Caroline Xie, ICONIQ Growth, on What's Next for Healthcare

ICONIQ's Caroline Xie Sees AI as Health Care's Next Step

Health care is one of the last major US industries with negative productivity growth, and Caroline Xie of ICONIQ Growth thinks that is an opportunity. She argues the system's high costs and consumer shift will reward companies that sell directly to patients and deploy AI in administration first. Domain-specific models will win because clinical work cannot tolerate hallucinations. The QGenda story illustrates the kind of durable company she wants to back.

Takeaways

• Consumers take more control of care. Xie says patients are increasingly discerning about where and how they receive care. Convenience and access matter, and so does quality. Patient-centered care improves provider retention and adherence, which translates into financial gains.
• Medicare spending shifts toward the home. A meaningful portion of Medicare fee-for-service and Medicare Advantage cost is moving from facilities and clinical settings to the home. Xie expects this shift to create opportunities at the intersection of consumer health care and fintech.
• AI adoption starts with administrative work. Xie cites $1tn of annual US spending on administrative processes and nearly 2m health care jobs to fill each year. She expects adoption to begin with lower-risk uses such as call center support before moving to clinical decision support, with ROI coming from sustained engagement.
• Health care needs domain-specific AI models. Xie argues models trained on specific data are more accurate and contextually relevant than general purpose models, and also more cost effective. Hallucinations are unacceptable in health care, and good enough will not cut it.
• AI may become table stakes for providers. Some AI tools may become so standard that health systems without them struggle to attract providers. In life sciences, Xie says AI helps discover novel biomarkers and prioritize research targets. It can also decipher disease pathology.
• ICONIQ Growth invests in relationships. The firm drove over 450 high-impact introductions last year. It advised more than 120 executive and board searches and hosted over 40 events across 15 cities. Its team grew from four people in 2013 to about 100 across three offices.

QGenda's path from a teenage summer project

1. Greg Benoit built the first version at 15 as a summer project for a family friend who was an anesthesiologist, creating an automated call schedule and earning $1,000.
2. He wrote the first lines of code and cold-called prospective customers through high school and college.
3. An existing investor introduced Iconiq to the team, and they met virtually in March 2020 before moving quickly to a partnership.