Oliver Kharraz, founder and CEO of Zocdoc, says the graveyard of healthcare disruption keeps growing because the industry is not a simple technology problem.
Kharraz said he has spent 30 years in healthcare technology and nearly two decades building Zocdoc, an online service that helps people find providers who take their insurance and book in-person or virtual appointments. In that time, he said, he has watched company after company announce plans to 'disrupt healthcare' only to run into the same wall: a system built on hospitals, physician groups, insurers, pharmacies, electronic health records, regulations, clinical workflows and incentives.
The examples are hard to miss. Haven, the joint venture launched by Amazon, Berkshire Hathaway and JPMorgan Chase in 2018 to simplify health benefits and lower costs for their combined 1.2 million employees, disbanded in February 2021 after less than three years and after a string of executive departures including CEO Atul Gawande. Walmart Health launched clinics in 2019 offering primary and dental care at low, transparent prices, but in April 2024 Walmart said it would close all 51 clinics across five states along with its virtual-care service, calling the business 'not a sustainable model.'
IBM Watson Health launched in 2015 with a pledge to use AI to improve cancer treatment recommendations. Seven years later, in 2022, IBM sold the bulk of the unit, including Watson for Oncology, to Francisco Partners in a deal reportedly worth about $1 billion, far below the roughly $4 billion IBM had invested. Babylon Health, the UK-founded startup that promised AI-powered primary care through an app, went public via SPAC in 2021 at a valuation north of $4 billion. Two years later, in August 2023, its US operations filed for bankruptcy and its UK business was sold off in a fire-sale deal.
Kharraz said AI is a genuine breakthrough, but not a magic wand. In his view, it can improve many things and also accelerate healthcare’s broken incentives. He said technology alone does not generate a working healthcare system because healthcare is a complex systems-and-incentives problem.
His central point is blunt: disruptive playbooks work poorly when the target is an ecosystem that already has trillions of capital deployed and decades of built-up rules. Build one new piece outside the core, and the rest of the market does not automatically rearrange itself around it. The tracks do not rebuild just because the train is faster.
Zocdoc, he said, took a different route. Instead of trying to ignore or replace health systems, physician practices, insurers and electronic health records, it connected to them. The company says that approach has involved more than 200,000 providers across 200 specialties, more than 10,000 insurance plans, more than 175 calendar integrations and countless scheduling rules and workflows.
The market has already voted on the difference between slogans and execution. In healthcare, scale still belongs to the businesses that can work with the system that exists, not against it.
For investors, operators and patients, the lesson is the same: capital rewards clear rules, not fantasies of instant reinvention. Healthcare may still be improved, but Kharraz’s record suggests the winners are likely to be the builders of bridges, not the dreamers of demolition.
