[Farr] One of the big questions I have as someone who also wears an investing hat is how big can cash-pay healthcare get? What’s your answer to that as you look at publicly traded businesses like Hims & Hers?
[Blitz] Cash-pay is not going away and will continue to grow a ton. Every year our insurance premiums go up, health insurance companies pay for less of your care, they make it harder for us to get basic care paid for, so patients are just tired of all this. They are looking for affordable solutions that are just easy and don’t make them jump through hoops. [..]
I also think you’re going to see more payer scrutiny of virtual care insurance billing as the volume has massively increased since COVID. Payers fundamentally don’t want to pay for things and will continue to look for ways they don’t have to. [..] I also think we’ll just see an increase in auditing.
[Farr] D2C healthcare has historically been tied to stigmatized conditions. Makes sense, given people want care for things but are sometimes embarrassed to talk to a family practitioner. Can you share any other obvious patient personas where it makes sense for a D2C business to target them?
[Blitz] I think for sure we’ve historically seen stigmatized conditions and point solutions, but I think as we see more companies offer broader care, we’ll see them expand to treat other areas like cardiovascular, endocrinology, gastroenterology and others and they can now do it in a way where it’s more natural to treat patients than it was even 5 years ago when they just used a D2C platform for ED meds or hair loss.
I also think you’re seeing new models that are not necessarily stigmatized conditions – look at General Medicine, launched by the PillPack founders. Clearly it’s a superior consumer experience that combines transparent pricing across medical care, diagnostics, and medication. It’s not hard to see this becoming a go-to service for patients needing everyday medical care.
[Farr] What is the D2C health care company you most admire that isn’t your own and why?
[Blitz] Honestly, I think Ro and Hims & Hers have both been the OGs in the broader D2C space and paved the way for many of us who saw opportunities to deliver access to care in a much bigger and more convenient way than ever before. I think because of them, many of the larger D2C companies today were able to launch and flourish more quickly.
Both companies pushed the industry to rethink how we could deliver medically appropriate care coupled with the ease of doing it via an app on your phone, like we’re already doing for taxis and food delivery. They advertised on TV! They made it more normal to talk about these conditions. They also advocated for many states to transform their laws to allow for appropriate care to be done asynchronously. Because of them, millions of patients finally experienced getting quality care in an ultra-convenient way and now are demanding this from other care providers.
[Farr] Any predictions for the future of cash pay healthcare, especially in the context of the current administration?
[Blitz] I think it’s pretty clear this administration wants physicians and patients to have access to more types of care and alternative medicine that have previously been prohibited by the FDA, so I am bullish we’ll see current companies thrive and expand their offerings and new ones will launch to meet the needs of patients. It’s clear patients want these options and are willing and able to pay cash.
Of course, there are very complicated issues that have merit on both sides, like GLP-1 compounding, but with some of the recent news in several court cases it seems like judges are pushing the issue to the FDA and I suspect this particular FDA is much more supportive of it than in previous administrations. So I don’t see this ending anytime soon.”
Full post, C Farr, Second Opinion newsletter, 2025.9.9