Y Combinator and Watsi launch study to see how technology can fix health care

Y Combinator’s research arm YC Research announced on Tuesday it is funding a project by health care nonprofit Watsi to examine the implications of technology in the health care space. Specifically, the organizations want to know whether it can improve the quality and reduce the cost of treatments.

How much was contributed by YC Research remains undisclosed, but Y Combinator president Sam Altman explained that Watsi will be using the funds to support primary health care for a community in the developing world, while also building a platform to run the system “transparently.”

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Watsi cofounder and chief executive Chase Adam told VentureBeat that his team pitched Altman the study as it seemed like a good alignment of missions. “One of the most surprising things we’ve learned at Watsi is how much technology can improve health financing,” Adam stated. “Funding individual patients encourages more people to donate, but it also results in patient-level data that makes it easier to identify fraud, evaluate the quality of care, measure health outcomes, etc. This project is an attempt to use those learning to re-think how healthcare is funded.”

This is a reunion of sorts for both Y Combinator and Watsi. The latter was the first nonprofit admitted into the Silicon Valley startup program. Since “graduating,” Watsi has gone on to raise $7.5 million to fund health care operations for more than 10,000 patients in 24 countries. It has set an ambitious goal of treating 1 million patients by 2020. The idea behind this organization is simple: It’s a crowdfunding platform that enables anyone to directly fund potentially life-changing health care for people around the world. To aid in the donation part, Watsi recently teamed up with PayGarden to convert unused gift cards into funds that can benefit those who need treatments.

“Currently, up to 40% of all healthcare funding is wasted on operational inefficiencies, fraud, and ineffective care. Watsi’s goal is to improve the efficiency of funding, making universal healthcare possible,” Altman explained. After setting up its system, the nonprofit plans to test out ways to improve care while reducing costs, such as finding ways to make operations more efficient, cut down on waste and fraud, and minimize errors in reporting.

There may be some that question whether YC Research should have invested in other nonprofits and could look at backing Watsi as a play to “keep it all in the family.” However, based on performance, Watsi appears to have the necessary qualifications to understand how to leverage technology and social good to improve the health care of people that don’t have access to it.

The project will last through 2017 and Adam believes the first version of the system will be running in a small community within the next two months. Should it work out, Altman said that Watsi will provide governments around the world with access to the software to improve the health care systems in their respective countries and “provide universal healthcare for their citizens.”

Updated as of 1:59 p.m. Pacific on Tuesday: Added comments from Watsi CEO Chase Adam and more details about the study.