The J Curve Insider: The $10B Revenue Opportunity in Healthcare—Driven by AI and Smart Incentives

Brazil’s healthcare system is massive—$233 billion in annual spending, 10% of GDP—but it’s also deeply inefficient. The private sector alone wastes 30% of its spending, burning through $18 billion a year. And while private health insurance is in high demand, it’s also the #1 source of consumer complaints, outranking banks and telecom.

Today, I sit down with Gui Azevedo, co-founder of Alice, a Brazilian health insurance company, to break down what’s broken, why healthcare costs keep rising, and how AI and smarter incentives are creating a $10B revenue opportunity in Brazil’s private healthcare market.

Let’s get into it.

BRAZIL VS. THE WORLD: THE HEALTHCARE PARADOX.

Olga Maslikhova: Let’s start with the big picture. How does Brazil’s healthcare market compare to the U.S. and Europe?
Gui Azevedo: Brazil is one of the largest healthcare markets globally, but its per capita spending is dramatically lower than developed countries:

• Brazil: ~$1,000 per capita.

• U.S.: ~$14,000 per capita.

• OECD average: ~$6,000–$7,000 per capita.

Yet, despite spending 14x less per person than what the U.S. spends per person, Brazil achieves nearly the same life expectancy as the U.S. (76 years vs 77 years respectably).

This means Brazil’s healthcare system is incredibly cost-effective—but within the private sector, it’s the exact opposite: wasteful, fragmented, and unsustainably expensive.

THE $18B WASTE PROBLEM.

OM: That’s a wild efficiency gap. If Brazil is so cost-efficient on a macro level, why is private healthcare in such bad shape?
GA: Because private healthcare in Brazil is fundamentally misaligned. There are two major structural inefficiencies that drive $18 billion in annual waste:

1. No primary care in the private sector.

• In Brazil, only 1% of private healthcare consultations are primary care visits.

• Compare that to 50% in the U.S. and 70% in the UK.

Since there’s no primary care system, patients self-diagnose and go straight to specialists, often seeing 5–7 different doctors for the same issue.

2. A Completely uncoordinated system.

• Emergency room visits per 1,000 people per month:

• Brazil: 108

• UK: ~35

• U.S.: ~35

• Specialist visits per 1,000 people per month:

• Brazil: 351

• Alice members: 200 (40% fewer specialist visits)

With no coordination, patients bounce between specialists, getting redundant tests and conflicting diagnoses. Here’s an example for you: Brazil has the highest MRI scan rate per capita in the world—higher than Germany.

THE PRESCRIPTION FOR BETTER HEALTHCARE.

OM: Let’s talk solutions. How does Alice address these inefficiencies?
GA: We built Alice around care coordination, AI-powered efficiencies, and aligning incentives.

1. Primary care first.

• 68% of Alice consultations are primary care vs. 1% in the broader market.

• This has reduced ER visits by 32% and cut specialist consultations by 40%.

2. AI-powered care navigation.

• AI triage reduced the overall digital care journey from 30 minutes to 25 minutes by eliminating inefficiencies.

• Response times for patient care requests are under 60 seconds—compared to hours or even days in traditional healthcare.

3. Aligning incentives for better health outcomes.

• 84% of private-sector births in Brazil are C-sections.

• Alice restructured provider incentives, reducing C-sections to 45%.

By tying payment to outcomes instead of volume, Alice is eliminating waste and improving care at the same time.

THE EMPLOYER DILEMMA.

OM: What does this mean for employers who provide healthcare for their employees?
GA: Private health insurance premiums in Brazil grow at least twice the rate of inflation—and in 2024, they surged to three times inflation.

• Industry-wide, double-digit annual price hikes are common.

• Alice, however, has kept price adjustments at around 8%—far below market averages.

For employers, this means better cost predictability and retention, which is why Alice has a 100% renewal rate among companies with 30+ employees.

WHAT’S DRIVING $10B IN NEW REVENUE.

OM: What are the biggest tailwinds driving long-term market expansion?
GA: Three big trends will reshape private healthcare:

1. AI-Driven efficiency & cost reduction.

• AI triage reduces unnecessary ER visits by directing patients to the right level of care.

• AI documentation cuts administrative workload, freeing up doctors for actual patient care.

2. The national citizen health record (Brazil’s “PIX for healthcare”).

• Brazil’s government is building a national patient health record, similar to how PIX transformed banking.

• Today, patient data is siloed across hospitals and insurers—this system will centralize it for better care.

3. Expanding private health insurance penetration.

• Only 25% of Brazilians have private insurance today.

• AI-driven efficiencies could increase this to 40%, adding 30 million new customers.

This shift could unlock $10–15B in new revenue across the private healthcare market.

THE DIGITAL SHIFT.

OM: Beyond in-person consultations, how is technology changing how people access healthcare in Brazil?
GA: Telemedicine is becoming a primary gateway for care. In Alice’s system, 70% of health events can be resolved digitally, significantly reducing unnecessary in-person visits.

OM: That’s a major shift. Why wasn’t this happening before?
GA: Telemedicine has existed since the invention of the telephone, but AI and improved digital infrastructure now allow us to triage patients effectively, resolve cases remotely, and route them to in-person care only when necessary.

NAVIGATING THE MAZE.

OM: Let’s shift gears. What advice would you give to entrepreneurs looking to enter the healthcare or another complex industry in Brazil?
GA: First, figure out who is going to pay you. Unlike in the U.S., Brazilian consumers expect everything to be covered by their insurer. Your business model will either rely on corporate payers (employers offering health plans) or direct consumers—but out-of-pocket spending is low due to the lack of deductibles.

Second, plan for long sales cycles & compliance hurdles. There are no J-curves in healthcare, at least not in the way SaaS scales. Trust and partnerships take time to build. On top of that, entering the market requires navigating compliance, government regulations, and entrenched players.

Third, execution > hype in healthcare. There are no “blitzscaling” shortcuts in this space. Unlike SaaS, healthcare growth is slower but offers long-term, defensible market positioning. Building credibility with regulators, providers, and payers is critical.

Fourth, technology adoption is incremental, not exponential. AI and software won’t disrupt healthcare overnight—but compounding improvements in efficiency can transform patient outcomes over 10–20 years.

And finally, capital efficiency matters more here than in other sectors. Healthcare startups can’t burn cash like consumer tech. The ability to balance growth with strong unit economics is key to long-term survival.

FINAL TAKEAWAYS.

OM: Looking at Alice’s journey and the challenges in Brazil’s healthcare system, what are the biggest takeaways for operators, investors, and founders?
GA:

✓ The biggest opportunities are in fixing systemic inefficiencies.

• The real cost drivers in healthcare aren’t insurance products—they’re uncoordinated care, lack of primary care, and misaligned incentives.

✓ Founders need to think in decades, not years.

• The biggest wins in healthcare come from long-term, compounding improvements, not fast disruptions.

✓ Market size is massive, but scale takes patience.

• Brazil’s private healthcare market is worth $150 billion—but founders must understand the payer structure and regulatory hurdles to win.

✓ AI is not a silver bullet—but it’s a force multiplier.

• AI works best when applied to efficiency improvements, care coordination, and reducing administrative burdens.

✓ Execution and relationships are more important than speed.

• Unlike consumer tech, moving fast without understanding regulation will kill your company.

• Those who play the long game and build trust will win.

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