110 – Rich vs. Poor Lifespans, Trump’s Healthcare Shake-Up, and AI Diagnosing Your Health
Episode Notes
Vic and Marcus discuss the slow news week following the holidays, covering topics like the stock market's strong performance over the past two years compared to healthcare's stagnation, the impact of Medicare Advantage and pharmacy costs, and cyber security concerns in healthcare. They delve into longevity and wealth disparities, explore General Catalyst’s acquisitions targeting Epic, and evaluate emerging diagnostic tools like AI-based facial analysis. The episode also previews potential healthcare changes under the new administration and challenges for hospitals in 2025.
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Episode Transcript
[00:00:00] Marcus: If you enjoy this content, please take a moment to rate and review it. Your feedback will greatly impact our ability to reach more people. Thank you. Happy 2025, Vic. Yeah. Happy New
[00:00:10] Vic: Year.
[00:00:10] Marcus: How was your, how was your holidays?
[00:00:12] Vic: I had a great holiday. We went to Europe, did a little skiing. And then, um, my wife got sick.
[00:00:18] Vic: So it got kind of cut short and all kinds of, uh, trouble getting back and things, but great to be away. Where were you in New York? I was in the Dolomites, which is in northern Italy. Oh, yeah, Italy. Yeah. Yeah, it was great. I'd never been anywhere skiing in Europe, kind of different. But fun to check it out and that's awesome.
[00:00:35] Vic: Yeah, that's awesome. How about you? How
[00:00:37] Marcus: were your
[00:00:37] Vic: holidays?
[00:00:37] Marcus: Uh, mostly here. Very good. Um, no health issues would, you know, to escape the holidays without health issues, actually a real blessing. Uh, had both the boys home, which was really cool. Um, able to do Christmas at the, at the parents house. Um, it was, it was, it was pretty great.
[00:00:57] Marcus: It was pretty great. Um, we're, we're [00:01:00] watching our oldest dog, uh, Ronan. He's a Australian shepherd. And he's, so he's brilliant. Super, super smart dog. Otherwise I don't think I would do the, you know, the dog sitting thing. Uh, but he, he's really, really smart. So he's getting me up in the morning. We're taking these long walks around the neighborhood, which is good,
[00:01:19] Vic: which is good.
[00:01:20] Vic: Yeah. Those dogs are smart. I mean, I know one that can open doors just like,
[00:01:25] Marcus: It's like he can understand everything we're saying, you know, it's, it's, it's pretty, it's pretty amazing. Um, but also because they're so smart, like you got to watch them because they, cause they are. They are mischievous.
[00:01:36] Marcus: Absolutely. Yeah, absolutely. Uh, well, we have a pretty slow week. Um, I mean, basically it's look, we're recording this is January 2nd, right? Some people aren't even like back to the office. I was walking around. Yeah. It's quiet around here. It's super quiet around here. So, uh, you know, but. I love the fact that we're back day two and
[00:01:56] Vic: we're
[00:01:56] Marcus: gonna
[00:01:57] Vic: we'll cover the news that's out there.
[00:01:58] Vic: It's been a slow [00:02:00] week. So it's expected, but good to start thinking about 25
[00:02:04] Marcus: and also we're going to ramp up so quickly in January. We've got JPM. We've got. Um, you know, earnings for Q4, we'll, we'll start to roll out in the next couple of weeks. And then we've got the inauguration. So January is this will be the slowest storm.
[00:02:19] Marcus: Yeah, exactly. Exactly. So, uh, without any more pre talk let's, uh, let's go ahead and dig in. You.
[00:02:36] Marcus: Found this article in the Wall Street Journal kind of recapping the last two years of the stock market. It's, it's, it's been remarkable, right? I mean, it's, it's hard to, um, be in our industry when the stock market is performing this well, you know, you're like, yeah. Uh, you know, we're supposed to be here to beat the market and provide create outsized returns And it's kind of hard because there hasn't been a lot of [00:03:00] liquidity because there hasn't been a lot of deals And the stock market has been on an absolute tear
[00:03:03] Vic: Yeah, the sp500 this chart if people are listening the last two years has been over 20 percent It's like 24 23 percent, which is incredible.
[00:03:11] Vic: It's incredible. Yeah.
[00:03:12] Marcus: Yeah, but You were wise enough to pull out the healthcare index and give us a bit of a comparison. Maybe not for the last two years. Cause I think 2023 was, was a pretty good year for, um, the healthcare index overall.
[00:03:30] Vic: Yeah. I just felt like when I was reading this story, I don't feel as buoyant, as excited as the story.
[00:03:39] Vic: And so that's made me look at the XLV, which is sort of the segment of the S& P 500 index. that covers all the health care holdings.
[00:03:48] Marcus: Right, right. So, so last year, I mean, when we think about what the year was dominated by in terms of storylines, we went into, we entered the year [00:04:00] with all sorts of concerns about Medicare Advantage, right?
[00:04:03] Marcus: Yes. Um, the health systems had kind of rebounded 2023 and we're looking good heading into 2024. Yeah. But Medicare Advantage had really started to sour. the market on several, not all, but several of the, of the payers who are out there. Humana is sort of, you know, the number one. That was like Storyland we entered the year with.
[00:04:24] Marcus: Um, shortly after that, we had the change healthcare issue, but that actually didn't have a big impact on healthcare stocks, and in particular, like United stock, it really did not meaningfully impact their stock price. Um, But then as the year started to go on, inflation continued to sort of tick up and be a little bit more stubborn.
[00:04:45] Marcus: Um, and so that presented issues from a labor perspective for the providers. Uh, there was a probably more aggressive eye looking at pharma that was not Glip1.
[00:04:58] Vic: Yeah, right.
[00:04:59] Marcus: If you didn't [00:05:00] have a good Glip1 strategy, you know, your, your, your pharma stocks may have taken a bit of a beating. Uh, and then, then we had the CVS story.
[00:05:10] Marcus: Right. Land. Which was pretty devastating.
[00:05:13] Vic: Yeah,
[00:05:13] Marcus: definitely. Uh, and, and scary, I think for the entire, uh, payer sector. And then tragically in the beginning of December, uh, Brian Thompson was murdered. Right. And, uh, that had an impact across, you know, across all the, all the, the payer stocks really because of, uh, public sentiment, um, which I think was unexpected.
[00:05:36] Marcus: Uh, a, a CEO of, uh, one of the largest companies in America was murdered. Coldblood. for all kinds of purposes in broad daylight. And social media response was to not, um, you know, focus on the murder, but to focus on America's, uh, [00:06:00] dissatisfaction with the healthcare system writ large. And, um, that had an impact on, on stock performance.
[00:06:07] Vic: I mean, that, that, that. It was shocking to have one of the management team of a great company get murdered. But I was more really shocked and disturbed by the social media outpouring of hatred and vitriol against the industry. Yeah,
[00:06:26] Marcus: and support for a murderer.
[00:06:27] Vic: Yeah. I mean, straight up support. And I think that the stock market prices Reacted to that.
[00:06:33] Vic: Like people, people realize, Oh gosh, there's a lot of sentiment against this industry and they just maybe sold without thinking too much about it. But the other thing I think is that, um, so those are the things that impacted healthcare. We didn't get the positive side that the SB 500 did around AI, AI and sort of the The cloud, [00:07:00] you know, additional needs for cloud infrastructure.
[00:07:02] Vic: So I think a lot of the, I didn't pull up, but the magnificent seven or eight, whatever we're on now that, that top 10 individual companies in SP 500, I think drove a lot of the gains and there are no healthcare companies really in there.
[00:07:16] Marcus: And, and this chart that you have comparing the two, I think what is really standing out to me is sure.
[00:07:23] Marcus: You you've got the overall index, you know, sort of outperforming, but the shapes really do. Match up until around September and then they diverge where health care Takes a, you know, a nosedive and the S and P climbs from about 15 percent to, you know, 25%, um, by, by the end of the year. So that, that is another sort of interesting thing that makes me want to look, look back at, you know, Q4 in its entirety, right?
[00:07:54] Marcus: Because Brian Thompson was murdered in December, right? There was a lot happening across [00:08:00] September, October, November, right? Um, I wonder how much of this was the CVS stuff, but, but I, I think we, it's, it's going to be worth looking back, um, especially as we, we, we put forth our first, uh, quarterly report, uh, of, of, of, uh, of the health further brand to, to kind of say what, what really caused that divergence.
[00:08:18] Vic: Yeah. We'll have to pull out the different, the different factors and how much each one had waiting on it. But I think the, um, the uptake of COVID vaccines was pretty low. I really hurt Pfizer and, uh, Was one of the company I can't think of the name right now that buying tech maybe yeah Yeah, and then I think as the Fed started cutting I think that's negative for health care.
[00:08:43] Vic: it's going to drive inflation. And I think, although it helps the stock market, I think it hurts the longterm outlook for health care more than it helps.
[00:08:53] Marcus: Yeah. Yeah. Agree. So thanks for pulling out this, this kind of overview. Next article here from the wall [00:09:00] street journal, Trump's return, sparks hope for 2025 deals revival.
[00:09:03] Marcus: I mean, this is just sort of what we're all hoping for. Right.
[00:09:06] Vic: Yeah, I think that, um, there is a lot of hope that there's going to be a friendlier kind of FTC, Justice Department for M& A. There'll be more support from the overall office for the stock market. And that will lead to deal making, which I think, I think probably makes sense.
[00:09:26] Vic: I think there's a lot of, you know, potential deals that boards have been talking about for years that they just didn't think they could get through. Right. That now hopefully they will.
[00:09:36] Marcus: I, I do love the byline here though, where it says dealmakers say less regulation, lower interest rates and rising stock markets could fuel activity.
[00:09:44] Marcus: But in quotes, people really don't know one banker says, I mean, I that's how I feel about it, right? It's like, it's like, there are all these things that line up in such a way that it feels like we should be able to get more Deal activity, particularly the regulatory environment. I mean, I think that one is pretty clear.
[00:09:59] Marcus: [00:10:00] Yeah. Regulatory environment will be favorable. I don't think there's any question about that. Um, but the, but the people really don't know part is kind of something that I'm feeling and I'll tell you what I'm wondering about. I am one. It's kind of related to the last topic. We were. Discussing about the S and P, right there, even within the S and P, there's been this multi year pull away that has created a magnificent seven, you know, and I guess I'm just wondering, we're, we're now at 2025, right?
[00:10:33] Marcus: You know, so we're five, we're in our fifth year of the 2020s to 2020s have been very weird. Yeah. You know, yeah. COVID was five years ago. I know.
[00:10:42] Vic: Like a long time ago.
[00:10:43] Marcus: It's insane. Right. So, so we're, we're now in our. Fifth year, right? And, and, and I'm just kind of wondering, do we think that there has been enough fundamental change and consolidation in the market that [00:11:00] deal activity just is not going to return to what it was prior to the 2020s?
[00:11:08] Marcus: You know, that, that's a, that's just a question that I have that the makeup and the structure of the market, the competitiveness of the market, and especially as things are now aggregating around AI and that that is the momentum we've been discussing since, since we first started taking AI seriously, that it's a big tech game at the end of the day, at the end of the day, it's a big tech game, right?
[00:11:30] Marcus: I mean, and it's going to be a winner's take most. Kind of kind of market opportunity. And so I don't know what, what, what are your thoughts on that?
[00:11:41] Vic: Um, I have sort of two thoughts simultaneously. One, I think there's many fewer publicly traded companies than there have been ever before. It's been declining and the market cap of the ones that are there are much bigger.
[00:11:58] Vic: And so that, that means [00:12:00] there's fewer small deals to get picked up that are, it's not really, Big public companies buying small public companies. It's more like private private being bought by a public company.
[00:12:10] Marcus: Yeah
[00:12:10] Vic: Um, and so I think that might limit the number of deals that can happen Yeah, but I also think there's a pent up sort of um, pent up backlog of deals that just didn't get done over the past two to four years because the regulatory environment was Preventing it.
[00:12:29] Vic: Yeah, and so there may be a Uh, I think there could be a decent uplift in M& A activity.
[00:12:37] Marcus: Yeah. I also think about some of the fundamental impairments between labor and AI that at least are being bandied around SAS and what percentage of enterprise venture capital is, you know, Is in SaaS as a business model.
[00:12:54] Marcus: Yeah. You know, so, yeah. So, you know, there, there are just some kind of systemic things mm-hmm . [00:13:00] That, okay, we're going to have a, a Trump regime that is absolutely going to change the regulatory environment. Right. That's gonna be good for m and a. That, that there's, there's no question about, but there's all these other much more durable things.
[00:13:14] Marcus: Right. That as we are in 2025, I kept saying fifth year, but we we're in the sixth year, you know? Yeah. Like as, as we're heading into this back half of the 2020s. Yeah. It's the second half of the decade. Yeah. As we enter the back half of the 2020s, how much of what has, has formed in the first half is durable and can't necessarily be undone by a more relaxed regulatory environment.
[00:13:38] Marcus: That's, that's a question. I just don't, I just don't understand like how to, how to fully think about it.
[00:13:46] Vic: Yeah. I don't know. I think that, um, we hit kind of a globalization peak. right before
[00:13:53] Marcus: COVID.
[00:13:54] Vic: And that now we are kind of retracting to more [00:14:00] onshoring or at least maybe US and Europe aligning and then Russia, China, other, other groups not aligning.
[00:14:09] Vic: That's going to drive expenses, right? Costs up. It might lead to M& A activity. It also might lead to new, new ventures, new, new sources of. Supply chains and things. Yeah. Um, I don't know healthcare is so Uh location based right? I don't know how much the You know, kind of globalization deteriorating and going to more of a, um, maybe not U.
[00:14:41] Vic: S. only, but certainly a U. S. first and onshore sort of thing will affect health care. Yeah, um, so I don't know. I think it's
[00:14:50] Marcus: and then I guess maybe the other theme about the trump. Administration is, uh, in particular as it relates to [00:15:00] health care, I would say, generally speaking, it does not feel terribly incumbent friendly, right?
[00:15:08] Marcus: Which, which could drive more deal activity in and of itself, right? Just because it will, it's not going to regulate an incumbent. Out of existence. I don't, I don't expect, but I think it will increase the potential for competition, um, with incumbents, which, you know, healthcare has used the regulatory environment to stifle competition, quite frankly, so lowering some of those regulatory barriers to creating a more competitive environment in healthcare specifically could be the thing that really drives more deal activity in our industry.
[00:15:43] Vic: Yeah. Yeah. I mean, I think, uh, I think that'd probably be healthy. I don't mean, I think it, whether it leads to more deals or more impactful deals, I don't, I don't know. But
[00:15:54] Marcus: if
[00:15:54] Vic: you believe
[00:15:55] Marcus: in the free market, right. Then I think you would, you would believe that that is healthy.
[00:15:59] Vic: Yeah. That's, [00:16:00] that's my belief.
[00:16:00] Vic: I'm more of a free market guy. So, uh, I think incumbents have plenty of advantages and I don't think the government needs to give them more.
[00:16:08] Marcus: Totally. Totally agree with that. Totally agree with that. Uh, all right, let's keep moving. One VC deal to cover. One deal was announced in the last two weeks. This actually was December 18th, so.
[00:16:17] Marcus: Yeah. Um, Scripta Insights raises 17 million in Series B funding, 42 million in total. So tell us about this company.
[00:16:23] Vic: Yeah, so they're sort of a pharmacy benefits navigation company helping large employers with their employees. Get their drugs more effectively at better discounts, and they're, they're raising money to grow.
[00:16:39] Vic: And so I think it's a positive thing. You know, this is not a new concept, but good. I mean, I've been trying to navigate some drug stuff with my wife and teaching her about how the pharmacy benefit world works. And there's a lot of. Money you can save absolutely. [00:17:00] Um, and so, uh, it's I think it's a good it's good to see it get done You know, it's very it's been a quiet
[00:17:06] Marcus: This is from Wall Street Journal Pro, so most people will unlikely, uh, be unlikely to access this.
[00:17:14] Marcus: Um, but this is talking about a bill that is, uh, making its way through Congress, bipartisan support. Trying to sort of address the situation that the healthcare industry has found itself in as it pertains to cyber security issues, you know, 2024 was the year that the lid was just blown off. No one was safe.
[00:17:33] Marcus: The absolute, you know, biggest, and I would say probably best performing, uh, uh, tech and data. Healthcare companies is United Health Group. You know, if you know how many tech workers they have and like what their investments have been in that over the course of the last two decades, I don't think there's anyone who's stronger in that capacity than them.
[00:17:52] Marcus: And of course, Change Healthcare did come through an acquisition, but still, I mean. Their their asset. Yeah. And that was a crippling cybersecurity [00:18:00] event. Yeah. Right. And
[00:18:00] Vic: it it shows me that anyone can is exposed. Yeah. If, if they can get exposed Yes.
[00:18:05] Marcus: Anyone can be, can be exposed. Yes. Right. Yeah. So, so what's, what's sort of the approach that make So this, so this approach is,
[00:18:12] Vic: um, it would mandate that all healthcare data that is covered by hipaa, which is almost all, almost all healthcare data, would have to be encrypted at the source.
[00:18:25] Vic: So that if it did get exposed, it would be useless. Yeah. And that sounds good. It's going to be very expensive in order to encrypt it. Then you have to be, have a way to unencrypted to use it and keep it all straight and everything. It's, that's not a cheap proposition. And so, um, HHS and Congress are both kind of coming at this through different means, but it's bipartisan in Congress and HHS of course is going to change leadership, but.
[00:18:59] Vic: But it's pushing it as [00:19:00] well. They estimated it'd be 9 billion, I think, in the first year. And then 5 billion every year thereafter. And I don't see how the industry has I don't know where that money comes from.
[00:19:13] Marcus: Yeah, is HHS going to, um, change the, uh, the, the, the payments, uh, coming out of CMS to, to support that kind of, uh, I mean, that, that, that sounds insane.
[00:19:24] Marcus: We, we, we've been talking for a while about how there's something pretty wrong around, uh, The regulations requiring health care providers to store and maintain this data digitally. Um, and not thinking about the economic impact of that. Yeah. Um, as well as the honeypot that they created when they did that.
[00:19:49] Marcus: And now adding on additional expense requirements to these providers. And oh, by the way, they're healthcare companies. They're not tech companies. I mean, you know, we're talking about United. Now we're talking about a [00:20:00] healthcare company that's also um, Pretty much a tech company, but like the vast majority of these healthcare companies are not.
[00:20:05] Marcus: You don't have that
[00:20:06] Vic: capability. Right. So they would have to hire a vendor or something to do it for them. Yeah. Creating a whole new vendor industry. Very expensive. And I just don't think it's workable. It is a, um, access point that we need to try to close, but I don't, I don't see this really being feasible.
[00:20:30] Marcus: Yeah. And, and look, I mean, it's kind of weird, but. In 2025, it's more about the ransomware and the keeping these, these hospitals up and running than it is the sensitive data. All the data's been hacked. It's like That's my view. It's my data.
[00:20:50] Vic: I'm sure out there 15 times. I mean,
[00:20:51] Marcus: between change healthcare and Equifax a million years ago, it's like, my stuff's out there.
[00:20:58] Marcus: Right. My stuff's out there. It's, [00:21:00] it's like Whatever, right? So you can't say that the reason for this is to protect data. No one is able to protect data. It's about ransomware, and it's about shutting down Lurie's Children's Hospital, right, for however long it was shut down. It's about making sure that people are able to get care.
[00:21:19] Marcus: But encrypting the data would not solve that. I don't, well I guess it depends how you encrypt
[00:21:24] Vic: it, maybe.
[00:21:25] Marcus: Yeah, I mean, I guess Encrypting the data is a different thing than taking control of the network and shutting down the network. That's what I mean, like
[00:21:33] Vic: the ransom is usually Network control. The owner doesn't have access anymore.
[00:21:37] Vic: Yeah, yeah, network control. Right.
[00:21:40] Marcus: Well, back to lawmakers and regulators. You know, have to have to come up with something.
[00:21:47] Vic: People, they are constituents. The voters are upset that their data got out there, right? So this is the natural response, but I don't think it's workable.
[00:21:55] Marcus: Yeah. So it's a really gnarly problem.
[00:21:57] Marcus: Yeah. All [00:22:00] right. So Elon Musk and Donald Trump, but it's, you know, here's the thing. I'm not on truth social. Right. Yeah. I'm not either. And I feel like I need to be because all I ever see is like screenshots of what Donald Trump is posting and he is the president. It's like, it's getting to the point where true social is not this French thing.
[00:22:18] Marcus: It's his, it's his press office. He does not directly post on X. He posts on truth social now. So what I see is Elon on X. Yeah. Right. Right. You know what I mean? And I just saw Elon going nuts about the stopgap.
[00:22:33] Vic: Yeah. Right. Yeah. So we. Two weeks ago we covered it, and we were covering it on the day that they were debating it.
[00:22:42] Vic: Um, and then that night, I think Elon, I'm not on true social either, so it's hard to get the exact timestamps, but I think Elon was running in front of Trump. That's what it seemed
[00:22:56] Marcus: like. Yeah. I mean, I, again, I'm not on true social, so I can't say [00:23:00] all I see is what Elon does. I don't see what Trump is doing.
[00:23:03] Marcus: Um, but on X, oh my God. Like he was, he was, he was basically, he killed, he
[00:23:13] Vic: killed the deal. He killed the deal. And, and the way he did it, I have never seen before. I don't think it's happened before, but I, we need to ask Emily. He, you know, he has whatever he has 200 million followers, a lot of followers, and they started calling their Thomas people.
[00:23:28] Vic: Yeah, he just inundated them. Because the, the people on X will, will do what he says. And the continued resolution did have a lot of. extra stuff, often called pork, in it. And one of them was this, this pharmacy benefit manager's, um, kind of restructuring, um, which I think was going to be healthy, really, but, uh, but everything that wasn't directly related to continuing the government functioning.
[00:23:58] Vic: Got cut out. Yeah, to include [00:24:00] the PBM to include that, right? Exactly. Yeah.
[00:24:02] Marcus: So, so this Wall Street Journal article is, uh, the, the headline is drug middlemen spared by Trump and Musk for now, but PBMs are facing intense pressure and I don't believe they're going to be spared. I mean, Elon has been retweeting and sharing more and more on this.
[00:24:18] Marcus: charts on health care. Um, and so I think part of Doge is going to be a deep dive on health care. Um, you have to, I mean, it's such a big part of the budget. They have to do it. You can't, uh, be serious about cutting, um, government spend without doing it. Taking a hard look at health. Yeah, right. Fierce Healthcare pulled together what I thought was a really nice article on the 2025 outlook for hospitals.
[00:24:45] Marcus: Um, and they pulled in stuff from Moody's and Fitch and HFMA and, um, Kevin Holleran who is, uh, Fitch's kind of, you know, top guy when it comes to credit ratings and stuff. He's actually a member of the HFMA board with me. [00:25:00] Oh, yeah. He's a really, really sharp guy. I was reading this article. I was like, Oh, if, if Kevin, if Kevin's quoted in here, like that's, that's, uh, that that's real stuff.
[00:25:10] Marcus: What stuck out to me in this article was that Fitch is going to, or not is going to has, um, in early December bumped the credit outlook for the nonprofit hospital sector to neutral from deteriorating. Right. Yeah. And, um, that to me just seemed to be a. A really big deal because these credit ratings are fulcrum for these hospitals in terms of their ability to, um, issue bonds.
[00:25:36] Marcus: So the only
[00:25:36] Vic: way they can raise money? Raise money, yeah, issue
[00:25:38] Marcus: bonds, right? And so, getting something, moving from deteriorating to neutral, even just like for the layman, that sounds incredible. Yes, right. That sounds like, oh, deteriorating, bad, neutral, eh, you know. Right. Is what it is kind of thing, right? So maybe not awesome, but not deteriorating.
[00:25:57] Marcus: So that to me, that's a huge boon [00:26:00] for the nonprofit sector.
[00:26:01] Vic: Yeah, I think that's right. It's going to be, um, I think it's going to be a challenging year and you're going to have to operate your health system. Well, no question, but the environment is set up for for health systems to perform. They have good volume.
[00:26:19] Vic: Security is pretty high. The labor costs are likely to increase with inflation. But if you manage it well and you start reorganizing your operations and things, I think you can work through that. So yeah, I think it's, in general, 2025 is going to be a neutral year. It's probably not a blowout year, but a good, a good year.
[00:26:41] Vic: Yeah.
[00:26:41] Marcus: Yeah. I agree. I agree. So anyway, this is a long article. They cover multiple, um, you know, aspects of, of hospital operations. They talk about revenue growth, margins, you know, shifting site of care, et cetera, et cetera. Um, we'll put the link in the show notes. Definitely worth a read. Definitely worth a read.
[00:26:59] Marcus: If you're [00:27:00] kind of thinking about what are the, the hot topics for hospitals and, and sort of what does it look like they've got headwinds and tailwinds. Right. All right. This is, this is, I think, kind of the special interest, you know, tending to us, uh, section of, uh, of the show wall street journal. The headline is money can buy a longer life to a point.
[00:27:17] Marcus: Well, first of all, why did you sort of gravitate to this particular article and then tell a little bit about it?
[00:27:23] Vic: Yeah, i'm kind of interested in wellness and longevity, kind of the, the health in us, whatever the category is. And then I think it also is sort of related to the K shaped economy where like, if you have funds, you can buy healthier food, you can organize your life where you get more sleep and you have Um, people helping you with things, and that results in, we can pull it up, it's down, it's maybe like 10 years longer of life.
[00:27:57] Vic: If your net worth is from 0 [00:28:00] to whatever the bottom 10 percent is, 100k or maybe 50k, your expected lifespan, medium lifespan is 72 years. And in the top 10%, it's 85, almost 86 years.
[00:28:12] Marcus: Makes sense to me. Yeah. When you get up there, the bottom line is, I mean, forget about what happens earlier on in life, because I think what's, what's interesting is we, you know, for people who are between 72 and 85, we've had kind of minimal wellness, longevity stuff in their lifetime, right?
[00:28:30] Marcus: By the time they're that age. We don't really have a whole lot. What we do have is what does it cost to keep you alive once you get that old? And here's the deal. It ain't cheap, right? It ain't cheap. Med Medicare is helpful, but it doesn't cover. No, man. Yeah. It doesn't get the job done. It doesn't get the job done by itself, you know, um, so yeah, I mean, I, I think thinking about what the cost of end of life is and [00:29:00] extending someone's life once they enter that, that sort of 65 and plus band is one way to look out of it, one way to look at it.
[00:29:06] Marcus: And I think you and I, You know, in our late forties, early fifties are looking at it slightly differently, right? I mean, you know, like my son's 25 miles. He's not thinking about now at all, right? You know, but for us in our late forties and early fifties, you know, the fact that our net worth is, you know, not at the, at the lower end.
[00:29:23] Marcus: We are investing in our health. We're investing in more diagnostics. We're investing in more preventative measures. We're investing in, you know, um,
[00:29:34] Vic: exercise the food. We like all the stuff on the outside of the grocery store, all the fresh produce. It is more expensive and doesn't the shelf life is short.
[00:29:43] Vic: I was shorter. Yeah. So my wife goes shopping probably three to four times a week and not everyone can do that. If you're working two jobs and running around. Try to earn money in an hourly job.
[00:29:53] Marcus: Yeah, and then sometimes, you know, you're, you're at work and you didn't bring in food. And, you know, I've seen you come back with an E Rose bowl, you [00:30:00] know what I mean?
[00:30:00] Marcus: Yeah, yeah, yeah. You know, that E Rose bowl is really good for you. Yeah. And guess what? It's also not the cheapest thing you could be buying on, you know, in downtown. Yes. Right? That's right. So, so yeah, I mean, I think, yes, this is definitely a, a pretty big area. I recently joined the board of. Nashville Health, which is Senator Bill Frist.
[00:30:18] Marcus: Yeah, right. Nonprofit that he started. And, um, I think the reason why I joined is because there is this fundamental understanding that, uh, health is tied to Wealth, you know, and you can't look at how healthy, you know, it's when you're looking at the zip codes and you're looking at the health outcomes, you're also looking at, you know, what's, what's the wealth disparity that's here.
[00:30:49] Marcus: And they're, they're so closely correlated. It's just not even worth talking about. You know what I mean? Yeah.
[00:30:56] Vic: And this article talks about it too, it's related to the built environment [00:31:00] and what crime is like in your neighborhood and just a lot of things that are eventually tied to net worth.
[00:31:06] Marcus: Yeah, I mean, you know, this is, this is kind of an obvious point, but I think now that the, the health and wellness industry, And concierge doctors and these, these, uh, you know, diagnostics that are not covered by health insurance, but you can still get on your own.
[00:31:21] Marcus: Now that this industry is becoming more and more robust. I think this, this, this point is going to be, you know, more extreme, right?
[00:31:28] Vic: Yeah. And we're going to have to decide as a society, what should be included in Medicare for everyone right. Or on, on the standard insurance company benefits. Right. And what is add on an extra and.
[00:31:44] Vic: You know, it's like getting caviar or something you don't need it to survive, but it's you can pay for it. Yeah, exactly.
[00:31:50] Marcus: Moving to the AI section, Commier acquires patient navigation platform, Memora Health. Commier has been They just keep going. Regularly, you know, every time we [00:32:00] say Commier, we can swap it out for General Catalyst, right?
[00:32:02] Marcus: But Commier has been very, very consistent in their acquisition, um, and building out, uh, kind of a comprehensive health IT platform for hospitals.
[00:32:14] Vic: Yeah. And they are You mean it's only two that I can recall, but they bought like medics. I think that he's saying that they bought like medics was like a hundred million dollar publicly traded company, but pretty small.
[00:32:28] Vic: And now they're buying this company. It was not released, but they had raised about 80 million in capital. I'm starting to see a trend of them buying kind of. Companies that have decent product market fit, but they, they're not really a full scaled company. It's more like a product point system and general catalyst is acquiring it, put it in and that's an interesting strategy.
[00:32:51] Marcus: Yeah. But they're not seed stage companies. No, these are a
[00:32:53] Vic: hundred million to 200 million acquisitions. Exactly.
[00:32:56] Marcus: Exactly. Augmetics was a small cap stock. Right. Um, you know, I think. [00:33:00] I think that Memora was not publicly traded, but as you said, 80 million in A16Z was an investor. I would think
[00:33:07] Vic: they got some kind of return for it.
[00:33:08] Marcus: Yeah. Yeah. So they're, they're pulling in meaningfully invested in products, but maybe not platforms to make them part of this much, much larger platform. Um, it's a, you know, it's, it's a, it's an interesting play because the, the integration in the value proposition has to be about. How you combat epic I I can't see another player out there, you know, even even oracle health I think is going to be positioning against against epic.
[00:33:39] Marcus: Yeah, you know ultimately And I can't see how you you can't you can look at what comm you're is doing here and say, okay Well, who are they trying to take out in the market? You know, who is their incumbent that they're going after right?
[00:33:53] Vic: Yeah, they're trying to create the epic replacement You know, Epic was created in the 90s.[00:34:00]
[00:34:00] Vic: Yeah. And then, of course, benefited from the whole EHR land grab. And it's Good technology, but you, you could reinvent that same set of services much more effectively, and I think that's what General Catalyst is doing. They bought that health system to sort of have a testing ground, but the, the knocking off the incumbent, going back to the incumbent discussion, Epic is very entrenched.
[00:34:27] Vic: And so I'm excited to see come here and Oracle fight against them, but it's a long, it's gonna be a long process. They're pretty entrenched.
[00:34:35] Marcus: Yeah, yeah, they're pretty entrenched. And I guess the 1 thing that I will give to both come here and Oracle is, um, they both seem to be acting with a sense of urgency because because epic is so entrenched and has been eating market share at a pretty good clip.
[00:34:52] Marcus: There's not a lot of time if you want to, you know, if you want to go capture. The green space that they haven't already captured because they've, they've, [00:35:00] I haven't talked to a whole lot of, you know, hospital CEOs who are in with Epic, who are anywhere close to changing. Yeah. So, so it's like, I feel like you got to go after the green space, right.
[00:35:10] Marcus: And, and get, get to somebody who's not currently on Epic because getting them out of the Epic religion is going to be pretty hard.
[00:35:17] Vic: I don't think there's a, that's, that's going to be hard to build a business just with the things that I'm, Platforms that are not on Epic. Well, they don't
[00:35:25] Marcus: have, they, they're, they're not quite a 50 percent even in the market yet.
[00:35:29] Marcus: So that, you know, there's still, there's still a majority of the market. That's not on Epic to my understanding and Cerner is already starting with a pretty good clip. Yeah. Yes. Yes. Oracle's in good shape. Oracle. I
[00:35:41] Vic: think Oracle Oracle's from a 20 low 20 percent market share to 40 or something. Yeah. For sure.
[00:35:50] Vic: But the number of health systems that are on either Cerner or Epic, right
[00:35:55] Marcus: now, now you're starting to talk about 70 percent Yeah.
[00:35:59] Vic: And so for calm, [00:36:00] you're at, I think you need to have some kind of adjacent strategy to begin pulling. Surrender an epic clients for point systems at least but epic and Turner both are pretty pretty tight in it's hard to do that It's hard.
[00:36:15] Vic: So I don't know I'm excited that general catalyst is doing this because I can learn from it, but it's it's gonna be a long road I think
[00:36:22] Marcus: you know, the thing is I I believe the people of General Catalyst are smart people, and I just wish I knew what their strategy was. You know what I mean? Um, I believe they have one.
[00:36:35] Marcus: I don't believe they've communicated it, but I believe, you know, we're, we're picking up, you know, clues from all the different moves they're making, and we're trying to kind of piece it together. That does, that doesn't make a strategy, right? Like, I would love to know what their actual strategy is, because we were talking before the, we hit record that, uh, At this point, they're not behaving like a venture firm anymore, right?
[00:36:56] Marcus: I mean, you know,
[00:36:57] Vic: yeah, I mean, acquiring businesses, [00:37:00] you know, taking a company private or buying a company that I don't know what the terms were, but they raised 80 million. Those aren't venture Those aren't typical venture deals. No,
[00:37:11] Marcus: no.
[00:37:11] Vic: They're almost like a multi stage asset management company. Yeah, yeah, that's right.
[00:37:16] Vic: That's right. And buying
[00:37:17] Marcus: a hospital is not a health, not a VC deal. Definitely not. Definitely not. All right. And last story. What your face age, in quotes, can tell doctors about your health. So, This is a story about how AI and also even just doctors, you know, intuition, leveraging sort of basic knowledge about your face actually is a, is a diagnostic tool and can tell people, you know, how healthy you are, but also, um, Um, what kind of, uh, kind of, kind of the severity of treatment that you can withstand?
[00:37:51] Vic: Yeah, and I think it's interesting. I think doctors have, particularly in cancer care, is where this article talks about it. Brigham and Women's [00:38:00] has a, uh, doc from, The oncologist at Brigham and Women's, and he was trying to figure out, could he give an 82 year old, uh, chemo regimen, um, and he had this gut level feeling that, you know, he seems pretty healthy.
[00:38:16] Vic: I think he maybe could withstand it. Um, and that judgment forever has been the doctor's role. Right. And it's very nuanced and hard to tell, really, and patients don't always tell the truth about, I mean, every patient tries to say to the doctor that they are feeling good and put on a good face because they want the, they want the chance at the chemo, um, and so this is a tool now that, uh, the doctor can use that takes an image of the face and then there's a whole bunch of different, um, aspects of the face that is, uh, Indicative of wear and tear, aging, you know, kind of stress on the body.
[00:38:55] Vic: And so, um, So, so it was a 90 year old and [00:39:00] he used the face age tool because he thought he was probably a little bit younger and more healthy and was able to just give a little more comfort that this patient can withstand the chemo and was successful. So it's early, but, um, yeah, they're looking at your, um.
[00:39:16] Vic: Eyes and the bags in your eyes and different wrinkles and all kinds of stuff.
[00:39:20] Marcus: Yeah. Yeah. So, I mean, just, just another way that, that AI is going to play a role in healthcare. Yeah. You know, I, I thought, I thought this was a great, great story for you to highlight because this is not something I would have thought would have been viable in the healthcare setting.
[00:39:36] Marcus: Uh, but you could really see how this is a, this is a critical decision, um, assistment, assisting tool, right?
[00:39:42] Vic: Yeah, that's right. And I think I'm really interested in. Um, diagnostic inputs that are low interaction, like low acuity, where like take a picture of my face pretty easily, draw a little bit of blood easily, go sit in an [00:40:00] MRI machine for two hours is not that easy.
[00:40:02] Vic: No, no. And there's only so many machines like that. So there's a fixed cost thing. So I think we'll keep seeing more and more of these. Um, really adjunct diagnostic inputs, but as we get more and more of them, I think they could start having, start having an impact on things.
[00:40:20] Marcus: All right. Well, look, it's January 2nd.
[00:40:23] Marcus: I think you did a pretty good job pulling together a show given the fact that everyone's not that much news crawling out of their holiday hole. Right. Right. Um, but yeah, I think, I think next week will be much more robust and as we have discussed, the following two weeks will be Crazy.
[00:40:37] Vic: Yes. That's right.
[00:40:38] Vic: It's going to be a busy year. I'm excited about it. I think it, it'll be fun. It'll be a lot of change and we'll see, we'll be able to cover it. Yeah,
[00:40:47] Marcus: absolutely. So, uh, yeah. See you next week and you know, hopefully there's a lot more deals and, and more clarity on, uh, what the new administration is looking to do.
[00:40:57] Vic: Yeah,
[00:40:58] Marcus: that's [00:41:00] right.