For decades, innovation in healthcare has primarily moved from the inside out.
While hospitals, insurance companies, pharmaceutical companies, and regulators decide how care is delivered, the available options are primarily chosen by patients. Innovation was driven by institutions and consumers were expected to adapt.
That model is changing.
Across the United States, millions of patients are increasingly making their own health care decisions and seeking services that are more accessible, personalized, and responsive than those offered by traditional care pathways. In doing so, they are helping to build what many have begun to call a shadow health system. It is a growing ecosystem of digital platforms, virtual clinics, diagnostic tools, and consumer healthcare services that exist alongside traditional healthcare infrastructure.
As an investor focused on healthcare innovation, I believe this represents one of the most important structural changes occurring across healthcare today.
The rise of the healthcare consumer class
Patients are no longer willing to wait for the healthcare system to evolve around them.
Years of fragmented care experiences, long wait times, opaque pricing, and limited access to professional services have led consumers to seek alternatives. Technology has made these alternatives increasingly accessible.
Patients now have access to fertility treatments, nutritional counseling, hormonal health services, mental health support, chronic disease management, and expert consultations through a platform designed around convenience, accessibility, and ongoing engagement.
What started as a niche trend has become a significant influence in the medical field.
Telemedicine adoption remains dramatically higher than pre-pandemic levels, and a proportion of outpatient visits are expected to shift to home-based, virtual, or digitally enabled settings over the next decade.
Importantly, this shadow medical system does not replace conventional medical care.
Rather, it has become a powerful source of innovation and patient engagement, increasingly influencing how the broader healthcare system evolves.
The most successful companies don’t build outside of their systems. They are building a new front door there.
Evolution of the direct-to-consumer model
For many years, many investors believed that direct-to-consumer medicine would fundamentally disrupt traditional medicine.
Most were wrong.
Healthcare is ultimately a multi-stakeholder market involving patients, providers, employers, health systems, and insurance companies. Pure direct-to-consumer healthcare businesses have historically struggled to achieve venture-scale results because healthcare spending and decision-making is rarely left solely to the consumer.
But while the original paper turned out to be flawed, something even more interesting was revealed.
Direct-to-consumer sales, it turns out, is not the destination. It became a wedge.
Today’s most successful healthcare companies use consumer engagement to validate demand, build trust, improve care delivery, and generate outcomes data before expanding to employer, payer, and provider channels.
Companies like Kindbody and Nourish exemplify this evolution. Rather than waiting for reimbursement agreements or partnerships with health systems before launching, we first built a direct relationship with consumers. As these relationships deepen and outcomes become more measurable, employers, insurers, and healthcare providers increasingly become partners rather than gatekeepers.
Consumer adoption has become a mechanism for broader healthcare integration. Historically, healthcare companies sought facility adoption first and then patient adoption.
Many of today’s most successful companies start with patients and use that work to gain adoption across the rest of the healthcare ecosystem.
Winners are not circumventing the health care system.
They are harnessing consumer demand and helping reshape it.
The most important healthcare consumers are women
One of the most overlooked realities in the healthcare field is that women make approximately 80% of their families’ healthcare decisions.
They are often the primary healthcare decision-makers, not only for themselves but also for their children, partners and elderly parents.
However, many of the health care areas most important to women have historically received limited attention from both health care systems and investors. Infertility, menopause, hormonal health, caregiving, maternal health, and the many chronic diseases affecting women remain underserved despite their significant economic and social impact.
The rise of consumer healthcare can help address this imbalance.
By building directly for patients rather than facilities, the founders identify needs that traditional healthcare models often overlook. In many cases, women are driving the introduction, involvement, and ultimately growth of entirely new healthcare categories.
The result is more than just a better consumer experience. It’s about building a new health infrastructure around some of the biggest unmet needs in health care.
The AI opportunity is bigger than most people think
Artificial intelligence is often discussed through the lens of algorithms.
The more important story may be the data.
For decades, medical datasets have been incomplete, fragmented, and often biased toward populations and conditions that have historically received the most attention from researchers and medical institutions.
Consumer healthcare companies are starting to change this.
By building direct relationships with patients, we are generating entirely new categories of longitudinal health data that have not previously existed at scale.
Consider the research being done by Evvy, which is building one of the largest datasets focused on the vaginal microbiome. This area of women’s health has been dramatically understudied for decades, despite its connections to fertility, pregnancy outcomes, infectious diseases, and broader health conditions. Through direct consumer engagement and the collection of new biomarkers, companies like Evvy are helping create datasets that didn’t exist before.
This is happening across healthcare.
The organizations that stand to benefit most from AI may not ultimately be the ones with the most sophisticated algorithms. They may be companies that have spent years building trusted consumer relationships and amassing unique data sets that competitors cannot easily replicate.
In an AI-driven future, data is becoming an increasingly strategic infrastructure.
next frontier
Despite major innovations over the past decade, some of the largest categories in health care remain underserved.
Chronic pain and musculoskeletal care continues to be one of the largest cost burdens in healthcare. Autoimmune diseases, metabolic health, hormonal health, nursing support, and longevity-related care are still areas where patient demand often exceeds available solutions.
These are exactly the categories where a direct-to-consumer healthcare model can thrive.
Opportunity does not necessarily mean reinventing medicine. It’s about creating better access, stronger engagement, more personalized experiences, and more ongoing support for existing clinical care.
Patients are becoming the organizing force of healthcare.
For decades, medical innovation has flowed from facilities to patients.
It keeps flowing in the opposite direction.
Patients are discovering new paths to care, validating new delivery models, and creating entirely new datasets that will shape the next generation of healthcare innovation.
The most successful companies will not be those that choose between consumers and the health care system. They will use consumer trust as a bridge to connect patients, providers, employers, payers, and technology in ways never before possible.
Shadow health systems no longer operate in the shadows. It is helping to shape the future of medicine itself.
Rachel Springate is a founding partner of Muse Capital.
