$Hims & Hers Health Inc.(HIMS)$ Much of $HIMS 100X potential comes from its unique approach to AI in the healthcare space.
In Q3 2023, $HIMS launched Medmatch, a “proprietary service that deploys artificial intelligence and machine learning against the expansive dataset at the core of the Hims & Hers platform.”
When comparing $HIMS architecture to $TDOC, $HIMS can deploy this service for each of its verticals and translate the insights it yields into productive modifications of the healthcare process–without having to deal with the inflationary, slow, and costly traditional healthcare system.
With nearly 1.5M subscribers–and assuming $HIMS has been storing the anonymized data–MedMatch will see in one day more patients than a physician can see in ten lifetimes.
As $HIMS continues to scale, this competitive advantage will continue to compound.
Medmatch is another sign of the company’s relentless pace of innovation, which I find encouraging. Secondly, I believe this is the first instance of an AI closed loop in the healthcare industry.
No one else is treating millions of patients while picking up data and immediately applying the resulting insights to iterate an underlying and vertically integrated healthcare infrastructure.
All other AI loops require, like $TDOC, a modification of the sluggish traditional healthcare system.
Certainly, other players have more data.
But it’s not so much about the volume of data as it is about the applicability of the insights that it yields.
A smaller system that learns faster will over time outpace a large one that learns slowly.
Going forward, this loop should act as a tailwind for $Hims, improving patient outcomes per dollar invested in the business.
This should equate to improved unit economics, which should in turn translate into a more attractive cash flow profile.
For now, Hims treats a limited range of conditions and only serves a small portion of its addressable market.
But if my understanding of the company is correct, they will replicate their current manufacturing facilities many times over going forward.
As they reach more customers, get better at manufacturing and generally cure more patients, I believe AI will become the company’s most important asset.
It will increase physician productivity by orders of magnitude and non-linearly increase the company’s operating leverage.
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