In Healthcare, the User Loves You and Still Can't Buy: Selling Into Reimbursement

Every market in this series has had its own challenges. Golf made you wait years for a cold category to warm up. Fintech made you earn trust before anyone would touch your product. Healthcare, on the other hand, has the strangest challenge of all, and it breaks the instinct every founder is built on.

The instinct is simple: if people love what I made, they'll buy it. Make something users adore, and sales follow. Almost everywhere, that instinct is roughly true. In healthcare, it can be completely false, and the gap between "they love it" and "they bought it" is where some of the best-funded, best-designed health startups in the world have died.

Here is why. In an ordinary market, the person who uses a product, the person who chooses it, and the person who pays for it are usually the same person. You want a coffee, you pick the coffee, you pay for the coffee. In healthcare, those three roles split apart into three different parties:

• The user is the patient, who actually uses the treatment.
• The chooser is the doctor or hospital, who decides what gets used.
• The payer is the insurer or government, who actually pays for it.

You can delight the user completely and still never make a sale, because the user doesn't choose and doesn't pay. You can win over the chooser and still collect nothing, because the payer hasn't agreed to fund it. This is the central truth of going to market in healthcare: nothing scales until all three say yes - and they say yes in a specific, brutal order.

Let's see what that does to a company. First in the United States, where the three-party split is at its most extreme and most lethal. Then in India, where the structure is fascinatingly different and the lesson inverts. And then the failure that proves the rule - a company beloved by users and doctors that died because the third party said no.

The American maze: why "the doctor loves it" isn't a business

In the US, the warm-up this series keeps describing isn't measured in months. For a genuinely new kind of medical product, it can run for years, because the thing you're waiting for isn't customer understanding - it's a payment code.

Here's the machinery, in plain language. When a doctor delivers a service, they get paid by submitting a billing code to an insurer. The dominant code system is called CPT. If your product enables a service that already has a code, a provider can bill for using it, and you have a path to adoption. If your product is genuinely new - a category that doesn't map to any existing code - then a provider who uses it does extra work for no reimbursement, and most simply won't. Getting a brand-new code created is a slow, demanding process that typically requires regulatory clearance and years of evidence.

Read what that means for go-to-market. Industry advisors put it bluntly: it can take years to gain a specific code for your product, and you will likely need to enter the market and generate revenue before then. You have to survive the warm-up before the thing that makes you reimbursable even exists. The runway has to outlast the bureaucracy.

This reorders everything. In most markets you sell to the user. In US healthcare, the smart sequence is roughly:

1. Win a clinical champion: a respected doctor or health system willing to adopt early, often through a pilot, before reimbursement exists, because they believe in the value.
2. Generate hard evidence: clinical and real-world data proving the product is safe and improves outcomes, because that evidence is what eventually persuades a payer.
3. Secure the payer: coverage and a payment path, which is the gate that finally lets the product scale.
4. Then, and only then, scale across providers: because now using your product pays for itself.

Skip to step four too early - go wide before reimbursement exists - and you bleed out. As one piece of guidance for the sector notes, health systems increasingly won't even run a one-off pilot unless they can see a credible path to enterprise-wide rollout. Provider adoption has become the thing that determines what scales, and providers are watching the payer gate as closely as you are.

This is the WHY test from Part 1 at its most punishing. The cold years here aren't cheerful. They're spent in committee rooms and evidence reviews and coding applications. The founder who survives is the one whose conviction is strong enough to fund a multi-year crossing toward a payer who may still say no.

India: when the patient pays, the maze disappears

Now travel to India, and watch the entire structure change shape - because the difference is the most useful thing in this article for anyone building in India.

In India, a strikingly large share of healthcare is paid for directly by patients, out of their own pockets. As of recent years, well over half of all health spending in India was out-of-pocket, with only a minority of Indians carrying medical insurance. That single fact rewires the whole go-to-market problem. When the patient pays directly, the three parties collapse back toward one. The user is the payer. The insurer-gatekeeper that makes the US such a maze is, for huge parts of the market, simply absent.

So, the Indian healthcare founder faces a completely different first question. Not "how do I get reimbursed?" but "how do I get the doctor and the patient to adopt this directly?" The gate isn't a payer. The gate is the chooser - the doctor - and the patient's own willingness to pay.

Consider Practo. It began in 2008 with a precise wedge: software for individual doctors and clinics to manage appointments and records, sold to doctors for a modest monthly fee. It didn't wait for any payer. It went straight to the chooser. And it grew through exactly the unglamorous, hand-to-hand work this series keeps celebrating - ground staff who walked every street in Bangalore to map every doctor and clinic, a process that took four months for one city. Early-adopter doctors then became its salesforce, recommending it within their own professional circles. From there it built a two-sided platform: doctors on one side, patients discovering and booking those doctors on the other. By its own reporting it reached profitability and now operates across thousands of cities, and is exporting the India-built model outward to the UAE and even the US.

Notice the inversion. The American digital-health startup must obsess over the payer, because the payer is the gate. The Indian one obsesses over the doctor and patient, because they are the gate. Same industry, opposite go-to-market, entirely because of who holds the money. This is the series' core thesis in its sharpest form: distribution is dictated by whoever controls access to the buyer - and in healthcare, that controller is different not just by product, but by country.

There's a deeper lesson here for your own market. India's out-of-pocket structure is often described as a weakness in its health system, and in human terms it is. But for a go-to- market strategist it is also a doorway: it means a genuinely good product can reach patients directly, without waiting years for an insurer's permission. A founder who copies a US playbook - pour everything into payer strategy - onto an Indian launch would be solving a gate that, for much of the market, isn't even there. And a founder who copies the Indian direct-to-patient playbook onto a US launch would walk straight into the reimbursement wall. The structure decides the strategy.

The failure: Pear Therapeutics, loved to death

Now the cautionary tale, and it is almost a laboratory demonstration of this article's thesis - a company that won the user and the chooser, lost the payer, and died.

Pear Therapeutics was a pioneer of "prescription digital therapeutics" - clinically validated software treatments, prescribed by doctors like medicine, for conditions like substance use disorder and insomnia. Pear did almost everything the textbook asks. It earned the first-ever FDA authorization in its category. It ran real clinical trials using the same rigor as pharmaceutical companies. It partnered with giants like Novartis. It went public. Doctors prescribed its products, and patients who used them engaged with them and benefited. By the measure that governs every other market - users and choosers love it - Pear was winning.

And it went bankrupt in 2023, laying off more than 90% of its staff, its assets auctioned for a fraction of what had been invested.

What killed it was the third party. The payers - the insurers - largely refused to cover the products, in significant part because the reimbursement codes for this brand-new category didn't properly exist yet. The numbers tell the whole story: in one nine-month stretch, around 31,000 prescriptions were written for Pear's products, but only a little over half were ever filled, and many of those were never reimbursed. The founder, in a widely read farewell, placed the blame squarely on payers who wouldn't pay. Pear was burning roughly $35 million a quarter, and had gone public raising only about half the capital it expected - which meant it simply ran out of runway before it could force the payer gate open.

Sit with the precise shape of this failure, because it is the article in miniature. Pear did not fail on product. It did not fail on the user. It did not fail on the doctor. It failed because it reached massive scale on two of the three parties and never secured the third - and in healthcare, two out of three is zero. The prescriptions were written. The patients were willing. The money never came, because the payer never said yes, because the code never existed, because the warm-up was longer than the runway.

This is the exact danger this series has warned about since Part 1, in its cruelest form. A founder looking only at adoption - prescriptions climbing quarter over quarter - would have seen a success right up until the bankruptcy. The signal that mattered wasn't usage. It was reimbursement. And by the time the gap between the two became undeniable, the cash was gone.

What a founder should take from this

Five transferable lessons, each a thread from earlier in the series, now bent through healthcare's three-party structure:

1. Map the three parties before you build. Name the user, the chooser, and the payer explicitly - they are usually different people, sometimes different institutions. If you can't say clearly who pays and what makes them say yes, you don't yet have a go-to-market; you have a product and a hope.
2. In healthcare, "they love it" is a vanity metric until the payer agrees. User delight and even doctor enthusiasm can climb impressively while the business quietly has no path to revenue. Watch the gate - reimbursement - not the applause.
3. The warm-up can outlast the runway. Fund accordingly. When the thing that makes you payable (a code, a coverage decision) takes years, your capital plan has to survive that wait. Pear didn't, and it died with FDA clearance and happy users in hand.
4. Who holds the money decides your whole strategy - and it changes by country. A payer-gated market (the US) demands a payer-first sequence. An out-of- pocket market (much of India) lets you go direct to doctor and patient. Copy the wrong country's playbook and you'll fight a gate that isn't there, or ignore a wall that is.
5. Win a champion, prove it with evidence, secure the payer, then scale - in that order. Going wide before the payer says yes is the single most expensive mistake in health-tech. The sequence is slow on purpose; respect it or it ends you.

And beneath all five, the constant of this series. Healthcare's three-party maze is the longest, coldest crossing of any market we've examined - years of pilots and evidence and committees before the revenue gate opens. No tactic shortens it enough to skip. What carries a founder through is the thing Part 1 named: a why clear enough to keep funding the crossing when the user already loves you, the doctor already believes you, and the payer still hasn't said yes. Strategy tells you the maze exists. Conviction is what gets you to the far side of it.

In the next article, we stay in the world of care but trade patients for pets - and meet a buyer who never rejects you loudly, just quietly stays with what they already have: the budget- strapped, switching-averse veterinary clinic, where the smartest way in is the smallest tool you can build.