Rock Health's Halle Tecco: The Many Challenges Healthcare Tech Startups Face

Rock Health sees the future, and healthcare technology is an integral part of it. The company, founded by Halle Tecco, funds startups in the field of digital health. Last year was a record year for digital health funding, with more than $4 billion invested in the market -- a 127 percent year-on-year growth. The speed of growth in digital health is faster than growth in traditional healthcare and software in general.

As a result, investors have turned their collective attention to the industry. This is evidenced by the fact that 30 percent of Google Ventures' investments last year were in healthcare.

But, the industry faces serious obstacles as a longstanding industry adjusts to the changes technology will bring.

Innovative Ideas
Rock Health specifically seeks out ideas that will make a big difference in healthcare. Healthcare is a $3.7 trillion industry, and Tecco has found there are many areas that could be dramatically improved through technology.

"I would say that's first and foremost is that the product or the service that a company is creating can make a really big difference and not just be incremental, 'okay this is a little bit better than it was before,'" Tecco says.

Regulatory Obstacles
Since healthcare is heavily regulated on both the local and federal level, Tecco sees a great deal of concern from tech innovators over whether a product will be required to go through regulatory hurdles. Telemedicine shows a great deal of promise, with companies like Neurotrack and Cellscope revolutionizing medical diagnosis. Tecco hopes to see a day when diagnosis leaves the medical environment and resides in every home, but there are some major regulatory obstacles to reduce first.

"One of the biggest burdens is around state credentialing for doctors," Tecco says. "You can't actually treat patients across state lines if you're a doctor. As you can imagine, if you're building a platform that's a telemedicine company, you'd have to hire doctors in every state. That's a big issue and that's something that the states want control over."

Change Resistance
The medical community is understandably resistant to the idea that computers may someday replace humans in diagnosing and treating disease. Vinod Khosla's statement that 80 percent of doctors could be replaced didn't help matters. Tecco doesn't see digital medicine as replacing humans, but instead improving the industry as a whole.

"A lot of what doctors do is going to be replaced," Tecco says. "And we think that's a good thing because then doctors can be freed up to really focus on the most complex cases. If a diagnosis can be made more accurately and more cheaply with a computer, then we should allow that to happen."

Finding Talent
Among the biggest problems Tecco currently sees is a lack of talent, especially in the Bay Area. Finding talented developers and support staff for the many healthcare-related startups emerging in California is an ongoing challenge for entrepreneurs.

"The real barriers are the same as any other industry, which is hiring," Tecco says. "That's the biggest complaint we hear."

Good Bets
Entrepreneurs are always seeking to learn more about the types of projects venture capitalists are interested in funding. Tecco says entrepreneurs should look for ideas that can be completely transformative. Investors see so many great projects every day that it usually takes a project with a big idea behind it to get their attention.

"Don't pitch me something where the margin and the mission do not align," Tecco says. "In healthcare, we see a lot of things that can make a lot of money but actually would keep people unhealthy. There's too many ways to help people be healthier versus reduce access. Don't bring anything that is bad for healthcare."