A Problem isn't Real Until Someone Pays for It
Before You Find Your Buyer, Define Your Problem - Correctly
Tina Simpson, JD, MSPH
April 4, 2026 • Founders’ Field Guide to US Health Market
This is our fourth installment of the series, check out prior articles, How EU Founders Misread the US Health Market and Understanding Fragmentation in the US System.
Welcome back.
Over the last three articles, we’ve spent most of our time taking things apart — dismantling assumptions, reframing mental models, and mapping a market that defies easy description. Now it’s time to start putting things together.
A Case Study: DocuAide enters the US Market
So far, we’ve established that the US healthcare market doesn’t follow EU sequencing, that fragmentation is a feature, not a bug, and that payer-driven logic governs everything downstream: purchasing authority, value definition, and the often-misunderstood split between your economic buyer and your operational user.
That is the terrain. Having mapped that out, we can now turn to strategy.
And that starts with a deceptively simple instruction: redefine the problem your innovation solves -not just clinically, but in payment terms.
There is a critical difference between a problem that exists in a system and one that is financially owned by the system. In the US, defining the problem is a payment logic exercise: the two are inseparable.
This step is often skipped.
Founders assume the problems they address are universal and self-evident. And they are – if by “problem”, you mean the frictions and pain points experienced across a system.
But in the U.S., that is not enough.
A problem only becomes actionable when it is owned—financially or operationally—by a specific actor within that system.
When founders import their problem definition directly from their home market, they risk centering their offering around a problem that, however real, however well-evidenced, is commercially invisible in the US context.
Let me make this more concrete.
Mind the Gap
Consider a value proposition that resonates powerfully for European providers: “We reduce hospitalizations in chronic disease populations.”
In Europe, that sentence opens doors. In the US, it can land in silence.
A US hospital operating under fee-for-service reimbursement loses revenue when admissions decline. The value proposition that signals impact to a European provider can be a revenue threat to an American one.
You’ve created value, but you haven’t created a customer.
The first and most consequential task in US market entry is to redefine the problem your solution solves in payment terms. That requires answering three questions:
- Where does the problem sit operationally? (eg. who experiences this problem?)
- Who is financially accountable for it?
- Under what conditions is that buyer motivated to act.
Put another way, is there a specific actor in the system who both feels this problem and is positioned (financially and operationally) to do something about it?
A solution that addresses a clinical problem but sits outside any payment structure that makes it financially actionable is not a commercial proposition. It is a proof of concept, waiting for the right context.
The Payment Logic Decision Point: (To FFS or VBC)
Those three questions lead to a critical decision point which sits at the heart of US healthcare economics:
Does your solution generate value through billable activity, or through outcomes and reduced utilization?
To VBC or not to VBC – that is the question.
Despite my wry misquoting above, this is not actually a binary choice. Most solutions have elements of both. But determining where the weight of your value falls determines everything that follows: who your buyer is, how they evaluate your solution, and what evidence they need to act.
Let’s start by defining each.
Fee-for-service ( FFS aligned value)
In fee-for-service environments (the primary model for the US system), value is generated through billable activity, either by increasing volume or optimizing revenue capture. A tool that optimizes surgical room turnover is a good example. It allows more procedures in the same time window, directly increasing billable output. The financial benefit is immediate, legible, and flows directly to the purchasing entity.
There is no translation required. The solution plugs into the existing business model and makes it work better.
Risk / Value-Based Care (VBC aligned value)
In value-based arrangements, value is generated differently. Value comes from
- Reducing total cost of care
- Improving outcomes under financial risk
- Preventing unnecessary utilization
This value is only realized when someone in the system bears financial responsibility for outcomes — not just services delivered.
Prevention-focused interventions, chronic disease management platforms, and care coordination tools fall into this category. They create real value, but that value accrues to whoever holds the risk for the population they serve.
In a pure FFS environment, reducing utilization is not a benefit to the billing provider. It is a revenue threat.
Putting in Context: Remote Patient Monitoring
Remote patient monitoring (RPM) illustrates this tension. RPM has fee-for-service billing codes, which provide a pathway to reimbursement. But these codes do not explain why health systems invest in RPM at scale.
The real value of RPM (keeping patients out of the hospital) only materializes for buyers in environments where someone is financially responsible for the total cost of care. Health systems invest in RPM infrastructure at scale because they are managing defined populations under risk-based contracts, and RPM keeps those contracts “in the black.”
Fee-for-service reimbursement enables adoption.
Value-based care justifies the investment.
This is the insight EU founders most consistently miss:
Almost any genuinely innovative digital health solution will need to grapple with value-based care logic.
Not because fee-for-service is irrelevant – it isn’t — but because the most significant opportunities live in the space between delivering care and managing wellness. That space is governed by risk.
Therefore, the question is not whether VBC is relevant to your solution. It is, instead, which value-based care environments your solution is suited to – and which are sufficiently motivated to act on your offer. That requires evaluating three variables: the payer’s risk structure, time horizon, and whether there is a nexus between financial accountability and clinical authority.
This is the difference between leading with a compelling, targeted offering – and simply assuming that that environment exists.
The following case study illustrates what this looks like in practice.
Case in Point: Livongo
By 2018, Livongo was one of the most closely watched companies in digital health. It connected diabetes management platform,combining a smart glucose meter combined with real-time data upload, personalized coaching, and behavioral feedback. Livongo built a loyal and growing client base in the self-insured employer market, backed by a well-evidenced value proposition and a clear commercial model.
Its success was not accidental: Large self-insured employers bear the full costs of their employees’ healthcare. When hospitalizations increase because a chronic disease (like diabetes) is not managed, that cost shows up immediately on their balance sheet. No intermediary captures the savings; no churn dissipates the return.
Livongo evidence of direct clinical impact presented a compelling case for adoption. This gave Livongo a strong beachhead but also a ceiling.
The question was where to go next.
Testing the Frontier
In 2018, I worked with Livongo on one of their first pilots outside the employer space: implementing a pilot within an Accountable Care Organization. The payment logic aligned in theory and patients valued the intervention. But the pilot revealed structural constraints. In the ACO context, risk wasn’t sufficiently concentrated, time horizons were shorter, and the gap between financial accountability and clinical authority was harder to close. The value proposition held, but the ROI was more limited.
In 2018, I worked with Livongo on one of their first pilots outside the employer space: implementing a pilot within an Accountable Care Organization. The payment logic aligned in theory and patients valued the intervention. But the pilot revealed structural constraints. In the ACO context, risk wasn’t sufficiently concentrated, time horizons were shorter, and the gap between financial accountability and clinical authority was harder to close. The value proposition held, but the ROI was more limited.
Acting on Information
Livongo acted on this information. Rather than forcing entry where alignment was partial, the team leveraged the ACO pilot as evidence focused on markets where conditions were stronger. That meant expanding into managed care programs: Medicare Advantage plans, Medicaid managed care organizations, and the Federal Employees Health Benefits Program. Each buyer had direct financial risk for a defined population, a sufficient time horizon to realize the value of the intervention, and held both the financial motivation and operational authority to act.
By aligning its offering with environments where value could be captured, Livongo translated clinical impact into measurable financial performance—driving rapid growth and culminating in its acquisition by Teladoc Health in 2020 in a transaction valued at $18 billion.
Livongo’s trajectory is a precise illustration of the framework in action: identify where your value is capturable, find the buyers structurally positioned to capture it, and expand systematically through that profile. Resist the temptation to chase markets where no sufficiently motivated buyer exists.
Tying it Together (and Coming from the Side)
Livongo’s story is instructive not because it is exceptional, but because it is replicable.
The decisions that drove their expansion weren’t born of luck or superior technology alone. They were the result of asking the right questions (in the right order) and having the discipline to act on the answers. Even when that meant walking away from markets that initially looked attractive.
The US market does not reward the best solution. It rewards the solution that fits: in the right context, for the right buyer, under the right payment logic. Getting there requires resisting the instinct to lead with clinical validity and regulatory credentials, and instead asking the harder, less comfortable question: in whose financial interest is it to solve this problem, and are they positioned to act?
Answer that question with precision, and the right buyer becomes much easier to find. You’ll know the terrain. You’ll know where the risk is concentrated, where the time horizons align, and where financial accountability and clinical authority are held by the same hand. And when you walk into that room — you won’t just be pitching: You’ll be coming from the side.
Ready to Put the Framework to Work?
Contact us for a tailored worksession to map your solution against U.S. payer incentives, problem ownerships and reimbursement logic to identify your strongest market entry beachhead.
About the Author Tina Simpson is a healthcare strategist and co-founder of Line Axia, a consultancy that helps European healthtech companies navigate U.S. market entry. Having worked on both sides of the Atlantic, she specializes in translating across healthcare ecosystems, 90s adventure films, and regulatory jargon.