10-minute grocery startups like Getir, Gorillas and Flink have redefined grocery shopping in Europe, seemingly overnight. The secret to their popularity with VCs is a full-stack approach; they control all steps of the business — from ordering and inventory to delivery. Visibility into all these steps in the chain means they can provide even better customer experiences.
But one industry in Europe hasn’t embraced the full-stack approach: healthtech.
Healthcare systems in Europe are facing huge challenges, from integrating technological advances in treatment, to increasing costs and the generational change in new doctors entering the field. The industry is in danger of forgetting the patient — the most important factor in the equation — as it tries to navigate these challenges. That’s why European healthtechs should be looking to full-stack companies like Getir for inspiration, if they want to continue to provide superior services and compete on a global stage.
Chris Dixon, general partner at a16z, defined full-stack startups as those that offer a complete, end-to-end product or service. For healthtech this could mean that a company offers an end-to-end service to patients by having its own doctors, even practices, fulfilment of medications; basically owning and fulfilling each aspect of the patient journey.
European countries rank among the highest in the WHO ranking of world health systems. But other countries are digitising their healthcare systems fast, improving patient outcomes and experiences and threatening Europe’s standing. A new generation of non-European healthcare companies, such as Carbon Health and Hims & Hers in the US, have embraced vertical integration as a way to control costs, get better insights into patients and ultimately provide better services. European healthtechs need to wake up.
Why Europe will benefit from full-stack healthcare
1. Better data = better care
Today, too much healthcare data is lost. In many instances, it’s still captured on paper and scattered across different systems. A change is long overdue. For example, Germany has been talking about launching an electronic health record since 2004; a pilot only began in 2021.
Low-quality, high-frequency data points — such as heart rate data from a smartwatch — can act as early indicators of risk. High-quality, low-frequency data points — such as blood tests or a GP visit — can serve as data validation for developing medical trends. The combination of the two will create the foundation for predicting medical outcomes; the problem is that fragmentation in healthtech means most companies don’t have access to this information.
This will help healthcare providers to act proactively rather than reactively, and also produce the data-rich evidence that is needed, for example, in clinical trials. Full-stack players have all their data in one place, and as a result can offer better care while also saving costs and resources in an already-strained healthcare system. This is actually exactly where healthtech Ada Health is going.
2. End-to-end service = better patient experience
Patients increasingly feel that they are treated like a commodity. A survey by our portfolio company Avi Medical showed that in Germany, 72% of patients want holistic, individualised diagnoses and treatments, as opposed to rushed appointments.
By combining hardware, software, design and marketing, companies can provide a consistent patient experience that's better than patients typically receive from fragmented incumbents.
Significant problems also exist at specific stages in the user journey. For example, the average waiting time for patients at a doctor in Europe is around 30 minutes. In Germany, 77% of all patients cite short waiting times as the most important factor in their patient experience.
Full-stack operators can solve issues with waiting times, for example, by leveraging data to predict the treatment duration of patients with different conditions.
3. Flexible platforms = flexible work for doctors
Many business models overlook the most important resources in the healthcare system: doctors and nurses.
A new generation of doctors and nurses are adamant in their demands for more flexible working hours and a modern workplace. 66% of all young doctors in Germany, for example, don’t want to run their own practice.
Full-stack approaches offer a modern working environment and flexible working hours by opening the door for digital doctor-patient touchpoints.
Full-stack models also provide doctors with digital tools, such as user-friendly management software, to reduce admin and make their lives easier.
US vs. Europe: losing the healthcare crown
European healthtech founders should not be afraid to embrace full-stack. It’s not impossible; Sweden’s Kry has done it. Kry evolved from a siloed solution — focusing only on telemedicine — to become a full, primary care provider. The transition to full-stack enabled Kry to create a modern, integrated patient experience that allows the treatment of any symptom and offers a superior experience. There's no reliable measure of a net promoter score (NPS) in the healthcare system, but full-stack primary care provider One Medical has a staggering NPS of 91, highlighting the superior patient experience offered.
Certainly, regulatory complexity is much higher in Europe. Another challenge is the varied structure of social systems compared to the US. Nonetheless, Europe will become an attractive place for full-stack models to become more prevalent, since the benefits they offer — to the industry, patients, and medical professionals — are simply too good to be ignored.
While I don’t predict a future of GPs riding door-to-door on mopeds, the impact that full-stack healthcare will have on European patients could be just as revolutionary.
Sebastian Schäfer is vice president at Picus Capital, where he is responsible for pre-seed healthtech investments.