114 – Trump’s DEI / HHS Freeze, China’s AI On A Budget & J&J Depression Nasal Spray

[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. 

[00:00:07] Vic: On health policy. We have not much going on in health policy this week.

[00:00:10] Vic: So we have to make up 

[00:00:11] Emily Evans: boring. I wish something interesting would happen. 

[00:00:13] Vic: Yeah. Thanks for doing this. Marcus is, um. Somewhere at a conference. I think he's in South Florida. Oh, 

[00:00:19] Emily Evans: lucky him. It's snowing in South Florida. 

[00:00:21] Vic: Yeah, so maybe not the best time to be down there, but uh, thanks for doing this. Let's dig into the stories this week.

[00:00:26] Vic: All 

[00:00:27] Emily Evans: right.

[00:00:37] Vic: Okay, so we're going to start off with the economy. And food prices and Hedgeye has been all over this really helped me understand it, but food prices have been significantly up over the last several months or years, really. So we're showing people that are listening and not watching. First of all, you should check us out on YouTube, but I'll describe it.

[00:00:58] Vic: So we have [00:01:00] six food products here, uh, sugar, coffee, potato chips, milk, bread, and ground beef. 

[00:01:06] Emily Evans: Well, you shouldn't be eating potato chips, so don't worry about that one. That's 

[00:01:10] Vic: actually the one that is not spiking so much. Maybe people are cutting back on their potato chips. But the one that really caught my attention is sugar and coffee.

[00:01:20] Vic: Just because they are up 80%, 70 percent over the last five years. These are underlying commodities. I mean, certainly I buy sugar and coffee, but they also go into lots of other food products. 

[00:01:35] Emily Evans: Right. Right. And sugar, you know, they're They're both fairly labor intensive, right? Yeah. Yeah. Harvesting them. Uh, and that is the, that's the, the cost of, of people, uh, is what you're seeing there.

[00:01:49] Emily Evans: Um, but the, you know, the price of goods is rising because, you know, the, everything else is rising and this is what, this is 

[00:01:58] Vic: called inflation. This 

[00:01:59] Emily Evans: is called inflation. And [00:02:00] the terrible thing about inflation is once it, get started. It's really hard to stop. And, and that's the, the, the quandary the Fed is having, you know, by, by in, you know, they raised interest rates and then misjudged things and lowered them too soon.

[00:02:17] Emily Evans: Yeah. Which is exactly the same problem. It's what they do 

[00:02:20] Vic: every time, really. Yeah. And 

[00:02:22] Emily Evans: most famously by Arthur Burns, because he was under a lot of pressure from Richard Nixon in the 1970s. Right. So this story is so luckily 

[00:02:30] Vic: we have a president that won't apply any pressure this year. 

[00:02:33] Emily Evans: Well, it's already started.

[00:02:34] Emily Evans: It is on, on the news today saying that he wants to, um, it, we, we need to cut interest rates. The thing that causes inflation interest 

[00:02:43] Vic: rates would. It would not reduce inflation, 

[00:02:46] Emily Evans: but if you cut at the same time, the significant amount of government spending that is actually inflation doesn't happen until some extraneous force comes in there and pushes up prices.

[00:02:59] Emily Evans: And in our [00:03:00] case, that was the Inflation Reduction Act, as well as some other things. And quite honestly, just some really crazy behavior at the Treasury Department. 

[00:03:07] Vic: Let me just. Pause for a second to make sure I'm understanding, because the naming conventions in D. C. are hard for me to get my head around.

[00:03:16] Vic: So I think you just said the Inflation Reduction Act was a catalyst that caused inflation. 

[00:03:23] Emily Evans: So 

[00:03:24] Vic: there's this new 

[00:03:25] Emily Evans: thing in Washington, so you name it the thing that it's not. Name it 

[00:03:30] Vic: the opposite of what it is, 

[00:03:32] Emily Evans: like the American Recovery Act or the Inflation Reduction Act. Just name it the opposite of what it is, and you might fool.

[00:03:39] Emily Evans: Yeah, well, no 

[00:03:39] Vic: one reads the rest of it. So if you get the title, then the rest of it doesn't matter. 

[00:03:43] Emily Evans: Yeah, well, you might fool about 10 or 15 people. Yeah, 

[00:03:46] Vic: yeah, yeah. So I think we're covering this every week. I think we're in this world of. Well, you're going to have higher than the Fed's target 2 percent inflation, almost certainly.

[00:03:56] Emily Evans: Yes. Yes. For 

[00:03:57] Vic: a long time. Yeah. And they have [00:04:00] an option of. cutting rates, which would spur certainly growth in financial assets almost immediately, and then maybe it would filter through to the rest of the economy, but it would certainly not stop inflation, or they can Unless Well, so let's go to, unless Elon Musk and Vivek and Trump are able to actually cut a trillion or two out of the government budget, which would be wonderful because then we'd have kind of the Goldilocks where you start to cut the amount of spending, which.

[00:04:38] Vic: It helps with inflation, there's less money floating around, but it also would mean government is one of the inputs into GDP. So I think the math is if you cut a trillion dollars out of the G in GDP. It's not likely that the economy will grow. [00:05:00] 

[00:05:00] Emily Evans: Well, you will have to make that up somewhere else. And how would you do that?

[00:05:03] Emily Evans: You would lower interest rates. That's what, that's the, that's the coded somewhat coded message. There's this thing that people believe, well, the fed controls inflation, right? No, inflation is driven by fiscal behavior. This was true in the 1970s and this was Richard Nixon's problem. You know, Paul Volcker had to basically drive the economy into a ditch.

[00:05:26] Emily Evans: That's what he had to do in order to 

[00:05:27] Vic: get control in 

[00:05:28] Emily Evans: order to get control of the situation. And at that point, you saw what? deregulation, which started under Jimmy Carter and then continued under Ronald Reagan. And you had, you had, you know, banking law changes, you had significant tax reduction, you had all of those things.

[00:05:43] Emily Evans: So it all worked out well. But when you just say, Oh yeah, we're going to lower interest rates. Yeah, of course you're going to drive inflation up if you do that. And the mistake that Jay Powell made when he lowered, did that 50 basis point was that the Fed was still borrowing short term. So you were pushing a bunch [00:06:00] of liquidity into the treasury.

[00:06:01] Emily Evans: Yeah, the Treasury, I'm sorry, the Treasury was borrowing short term, you're pushing a bunch of money, uh, creating liquidity, false liquidity, at the same time, same time you're pouring money out of the Inflation Reduction Act into infrastructure projects, some of it non productive, you know, some of it like Green New Deal stuff that doesn't actually produce a, a result, some of it productive, but, but mostly you're, you're pouring all this money, particularly into state and local government, um, And, and that is in inflationary.

[00:06:30] Emily Evans: So yeah, he, he cut those rates. That's inflationary. But then you're adding all these inflationary things on top of it. And so what do you get? You get ground beef at 5 and 61 cents a pound. Yes. 

[00:06:40] Vic: Yeah. And so the, um, optimistic view is that Trump and Doge will be effective at cutting. Maybe not very important spending in the government, which, which we don't need and would be really beneficial.

[00:06:54] Vic: And then the Fed will have the latitude to cut rates, and it will be [00:07:00] great for everyone. 

[00:07:00] Emily Evans: That's, that's the formula they're aiming for, and it's not crazy. That was Ronald Reagan's formula, okay? You know, he, he, he had to withstand Paul Volcker's, you know, tightening, which he could do, because it was, you know, early and it was a very popular president.

[00:07:16] Emily Evans: Um, but then, uh, then came all these fiscal long term changes, which, you know, got the boat righted, if you will. And, and the economy takes off and is running on, you know, pretty hot for, and well for, you know, uh, quite, quite a few years. 

[00:07:33] Vic: Yeah. And so let's jump into. the next phase, and then we're going to come to policy in a minute.

[00:07:38] Vic: But we're going to start at first with the venture markets. Lindus Health raised 55 million to fix the broken clinical trials system. They have a product called, they call themselves Anti CRO, which is contract research organization. Basically, they're, they're sort of bringing efficiency to the clinical trials markets.

[00:07:59] Vic: Which I [00:08:00] think there's a lot of opportunity for that. Yeah, 

[00:08:02] Emily Evans: I think that's right. 

[00:08:03] Vic: And so there's also a lot of embedded difficulty to change in that space, but I'm excited about them working on it. 

[00:08:10] Emily Evans: Well, as long as you have so much disruption going on in, uh, biotech and pharma right now, you know, you open up pathways for people to, uh, to innovate, you know.

[00:08:22] Emily Evans: Whereas, you know, five years ago, biotech was hot. It could do no wrong. Biopharma is, you know, Up and rising and tons of, you know, dividend income. Why mess with it, right? So you start to mess with it when you see it. Yeah, now they 

[00:08:36] Vic: have to find more effective ways to get new drugs to market. Yeah. So this, this could be good, I think.

[00:08:43] Vic: Then we have ELOS is an AI scribe specifically for behavioral health. So we're seeing a lot of AI raises. And Scribe was probably the first, one of the first use cases, and they're making a bet that there's enough [00:09:00] differences in behavioral health that it's worth it to have a dedicated tool. 

[00:09:04] Emily Evans: Behavioral health versus physical health, right?

[00:09:06] Emily Evans: Right. Okay. 

[00:09:07] Vic: So this is a system that is ambiently listening to a counseling session, which I think has some privacy concerns. Yeah, 

[00:09:17] Emily Evans: that would be, I would see clinicians as being kind of resistant to that. 

[00:09:21] Vic: Yes. But then it, it produces the clinician report automatically. And the clinician, I think I read it earlier, instead of taking 20 minutes to document the session of an hour session, they can do it in five minutes.

[00:09:37] Vic: They need to look over and make sure the typos are not right. And it did cover what they covered. But, um, you know, it's typical, this is the Ambient Scribe Market. You know, in the clinic, it's listening during the patient encounter with the doc, 

[00:09:53] Emily Evans: right? 

[00:09:53] Vic: And so it's the same, but it feels a little different talking about mental health than physical health from [00:10:00] a privacy point of view.

[00:10:01] Emily Evans: Yeah, well, there's, there's a lot more subjectivity to behavioral health. you know, because it's really somebody reporting how they feel and what they're thinking about. And, and that, and the, and the, you know, therapist trying to guide them. And, and, but it's, it's a lot of subjectivity. There's no x ray, right?

[00:10:19] Emily Evans: There's no blood tests. There's no conversation about this piece of scientific data that. I present to you and we discuss it. That's not, that doesn't happen. So it's, the, the, the treatment itself is, is the conversation. So, it's a little, uh, 

[00:10:37] Vic: I don't know if this is a separate market. I think that the Ambient Scribe existing players would argue they could do this as well, but we'll see.

[00:10:49] Vic: I mean, Ellis just raised What I would think 

[00:10:50] Emily Evans: is the most interesting thing about this is what information is collected and what can be trained on that information. You know, like, does, [00:11:00] is there a certain, and, and I think that there's going to be a real emerging, and there already is, an emerging questioning of all of this.

[00:11:11] Emily Evans: therapy that's being delivered to children in particular children and adolescents and not to be like too much like my mother but It you know, there's a there's a certain Point at which you've crossed over and it's you really kid you you need to kind of buck up and move on You know kind of thing. Um, which is not to diminish, you know, real mental health issues I'm, just saying that there's there is an and uh Abigail Shire, who writes often for the New York, the Wall Street Journal, has written a book called Bad Therapy.

[00:11:43] Emily Evans: And that's this, this sort of over medicating, if you will, through therapy, of therapy, through young people who were naturally inclined to do what? To please others, and including therapists, and sometimes come up with some, you know, stuff that is, is fairly counterproductive. So there's this, [00:12:00] this kind of questioning of that, you know, going on, that is, um, Is makes me wonder and what I'd be interested is what, what is it when this, you know, when you aggregate all the data it collects, what is it concluding?

[00:12:13] Emily Evans: What is it? What conclusions can you draw? That's to me interesting. 

[00:12:17] Vic: That is pretty interesting. I don't know that that. Is what they're thinking about right now, but, but all of this data is going to be, um, available in a different way than it was previously. It used to be that the, the doc, whether it's physical or, or mental health, the doctor did his or her thing and then they wrote up the notes.

[00:12:38] Vic: And now it is We're collecting a lot more data. We're basically transcribing every physician account. Yeah. 

[00:12:44] Emily Evans: And so we, we might learn a little bit about what, what the right kind of doctor is. Yeah. What's the best kind of doctor. 

[00:12:51] Vic: Okay. So Oshie Health raised 60 million to expand their virtual GI solution.

[00:12:57] Vic: This was led by, um, Annie [00:13:00] Lamont's company, Oak. But a group of other investors, you know, sort of a really strong list of investors. And it is a virtual sort of way to look at GI health. 

[00:13:13] Emily Evans: GI health is one of the dark, dark corners of health care because it's one really complicated. Yeah. Um, and two, it. you know, everybody wants to be a cardiologist or neurologist or an oncologist, you know, with few exceptions, very few people want to be GI docs, you know, uh, you know, that's your colon and your bladder and they don't want to, you know, it's not as interesting, but it's 

[00:13:40] Vic: very complicated.

[00:13:41] Emily Evans: It's complicated and it's really important. Um, and one of the tracking the gut 

[00:13:46] Vic: biome, I mean, I think the gut biome really affects all your overall health. 

[00:13:50] Emily Evans: It's yes. What you eat. And back to the mental health thing, you know, um, what you eat has, and how healthy your, your gut is, is a really big [00:14:00] part. And Chris Palmer at Harvard has done some of this research that is, I think, going to redefine behavioral health and with it, you know, gut health.

[00:14:09] Emily Evans: So I, I could get really excited about that. Yeah. 

[00:14:12] Vic: So, so it's a, sort of a wraparound model for virtual GI. 

[00:14:16] Emily Evans: Yeah. They need all the help they can get. 

[00:14:18] Vic: Okay. And then we have Recipio. It is an RPM company, Remote Mission Monitoring, which, you know, we've invested in several. It's pretty commonly understood. If you have chronic disease, you take biometrics and monitor the patient's health.

[00:14:32] Vic: They're doing it with a cell phone only. And that's pretty interesting. I don't know how they're doing that. Um, they're using AI to do that, whatever that means. So vision based algorithms. assess vitals and medication adherence. In order to qualify for reimbursement, you have to get 15 days of blood pressure, weight.

[00:14:58] Emily Evans: Right, which is reduced. [00:15:00] Glucose. Yeah. 

[00:15:02] Vic: How you get that with a vision, a phone, camera, looking at the patient, I'm not sure, but that. That's what they're doing. 

[00:15:10] Emily Evans: I, I'm, I'm, this is interesting for this reason and all of the AI products, I would say that this is true because so much advancement and innovation of AI has been held up by the adverse regulatory environment, um, uh, with in the last four years, uh, I think you're going to see, there's a lot of.

[00:15:31] Emily Evans: Pent up activity that needs to, you know, move, move forward. And, and so this is an, that's interesting to me for that reason. 

[00:15:40] Vic: I mean, I, I, if it is possible for my Android phone to know my weight every day, or my blood pressure, or my blood glucose levels, that would be great. I don't know that I've seen a device that can do that.

[00:15:56] Emily Evans: I have not either. No. 

[00:15:57] Vic: So, uh, or 

[00:15:58] Emily Evans: that a, a doctor would [00:16:00] accept that information. Well,

[00:16:04] Vic: yes, the doctor might not accept it, but the CMS won't pay for it unless it's, yeah, nobody, FDA approved device collect that 

[00:16:10] Emily Evans: information, but nobody wants to use it. 

[00:16:12] Vic: Okay. Then Redesigned Health, which is a US investor partnered with AL Investments to launch a venture studio in Saudi Arabia. 

[00:16:20] Emily Evans: Okay. 

[00:16:21] Vic: So that's pretty interesting where we are now.

[00:16:24] Vic: exporting some of our medical expertise to Saudi Arabia, which is great. 

[00:16:29] Emily Evans: Yeah, and Saudi Arabia, uh, I think announced that they're going to be making some significant investments in the U. S., which, you know, they had, um, they had not been interested in doing, uh, for a very long time. Yeah. So, so that's, uh, that's pretty interesting.

[00:16:42] Emily Evans: Yeah, 

[00:16:42] Vic: and Marcus is going to Saudi Arabia in late February, I think, so, uh, We are opening an office there, I believe. Oh, really? Hedgeye's opening an office there? 

[00:16:50] Emily Evans: I believe so. 

[00:16:51] Vic: Is that, so you have an office in Nashville, D. C. and Connecticut? Our 

[00:16:56] Emily Evans: offices are in, uh, Washington and, [00:17:00] um, I'm sorry, in, uh, Boston, Stanford, Connecticut, and, uh, we have one on the West Coast, which is mostly, uh, technology.

[00:17:08] Vic: Oh, okay. Okay. So this will be your first international office? I 

[00:17:11] Emily Evans: believe so, yeah. 

[00:17:13] Vic: Okay, and then this was a really interesting story. We're starting, I mean, this is still a VC adjacent kind of story because Trump and Larry Ellison and um, Miyashita san and Sam Altman announced at the White House a 500 billion fund to invest in AI infrastructure.

[00:17:35] Vic: Yes. And it was really exciting in the moment. But then there's been several, um, maybe less exciting things that have come out since. 

[00:17:47] Emily Evans: Well, this is political theater. I hate to break anybody's heart. Yeah, right, right. Um, but it's political theater. Uh, and it's political theater for a good purpose, okay? What, what, uh, Donald Trump is saying [00:18:00] there Specifically to Barack Obama, his nemesis, okay, but to a lesser degree, Joseph Biden.

[00:18:07] Emily Evans: What he's saying there is, that whole thing you tried to do, controlling AI through your regulation, that 

[00:18:15] Vic: Yeah, the executive, the Biden executive order that Obama was heavily involved in, 

[00:18:20] Emily Evans: which is weird to begin with, right? Go. If you're the former president of the United States, I expect a few things of you.

[00:18:26] Emily Evans: One, you're supposed to be really tired and need some time off and two, you're supposed to go write books and give speeches and, and paint pictures, you know, 

[00:18:35] Vic: I think Clinton and Bush both have done a good job. They're around, but, but they're not. Involved in the in the same way. 

[00:18:41] Emily Evans: It's a violation of norms going back to George Washington and uh, and however you may feel about the politics of Barack Obama, that's your everybody's personal business, but there's no questioning it violated norms for a president, former president, to sit down and write an executive order [00:19:00] that that was then produced under the over the signature of his, his successor or his former vice president.

[00:19:06] Emily Evans: Um, and, but what the, and, and Mark Andreessen is the one who talks about this best in, I believe, his podcast with Joe Rogan, where he says, yeah, we go to this meeting and, you know, this is 

[00:19:17] Vic: under the Biden administration a year ago or six months ago. Yeah. 

[00:19:21] Emily Evans: And we, we go to this meeting and, and, you know, basically the staff said, well, you don't need to worry about that AI thing.

[00:19:29] Emily Evans: We got it covered. You know, it's going to be, you know, Google and Apple and, you know, I don't know who else was they, but basically, you know, three firms and we don't need you, you know, messing with the program here. And uh, and that's when I think it was Joe Rogan said, so what'd you do next? Well, I went and endorsed Donald Trump.

[00:19:48] Vic: Yeah. 

[00:19:48] Emily Evans: So, 

[00:19:49] Vic: so I mean, a 16 Z is, is. They might be the best investor in AI. 

[00:19:54] Emily Evans: Yeah, and the, so the, the, the message from that release was not that we're going [00:20:00] to get all these things, because some of those things are already underway, you know, building those data centers. It's already underway. What he's actually saying is, ha, ha, ha, you're not going to stop the train, you know, to those people in the.

[00:20:15] Emily Evans: So 

[00:20:15] Vic: let's just. Make it clear. He rescinded the order, rescinded the order, and then two hours later held this press conference and announced a new plan to invest half a trillion dollars. 

[00:20:27] Emily Evans: Yeah. So first of all, to the people who wanted to control the development of AI, which became a big, a big hidden message in the, in the election.

[00:20:38] Emily Evans: Uh, basically, you know, you're not going to, you're not going to, which I think is 

[00:20:44] Vic: healthy. Probably. I mean, we don't want regulatory capture at this stage of AI and not, 

[00:20:51] Emily Evans: and not AI, right? You know, um, and, and, and the second part of it is, you know, he's showing some cooperation with the tech industry that [00:21:00] I think is kind of important.

[00:21:01] Emily Evans: Larry Ellison's comments were kind of loony to be perfectly blunt, but yeah, 

[00:21:05] Vic: he was talking to me about. MRNA curing cancer, which I'm not sure there's a lot of evidence for that. It's 

[00:21:12] Emily Evans: one of the least promising areas of oncology. 

[00:21:15] Vic: And then a day later, Elon Musk, who couldn't be tighter. I mean, he has an office in the White House.

[00:21:23] Vic: Very connected there, you would have thought they would have their messages coordinated, but he came out and said the money. There's no, there's not 500 billion there. And he pointed out the on the balance sheet of all these companies that were named is there's not enough money. Which goes to your theater thing.

[00:21:41] Vic: It was, it was a good press conference, but maybe not that real, or at least not 500 billion. I 

[00:21:47] Emily Evans: don't, I will not argue with their intent. I think the intent is still there. Um, I also think everybody needs to get comfortable with people like. You know, uh, Elon Musk or, [00:22:00] or, you know, um, uh, Scott Besson or anybody popping up Robert F.

[00:22:05] Emily Evans: Kennedy and, and showing some disagreement with the president. And, and that's really unique. And we haven't seen that in, I don't know, 40, 50 years. Um, so it's, it's hard to get used to. 

[00:22:18] Vic: And will Trump be okay with that? Oh, that would be good. I think 

[00:22:23] Emily Evans: that's actually part of what he has been trying to communicate.

[00:22:27] Emily Evans: You know, when people are, well, you're so and so said this and you're saying that. Like, great example, Robert F. Kennedy. Um, he's, somebody says, well, you know, you're Robert F. Kennedy is going to do all these, you know, things and, uh, he says, well, I'm putting him over there because we don't agree on the environment, you know, that Robert F.

[00:22:44] Emily Evans: Kennedy does not agree with me on what we're going to do in the environment. So he's going to be over at H. So, 

[00:22:48] Vic: so yeah, he's not on EPA. He's like, yeah, but his 

[00:22:51] Emily Evans: point being is you're not going to, if you find a bunch of people to staff a, a, that are 

[00:22:56] Vic: all identically like have the same philosophy [00:23:00] on everything, you're 

[00:23:01] Emily Evans: not going to get much talent.

[00:23:02] Emily Evans: And that's been true of Washington now for. Twenty years. 

[00:23:05] Vic: Yeah. So then the Wall Street Journal ran an article saying pension funds are pushing private equity to open up about fees and return. No way. 

[00:23:14] Emily Evans: Really? 

[00:23:15] Vic: Which, you know, they have been doing forever. Um, but two things caught my eye. One is that the investments have been going up Pretty dramatically into private equity.

[00:23:29] Vic: It hasn't really filtered into the venture market of private equity. I think it's later stage. Um, but then the, the fees, the median is two and just flat at two, which is the standard two and 20. Um, but the average, which I think means that the bigger funds. It's probably a dollar weighted average, I assume, or willing to accept less than 2%.

[00:23:55] Vic: Right. Which they should, really. I mean, there's a lot of fixed costs in investment [00:24:00] businesses. And so, the cost to run 100 million is not that dissimilar. From 50 billion, but obviously the 2 percent is a lot 

[00:24:10] Emily Evans: more. Well, what's really the real problem here is that those investments are not performing. You know, it's the same.

[00:24:16] Emily Evans: It's the same issue with a lot of the pension funds asking the hedge fund industry. Hey, you know, there should be a cash hurdle. If you can't hurdle a cash rate, why should I pay you anything? I'm better off in cash, you know? Um, and I think this is a really an express same expression or a different expression, the same problem, which is, you know, why are we paying?

[00:24:36] Emily Evans: When everyone's 

[00:24:36] Vic: making, you know, three X at the fund level and Really strong return to return you can summit the fees and when it falls down and they look for anywhere to sort of Right, and 

[00:24:49] Emily Evans: and they have a very reasonable case for saying you're not performing 

[00:24:53] Vic: Yeah, 

[00:24:53] Emily Evans: and and that this we pay you to perform, you know, so we should pay you less if you don't perform Yeah, that's how it works.[00:25:00] 

[00:25:00] Vic: Trump had several executive orders in the first day and many impacted health care. This article on fierce health care sort of goes through several of them. Um, but I want you to sort of take it in any direction you want. So the first one in the article is a regulatory freeze at HHS. 

[00:25:17] Emily Evans: Yeah, that's going to affect some of the drug price negotiations.

[00:25:20] Emily Evans: It's definitely going to affect the WeGoV expansion of Medicare coverage for, um, weight loss drugs, uh, among other things. This is not abnormal. This is not unusual to say, all right, stop. We're gonna get a handle on these new 

[00:25:35] Vic: administration comes in. They often will stop in the first part of it 

[00:25:39] Emily Evans: And it's generally not particularly controversial so that this is not anything to be Upset about a lot of a lot of news organizations are reporting it as it's new It's just really new to them.

[00:25:50] Emily Evans: Not not actually. Yeah Um, one of the other uh things that they've frozen is is some drug models, you know that came from I think the [00:26:00] model system comes to us through the ACA. I fully expect the CMMI to get yanked completely. And, and I think it 

[00:26:07] Vic: already, I think Biden shut down before he left the 

[00:26:09] Emily Evans: CMMI. No, it's still, it's still a department of, uh, of HHS.

[00:26:15] Emily Evans: It just underperforms massively. And Congress is like, you know, you don't make an, you don't. You know, you're not delivering on your promise and they want to get rid of it. So I think it ends up in reconciliation as a pay for, it's not a lot of money, five, 10 billion, maybe. So all these models need to stop anyway, because they're going to, that, that whole approach is going to be dissolving.

[00:26:36] Emily Evans: And, and remember the, the CMMI was created to help bend the cost curve. Remember bend the cost curve? And, you know, that was the reason for the Affordable Care Act. 

[00:26:44] Vic: I think, I mean, Marcus and I talked about, as Biden was leaving, he Made changes to CMMI, but we need to check. Either way. It's gonna, gonna get, it's gonna get axed.

[00:26:56] Emily Evans: I'm pretty sure. And it didn't work. 

[00:26:58] Vic: Right. 

[00:26:59] Emily Evans: Uh, [00:27:00] and the, you know, hiring freeze is another P that's also fairly, uh, fairly normal. Yeah. Pulled out the world health organization. Again, not particularly. Uh. 

[00:27:10] Vic: Yeah, but let's talk about that for a minute. We pulled out of the World Health Organization. 

[00:27:14] Emily Evans: Right, so it's going to be half a world organization.

[00:27:18] Emily Evans: Yes, 

[00:27:19] Vic: it'll be a half. I like that. Um, so CDC won't get health data from other countries, but I don't know how much that matters. And so the interesting thing is, we pull out and there's not a lot of repercussions, really. 

[00:27:37] Emily Evans: No, and Bill Gates is their second largest donor, and I don't think he's going to, you know, dissolve his commitment.

[00:27:44] Emily Evans: So they're still going to have It'll still exist. Yeah, still have that. Uh, and, and I, you know, I, I, yeah, I don't, I mean, what's the value add to American taxpayers there? Is it, is it we're helping other people around the world be healthier? That [00:28:00] would be nice, but I don't think there's any evidence for doing that either.

[00:28:03] Vic: Well, just to steal me on the other side, I'm not sure they Are very effective at doing this. I think it would be valuable for us to take the position that these communicative diseases, if they started in another part of the world, we will get them. And so monitoring outbreak in different parts of the world is valuable to us if they are able to do that successfully and find it in wherever it is, another part of the world.

[00:28:37] Vic: And then catch it, hopefully fewer people die there, but also it doesn't, they don't get on planes and, and transport it. Now, when we had COVID, WHO was certainly in play and it didn't really, it didn't stop it. 

[00:28:50] Emily Evans: Yeah, and the question is, is, is, are the national organizations that monitor infectious disease and the health of their citizens [00:29:00] equally as competent to communicate to the world that they found this thing?

[00:29:04] Emily Evans: Yeah, maybe. in Cambodia or Thailand, probably, right? Um, so it could be the World Health Organization, you know, sits on top of all of those organizations to organize them. And maybe it's better organized, but, you know, I don't know when it comes to public health and life and death, most people will organize themselves around what works the best.

[00:29:25] Emily Evans: And, and, and so far, I don't know that the, I don't know that the World Health Organization has produced results either. 

[00:29:32] Vic: Yeah. I mean, if it was well run, I think you could have, Sharing best practices, there could be functions that a global body could do that would be useful, but I don't know that they have been 

[00:29:43] Emily Evans: cushy sinecure in Geneva.

[00:29:44] Emily Evans: Who doesn't like that? 

[00:29:46] Vic: Yeah. 

[00:29:47] Emily Evans: Come on. 

[00:29:47] Vic: Okay. So, um, so this is, this is the big one. So this is the title from the wall street journal. Yeah. Cause it's, it's, um, provocative. Trump's war on DEI freezes diversity work across the federal [00:30:00] government. And I know you have a lot of thoughts about how this will impact healthcare.

[00:30:04] Vic: So talk about this and what the ramifications are going to be. 

[00:30:07] Emily Evans: You know, your first thought, when you look at that headline is, Oh, okay. We're going to freeze. That, okay, the, all the HR, you know, diversity, uh, diversity, equity, inclusion, and accessibility programs. Yeah, at the 

[00:30:21] Vic: Internal Revenue Service, they won't, they'll have to not do a DEI program or something like that.

[00:30:27] Vic: Right. That's what I thought. And those, 

[00:30:28] Emily Evans: those employees would now have been They're on paid administrative leave, and what's going to happen over the next few months is they're going to figure out, okay, which of those employees are redundant, which of those employees, you know, should be reassigned to other, you know, uh, functions.

[00:30:43] Emily Evans: Yeah, and they might 

[00:30:44] Vic: have a, um, a review process that they need to make sure doesn't include DEI or whatever. It's HR. I thought it was an HR story. 

[00:30:52] Emily Evans: Yeah, but what's included in the, in the, uh, executive order is that [00:31:00] we, we're not just, you know, Shutting this down the government. We're not going to preference it with the activities of government, which is grants Okay, so grants and any kind of funny phrase.

[00:31:13] Vic: We're not going to preference it confuses me Well, we're 

[00:31:15] Emily Evans: not going to we're not going to give you a grant Given, you know, Academic Medical Center A and Academic Medical Center B, let's call them, say, uh, University of Mississippi and Harvard, all right? Under the previous administration, you know, we would give preference to Harvard because they had this DEI program that was part of our objectives as an organization.

[00:31:45] Emily Evans: I can't, I haven't looked if the University of Mississippi has it. My guess is probably not. But, but if you, what they're saying is we're going to, we are not grant giving grants to people who use our money to support meaning the federal government's money to [00:32:00] support that kind of programming in their university.

[00:32:03] Vic: Yeah. It's a little bit more far reaching than we're no longer going to give you a preference. So we're not 

[00:32:11] Emily Evans: going to support others giving, uh, they're, they're, they're extending it to, Yeah, so 

[00:32:15] Vic: if you receive grant monies from, say, NIH, 

[00:32:19] Emily Evans: Mm hmm. 

[00:32:21] Vic: Is it right to say you You cannot have a DEI program or you can't have a DEI program that is touching that money.

[00:32:28] Emily Evans: Uh, that's unknown. So that's the big question. Are you saying when the NIH says, all right, um, we are not going to give preference to Uh, entities, sponsors of research that have DEI programs, that's one way of looking at it, okay? Um, another way of looking at it is But there 

[00:32:50] Vic: might be other things that Harvard could have that would make it more likely a grant than University of Mississippi.

[00:32:58] Emily Evans: Uh, it could. They [00:33:00] still 

[00:33:00] Vic: might get a lot of grants, I guess. It could. 

[00:33:02] Emily Evans: If they could. Yeah. Um, and they, but the government is, is gonna say, all right, we're not interested in giving you money to support your university or your research programs if you're gonna support these policies that we think are adverse to the principles of the federal government.

[00:33:18] Emily Evans: That's what they're saying. Okay. Now, how far does that extend? Is that just, you know, the research entity? Is that the, you know, is that the academic medical center? Is that the whole university? I don't know. They haven't 

[00:33:32] Vic: defined it. Yeah, they have 

[00:33:33] Emily Evans: not yet defined it. What they have done is suspended the study committees, a rant, which are a preface to, you know, grant funding, uh, which tells you they're they're trying to figure it out as well.

[00:33:45] Emily Evans: But yeah, I would. So it's at least 

[00:33:47] Vic: going to be so a lot of our listeners. are connected to academic medical centers. I mean, we have one here in Nashville at Vanderbilt, but there's, there's a lot [00:34:00] across the country. I mean, almost, um, almost every state has an academic medical center and several have multiple.

[00:34:09] Vic: So I, I pulled up a list of who gets this money, the government contractor that's doing government biomedical research that gets the most money, which let's not get into that right now, but Johns Hopkins, number one, uh, yeah, and the California system, Penn, Duke, Michigan. Mass General. I mean, it's, it's the people you would expect.

[00:34:32] Emily Evans: Yeah. And nobody at those organizations voted for Donald Trump, or I should say, very few voted for Donald Trump. You know, so he did the, not the, I don't know. I think it's a big mistake to think of these actions on the part of the president, these executive orders as retribution of any kind. I think it's more probably accurate.

[00:34:51] Emily Evans: Oh, there's Alabama down there. Um, it's more, it's more accurate to think of these actions as the federal government is [00:35:00] supporting policies and activities that are contrary to the goals of the president and the federal government. Okay. Um, and well, DEI can be a laudable goal and I think everybody agrees that it is.

[00:35:14] Emily Evans: Um, institutionalizing that. It can be unproductive, you know, it can create activities and, and, and, you know, activities and relevant to our conversation, the awarding of grants that isn't necessarily productive. It doesn't produce results. Yeah, and 

[00:35:33] Vic: whether people that work at these academic medical centers voted for the current president or not, elections have consequences.

[00:35:40] Vic: He won the election. 

[00:35:41] Emily Evans: Right. 

[00:35:42] Vic: And his administration is putting this in place. And so what I wanna talk about is how, what's the impact to Johns Hopkins or, um, any of these institutions? 'cause they're running medical centers and a [00:36:00] lot of them rely on grant funding as a significant 20% to 30%. Yeah. Yeah.

[00:36:05] Vic: Significant part of the budget. And so, um, it sounds like it's. Has a chance of being delayed and then maybe a small ish chance, but some chance of being Cut or, or changed. 

[00:36:19] Emily Evans: Right. So what I, what the, in, before you get into the DEI, you gotta know that the, uh, Senator Cassidy on the Senate side has made an issue of funding, NIH really around the way in which it coagulates around the, these 25 or so large academic medical centers.

[00:36:38] Emily Evans: Mm-hmm . Like, like Vanderbilt and, and the. You know, Icon School of Medicine at Mount Sinai and we'll have, 

[00:36:44] Vic: we'll have a link in the show notes so people can check this out. I mean, it's, it's all the names that you would guess, but there, there is a, there's an 80 20. Like it, it's a, it's the normal, normal expected way that, that these funds are given out there.

[00:36:57] Vic: There's a group of [00:37:00] 10 that get. A lot of the money, and then there's another group of 10 to 20 in that sort of ranked 11 through 30, 25 or 30, that really, that's where most of the money goes. 

[00:37:12] Emily Evans: Yeah, where's the University of Tennessee on this list? You know, it's, it's, it's tiny. A little ways down. Yeah. And so the, um, so the, the already before going into the election, before we're even talking about DEI, what we know is that there has been a policy, a def, an interest in shifting the policy away from these large universities.

[00:37:32] Emily Evans: Okay. That became. 

[00:37:34] Vic: Oh, interesting. Senator Cassidy. Senator 

[00:37:35] Emily Evans: Cassidy. You're getting, getting it to be more fair or getting, you know. Or more. 

[00:37:41] Vic: Bread geographically into different institutions, 

[00:37:45] Emily Evans: right? And, and, you know, that became really clear, you know, when after, um, when we had these university presidents testifying, you know, from Harvard and Penn and who else was there?

[00:37:57] Emily Evans: Um, uh, but [00:38:00] anyway, they're doing this. You know, they're, they're talking about, you know, October 7th and anti Semitism and, and, and failed miserably, right, in front of this, this group of people. And sort of demonstrated, at least from Congress's point of view, is this group of people have completely different values.

[00:38:19] Emily Evans: Now those values may be they're worried about, you know, kids from, Countries, you know, that are paying cash that aren't particularly aligned with, you know, some of these that could be just economics. We don't know. Yeah, 

[00:38:32] Vic: but that's not what they shared on the Senate. Committee floor? No, it 

[00:38:36] Emily Evans: could be, but most likely is that they're, these, the values of the government, if you will, don't align with these universities.

[00:38:45] Emily Evans: Yeah. And that is now more true today than it was, you know, a few, a few months ago. And so, so that's really what's going on. So if you're a university, if you're Johns Hopkins University, and I'm gonna bet this is what happens there, [00:39:00] uh, you have a few choices. Yeah. So. 

[00:39:01] Vic: In 2023, just for context, Johns Hopkins received 842 billion.

[00:39:09] Vic: Mm-hmm . In, in that one year. in, in IH grants. Yeah. Right. And I've looked at several years. It's fairly consistent. I mean, there's some moving around, but, but they get a significant amount of money every year. Yeah. And so if that dries up or is delayed. It's going to be challenging. 

[00:39:27] Emily Evans: It's going to be delayed.

[00:39:28] Emily Evans: There is going to be a hiccup in the system. So the purchases of research equipment, tools, consumables, that is going to be delayed. There may be layoffs. There may be leases negotiated. All of those things are likely to happen in the next three, six months. Okay. Now you're, if you're Johns Hopkins and you get the message from the federal government, we're not going to support you because you support programs that we think are adverse to the American taxpayer.

[00:39:57] Emily Evans: DEI being the one at [00:40:00] issue here, 25 

[00:40:00] Vic: percent of your budget is 

[00:40:01] Emily Evans: 25 percent of your budget. You have a few choices. Your first and obvious choice is to just get rid of all that stuff. Okay. And say to all of your, you know, faculty members and all your researchers and you have 

[00:40:12] Vic: a staff issue, but you then get the money back.

[00:40:16] Emily Evans: Right. So you, that takes a strong leader, which is not. 

[00:40:20] Vic: Not always present. Not always 

[00:40:22] Emily Evans: present in large academic centers. Uh, your other option, uh, is, at the other extreme, is to ignore your government and not do that, which is going to cost you some big money. Um, and then there's going to be people who are in the middle where the leadership of the research entity, Johns Hopkins or wherever, uh, says, okay, we're going to get rid of all that.

[00:40:45] Emily Evans: We need to conform with federal policy. We're going to end our DEI programs. We're going to reassign people here. We're going to have, you know, blind admissions as far as race, creed, color, etc. goes. Um, we're going to do all those things. Um, [00:41:00] and, uh, and your faculty goes nuts, you know, that's, that's going to be the real pickle for some of these guys, because there are a lot of people employed at these organizations who are first and foremost very adverse to the current President of the United States, but also this is a closely held belief of theirs, uh, and they don't want it to be disrupted.

[00:41:22] Emily Evans: And that's, that's where the, that's where the, I think the real, the real challenge will be. And I hope that doesn't happen. 

[00:41:28] Vic: There's a lot of feelings and beliefs and emotion on both sides. Yeah. And I want to end by saying, this is medical science we're funding. Can't we just do science? That's right. I don't know how to get there.

[00:41:47] Vic: And I'm not saying that, I mean, Trump is sort of picking a fight, and so, no, no side is right or wrong, but like, it should, I would like the NIH to award grants to the [00:42:00] institution that is going to do the best science for the country. 

[00:42:03] Emily Evans: Right, and I think that, um, I think the incoming head of NIH would agree rather.

[00:42:09] Emily Evans: wholeheartedly with that. Uh, and I think what you will, if you start digging, and John Adinas at Stanford had written a great paper on this about a lot of non productive activity. If you have a mandate at NIH to deliver research to a certain portion of grant applications that meet certain criteria under the rubric of Diversity, you know, equity, inclusion, accessibility.

[00:42:38] Emily Evans: And those aren't particularly good research projects. Then what you're doing is wasting the taxpayer's money. If you want to get right down to it, 

[00:42:46] Vic: okay? And someone else can fund that. 

[00:42:49] Emily Evans: Oh, yeah. 

[00:42:50] Vic: I'm probably in favor of that. But I don't know if the NIH should be funding 

[00:42:54] Emily Evans: that. And that's, I think, the point.

[00:42:55] Emily Evans: That's really the point. And, and you need to get [00:43:00] involved. You need to think about this as hardcore science and hire hardcore scientists. Don't hire them because of the circumstances of their birth. That's the, that's the message. It is controversial and it is going to be really uncomfortable because one of the things that characterizes these academic research centers is their lack of Circumspection or introspection when it comes to these issues and then they, they, they, this is going to be tough because a lot of people feel are going to feel they're shocked, you know, I was talking to somebody at lunch whose, um, old roommate wrote, you know, some of the scripts for the, the professor, the University meds that justified, you know, about anti semitism and at the, um, uh, in Congress and they were shocked, they were shocked by the reaction they got and you, you have to, you need to probably get out more if that's, that's what happens to you.

[00:43:59] Vic: So [00:44:00] that's going to be really impactful to a lot of health systems. Okay. And then Trump also froze HHS communications, several websites. Or not functioning. A lot of 404 error out there. Um, is this also norm? I haven't seen websites go down in the beginning of administration. I have not seen this 

[00:44:21] Emily Evans: either and I think what is, because the, I, I, I think this is.

[00:44:26] Emily Evans: It's good management, management of communications, even though everyone probably would disagree with me because President Trump has made some fairly bold departures from policies that date back to 1965. Okay, that's how radical some of this stuff is. I think it's, this radicalism is being embraced by a lot of people.

[00:44:51] Emily Evans: He's not. Getting out of his lane yet, but, um, but he's, he's really doing some pretty radical things and in order to keep yourself from [00:45:00] being embarrassed, you've got to have to shut it all down because you what you don't want is HHS sending out an update on their diversity, you know, equity and inclusion and accessibility policy at the same time that you just issued an executive order saying we're not going to do that.

[00:45:15] Emily Evans: So this is really the only thing you can do at this point. Yeah. 

[00:45:18] Vic: And is. Do we think this is a short term issue? 

[00:45:21] Emily Evans: I wouldn't expect this to last more than a couple weeks, maybe even less. Okay. You got to get the comms people in there and get, you know, the policies, you know, set up and, and so forth. So, 

[00:45:31] Vic: yeah.

[00:45:32] Vic: So this is the Wall Street Journal. Trump order seeks to stop virus research that critics have linked to COVID. 

[00:45:38] Emily Evans: Yeah, well, you know, Barack Obama did this too. Dr. Anthony Fauci ignored him. 

[00:45:44] Vic: Yeah, so this is the gain of, gain of function of research. Just to be clear, it sounds like a Barack Obama tried to stop it, and now we are again trying to stop it.

[00:45:56] Vic: Yeah. 

[00:45:56] Emily Evans: Yeah. And, and what happened was that [00:46:00] because, you know, the, the, the whole gain of function thing, that is a, that is a biowarfare thing. That's not really a, that's not going to make people healthier if you do that, um, in most cases. Yeah, it's a 

[00:46:14] Vic: DOD effort. It's 

[00:46:15] Emily Evans: a, it originated with DOD and specifically originated with Um, Dick Cheney, Dick Cheney went to DOD and said, Hey, we need to come up with all these viruses that might actually be a challenge for us militarily and domestically.

[00:46:29] Emily Evans: Will you do this project with the Department of Defense? Uh, program called DARPA. And they said no. 

[00:46:36] Vic: So, hold on, that, that, that sounds more defensive. Like, for our own people. Well, yeah. To protect ourselves. The idea 

[00:46:43] Emily Evans: is to create a virus, and when you create the virus, then you know how to create the inoculation against that virus.

[00:46:49] Emily Evans: That's, that was the whole thinking back in two thousand and, I don't know, eight. somewhere, somewhere in there. Because remember, George Bush got really worried after the [00:47:00] anthrax scares. And, and he, he read a book about the yellow fever in Memphis, which I'm sure you're familiar with. And, uh, and he, he made this a big part of his presidency in it sort of.

[00:47:11] Emily Evans: by midterm, late term. And Dick Cheney was kind of looking to solve that problem. And he goes to the Department of Defense and says, Hey, uh, how about we develop this research, uh, virus research, and then we can develop the, 

[00:47:25] Vic: yeah. And DARPA has invented and tried to invent lots of really effective ways to either protect our troops or kill the other side.

[00:47:36] Vic: And they didn't want, they refused to do it. 

[00:47:38] Emily Evans: And they, they basically, the, the, the, the, the documentary evidence from the Department of Defense is, you know, and it was the same group that ended up doing the work at, at, subject to all the controversy over COVID. And that's something called Echo Health Alliance.

[00:47:54] Emily Evans: And there's a documentary evidence where the Department of Defense has said, we're not doing that. You know, and if we're doing that, [00:48:00] we're not doing it with you. You know, that was what happened. And so Dick Cheney goes to. You know, which of course they're tinkling test tubes all day long, right? And he says, all right, you know, why don't you do this?

[00:48:12] Emily Evans: And Anthony Fauci, uh, who's head of infectious diseases said, yeah, sure. You know? Um, and. Uh, Obama, there was a little bit, that created some controversy, particularly from Richard, uh, Ebright at Rutgers, who made a big stink about this and still does on Twitter, he's very entertaining. Um, and in, and they, it, it reached the White House, Obama bans it, but They find this way around it, you know, and continue to fund it.

[00:48:40] Vic: They funded it outside of the U. S., I think. They funded it in China. 

[00:48:43] Emily Evans: Yeah. And that's where this comes from. Um, I don't think there's going to be a work around this time like there was then, um, because the defense, the, the Dick Cheney's, the, the kind of the defense. The neocon 

[00:48:58] Vic: group is sort of out of power.

[00:48:59] Vic: They're being, they're [00:49:00] being excommunicated right 

[00:49:01] Emily Evans: now. Yeah. So I don't. 

[00:49:02] Vic: But that's probably good, right? 

[00:49:04] Emily Evans: Yeah, they're. There's a, there are very qualified and serious scientists who have said for two decades, this is nuts. 

[00:49:12] Vic: Yeah. Yeah. There's no reason to invent something that. Is very contagious or very effective at killing people, we shouldn't do that.

[00:49:23] Emily Evans: Right. And and part of that whole theory too, is centered around, well, um, humans are incur there, there's an in, you know, incurring, they get, they're entering. Habitats, and it's kind of connected to the climate change thing, they're entering habitats in there, and, and as they enter those habitats, they're exposing us to, you know, bats and so forth.

[00:49:42] Emily Evans: Well, the truth of the matter is, we're not really entering that many habitats anymore, you know, the population Yeah, we've 

[00:49:47] Vic: taken over all the habitats. Yeah, or, 

[00:49:49] Emily Evans: or, or they're receding, you know, because we're not actually, um, actually occupying certain Places like we did just, you know, look at downtown Nashville.

[00:49:59] Vic: I [00:50:00] don't know. I was driving through today. It was pretty busy down there. Okay. Then, um, this 

[00:50:04] Emily Evans: is also huge. 

[00:50:05] Vic: Yeah. So the health GOP floated Medicaid cuts and a bunch of other things to finance really the extension of the tax cuts, but, but all of Trump's agenda. But let's, let's talk about the forget why they're doing it.

[00:50:19] Vic: They're trying to cut. Um, expenses, what they came up with the top one is, I mean, it's, it's in this New York Times thing. It's a long time conservative goals like slashing Medicaid, 

[00:50:33] Emily Evans: right? 

[00:50:33] Vic: When you read through it, I think it is changing the percentage match for the expansion population. So I think it was never meant 

[00:50:42] Emily Evans: to be permanent.

[00:50:44] Vic: Most of our audience probably is aware of this, but Medicaid is a 50 50 share, cost share between the states and the federal government. Depends 

[00:50:51] Emily Evans: on the state, which is also the subject of debate right now, but 50 50 is a good number, thumbnail number to use. 

[00:50:56] Vic: Yeah, and then if you expanded, really I [00:51:00] think to encourage expansion, the expansion population is covered at 90%, 10 to the states.

[00:51:06] Emily Evans: Right. 

[00:51:08] Vic: And so they're looking at that, that equation. Like, should it be 50 50 and then 90 10? And what, what do you think is going to, what's going to be the resolution? Where are they coming out on this? 

[00:51:19] Emily Evans: Uh, this is probably going to make its way into reconciliation. Uh, and it, because it's such a big number, um, it, it, the, over 10 years, I think one number I saw was something like 500 billion.

[00:51:31] Emily Evans: Um, so, you know, if you're trying to cut. two or three trillion. That gets you pretty far down the road, right? Uh, and what they're trying to do is equalize the federal government's contribution to Medicaid programs between traditional populations, aged, blind, disabled, elderly, pregnant women, uh, and And 

[00:51:51] Vic: the 50 percent probably.

[00:51:53] Vic: Yeah, they're They're in the normal Medicaid. 

[00:51:54] Emily Evans: They're the traditional populations. Okay. And they're get the fit, the match is 50%. But if [00:52:00] you're in the expansion population, which means you are, uh, You're you could be a working adult. Okay, you you could be your you 

[00:52:08] Vic: might be working in a job That doesn't have health care benefits.

[00:52:11] Vic: You might be did that you'd have to be Relatively low paid 

[00:52:15] Emily Evans: right or you're working in a job where the cost of those benefits is so high you've managed to you know Work your way into the Medicaid program and what that message is and this is the the argument from And, and, and it was always meant as an incentive to get states to go along with the expansion.

[00:52:31] Emily Evans: It was never meant as this permanent thing. And, uh, and one of the problems there philosophically is your, the federal government is funding able bodied adults better than they're funding pregnant women. That's not a really good policy, no matter how you look at it. And it's contributing to a lot of, uh, bad behavior.

[00:52:51] Emily Evans: So states, you know, and, and the example I give a lot is, you know, A pregnant woman enters the program, uh, Medicaid program, [00:53:00] she's in the traditional population because she's a pregnant woman and there's a 50 50 match. She has that baby at some point and she moved and she's supposed to move to the expansion population but frequently they don't read states don't reclassify people.

[00:53:14] Emily Evans: So the level of fraud and mis Assignment because the incentives are, you know, let's 

[00:53:19] Vic: incentive would be to move. I'm sorry. 

[00:53:21] Emily Evans: I meant to yes So yeah, they they move her to the expansion population or they enroll her as a pregnant woman in the expansion population to begin with and that those are incentives that are Just creating enrollment in the expansion population that is not necessarily, uh, was the intention and, and there's a lot of, uh, so do you 

[00:53:43] Vic: think it will be sort of normalized at 60 percent or something or what would be the, 

[00:53:48] Emily Evans: here's what I think is going to happen.

[00:53:49] Emily Evans: Um, there are two, there's several. One is cutting the match to the expansion population. Uh, another is lowering the overall [00:54:00] federal match. The floor is 50%. Um, so no matter how wealthy your state is, you'll always be able to get a 50 percent match. Um, in Mississippi, you might get a 65 percent match. All right.

[00:54:13] Emily Evans: But in California is a very wealthy state still or Florida, you get a 50 percent lowering that, that, that floor, you know, maybe 40%. Okay. Um, and, uh, and another policy, how do 

[00:54:24] Vic: they judge if a state is wealthy or there's a 

[00:54:28] Emily Evans: calculation based on poverty and population and stuff like that. So, uh, the, um, the, The other policy is to implement per capita caps.

[00:54:39] Emily Evans: So what I expect to happen here is the federal government will cut spending to the Medicaid expansion population in reconciliation and the states will go nuts. Okay, and what the federal government would say, okay, you're right. You're right. This is a hardship for you. Okay, so and you're gonna have all this population You've got to deal with you're right.

[00:54:59] Emily Evans: So [00:55:00] how about this? How about if we estab work with you for a wave of 1115 waiver? Which is how states operate their Medicaid program and we will come up with a program a block brand or a per capita program where you will basically be made whole at the beginning of Of this five or 10 year run, um, and we will flatten that curve so that when we get to the end of that five or 10 year period of that waiver, you're where we would want you to be if we just cut spending.

[00:55:35] Emily Evans: Does that make sense? 

[00:55:36] Vic: Yeah. So let me just rephrase to make sure I'm following. So today, I forget which state, but. California, they're getting 50 percent for their regular Medicaid program and 90 percent for the expansion. And there's like a two step dance that you're proposing might occur, although we're guessing now, because it will happen in reconciliation.

[00:55:58] Vic: But you talk to a [00:56:00] lot of people up in D. C., so let's just go with this for a minute. So they might, in reconciliation, cut the expansion to match the 50 50, for instance. And then allow states to go with that option. 

[00:56:15] Emily Evans: Right. 

[00:56:16] Vic: Which would 

[00:56:17] Emily Evans: disenroll a lot of people from Medicaid. Or it would make it very 

[00:56:21] Vic: expensive for the state.

[00:56:23] Emily Evans: Right. 

[00:56:24] Vic: Some combination of both. Right. That, that would be what happens in reconciliation and in fact the federal law. But they also would be willing to negotiate a Medicaid waiver. With whatever number you said, um, that could do a block grant, which would be based on their population. That's why you call it a per capita, but it's a block grant to the state Medicaid program, right?

[00:56:52] Vic: That is. Maybe let's just say equal to what they got last year, right? But [00:57:00] it's not going to grow at anything more than like maybe a cpi inflator or something Yeah, or 

[00:57:05] Emily Evans: maybe flat, you know, 

[00:57:07] Vic: yeah, so so for the immediate Needs for the governor of that state. You're not screwed. You're not screwed, right? But you have this ticking thing that in the next five to ten years you're going to have to figure out a way to Deliver health care to these people and fund it or or you're not going to have as much health care, 

[00:57:29] Emily Evans: right?

[00:57:30] Emily Evans: Yes, exactly. And part another policy that's part of that is something called supplemental payments, you know and and hospitals and nursing homes in particular what they do is they'll agree to pay a Tax a bed tax. Yeah, and then they 

[00:57:46] Vic: get back somehow 

[00:57:47] Emily Evans: and then that which they basically get back times two or even more than two.

[00:57:52] Emily Evans: And the, this is long, long standing policies have said, this is a bad idea, you know, because it creates [00:58:00] incentives that should not, should not be there. And, and where we are right now is, and quoting one, you know, investor relations, uh, head at a large publicly traded hospital company, you know, we are now agnostic as to who pays us, which is a very, very different environment, you know, because of, because we, we've got supplemental payments from Medicaid, we've got this, we've got that.

[00:58:23] Emily Evans: Um, and so that would also probably be part of those. that those deals as well. And if you want a template for that, you go back to 1986 when under Reagan administration as part of the tax cuts and the budget, you know, changes the budget. There was a law, uh, Tefra, which essentially gutted Medicare. Okay.

[00:58:44] Emily Evans: And of course all the hospitals are screaming bloody murder. And that's where the prospective payment system came from. Like, Oh, okay. You don't like getting this to happen. Well, here, we're going to come up with this. And that's how you got them to the table. 

[00:58:58] Vic: Interesting. So [00:59:00] no matter what the details are, it seems like the direction that Congress controlled by the Republicans is likely in reconciliation to cut Medicaid in some form or fashion, whether they do it in exactly the, the scenario laying out or some, some, the variety.

[00:59:25] Vic: It seems clear that it's going to be pretty difficult for health systems, there'll be less money flowing 

[00:59:33] Emily Evans: over time. There is no doubt that there's going to be less money flowing over time. That is, you have got to revert to the main. And if you look at, just say an employment chart. of healthcare in the United States.

[00:59:46] Emily Evans: You know, it's got, you know, two major hookups. Until 2014, roughly, it was following a 2 percent trajectory year over year. Number of 

[00:59:59] Vic: employees [01:00:00] in healthcare. 

[01:00:02] Emily Evans: 2015 implementation of the Affordable Care Act, we bent the cost curve. And 

[01:00:08] Vic: we had a lot more employers, employees. 

[01:00:11] Emily Evans: Yeah. And then the other big bend of the cost curve up, you know, was under the public health emergency.

[01:00:19] Emily Evans: And so you've had these, like, I call them the three epics of healthcare, uh, before the affordable care act, the period of the affordable care act until the public health emergency, and then the public health emergency to where we are today. And what's going to have to happen is you're going to have to get back to some inflated version of health care prior to the Affordable Care Act, which, by the way, means you're freeing up money for wages, cash wages, because you're driving down the amount of money the government spends on, on health care, and therefore the taxes that are spent on health care, and therefore, you know, the, the whole regime, you know, gets disrupted.

[01:00:57] Vic: Uh, I was following with the, the [01:01:00] Cost has gone up and then up again in the two new ethics as 

[01:01:05] Emily Evans: defined by the number of people employ and then 

[01:01:08] Vic: Um, it seems like this new administration is going to cut Certainly, in Medicaid, they're talking about, they've, they've, they've previewed it a lot. Um, how that frees up money for wages, you mean wages overall, not just the healthcare wages.

[01:01:26] Vic: Overall, I don't mean healthcare wages, I mean overall. Yeah, it's gonna be negative to healthcare wages. Yeah, yeah, I don't 

[01:01:30] Emily Evans: mean, because what has, what you have to do is get the cost of healthcare back to that. Trajectory pre ACA just yeah, 

[01:01:41] Vic: so jumpstart, but we're too small, but jumpstart. We we have health care benefits Mm hmm And so your point is if those if that cost begins coming down as a percentage I can pay my employees More right, which might be good for society and good for business 

[01:01:59] Emily Evans: it [01:02:00] correct, 

[01:02:00] Vic: but it's The point I'm trying to make sure I understand is, over the next, say, five years, health systems and physicians and all of the ancillary vendors and providers related to the healthcare system, the pie is getting smaller.

[01:02:18] Emily Evans: Right. Those costs, all those things are costs and all those things show up in your insurance premiums. That's the bottom line. Your insurance premiums are an expression of all of the costs that go into that system. In the aggregate, in the macro level, I'm not talking about your particular. Yeah. Yeah. 

[01:02:35] Vic: So, well, I mean, it's roughly at a macro, it's 50 percent employer based and 50 percent government based, something like that.

[01:02:43] Vic: Yeah. You know the details more, but rough math. And so. Yes, it will benefit employers and employees eventually because there's more money to, to pay them, you know, it'll reduce government spending, which [01:03:00] maybe would float a tax cuts. But the more immediate thing for my portfolio companies and for a lot of listeners here is that the growth in health care spending.

[01:03:14] Vic: is going to slow down or maybe even decline, negative growth. 

[01:03:19] Emily Evans: Potentially, yeah. And you combine it with demographics, yeah, that could happen. Yeah. You know, and, and, and one of the pitches from Robert F. Kennedy, who's going to testify on January the 29th, Um, for his nomination, is that, We spend too much on health care because health care, health care sells too much, you know, they're, they're, the, the, we, we spend a lot of money on it and we have all these reasons for spending money on it, but, you know, and, and the flashpoint for this is the anti obesity drugs, like Wegovy and Ozempic, and where you have this, a drug that's, you know, nine, 1, 200 a month, um, because the food supply sucks or the people that a certain portion of the [01:04:00] population is relying on the potato chips we were talking about earlier.

[01:04:03] Emily Evans: Um, and their ability to, you know, manage their health properly through the nutrition that they get is, is compromised. And his point being is we, if we could get to that. That problem, you know, we don't have to spend as much money on. Yeah, we would 

[01:04:18] Vic: have healthier people. 

[01:04:20] Emily Evans: Right. 

[01:04:20] Vic: And if you 

[01:04:21] Emily Evans: make, and this, this I think is the really the big paradigm shift.

[01:04:24] Emily Evans: Which is, if you think about the fight over the Affordable Care Act. Which was. gruesome. And I'm referring to the repeal effort in 2017. It was just gruesome. You had, you know, you had people coming into, you know, wheelchairs into the Senate gallery. You had people falling out of wheelchairs, crawling across.

[01:04:44] Emily Evans: There was just this concentrated coverage of people who were sick and, and, and, and, and sick. I'm not, you know, trying to denigrate their condition, not at all, but the focus of the Affordable Care Act and the focus of the federal [01:05:00] policy is this presumption a lot of people are sick and we need to take care of a lot of sick people.

[01:05:07] Emily Evans: Whereas here, they're saying, you know, we want everybody to be well. We want everybody to be healthy and, and that's how it, it's not easily detectable unless you do what I do, right, but it is a definite shift in the way in which you think about your policy from, oh gosh, you know, no, and you know, Bernie Sanders is very fond of facing nobody in America should go without filling the blank, you know, uh, x rays or, or mammograms or, or whatever, um, to, Let's talk about what you're eating That's a huge shift, 

[01:05:42] Vic: but but 

[01:05:43] Emily Evans: it 

[01:05:44] Vic: you could do both right?

[01:05:46] Emily Evans: I think so, too, and I think you will but I'm talking about the focus. Yeah. Yeah, right. Yeah, so 

[01:05:51] Vic: the Robert Kennedy and Others are gonna focus on Food and maybe, maybe [01:06:00] they'll cut, uh, drug TV commercials or things like that, that, that are in, I think, in most people's opinion, not contributing to the population being healthy and well.

[01:06:12] Emily Evans: Yeah, because what's the message there? You know, call your doctor. The message is, you know, and people do, they call their doctor about this thing that they think they have. Right. And you know, and like WebMD, you know, you get this thing. I want to have, 

[01:06:22] Vic: I want to have sex on, you know, on a pool on a, in a pool.

[01:06:28] Vic: Overlooking the water that if I just get this little blue thing, everything works. And 

[01:06:35] Emily Evans: so that, but that's the, that's the real shift here. And, and, and it means you're going to spend more, less money on healthcare. 

[01:06:42] Vic: Yeah. One of the things that's being floated is that there are many. Hospitals that are nonprofits.

[01:06:51] Vic: Most, most are nonprofits. I agree. And they as that status, they don't pay taxes, they don't pay federal tax, they don't pay local [01:07:00] tax, they don't pay state taxes, they don't pay taxes. Right. And I was questioning how likely that was to actually come around and you shared this story from, from Marty McCarry, who is the incoming head of H-H-S-F-D-A-F-D-A.

[01:07:16] Vic: Yeah. FDA, um, what's Robert Kennedy gonna do? 

[01:07:21] Emily Evans: Robert Kennedy's secretary. HHS. He's HHS? Yes. And 

[01:07:24] Vic: okay, then Marty is FDA 

[01:07:25] Emily Evans: Jay, bat is uh, NIH. 

[01:07:28] Vic: Okay. 

[01:07:29] Emily Evans: Dave Weldon is the C, d. C and Mame. Oz is the CMS? Yes. Okay. 

[01:07:35] Vic: And so all doctors, Dr. Ari, put out this article on stat, which we're looking at, and we'll link in the show notes.

[01:07:44] Vic: Um. Making the case that hospitals should pay taxes. Yeah, 

[01:07:48] Emily Evans: and believe it or not 

[01:07:49] Vic: publicly obviously publicly 

[01:07:50] Emily Evans: This isn't even a republican thing, which is what makes it so dangerous Okay, it was actually bernie sanders who has raised the issue of the non profit status of [01:08:00] american health systems You know If you're running a big american health system, you're being paid pretty nicely.

[01:08:06] Emily Evans: Okay, and and one of the arguments that the CEOs will give to their board is well, if he went to HCA, he would get options. You can't have options when you're running a nonprofit. That argument gets floated a lot. 

[01:08:19] Vic: I think that's accurate. 

[01:08:21] Emily Evans: It is accurate. Except you're in a nonprofit because you're supposed to be helping the community, whereas over there at HCA, I guess you're doing something different.

[01:08:28] Emily Evans: I don't know. I'm being. Yeah, I'm joking around. But, um, but the Bernie Sanders has been on this. Okay. And the Republicans have been on this. So this is so dangerous because all of a sudden you have agreement. And what has contributed to this problem is high profile health systems sending taking their patients to court.

[01:08:50] Emily Evans: because they didn't pay their highly inflated bill, uh, and garnishing their wages and ruining their credit and all sorts of other [01:09:00] practices that if you had stopped to think about that just for five minutes as a non profit hospital, however many hospitals you may have in your system, you know, somebody with a brain in their head should say, you know, that's, that's kind of a bad idea.

[01:09:14] Emily Evans: We probably shouldn't do that. Um, but they did and they're caught. A lot of people's attention. Now, I do not think the non profit status of hospitals and health systems is going to disappear. 

[01:09:25] Vic: I mean, I don't know how the country could take care of the patients that we have to take care of because that just flipping that switch would be very difficult to do.

[01:09:36] Vic: You wouldn't 

[01:09:36] Emily Evans: flip that switch and here's what, what Bernie Sanders really wants and that is for the IRS to articulate a set of standards that makes a hospital or health system non profit. When do you cross that line where you really are, as, as Bill Carpenter ran LifePoint said one day in, you know, at an investor meeting, well they're, you know, [01:10:00] non tax paying, not non 

[01:10:01] Vic: profit.

[01:10:02] Vic: All the Nashville for profit operators refer to the, what we would traditionally call non profits as non tax, non taxable. Non taxable, right. Yeah. And, 

[01:10:11] Emily Evans: and Because there's a 

[01:10:12] Vic: lot of, there's a lot of Um, you know, money that is left over after they pay expenses, 

[01:10:22] Emily Evans: right? And they have no cost controls. They're notorious for that.

[01:10:25] Emily Evans: You know, they're notorious for over employing their there. There's all these things that that that a I, the rigor of some standards might actually help get there, get things in line. So what I expect to happen is that the IRS is going to come forward. And I don't think this is going to be on the short list of things to do here.

[01:10:46] Emily Evans: Yeah, 

[01:10:46] Vic: this is a, this is going to take a while. It 

[01:10:47] Emily Evans: will to come up with a set of standards that you would have to adhere to, um, if you're a nonprofit hospital. Uh, that will probably have something to do with salaries, you know, that will probably have something to do with, you know, [01:11:00] suing your patients, that will, those, those things that define, because if you're working for a non profit, you're supposed to be accepting that there are certain restrictions on your personal.

[01:11:13] Emily Evans: Achievements, particularly monetary, at least that's the way it used to work, right? It doesn't work that way anymore. Um, but, but what could also happen is some of these successful nonprofits could convert to for profit. Yeah. You know? And that wouldn't be the craziest thing in the world. The capital markets are free and widely available to them and, uh, and a lot of them are, have You've got great businesses and yeah, I mean, I think 

[01:11:38] Vic: you have two types of three tops of nonprofit health systems, right?

[01:11:43] Vic: There's the, you know, fully scaled, uh, very well run, like common spirit, Ascension, Kaiser Permanente. They have a new brand, but, but those, those platforms are, you'd put [01:12:00] HCA and LifePoint and they're, they're good operators and they. They could be, they could transition to be for profit or they could abide by whatever new rules come out.

[01:12:09] Emily Evans: My guess is they're going to be for profit. 

[01:12:11] Vic: Yeah. And then you have the academic medical centers. Which have the other grant issues and they are subscale and I don't know that they would be able to transition, but it depends, I guess, how they configure themselves, right? But they're actually. Better positioned than the last group, which is the subscale like community hospitals where you maybe have three hospitals somewhere and you don't have the academics for the grants, but you also don't have the scale and the executive team and that 

[01:12:48] Emily Evans: might, and there might be, but you also probably are serving your community a little bit different.

[01:12:54] Vic: They, I think, uh, we'll have to. Abide by whatever [01:13:00] these new standards are and that's probably okay. 

[01:13:01] Emily Evans: Yeah, I think that's probably, you know, probably fine 

[01:13:04] Vic: So but this is a pretty dang the reason I wanted to cover it. It's it's pretty dangerous uh thing to have being bandied about because there's a lot of states and cities that also have financial troubles and would really like to get the real estate taxes and the other, whatever, the local taxes.

[01:13:25] Vic: This topic has 

[01:13:25] Emily Evans: been openly discussed here in Nashville relative to I didn't know, yeah, so you know the Nashville politics. Yeah, this has been openly discussed, is that there's a lot of, uh, there's a lot of tax free property. In Nashville, uh, you know, we have Ascension and Vanderbilt, right, in, uh, in, in Midtown is two examples, uh, but, uh, and, you know, you pay property taxes on those parts of your business if you're Ascension or Vanderbilt that, that are meet certain standards of, of profit making, you know, like, um, if you're running it.

[01:13:58] Emily Evans: So they 

[01:13:58] Vic: do pay some property taxes. Some, 

[01:13:59] Emily Evans: [01:14:00] it depends on the, the function. If you're 

[01:14:01] Vic: running an outpatient surgery center. 

[01:14:03] Emily Evans: If you're running an outpace, no, but say if you're running a, a bookstore, you know, like the Vanderbilt's bookstores now, of course, you know, outsource, but, uh, so that might not be a great example, but there's a certain, there's often a component of, of for profit that doesn't meet the requirements.

[01:14:19] Emily Evans: Yeah, but 

[01:14:19] Vic: the amount of money that Nashville would collect would be much greater. I mean, Vanderbilt. Well, both of them, Vanderbilt and Ascension, have a big footprint. 

[01:14:27] Emily Evans: Yeah, this is, this is all under consideration already. And, you know, you start when you need revenue, you start looking everywhere, and this could be one of them.

[01:14:38] Emily Evans: So, yes, it's a very dangerous, dangerous idea, but probably one whose time has come. And I think the non profits have really, some of them, nobody to blame but themselves. Yeah. I mean, garnishing your patient's wages, really? Well, the only 

[01:14:53] Vic: thing that I know is that they will blame someone else besides themselves.

[01:14:58] Emily Evans: That's true, yes. 

[01:14:59] Vic: Okay, so [01:15:00] CMS is appealing UHG's win in court about their star ratings. This story will not die, and I don't understand it. Uh, um 

[01:15:11] Emily Evans: There was a one ratings are significant, produce significant bonuses for the managed care organizations. So if you get downgraded in your star ratings, you lose revenue from the federal government.

[01:15:22] Emily Evans: That's the bottom line. All right. 

[01:15:24] Vic: Yeah. And United court case and it's in fierce health care. Um, I, I haven't fact checked it myself, but I've seen this story now three different times. They won the court case because they got the D grade from five stars to four because there was one foreign language test call that was disconnected before they could evaluate it.

[01:15:48] Vic: And I don't know how that's going to be appealed. Well, the first, 

[01:15:52] Emily Evans: the first thing to understand about this is there's probably a little bit of trying to get the. [01:16:00] Payments down to the managed care organizations because the progressive wing, Elizabeth Warren on one side of the hill, Andrew, uh, Alexandria Ocasio Cortez on the other side of the hill are giving CMS a lot of pressure to how much money that is going out the door to non traditional, uh, Medicare.

[01:16:17] Emily Evans: So 

[01:16:18] Vic: part of this, hold on the, the progressive wing is pushing 

[01:16:21] Emily Evans: for cuts for managed care. Yes. 

[01:16:25] Vic: Cuts to managed care. companies because 

[01:16:27] Emily Evans: that would be good for traditional Medicare, which is not privatized. And so that, that pressure very likely, I don't know 

[01:16:36] Vic: how one equals 

[01:16:37] Emily Evans: the other. I don't either, but I'm just telling you, but, but the, but the result of, um, of that pressure as I think contributed to a few things.

[01:16:48] Emily Evans: One, the decline, the deceleration in payments, month, annual updates to Medicare. managed care organizations, um, in the form of the, the Medicare [01:17:00] Advantage payment update. All right. And if you listen to United Health Group's, um, earnings call, Andrew Whitty refers to the latest, uh, the latest update, which is over 4%, which we haven't seen in a while.

[01:17:13] Emily Evans: And he says, you know, it, it, they're, they're getting more rational than they have been in a few last few years, which, which is kind 

[01:17:20] Vic: of that last week, the physicians and health systems were about it. Cause it was It's higher than what they got. 

[01:17:26] Emily Evans: And what's happened and what they were probably doing in the star ratings as part of this, we're getting pressure and we wanted to fix the pressure.

[01:17:32] Emily Evans: The fact of the matter is I expect the star ratings to go away. Um, because, and this is in a train wreck, it doesn't work and it's got, they keep loading it down with things that shouldn't necessarily be there and it's contributing to the cost of healthcare. For example, you get improvement, you get a. You know, points or if you will, if you're prescribing statins, statins are controversial, you know, not everybody should be prescribed them and then [01:18:00] really the doc should decide based on, you know, the, the patient in front of them, not the score, you know, that, that you're getting from your, your Medicare Vantage plan.

[01:18:09] Emily Evans: So I expect them to go away. What they'll do is they'll fold it into the overall payment. So there won't be any decline in payments, but I think that's going to go away. 

[01:18:19] Vic: Okay. And then, uh, Elevance, uh, announced their earnings and they grew well. Memberships growing at least 7%, maybe 9%. So Elevance is the, probably the best performing MA plan.

[01:18:33] Emily Evans: They are. And if you look though at, um, outside of, uh, MA Well, even if you look at M. A., M. A. 's got some, Medicare Advantage has got some consolidation that's going to go on here. So you're not going to really see it right away. But when you look at the Medicaid managed care organizations and the Affordable Care Act and the deceleration in enrollment in those, I think the picture for the managed care organization is, is much bleaker than it is for the [01:19:00] providers.

[01:19:00] Emily Evans: Um, because there's one of the, the, the kind of the root problem is if you add up the, All of the number of people insured by something in America, my model is 320 million dollars, uh, 320 million people. There's about 340 million people in this country. You're not going to find that last group of people.

[01:19:22] Emily Evans: They're on the dead end road, you know, in Utah, right? Um, at the end of the Box Canyon. Um, but you don't have any growth. Yeah, 

[01:19:32] Vic: the boomers are gonna begin to, and they're pass away. They're right. 

[01:19:35] Emily Evans: They're already doing that. And 

[01:19:36] Vic: so, and my generation is not gonna fill in. You're not gonna fill in. Right. So you have, so you're gonna have less numbers in Medicare Advantage over time.

[01:19:45] Emily Evans: Yeah. So you have that demographic problem. At the same time you have these changes in Medicare, I'm sorry, Medicaid and the acas. And the fact is, you, you, you, everybody's got health insurance in some way. So, so there's no enrollment growth. for these managed care [01:20:00] organizations. So then it becomes a question, all right, well, if I can move that, that person from, you know, the Medicaid to the ACA, I make more money that way.

[01:20:09] Emily Evans: All right, how much of that can you do, you know, is, is really what it is. Cause there There's no, you can take share from somebody else, which is I think what Elevance is doing. You can underprice your plans, which is what happened this year, you know, to take share. But you're, you're going to have a, uh, there, there's not, it's not a very bright picture for this.

[01:20:28] Emily Evans: So then this 

[01:20:28] Vic: leads to the next story in modern healthcare, insurers are inventing more roadblocks to claims as reported by providers. This has been a fight forever. And it's always going to be a fight. 

[01:20:42] Emily Evans: And if you listen to some of, like, the people staffing the health organizations, like Marnie McCary, you know, their response is, good.

[01:20:51] Emily Evans: You know, some of this stuff isn't valuable. Some of this healthcare is not valuable. It doesn't produce healthier patients. [01:21:00] But the other thing that's at work here is that these guys mispriced their plans in 2024. Yeah. Um, and they did that because they, um, They did not, they're, they're poorly anticipated, well, let me rephrase this, they understand how competitive Medicare Advantage is, uh, there is some problems with the Medicaid disenrollment as well, but, but they are, they are, the, the Medicare Advantage is so competitive now and the population is.

[01:21:29] Emily Evans: Not growing and they they can't cut their their they can't increase their premiums because then they'll lose people 

[01:21:38] Vic: Yeah, I agree with that and this is the design of the US health care system. They're like the payers are In place, in my view, to challenge, and hopefully it is an honest, healthy debate, but to challenge what the provider is delivering, [01:22:00] and somehow it's messy, but that results in a reasonably efficient system.

[01:22:06] Emily Evans: That's your hope. Of course 

[01:22:07] Vic: the insurers are putting up roadblocks. At some level that's sort of their job. 

[01:22:14] Emily Evans: Right. 

[01:22:14] Vic: They're not under any risk. I mean, they don't take risk more than 12 months. So there's no risk taken. They're not real insurance as far as like compared to life or fire or something, right?

[01:22:23] Vic: They are adjudication and and trying to limit, you know, if the if that check wasn't there then The providers would do more things. So that's their function, really. 

[01:22:37] Emily Evans: It is their function. And the question is, are they doing it in a responsible, you know, an intelligent way? And if you, you know, listen to Andrew Whitty on the, you know, 2024 earnings call, he is talking about the fact that they're in their very early stages of using, you know, large computing models to.

[01:22:58] Emily Evans: help make decisions and [01:23:00] have the evidence that they need in order to support those 

[01:23:03] Vic: decisions. 

[01:23:04] Emily Evans: Yeah, I 

[01:23:04] Vic: did an AI show, I think it came out maybe two days ago, um, and we were talking about this arms race where both sides, the providers and the payers are, it's in the early days, but they're both gearing up to use large technical systems, really AI.

[01:23:22] Vic: And they're, They're going to be talking to each other. The AI systems are going to be negotiating. Yeah, it's the battle of the machines. 

[01:23:26] Emily Evans: And one of the things to remember about, you know, health insurers is health insurers are basically actuaries. You know, they're trying to figure out, all right, what, well, they're not, they're not, basically, they are actuaries, right?

[01:23:38] Emily Evans: How much am I going to spend this year based on all of these inputs, all right? And, you know, that went from You know, you had a slide rule and you had a ledger and, and then that went to an Excel spreadsheet and now it's next generation as it goes into, you know, a large predictive model. Yeah, they're 

[01:23:56] Vic: much better suited to [01:24:00] quickly move into this than health systems.

[01:24:01] Vic: Then health 

[01:24:02] Emily Evans: systems. Yeah. And you know, health systems have to worry about the person in front of them. And more importantly, they got to worry about the doctor that was trained to do, you know, this many scans and this, you know, these. Yeah. Those kinds of things. 

[01:24:15] Vic: Okay, last year, just quickly, um, uh, Fierce Healthcare is saying in 2024 more non profit hospital credits were downgraded as opposed to upgraded, which is, I wanted to report, it's not that surprising, but there's a lot of pressure on health systems.

[01:24:33] Emily Evans: Yeah, and I, and particularly the non profits, I think that they do not have the cost controls. do not want to embrace the reality is you've got to run a more efficient system. And, you know, here in Nashville, you know, you go down from Vanderbilt and you go down the street to HCA, you know, one of those knows how to run an efficient health system.

[01:24:52] Emily Evans: Is it, you know, is it the, you know, the, the Ford motor plan from the 19, you know, fifties [01:25:00] or no, it's not, but is it, is it better than other health systems? I think it probably is. 

[01:25:08] Vic: And then one of the factors related to this is that, so the next story in Fierce Healthcare is hospital and private equity affiliated, so primary care groups that have an affiliation with a hospital or a PE firm have better network rates.

[01:25:24] Vic: Yeah, that's because they leverage the broader negotiating power to get better rates, right? The Nashville community that's that's sort of one of the recipes in the Nashville recipe 

[01:25:37] Emily Evans: Yeah, what do you expect right? If you're if you're creating power in the insurers, which you did with the Affordable Care Act, right?

[01:25:45] Emily Evans: You know, what other response do you have if your health system you need to find that power yourself, 

[01:25:50] Vic: especially something like primary care 

[01:25:53] Emily Evans: Which is, you know, one of the most important functions of the medical system and one of the most poorly paid. And so there's no, [01:26:00] and then, you know, look at anesthesiologists and radiologists who goes in and asks for their anesthesiologist by name, you know, nobody.

[01:26:07] Emily Evans: So, so the, it's a, it's a way to change the, the power structure. So nobody should be surprised, you know, the people that created this Congress, the passage of the Affordable Care Act should not. be wondering. It's their invention. 

[01:26:21] Vic: And these last two stories, uh, the credit rating degrades and the fact that it's being researched and published, that you can get better network pricing as a bigger group is going to drive consolidation.

[01:26:36] Vic: I mean, consolidation is already happening and we're going to see more and more of it. 

[01:26:39] Emily Evans: Well, and it's going to drive consolidation in the way you drive consolidation as you're reaching the You know, kind of the end of a cycle, which we see all the time, right? You're, you've, you had this massive expansion of the healthcare system beginning in the 60s, but really accelerating beginning in 2014.

[01:26:58] Emily Evans: And that system was [01:27:00] built for The post war generation, they conceived it, they incubated it, they expanded it and it's taken care of 

[01:27:07] Vic: them 

[01:27:07] Emily Evans: and it has taken care of them beautifully. All right. But, 

[01:27:11] Vic: but as they 

[01:27:13] Emily Evans: in 2027, the last of that generation will turn 65. Yeah. And from there, it's one big giant trough with a few hiccups until you get to the millennial population.

[01:27:26] Vic: And so we've had multiple, um, challenging stories. And so I, I was looking for something that would lighten it up a little bit because it's just like bad, bad, bad. And so, Medical Express 

[01:27:39] Emily Evans: had this, 

[01:27:41] Vic: you know, game changing story that if you pair dogs with providers at hospitals, it, it eases both the staff and patients stress and anxiety.

[01:27:51] Emily Evans: Of course, which of course, we 

[01:27:53] Vic: both are dog love. We both have dogs. 

[01:27:55] Emily Evans: They're fluffy. Dogs are great. They're fluffy, and they, uh, slobber all over you. Yeah, [01:28:00] and this 

[01:28:00] Vic: was at an HCA facility, and they have dogs in the, um, birthing center. And everyone loves the dogs and they're part of the team. They come in three days a week and they cheer everybody up.

[01:28:14] Emily Evans: I think that is a really good use of HCA's money. So, uh, so kudos. I mean, if you can 

[01:28:19] Vic: keep one nurse a little bit longer, you know, turnover is expensive. So, yeah, and 

[01:28:26] Emily Evans: I'm, uh, I'm all for that. And I think, you know, one of the great, one of the, you know, the American healthcare system, probably more than any other healthcare system, was modeled on military, right?

[01:28:37] Emily Evans: It was, it was created and born out of a military system. That's why the Surgeon General is called the Surgeon General, right? And, um, And so it has this very uptightness about it, you know, and, and like, yeah, not having a, a, a dog, Oh, disease, you know, it's a perfectly healthy dog and, uh, and that's, uh, that leaving that [01:29:00] behind, you know, with the post war generation is a really big positive, I think.

[01:29:05] Vic: Okay. So Johnson and Johnson got a new drug approved by the FDA. It is for major depressive disorder. It's a spray. 

[01:29:15] Emily Evans: Mm hmm. 

[01:29:16] Vic: It is on its way to being a blockbuster. It already had other indications. So, um, it treats other types of depression. Okay. Um, but this is the first standalone therapy for, you know, treatment resistant, where you can't really get relief.

[01:29:35] Emily Evans: Yeah. 

[01:29:35] Vic: And so it's on its way to being a blockbuster, which is defined as a billion dollars. J& J needs some new things. They 

[01:29:41] Emily Evans: really do. Yeah. And 

[01:29:43] Vic: so, um, they're celebrating this. It's not clear to me how effective it is, but it got approved. 

[01:29:48] Emily Evans: This is going to be, you know, back to that We Go V model, where we're paying a lot of money for a drug because we don't have good, you know, processes and, and approval processes in our food [01:30:00] supply.

[01:30:00] Emily Evans: Yeah. Um, I think, uh, the antidepressant and the, the anti anxiety drug business is going to face a similar reckoning, uh, which is. They were spending a lot of money on these drugs. Almost everybody in America is on some sort of, you know, mental health, uh, so we need to look at. Why we're spending that money.

[01:30:19] Emily Evans: Is it because everybody is the, the majority, literally the majority of Americans have need antidepressants or is there something else going on in the case of the anti obesity drugs? There's a belief that it's the, it's the food system, you know, and the food supply with the anti obesity drugs. Is it also the food supply?

[01:30:39] Emily Evans: But you've, Robert F. Kennedy is talking pretty openly about this. So I think there, I think you're going to see some medical. Attitudes change, which maybe J and J is not prepared for 

[01:30:52] Vic: well, I mean, changing the food supply is it's hard for J and J to make money with that. 

[01:30:57] Emily Evans: No, it's not. And that's the great.

[01:30:59] Vic: [01:31:00] If that could solve depression in any small way, we should do that. But it's still not going to help J and J's. They need to find, well, that's 

[01:31:08] Emily Evans: the big problem, right? Is, is health, a healthier population, a good business model? 

[01:31:15] Vic: Well, it's good for the country, 

[01:31:17] Emily Evans: right? But I would argue it naturally 

[01:31:19] Vic: would shrink the healthcare system.

[01:31:21] Emily Evans: Well, but, and I would argue there's lots of things that we aren't doing mostly in the private sector that would make, uh, make. people healthier and, and, and not, not quack stuff, but, you know, make, make people understand how to take care of themselves better, which is under penetrated. The market is under penetrated for that.

[01:31:41] Vic: ADHD is a study in the United Kingdom. 

[01:31:45] Emily Evans: Robert F. Kennedy, by the way, does not believe ADHD actually exists. 

[01:31:48] Vic: Oh, that's interesting. Well, 

[01:31:50] Emily Evans: maybe that's hyperbole. It's not that it doesn't exist. Maybe it's over treated. It's over 

[01:31:54] Vic: diagnosed, I think. Yeah. I would say it's over diagnosed. But a study of 30, 000 [01:32:00] British adults Showed that people with ADHD are likely to die earlier than their peers.

[01:32:07] Vic: And so I want to know it's just caught my attention. I want to know what they control. We have this study here So we'll link to this article um, that makes me worried because I have family members with ADHD, but um, and then this is a cautionary tale so a startup claimed that they could Cure cancer by filtering the patient's blood, of course, is not approved by the FDA.

[01:32:31] Vic: I 

[01:32:32] Emily Evans: would think that. 

[01:32:32] Vic: Um, and this is in the New York Times, there were two companies that sort of got together to work their way through the regulatory process and they set up a treatment center in Antigua. Which should be your first clue. Which is your first clue. And two people have died. And so, there's a lot of cancer patients that are interested in going outside the U.

[01:32:57] Vic: S. regulatory environment to find [01:33:00] new therapies. And I think some of them have some promise, but this one, uh, killed people. And filtering your blood to cure cancer, I'm not sure that that makes sense 

[01:33:15] Emily Evans: to me. And putting your, uh, in the, the, the, the, the, the, the The difference here, I suspect, is, or the important factor, my guess is that they were seeking cancer treatment at a cost they could afford, not necessarily seeking cancer treatment.

[01:33:30] Emily Evans: And for all of its, all of this coverage information, you know, we have, you know, 93 percent of Americans are covered with some insurance. It's not particularly Affordable, you know, uh, and even on Medicare, you know, and not, yeah, there's a 

[01:33:47] Vic: lot of CAR T treatments that you can't, that are not covered. They're not covered.

[01:33:51] Vic: You 

[01:33:51] Emily Evans: can't, you can't get them, you know, and, well, you 

[01:33:54] Vic: can get them, but you have to be willing to pay, sell your house. Yeah. And 

[01:33:58] Emily Evans: so that, that, my guess is [01:34:00] what is driving this more than anything else. But it's a terrible thing, you know, that, uh, that, that something like that happens. 

[01:34:07] Vic: Um, and then in our longevity, uh, sort of segment, there's a really good podcast, uh, Marcus and I have decided we're going to try to every few shows, recommend a podcast that we'd like besides this one.

[01:34:18] Vic: Of course, this is the one that people that are listening to this show listen to, but. I would recommend Kevin MD, his podcast is very creatively called the podcast, but he's talking about biomarkers that could boost your health span and longevity, which is sort of on the theme that you're saying that the government's turning to is let's try to worry about health span and longevity and keep people healthy.

[01:34:42] Emily Evans: Well, and, and being, while you're living your life to be as healthy as possible. Yeah, enjoy your 

[01:34:48] Vic: life. You know, 

[01:34:49] Emily Evans: I mean, I think the end of life care in American health care system is one of the great scandals, right? You know, treating 85 year olds for, you, their need, we, [01:35:00] we're so driven by the The income and even the value based care, it doesn't solve this problem, which is you, you really, there's a, there is a point at which your oncologist needs to tell you to go home, you know, and, you know, watch TV with your kids and, you know, and, and eat a few good meals.

[01:35:17] Emily Evans: Cause 

[01:35:17] Vic: Yeah. And there's so many social and. Uh, kind of interpersonal family dynamics going on with that. It's very difficult for the doctor to know how to broach that topic, how to talk about it, and who will make the decision. Right. Yeah. So it just doesn't get brought up. 

[01:35:33] Emily Evans: You need, they all need to talk to my mother, who kind of laid it all out, you know, fairly early on.

[01:35:39] Vic: And just said, this is what we're going to do. Well, 

[01:35:40] Emily Evans: the threat was, uh, she would haunt us if we deviated. And if you knew my mother, you would know to take that threat very seriously. 

[01:35:48] Vic: Yeah. So Innovasr, which we seem to talk about every week on this show, I think it was two weeks ago, they acquired another AI company.

[01:35:55] Vic: It's their third in a year, and this is AI for actuarial [01:36:00] services. So Innovasr has built a pretty good suite of AI tools. They're here in Nashville, and they're definitely going with the broad Let's try to have several different AI tools for every, every use case. Okay. But pretty interesting. Uh, they're definitely building up a pretty good portfolio.

[01:36:18] Emily Evans: That actuarial stuff could be really super interesting. Yeah. Especially 

[01:36:21] Vic: when you pair it with some other tools that they have. Yeah. Okay. So I have an investment in an, uh, a company that tracks. Uh, that watches eye tracking to be to predict human performance, mostly for the military. So they're talking about like elite performance for pilots and other things, but this another research out of the UK researchers found that they could use AI to predict dementia risk by tracking how the eye movements are.

[01:36:48] Vic: Which is pretty interesting. 

[01:36:50] Emily Evans: That is pretty interesting. And I'm, uh, I, I, I would, I I think anything that helps you def define that very difficult, you know, [01:37:00] condition. There's so many, there seem be like this so multifactor 

[01:37:03] Vic: that Yeah. Well, and dementia is, is is pretty vague and broadly defined, right? 

[01:37:10] Emily Evans: Yeah.

[01:37:11] Vic: Versus something like Alzheimer's or, I 

[01:37:12] Emily Evans: mean, I had dementia this morning for a bit, so , 

[01:37:16] Vic: okay, so now we're moving into the AI section, open ai. Announce that they have PhD level super agents. So they're stupid. They're trying to use every buzzword they can. Uh, agents are the new AI buzzword. And they have PhD level super ones.

[01:37:37] Vic: And they're so powerful in this Axios story. It's reporting that, that they are having to brief the U. S. government before they release it. I don't have any inside information, but I'm very cynical about this. I, I think it is. You deserve to be. I don't think it's, I think it's more hype than real, but we'll see.

[01:37:56] Emily Evans: Yeah. 

[01:37:56] Vic: I mean, I, I'm really interested in AI, but [01:38:00] when, when Sam Altman tells me that he has to have a closed door briefing with the U. S. government because his AI is so powerful, that sounds like marketing to me. 

[01:38:09] Emily Evans: And it sounds like Shawn Lane to me too. Um, uh, from. I don't know Shawn 

[01:38:12] Vic: Lane. 

[01:38:13] Emily Evans: Oh, Shawn Lane, uh, his company Olive.

[01:38:15] Emily Evans: Oh, okay. Yeah, this is so super secret, you know, we get, here's, we're going to get back to this problem that I mentioned earlier when we're talking about, you know, research is that what you train your model on, if you want somebody to be PhD level smart, that ain't a high bar. right now. He makes it sound really, really like it's a big deal.

[01:38:39] Emily Evans: Now, I'm not saying that there aren't some really smart PhDs out there have done some really amazing work. There are. Okay. But you have to, if you're doing an AI, you know, large language model, you have to collect as much as you possibly can, um, information, you know, and research and so forth. And a lot of it's crap.

[01:38:59] Emily Evans: [01:39:00] Yeah, published 

[01:39:00] Vic: research. There's many published research papers that have never been replicated. 

[01:39:06] Emily Evans: More than half. 

[01:39:07] Vic: Yeah. And in some 

[01:39:08] Emily Evans: fields, it's, it's in the 60 percent range. Sociology, for example, education. Um, you know, it, because, because, Biomedicine or biomedical or biotech or whatever you because that has to go through a regulatory process.

[01:39:25] Emily Evans: Yeah, we're 

[01:39:25] Vic: better. It's better It's more better. Yeah, 

[01:39:27] Emily Evans: but it still can be pretty junky as well. And that's where you get the alzheimer's situation 

[01:39:32] Vic: Yeah. Yeah, so we'll see. Um Yeah, i'm with 

[01:39:36] Emily Evans: you And look, they put Mike Allen and Jim Vanderhyde on that story, the two founders of Axios. 

[01:39:44] Vic: China is, uh, evolving into our biggest geopolitical competitor to the U.

[01:39:51] Vic: S. And they released a new AI model that they built with very inexpensive chips. [01:40:00] I think primarily to say, you know, thumb their nose at us, like we can't get the Nvidia chips, but we don't need them. 

[01:40:06] Emily Evans: Right. Yeah. I'm sure that is true. 

[01:40:08] Vic: I tested this model. It is okay. It's not as good as the U. S. models, but it was built with like 5 percent of the money.

[01:40:19] Vic: So, so like, it's not quite as good, but, but it is still important to track. You know, if they are able to make it better over time. 

[01:40:28] Emily Evans: Well, I mean, there, I think when you start talking about AI and, and these, the ability to take a bunch of information, what, whether that's, you know, biomedical research or whatever, take a bunch of information and turn it into something usable.

[01:40:44] Emily Evans: All right. Um, I think there's going to be, and I think there already is a tendency to think about the prospects of that as, well, I need to, I need to essentially create the, you know, nuclear, you know, armament of, of [01:41:00] intellectual pursuits. And you don't really, you really need that thing that's usable for that particular task.

[01:41:06] Emily Evans: And, and, and, and yeah, a cheaper chip would be nice because I don't. Everything doesn't have to go at lightspeed, everything doesn't have to digest, you know, the entire research library at NIH. You know, let's just get 

[01:41:22] Vic: that. 

[01:41:22] Emily Evans: Yeah, 

[01:41:22] Vic: I mean, I don't necessarily, in order to help me edit my blog post, I don't know if I need a Ph.

[01:41:29] Vic: D. in English literature studies, but I need someone to correct my grammar, or I need a thing to correct my grammar, and then, you know, uh, punch it up a little bit, like you'd say in speech writing, like to make it a little bit more interesting. It probably is a good. Middle school teacher. 

[01:41:45] Emily Evans: Yeah, I've got a the Associated Press edits all my stuff and I very frequently ignore them for what it's worth 

[01:41:52] Vic: interesting.

[01:41:52] Vic: Yeah. Okay. So the last story is going to go exactly to your what you just were talking about. So AI has passed. [01:42:00] So far every test that humans can create we ran into this problem where there was no way to Test how the models were doing compared to each other because they all were getting a hundred on every test, right?

[01:42:14] Vic: And partially we have an issue that after the test has been out for a little while The answers are now, and so it's, it either is the AI is very smart or the answers are embedded in the training algorithms. Um, people made, a group of humans made a new test called humanity's last exam that they think is the hardest test that humans can create.

[01:42:43] Vic: And so I'm, I'm going to read this so we can try our hand at this. Hummingbirds within the. Adder performs uniquely have bilaterally paired oval bone, a seismon embedded in the cater lateral portion of the [01:43:00] expanded cruciate, how do you say the next word? 

[01:43:01] Emily Evans: Uh, aponeurosis. 

[01:43:05] Vic: Of insertion of the M depressor. How many paired tendons are supported by this sesamoid 

[01:43:16] Emily Evans: bone?

[01:43:17] Emily Evans: Uh, 64. 

[01:43:19] Vic: That's amazing. That's correct. I have no idea what that is. Are 

[01:43:23] Emily Evans: the answers at the bottom? 

[01:43:25] Vic: No, they don't have the answers. I mean, these people have the answers, but they're not Giving them away because they, they want AI to be able to answer them. And so, um, it is just interesting that we are, I don't know if we have.

[01:43:42] Vic: Um, AGI meaning AI that is smarter than any human. But we are getting to the point where we, humans don't have the ability to, to test the eyes anymore. 

[01:43:54] Emily Evans: Oh yeah. They could tell us anything, right. And we'll, yeah, you can, you 

[01:43:57] Vic: can answer that question with any number between. [01:44:00] Between one and a thousand. 

[01:44:02] Emily Evans: Yeah, it's not bigger than a hummingbird.

[01:44:05] Emily Evans: Right, right, right. 

[01:44:06] Vic: Well, I don't know how small the bones are. 

[01:44:08] Emily Evans: Yeah, I don't even, I mean, a hummingbird, you know, those are really little animals. Yes, but they 

[01:44:11] Vic: probably have little bones. 

[01:44:13] Emily Evans: Little bones. But the, the, one of the things that runs through a lot of these AI stories, I think, uh, and, and this goes to.

[01:44:20] Emily Evans: Barack Obama's interest in it, I think, and that is that, that A. I. is trying to be painted as this existential threat to humanity, and Elon Musk has even said that, uh, and, and of course that assumes that there will be no, effort to countermand that existential threat, 

[01:44:40] Vic: which, or that we won't be able to.

[01:44:42] Emily Evans: Yeah, humans are very good at self preservation. We've been at it for a while, so I'm not particularly worried about that. But, but the, the theme that runs through this is kind of like a, a doomsday, you know, Oh, yeah, kind of thing. I 

[01:44:55] Vic: mean, P Doom is what's the probability that the human species will be extinct?

[01:44:59] Vic: I mean, people, and [01:45:00] people, Put a prediction on it, 

[01:45:01] Emily Evans: right? And this is kind of, I mean, we've seen this so many times for human history and really what it is, is just an expression of the anxiety of our times, right? Which is, you know, get off twitter, you know, don't go for a walk in the park without your, you know, without your phone.

[01:45:21] Emily Evans: Um, and, and, and, you know, go, go find somebody you can help, you know, have a better day. But, but the, but the, the, the, uh, That is the really what it's expressing to me and and the fact of the matter is is AI is going to be very helpful And getting work done that you need done and yeah writing code and creating apps and doing all these things AI is so far for me not been particularly helpful and I don't know if that's because I spent a lot of time in I mean in working with humans coming in contact with each other and making power decisions.

[01:45:58] Vic: So when a [01:46:00] 800 page bill is dropped. You don't use AI to help you sift through it. You've, you've read enough of these that you can, I don't really 

[01:46:08] Emily Evans: need it to because yeah, I've read enough of these as well. But when I do, like I'd used AI the other day. So I, when I've got the executive orders, okay. Uh, and one of the executive orders one four Oh nine.

[01:46:22] Emily Evans: Um, and so I asked my GROC, which is the only AI I've got access to, all right, which federal rules published in the Federal Register relied on Executive Order 14009? And it gave me a list of, I think, three, okay? There are actually more than three. But they did get the big ones, so in that sense that, yeah, that, yeah, so that 

[01:46:48] Vic: saved you time.

[01:46:49] Emily Evans: Saved me time, yes, and I would say probably a decent amount of time because to find that answer otherwise would have been, you know, a search of the federal register, which doesn't [01:47:00] have a great search engine, which is. Probably a better answer, you know, in the long run. Um, but you know, if I ask it something like, um, you know, please tell me, you know, what Donald Trump's expressed priorities through his executive orders are.

[01:47:17] Emily Evans: What are those, that body of information? I'll tell you, it's crap. You know, it can't really, it doesn't know how to calculate or express human ambition, you know, vengeance, uh, anger, uh, and also, you know, I think. You know, a genuine interest in, in fixing some very broken things. 

[01:47:44] Vic: Well, I mean, I think, um, I disagree somewhat.

[01:47:49] Vic: I think for, for my use cases, it's pretty good quality. It's the quality of a, of a, if I hired a college intern, so I'm, I'm typically [01:48:00] looking at a new business to invest in, or I'm doing something, uh, doing a lot of market analysis, like what is the existing status quo in this niche space? Right. And who are the competitors, and what is the relative strength, SWOT analysis maybe for it.

[01:48:18] Vic: And I could hire a college student for, 15 an hour, um, to do that. And they do a pretty good job. It's not like, I can't just like put it into the investment memo, but, but it saves me a lot of time. Yeah. And I used to do that. And I I've used almost every of the AI tools. They're all different strengths and weaknesses, but they all are pretty good at replacing that, you know, average to.

[01:48:47] Vic: Medium high IQ level but really not an expert at that competitive market. Yeah and it's It happens in something like 15 seconds as opposed to a [01:49:00] week and it cost me 20 bucks a month. So, but the problem I have is that the inner, I really don't have a good interface, right? So it doesn't then fit into my investment memo.

[01:49:13] Vic: It doesn't help me with emails, like it's, it doesn't connect to my life. I have to then cut it, copy it out of that program and then put it into a Word document or a Google document. And so the, I find it to be pretty useful, but the interface points are still, the UI is terrible and I'm literally cutting and pasting on the clipboard.

[01:49:38] Emily Evans: Right. In a 

[01:49:39] Vic: way that is, is not ideal. Right. 

[01:49:42] Emily Evans: Yeah. 

[01:49:42] Vic: And so I think we're still in the early days. 

[01:49:47] Emily Evans: And somebody is going to make a lot of money by thinking without AI. Think about that. Eventually everybody will use AI. And then, yeah. And then there'll be a new 

[01:49:55] Vic: thought. 

[01:49:55] Emily Evans: Then there'll be that new thought. Yeah.

[01:49:57] Emily Evans: Yes. [01:50:00] That'll be me. Cause I, I'm, I'm, I'm, I'm, I'm not a Luddite. I'm not that bad, but I also, yeah, you're 

[01:50:06] Vic: designing a new app for hair. 

[01:50:08] Emily Evans: I know. I'm 

[01:50:09] Vic: not a Luddite, but you are, um, You want it to be a certain level of quality. And you also know some of the inputs aren't that good. 

[01:50:17] Emily Evans: Yeah. And what you know about a, or any tool really is, you know, back in the day, you know, you, well, you still have, you got a carpenter, he's got a hammer and he's got nails and AI is hammer and nails.

[01:50:30] Emily Evans: They're not going to be the carpenter. Yeah. You know, no matter what the doomsday expression is, the carpenter will adjust as time goes on. And 

[01:50:39] Vic: yeah, I think that's right. Human creativity and human empathy are, are makes us 

[01:50:45] Emily Evans: human. Yes, 

[01:50:46] Vic: that's right. That's right. That's right. Okay. Well, thanks for hosting. It was great to have you.

[01:50:51] Vic: We will have Marcus back next week. Yeah. He's going to have to edit this, right? No, no, no. I'll get it out on Saturday. Oh, okay. All right. [01:51:00] Well, I'm looking forward to it. We have an editor. We have an editor. Actual editor. Yes, a real editor. All right. Well, I enjoyed it. Thanks for having me. 

Thanks