The four fragilities of a healthcare system under pressure

In the first of these pieces I argued that investing in health is not the same as investing for health impact, and I ended it on a question I have kept returning to since: which specific structural failure of the healthcare system does a company address, and how would you know if it worked? In the second I described the three axes a health fund can organise itself around, and explained why we chose to lead with problems rather than with technologies or diseases. I closed that piece by naming four broad places where the system seemed to be under the most strain, and by admitting that they deserved more than a paragraph. This is the longer treatment, and it is also the part of the argument with the least room to hide, because a fund that leads with problems has to be able to name them precisely, or it slides back into the vague good intentions the first article was written against.

What follows comes from the same work Carmel, Luc and I have been doing for well over a year now to build the thesis for our upcoming health fund. That thesis is centred on four fragilities, the structural weak points that keep European healthcare systems under pressure. We arrived at them by taking an existing model apart, so that is where I want to start.

The framework we started from

That model is the Quadruple Aim¹, which Thomas Bodenheimer and Christine Sinsky proposed in 2014. It extended the earlier Triple Aim with a fourth goal, improving the work life of the people who deliver care, and has since become one of the most widely used lenses on health system performance. It describes four things a high-performing healthcare system should achieve: better health outcomes, lower cost of care, a better experience for patients, and a better experience for the professionals who look after them. By design it describes what good looks like, and that is exactly why it could not do the whole job for us as investors, because a fund does not invest in aims. A fund invests in companies that fix something, and to find them you need a picture of where the system breaks. So we worked backwards from each aim to its most common failure in practice, and named each one for the pressure it creates in the system. That is what we mean by a fragility.

The four fragilities

I take them one at a time below, in no particular order, although, as I explain further down, they are anything but independent. We look for answers to each of them across the three areas we invest in, MedTech, HealthTech and Enabling Tech, and it was the problems themselves that led us to those three. A fragility belongs to the whole system, and easing one rarely takes a single kind of tool. It takes devices that reach the patient and the procedure, software that turns what those devices capture into decisions and coordinated care, and the data, laboratory and production infrastructure underneath both. Moving a treatment from the hospital into the home, for instance, needs equipment that is safe outside the ward, software to follow the patient remotely, and the logistics and data flows behind both before it changes anything. That is why we treat the three verticals as the toolkit these four problems require, and why the companies we find most interesting often sit where two of them meet.

Fragility 1: The burden of preventable and late-detected disease

Better health outcomes are what a system fails to deliver when chronic disease is caught late, when prevention depends on a patient happening to see the right clinician at the right moment, and when complications are treated after they appear instead of before. Late detection, variation in practice, gaps in risk stratification and poor adherence to long treatments all push in the same direction. The companies we look for move the moment of useful intervention earlier, through diagnostics that find disease sooner, monitoring that picks up deterioration at home, or decision support that flags the patient at risk before the emergency admission. Earlier is usually cheaper ánd better for the patient, which is why it is a natural place to enter the loop I describe further down.

Fragility 2: The unsustainable cost of care

The OECD projects public spending on health to grow by an average of 1.5% of GDP by 2045 across its member countries, and the reasons are structural: ageing populations, a widening range of possible treatments, and the accumulated cost of complications and readmissions that earlier care would have avoided. Beneath the headline figures sit less visible costs, from administrative work and low hospital throughput to care delivered in more expensive settings than needed. The innovations that respond to this rarely make headlines. They shorten procedures, move care from the ward to the outpatient clinic or the home, automate work that nobody spent years training to do, and lower the cost of bringing new therapies to patients in the first place. Each saving looks modest on its own, but together they decide how much care a system can keep paying for.

Fragility 3: Fragmented access and coordination

This is the fragility patients feel most directly, and it is where the goal of a better patient experience breaks down. Ask people about their last encounter with the system and they will rarely complain about the clinical care itself; they will talk about the waiting list, the referral that went nowhere, the specialist who never received the GP’s notes, and the sense that nobody was responsible for the whole journey. The causes are the separation of care settings, uneven provision across regions, manual handovers, and data locked in separate systems, with GP, hospital and other care records that do not talk to one another. We look for companies that bring diagnosis and treatment closer to the patient, that take care of the journey and not only the appointment, and that build the interoperability without which none of this scales. Personalisation, in my experience, tends to follow from continuity rather than precede it.

Fragility 4: A workforce under pressure

The fourth fragility limits what the system can do about the other three, because almost every intervention in healthcare still depends on a professional’s time. The World Health Organization projects a shortfall of 950,000 health workers across its European Region by 2030, and a headcount understates the problem, since burnout, documentation and an ageing workforce erode capacity long before anyone leaves. Clinicians spend too much of their day on administration, training pipelines cannot produce specialists fast enough, and many workflows were designed for a different era of medicine. The question we ask of any company here is whether it gives a clinician time back or asks for more of it. Documentation automation, remote care that extends the reach of scarce specialists, assistive robotics and training tools that shorten learning curves can all answer well, when they work as promised.

A loop rather than a list

Listed one after another, the four fragilities may look like separate compartments, each with its own set of solutions. In practice they feed each other through channels any clinician or hospital manager will recognize. Disease caught late costs more to treat and takes more clinical time per patient. A stretched workforce has less time for the preventive and follow-up contact that would have caught the next case earlier. Cost pressure leads to rationing, rationing lengthens waiting lists, and patients who wait tend to present later, which brings the loop back to where it started. There is no single root cause to fix, and an intervention aimed at one point is often absorbed by the pressure coming from the other three.

This changes how we assess a company. We ask which fragilities a product touches, and through what mechanism, and we pay most attention to those that loosen the loop at more than one point. A company that detects deterioration earlier at home also avoids admissions, spares scarce staff and shortens the distance between patient and care. A company whose effect stops at one fragility may still be a good business, but it is usually doing less for the system than its pitch deck suggests.

None of this is new to how my colleagues and I have invested. Our four most recent health investments Noah Labs, Healthplus.ai, Psylaris and Vivalyx, were each a deliberate choice made with these pressures in mind, and each acts on more than one of the fragilities described above, as the figure below sets out. What we have not had until now is a formal health impact framework to hold those choices to, one that makes the reasoning explicit before we invest and measures it consistently afterwards. That is the main thing our upcoming fund, the first we have dedicated entirely to health, adds.

This is the last of the three pieces, and read together they make one argument. Impact in health has to be measured against what a company does for the system. The most direct way to organise a fund around that idea is to start from the system’s problems rather than from a technology or a disease. Among those problems, we have chosen to build our thesis around four fragilities, and because they reinforce one another, the companies we most want to back are the ones that ease more than one at once.

Describing the thinking behind our framework was the easier part. Holding companies, and ourselves, to it over the life of a fund is the work that comes next.