This is a write up from the first webinar in our four-part series — Decoding the US Healthcare Market — which we’re running in partnership with BioSTL Global. Session 1 was hosted on the 7th of April 2026, led by Patrick Aguilar, Managing Director of Health at Olin Business School, Washington University in St. Louis, and advisor to BioSTL’s Global Innovation Advisory.
The US healthcare market is the largest in the world. It spends more per capita on healthcare than any other country. And unlike the NHS, it doesn’t have a single buyer, a single payer, or a single pathway to adoption. Understanding why it works the way it does is the first step to navigating it successfully, and this is where Patrick started Session 1.
Most UK founders arrive in the US with a map that doesn’t match the territory. They know it’s big. They know it’s complicated. What they often don’t know is how it got that way — and that gap costs them months of misdirected effort.
Here’s what we covered.
Why the history isn’t just background noise
Patrick opened with an image of a Frankenstein house. Not one house built to a plan, but an original structure with extension after extension bolted on over the decades — each one making sense at the time, none of them designed with the whole picture in mind.
That, he argued, is exactly what US healthcare looks like. “It’s like a house where it made sense one piece at a time,” Patrick said. “And if you understood the reason there’s a billiard room off the nursery, you’d kind of follow why that addition was put there. It’s difficult to make sense of how the whole thing fits together.”
Understanding the story of how it got there is what gives you the intuition to navigate it. So let’s run through the key moments quickly.
1700s–1800s: Healthcare in the home. Doctors travelled by horse to patients’ homes. For the poor, there were almshouses — charitable facilities often run by religious orders. There were no agreed standards of care. Doctors did what they could, based on what they knew, which wasn’t always much. Patrick used the death of President James Garfield in 1881 to illustrate this. Garfield was shot by an assassin in July of that year and survived the bullet wound — only to die months later from the infection caused by his physicians’ unsterilised tools. Germ theory was already known by then. It just hadn’t reached the people treating him.
1910: The Flexner Report. The American Medical Association commissioned a review of medical education across the US. The findings were damning. Most medical schools were substandard. Congress responded with regulations requiring standardised training for physician licensure. Most medical schools subsequently closed. Doctors, no longer travelling house to house, began to congregate in hospitals — upgraded almshouses that became the institutional home of American medicine.
1929: The first subscription model. Baylor University Hospital in Dallas, facing the Great Depression, struck a deal with the Dallas School District: 50 cents a month per teacher in exchange for 21 days of hospital coverage. It kept the hospital alive. Commercial insurers noticed. If people would pay a monthly fee to cover the risk of needing a hospital, that looked very much like other kinds of insurance they already sold.
1940s: WWII creates a benefits culture. Wartime wage controls prevented employers from offering pay rises to compete for talent. So they offered health insurance instead. It worked. It was popular. And as care moved increasingly into hospitals and became more expensive, having insurance to pay for it made sense. The federal government reinforced this in 1954 when the Revenue Act allowed employers to take tax deductions for providing health insurance — at which point it shifted from a perk to an economic incentive.
1965: Medicare and Medicaid. Employer-sponsored insurance left two groups unprotected: people without jobs, and retired people who’d aged out of employment. The Johnson administration created Medicare (care for the elderly — primarily people 65 and over) and Medicaid (aid for the poor — low-income individuals, administered state by state with federal funding) to cover them. This is where government becomes a major payer in the US system, and it’s a distinction that matters enormously for any founder thinking about which customer to approach.
2010: The Affordable Care Act. The ACA is the most recent major reshaping of the system. It created health insurance exchanges for people without employer coverage, eliminated the ability of insurers to deny coverage based on pre-existing conditions, required large employers to provide insurance, and introduced incentives for coordinating care. Employer-sponsored insurance went from attractive to required. The web got more complex.
Patrick’s point in walking through all of this wasn’t a history lecture. It was this: every layer of the US system exists because of something that happened before it. If you understand why each layer is there, you can start to understand who’s making decisions, what they care about, and where your product might fit.
The three types of buyer — and what each one actually wants
Before you approach anyone in the US market, you need to be able to answer a deceptively simple question: who is your customer?
In the NHS and other single payer systems, there’s at least a theoretical alignment between the entity that funds care and the entity that benefits from innovation. In the US, those things regularly come apart. The party that pays for your product is often not the party that captures the value. And that gap is where good products go to die.
Here are the three main buyer types you need to understand.
Payers — insurance companies and government programmes
Payers are the organisations that fund healthcare costs. In commercial insurance, this means health insurance companies — largely funded through employer-sponsored plans and the ACA exchanges. In government programmes, it means Medicare and Medicaid.
How do payers make money? They collect premiums and aim to pay out less in claims than they receive. The Affordable Care Act regulates this relationship through what’s called the Medical Loss Ratio — a requirement that a meaningful proportion of premium revenue goes to actual care costs, which limits how much insurers can extract in profit. As Patrick explained, this means payers are “motivated to manage the total cost of care while still offering a competitive product.” They need to keep their employers happy (employers buy most commercial insurance and will switch provider if employees complain) and keep their claims costs down.
One distinction that matters practically: many larger employers are self-insured. That means they carry the financial risk of their employees’ healthcare costs themselves, and simply pay an insurance company to administer the plan. Washington University in St. Louis — Patrick’s own employer — is one example. Self-insured employers have a direct financial interest in reducing healthcare spend, which makes them a potential customer in their own right, not just a route to a payer.
The important caveat on payer strategy: commercial payers aren’t looking for 50-year value horizons. Employers change insurance providers. Members move on. Patrick was direct about this — payers are looking for cost reduction in a one-to-two year window. If your value story only pays out over a decade, you need to think carefully about whether a commercial payer is actually your first customer.
Providers — hospitals and health systems
Hospitals are where most physicians now work, and where most care gets delivered. A few things are worth understanding about how they actually operate.
First, consolidation. In 2024, 68% of US hospitals were system-affiliated, part of larger networks like BJC HealthCare or Ascension, and that figure is heading towards 80%. They’ve consolidated because insurers have gotten bigger and more powerful, and hospitals need scale to negotiate effectively. This matters for founders because you’re often not pitching a single hospital — you’re pitching an organisation that has to align purchasing decisions across a system.
Second, margins. This is where many UK founders get a shock. US hospitals, despite the perception of a profitable system, often operate on razor-thin margins. As Patrick put it, many service lines such as obstetrics and behavioural health, actively lose money. Hospitals cross-subsidise from profitable areas to fund the services they’re required to provide. Some systems operate at an overall loss. “What they’re trying to do with any innovation is offset existing costs or drive new revenues,” Patrick explained. That’s their reality, which you need to understand if you are going to work with them.
Third, the pitch fatigue problem. Hospital innovation teams see hundreds of pitches a year, all claiming to save money or improve outcomes. Getting heard matters less than getting introduced. Patrick was explicit on this: warm introductions are not just helpful, they’re often the difference between getting a meeting and being filtered out before anyone reads your deck. Cold outreach rarely lands in the provider space. This is where support from people like our partners at BioSTL is crucial.
What does that mean practically? If you’re targeting US health systems, read their annual reports and strategic plans before you approach them. Every system has two or three stated priorities: AI adoption, post-acquisition cultural integration, insurance reimbursement turnaround, throughput. Aligning your pitch to their stated focus gives you a much better chance of accessing both their interest and the operational budget they’ve earmarked to address it. Put another way, you should get on the train thats leaving the station.
Employers as buyers — the one UK founders keep overlooking
This one surprises almost every UK founder we work with.
Large US employers who self-insure carry their own healthcare risk. A workforce health intervention that reduces claims costs, reduces absenteeism, or improves retention has a direct and measurable financial return for that employer. For certain categories of digital health like mental health support, chronic disease management, and preventative tools, employers can be a faster and more accessible entry point than either health systems or insurance companies.
They’re not right for every product. But if your solution creates measurable value in a population of working-age adults, it’s worth asking whether there’s an employer route before assuming you need to go through a hospital or insurer.
The question Patrick left everyone with
Towards the end of the session, Patrick gave the room a four-point diagnostic. It’s not a comprehensive framework — he said so himself — but it’s a useful starting point for working out who your first US customer should be.
Does your product reduce total cost of care in 1–2 years? If yes, payers are the natural target. Keep the time horizon in mind.
Does it drive revenue, throughput, or margins for providers? If yes, health systems are the obvious target — and reading their strategic priorities tells you which ones and on what basis.
Does it create clear, immediate value that patients will pay for out of pocket? Direct-to-consumer is possible, but it’s the hardest path. Most Americans have significant healthcare costs already. The bar for additional willingness to pay is high.
None of the above clearly? That’s not a reason to give up on the product — but it is a reason to revisit the value proposition before you spend money on a US commercial strategy.
The underlying question Patrick returned to repeatedly was this: who benefits if your innovation works? Not who would use it. Not who would find it interesting. Who actually wins financially, if it does what it claims?
That answer tells you who your customer is.
A note on Medicare Advantage — worth understanding even if it’s not your first target
A question from the audience about falls prevention and elderly populations gave Patrick the chance to explain something a lot of UK founders miss: there are two distinct versions of Medicare.
Traditional fee-for-service Medicare is government-administered, and it runs various programmes that incentivise specific behaviours from providers. If your product fits within an existing programme, like the Guide Programme, which funds caregiver respite for people with dementia, you may be able to work with programme administrators as your route in.
Medicare Advantage is different. These are managed Medicare plans offered by commercial insurers, and they operate with a long-term view of their patients that commercial employers don’t have. As Patrick explained, if a Medicare Advantage plan recruits a patient at 65, they may well have that patient for the rest of their life. That changes the maths on prevention and long-term cost reduction in a way that commercial payers can’t replicate.
For founders building in elderly care, falls prevention, remote monitoring, or chronic disease management, Medicare Advantage plans are worth understanding as a distinct category — not just a government programme and not just a commercial insurer, but something in between with its own incentive structure and its own appetite for innovation.
What’s coming next — and how to join us live
Session 1 was about building the map. Session 2, 7pm BST on the 21st of April, goes into what it’s like to actually navigate it,specifically for companies building with AI. You can register below, or sign up to our mailing list using the form at the bottom of this page to get our write up straight in your inbox
Our next session is led by Katherine Frierdich, former Regional General Counsel at Centene, who now advises healthcare organisations on regulatory strategy and AI governance. The session will cover why healthcare compliance goes significantly beyond HIPAA, how US buyers and regulators are currently evaluating AI governance and risk, and how these factors shape reimbursement decisions and commercial traction.
If you’re building an AI-enabled product and you’re thinking about the US market, this is the session to attend.
Register for the next session →
It’s free. Sessions run at 7pm BST.