than any other industry. The reasons are structural, not accidental.

The same characteristics that made healthcare a laggard in previous technology waves, its low historical adoption, its deep reliance on specialized domain knowledge, its entrenched labor challenges, are precisely the conditions that make AI most valuable.

"All of those things are exactly the criteria that make our industry the most conducive to the application of AI," she said. "And the slope of the curve of what we're seeing in healthcare is steeper than a lot of other industries."

Yoo opened her remarks with something personal. As a former founder, she recently challenged herself to rebuild the full technology stack of Kyruus, the health tech platform she co-founded that scaled to 20 million patients and more than 225,000 providers before its acquisition. The version that took years and significant venture capital to build the first time?

"I was able to finish it in four days," she said.

That compression changes everything about how founders should think about product development. But Yoo was quick to note the limits. The technology stack is no longer the bottleneck. The bottleneck is everything else.

She referenced an analogy about AI's effect on the construction industry: if you automate everything except the plumber, plumbers suddenly become as scarce and valuable as LeBron James. Yoo applied the same framing to healthcare. The human touchpoints that cannot be automated, the clinicians in the home, the hands-on diagnostic moments, the judgment calls that require both domain expertise and presence, are now the scarcest and most valuable resource in the system.

For years, conventional startup wisdom in healthcare held that you should do one thing, for one market, with one business model, before earning the right to expand. Yoo was among those who enforced that discipline.

She no longer holds that view.

"Our best performing companies in our portfolio today are all compound businesses," she said. "They're doing multiple products, selling into the same end market. Or the same product into multiple markets. Or multiple business models, B2B and direct-to-consumer, all at once."

The AI leverage founders now have on roughly 80% of their technology stack frees up meaningful capacity to pursue expansion earlier. Rather than spending engineering cycles building, they can deploy those calories against go-to-market growth, new revenue streams, and new customer segments. And the market is demanding it.

"The era of point solutions and this fragmentation has really frustrated a lot of customers," Yoo said. "The payers, the systems, the people who want solutions but are tired of one specific narrow answer."

The bar for fundraising has shifted. Three years ago, arriving at a Series A with $1 million in ARR and strong growth made you stand out. Today, Yoo said, nearly everyone walks in with $5 million ARR, similar products, and the same target market.

"It's really hard to tell purely based on the numbers who is actually the breakout winner," she said.

That means investors are increasingly focused on what the numbers cannot show: the caliber of the founder, the ambition and clarity of the roadmap, the vision for where the company will be in five years.

"It does come back to how do we assess the exceptionalism of the founder," Yoo said. "Which I think is a very good thing."

For founders considering a16z specifically, Yoo clarified that the firm's health strategy operates primarily at seed and Series A. The firm's separate growth strategy is generalist, meaning health companies pitching there are compared not against other health companies but against the entire technology landscape.

"You will literally be compared to OpenAI and SpaceX," she said.

One of the most provocative ideas Yoo has put forward recently is the concept of infinite healthcare, a framework that challenges a decades-old assumption embedded in how the industry thinks about growth.

Today, higher utilization of healthcare is treated as a problem. More visits mean more cost. More access means more spend. Yoo argues that this logic breaks down when the unit cost of care delivery collapses.

"When you have infinite supply, people should be using primary care every single day to manage their lives," she said. "The unit cost of care delivery is going to be a fraction of what it is today."

Her piece proposed four distinct payment models for AI-enabled care, challenging the prevailing assumption that value-based payment is the only appropriate vehicle. The reaction was mixed. Yoo was candid about why.

"For decades, everyone in this industry has been shouting from the rooftops: we have to solve the access problem. We don't have enough capacity. And then all of a sudden we come and say we think we can solve access, and those same people say that's bad. We're going to spend too much."

Her argument is a reframe. The goal is alignment on the end state, one in which the cost per unit of care is low enough that access is no longer a scarcity problem, and then working backward from there.

Unity Stoakes drew a direct line to a thesis he put forward years earlier: that the global healthcare market should ultimately expand as the 8 billion people on the planet gain access to care at a fraction of the current cost. The audience at the time was skeptical.

"Let's at least agree on what the end state is," Yoo said.

The StartUp Health community had no shortage of questions across the hour, touching on defensibility in an AI-commoditizing world, the investment thesis for clinical versus administrative solutions, the future of wellness and wearables, and the challenges of integrating a system still defined more by silos than by coordination.

On each, Yoo's framing was consistent: the frontier of what needs to be built keeps moving, timing is the hardest thing to get right, and the founders who succeed will be the ones who can hold a long-term view while executing with urgency in the present.

She closed with a challenge and an invitation.

"In the spirit of what Jack Dorsey did at Block, you have an opportunity to throw all previous assumptions out the window and build things in a different way in this era. And no one will fault you for that. This is the best time to be an entrepreneur in health tech. Go forth and conquer."