118 – DeepSeek is UNLEASHED, Doge’s Shocking Move & Inflation’s Breaking Point! w/ Paul Kappelman

[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: Okay, welcome everyone to Health Further. Excited to do the roll up show this week. I have a guest host. Marcus is still in Saudi Arabia solving all the world's problems, which is, uh, will be good to hear his update next week.

[00:00:20] Vic: But I have Paul Kappelman as a guest host. Morning. Thanks, Paul. Appreciate it. 

[00:00:24] Paul Kappleman: Good to see you. Sorry. It's a remotely. It's been a while since we've seen each other live, but 

[00:00:29] Vic: I know you're out west right now in ski country. 

[00:00:33] Paul Kappleman: Yeah, I got 15 inches out here in Utah. So it's President's Day weekend. So it's gonna be, it's gonna be busy and crowded, but I'm looking forward to getting out first.

[00:00:42] Paul Kappleman: It'll be fun for, uh, for the ski slopes. And I get both of my girls, uh, headed this way from Virginia, so 

[00:00:51] Vic: that's, 

[00:00:51] Paul Kappleman: that's the best part 

[00:00:52] Vic: of it. Yes. Yes. That's the perfect Valentine's Day for you. Probably. Exactly. Yeah. Great. Well, before we start, [00:01:00] maybe give the audience just a little bit of your background. I mean, you're a health system operator that has moved into private equity is my summary, but maybe give like, where you came from and what you're up to today.

[00:01:10] Paul Kappleman: Yeah, that's it. That's a good summary. I think, uh, really almost 30 years in health care operations. I think that's key is that I'm an operator. I'm today doing a lot of operating advising sitting on a few boards for my former. private equity sponsor, which is Morgan Stanley Capital Partners. Um, but at my core, really, healthcare operations, hospital operations is where I spent the bulk of my career.

[00:01:34] Paul Kappleman: I worked for HCA, Triad, um, CHS, um, and then we started up our own company called LHP in Dallas. That was acquired by Ardent. I was the chief operating officer of Ardent through the merger. Um, and then, uh, I, I joined a private equity backed fertility company as a CEO and led that to a successful exit. And, uh, since then have been doing consulting, operating, advising for, uh, several PE firms.

[00:01:59] Paul Kappleman: And then, [00:02:00] but primarily Morgan Stanley Capital Partners, really a great sponsor and, and nothing in the provider space right now. Real, really about support. Uh, most recently, uh, joined the board of Prescott's, which is a clinical engineering company that sells to health systems, uh, ESCs. So that's what I'm up to these days.

[00:02:17] Paul Kappleman: I'm really enjoying it. Um, one of these days I may get the itch and go back to run something. Um, but for, for now, right, enjoying some of the flexibility of being able to do some consulting. 

[00:02:29] Vic: Excellent. Well, let's dive into the stories. And

[00:02:42] Vic: so in the Wall Street Journal, uh, the CPI came out this week, the journal covered it. Inflation, uh, sort of continued to take a little bit higher. It's still not as bad as it was a couple of years ago, of course, but it definitely was up for this month. Um, and that made the markets nervous. And I think the [00:03:00] Fed is going to be pretty hamstrung and be able to cut rates in this environment as inflation is going up.

[00:03:06] Vic: Uh, so we just kind of keep track of it. And there's a good graph here. Um, for people that are listening, I think everyone will recall, you know, right in the exit of covid as people started moving around and buying stuff again, inflation really shot up and then, uh, it's been over the 2 percent target since then.

[00:03:26] Vic: Not as bad. It was at the core was at 3. 3 this month and the overall 3. 0. Uh, any thoughts about inflation, Paul? Yeah, just 

[00:03:35] Paul Kappleman: reading the the story kind of the details behind it. There wasn't really a bright spot, you know, normally it's like yes, but you know the core or the Rinse or things that you can pull out and tweeze it and sort of make it look good.

[00:03:48] Paul Kappleman: This was sort of a Across the board a little bad. So, um not altogether surprising for me. I think about Regardless of where you sit on politics or what you believe about Trump's economic plan, [00:04:00] it's going to take some time. I mean, if it works, and if you believe it's going to work, still, it's, it's not going to happen in a quarter or probably even two quarters.

[00:04:08] Paul Kappleman: It's going to take greater part of a year before we start to see the impact of, of those policies. Yeah, I 

[00:04:14] Vic: think that, I think that's right. The, uh, Doge cost cutting effort, of course, is getting tons of press coverage. And I think you're, you're exactly right. If they're able to cut significant spending, it might have effects on, you know, what the government's willing to support, which could be negative to healthcare.

[00:04:33] Vic: We'll cover that maybe during the whole show. But that, that will, um, help the bond market feel more comfortable that, that U. S. debt is secure and that could then bring down rates and eventually bring down inflation. But that's going to be a year. Or maybe longer to have the effect if it's successful and lots of fights in D.

[00:04:53] Vic: C. about it. 

[00:04:54] Paul Kappleman: Yeah, and obviously tariffs and the impact they have is meant to bring growth back to the United States and [00:05:00] jobs back to the United States and products being bought. But that conversion doesn't happen overnight. It takes time to transition. It's unfortunate that You know, many companies didn't make some of those transitions earlier and still buying a lot from some of our partners, uh, and non partners in China.

[00:05:15] Paul Kappleman: Um, but, you know, that's going to take time to, if you believe it's going to happen, which, you know, reason to doubt it, uh, it won't happen overnight. 

[00:05:23] Vic: Right, right. So I think we're going to be in this, uh, elevated inflation over 2% I think for the foreseeable future, hopefully it will stay under three to four.

[00:05:36] Vic: That's to me, the best case scenario, kind of bumpy inflation and somewhere 3%, two and a half to three and a half, somewhere in there. Um, okay, moving on. There were two or three, I think three, two stories, three big. Uh, VC deals that I want to cover in our VC segment. So Pvo, I guess is how you say it. They're this, uh, full body [00:06:00] scan that really, um, celebrities started doing and then, um, a bunch of longevity and folks have been starting to, they raise two $120 million to grow.

[00:06:09] Vic: Do you know this company? What are your thoughts about that? I 

[00:06:12] Paul Kappleman: don't know the company and I'm, you know, I'm curious to compare notes of the on sort of the whole body imaging because we both are into wellness and longevity and I've read a lot of the same stuff. But, uh, you know, I probably err on the side of, uh, I'm not sure I want to want to do this, um, you know, and I think a lot of doctors have concerns over full body scans because, you know, you end up chasing rabbits and.

[00:06:36] Paul Kappleman: Uh, you also, you end up maybe diagnosing and treating stuff that wouldn't necessarily need to be treated and having additional tests. And so there's a lot of doctors who are concerned about it. With that said, there's a demand for it. Let's be clear. I'm not opposed to it. I just want, you know, that's the point.

[00:06:50] Paul Kappleman: And I think, you know, what I thought about is, you know, what's the secret sauce here? Because it's an MRI machine software package. I think the secret sauce is [00:07:00] they they've done a lot of these and therefore have a comparable database that they can then get smarter and and use AI or machine learning to compare images.

[00:07:08] Paul Kappleman: Maybe that's the secret sauce. Because, you know, what's the barrier to entry? So what's your thoughts? 

[00:07:13] Vic: I think that's right from, uh, from a health policy and health system in our country point of view, My view is that more optionality for patients, if someone wants to get a full body MRI and do a very detailed blood test for every marker we can think of, I'm in favor of that optionality.

[00:07:33] Vic: I haven't chosen to do it exactly what you're saying. You're gonna get, you're almost certainly gonna get lots of yellow flags to look into more, and one of those yellow flags might save your life, but it also could drive Months or years of additional testing, additional taking, you know, a sample from, from, uh, somewhere in your body, and it could be a false false alarm.

[00:07:59] Vic: So, [00:08:00] um, I think it's unproven whether it is a net positive or negative, but each person can decide for themselves what I'd say. 

[00:08:08] Paul Kappleman: Yeah. As far as. Good raise, you know, longevity, preventive health. I like the space. Curious to see, you know, what is the barrier for others doing this? I'm not sure. I mean, it's just they're sort of first to market or largest and therefore have a database, but I don't not necessarily that I understood that there was proprietary software that they were using or their radiologists were any different than Hmm.

[00:08:30] Paul Kappleman: Hmm. Hmm. Standard radiologist could do, you know, neuroradiologist for the brain stuff body for everything else. So but 

[00:08:39] Vic: it's a maybe it's a first mover advantage and I'm not sure the investment has much of a moat around it. So I agree with you there. And then there were 2 startups. in nutrition that both raised 50 million this week, Faye and Barry Street.

[00:08:57] Vic: And they're both very similar. They [00:09:00] just happened to raise money at the same time. And they affect the amount. Goldman Sachs put 50 million into Faye. And then a group of investors invested into Barry. They both have networks of dieticians. There's slight differences, but pretty similar, um, kind of dueling nutrition startups.

[00:09:17] Paul Kappleman: Yeah. I mean, timing is, is obviously interesting. I think is RFK was, is, was appointed and confirmed. We'll talk about that, but you know, clearly a mandate that he will have is, is related to food and food is medicine and food and nutrition. And so capitalizing on those, some of those tailwinds sounds, sounds pretty right.

[00:09:37] Paul Kappleman: Um, I've always had a, had a lot of, uh, respect for our dietitians and felt like they were underused resource. Um, and I wasn't, I'm not necessarily sure I knew why. Uh, and it sounds like that, you know, maybe some of the burden related to getting authorizations and approvals as part of your routine outpatient work as part of it.

[00:09:55] Paul Kappleman: And these guys may have solved that. I think the other barrier is, [00:10:00] is American behavior, right? And just, you know, the services offered, uh, there's a nutritionist there. In the Vanderbilt clinic, you know, most of those clinics have a nutritionist that comes with how many people take advantage of it. What's preventing them from doing?

[00:10:12] Paul Kappleman: And I think a lot of it is, is they don't want to change, 

[00:10:16] Vic: right? I like my Doritos and I know they're not good for me. I don't need a dietitian necessarily. Tell me that. Yeah. And so moving into policy. Um, yes, Robert, Robert Kennedy jr got confirmed and then sworn in yesterday. Okay. And he immediately started talking about food and getting back to what he calls good science.

[00:10:39] Vic: And so, yeah, they have a, these two startups had the right timing to start long enough ago that they can, they can raise 50 million each now to try to capitalize on this. What are your thoughts about Robert Kennedy? 

[00:10:53] Paul Kappleman: Yeah, I'm just putting my sort of provider health system hat on and, you know, clearly there's a [00:11:00] lot to like, as far as, yeah, I want, I want the population to be healthier, like who, you know, who argues with that?

[00:11:06] Paul Kappleman: I want, I do think that we have a lot of opportunity to improve what we eat and that can bring down costs and make us happier and healthier. So, yeah, that's positive, you know, won't comment on the vaccine stuff. I think that's incredibly controversial. And as far as his impact on CMS, Uh, Medicare and Medicaid services provider landscape.

[00:11:26] Paul Kappleman: You know, I think he would be pretty benign. I don't think he understands it. If you, if you watch part of the hearings, there was, there was some evidence that he wasn't fully, you know, dug into understanding the system. I think the more of an impact will come from Medicare and Medicaid from DOJ and Yvonne 

[00:11:43] Vic: it.

[00:11:44] Vic: Right. Yeah. So let, so let's jump to that. So there was a really good story in fierce health care. Kind of summarizing the healthcare lobbying for 2025 and there's a lot of lobbying going on. They break it into [00:12:00] the different categories. And so maybe let's just spend a minute. Uh, this is a good article to sort of dig into the, what is the policy that is.

[00:12:09] Vic: Uh, being discussed is a lot of them and we were talking earlier. There's not a lot of, uh, tailwinds here. Uh, so we'll go through it. A lot of them are, uh, either neutral if, if the lobby is successful, it would result in kind of a status quo or similar to the last several years. And the fight is, you know, are we going to lose ground in this headwind or are we going to be able to hold on?

[00:12:35] Vic: So the 1st section they talk about is, is hospitals. I think hospitals are probably the most safe, but it's a, it's a relative benefit. They're not, no one's totally safe. 

[00:12:48] Paul Kappleman: I think a lot of it depends on your position and, you know, obviously there are, there are different levels of health systems that have dependence on subsidies for exchanges and their [00:13:00] exchange population, or they have supplemental programs that make up a huge amount of their total revenue or 340B.

[00:13:06] Paul Kappleman: So it sort of depends on. Which program gets hit and where you are as far as your dependency, but just talking about some of the big ones Obviously anything that that brings the insured rolls down Has an impact on hospitals. So The first piece is these subsidies, right? Um Congress has to do something in order for them to continue.

[00:13:28] Paul Kappleman: Anytime Congress has to act in order to something to continue, I'm going to put my money that they're not going to act because historically that's what they've done. So it's not the biggest hit. It's, it's potentially 4 million. Now for those 4 million, it's a lot of people. But if you think about the total number of insured, It's not humongous, but it will be a hit to hospitals because those people are now uninsured and they don't have the ability to pay their bills if they get sick.

[00:13:57] Paul Kappleman: So concern, they go from getting paid [00:14:00] something on the commercial rate to either Medicaid or nothing uninsured compensation. So that's the first one that will impact hospitals. Uh, we'll see. It's it's set to expire at the end of the year. 

[00:14:12] Vic: Yeah. The next thing is the hospital sort of Lobbying to limit the U.

[00:14:18] Vic: N. utilization management tactics of payers, obviously that's a fight between two different groups in the health care system, and it would be good for health systems to limit that, might not be good for payers, how that breaks down. Right. 

[00:14:33] Paul Kappleman: Yeah, I mean, there's, there's a lot of resources spent, whether it's people in medical records, people in coding.

[00:14:39] Paul Kappleman: People just pushing paper or electronics back and forth, spending time on denials, doctor's time, case management time, just on going back and forth on patient care. And it's not really patient care. It's, it's, it's, it's a lot of paperwork. And so if you can bring those regulations, that paperwork down, that burden down.

[00:14:58] Paul Kappleman: By limiting some of these [00:15:00] tactics of just denying things off the bat, I think that gives hospitals where they can deploy, they can cut those resources or deploy them to patient care. 

[00:15:08] Vic: Yeah, 

[00:15:09] Paul Kappleman: so that's, that's a big one. And listen, I think they're taking advantage of the timing. Uh, there's a lot of, there's a lot of focus on it right now, so that could be, that could be a nice tailwind.

[00:15:19] Paul Kappleman: It really could. Yeah, that's 1 of the few tailwinds that we have potential 

[00:15:23] Vic: and then a, a concerning 1 again, a sort of a, let's fight to try to keep the status quo is the 340 be program. That's been a. A really valuable program for health systems. Um, that is, you know, in the crosshairs, maybe. 

[00:15:39] Paul Kappleman: Yeah, I'm interested to see that the Doge and Elon sort of press conference when they dig into 340B to understand it.

[00:15:48] Paul Kappleman: I think their, their, their ears are gonna Yeah, their head 

[00:15:51] Vic: might explode from that. Yeah, 

[00:15:52] Paul Kappleman: for those that don't know, um, and listen, I never had the Really the ability with one exception to use 340b because [00:16:00] as a for profit system you have zero ability to do it. Even if you serve more underserved populations than your competitor who's not for profit.

[00:16:07] Paul Kappleman: So right off the bat that's a weird, that's just weird in my view. It's 

[00:16:11] Vic: looking like a true uh, investor owned operator. 

[00:16:15] Paul Kappleman: Investor owned operator, right? So we, just because we pay taxes can't have access. With that said, there are The intent was that high cost drugs needed to be discounted so that that health systems would deliver those to patients and not cut those services because they were unprofitable.

[00:16:35] Paul Kappleman: I think that was the intent, right? And vulnerable populations and health systems who serve vulnerable populations. We're still able to deliver chemotherapy or high cost, you know, immunotherapy to these, to these patients. And that intent, I think everyone would support. I'm supportive of, yeah, that makes sense how it's morphed over the years and how it gets used.

[00:16:56] Paul Kappleman: I think I don't want it to go away. I want that intent to be [00:17:00] preserved, but how it gets delivered, I think could be reformed. Right. I make, I make it a lot of arrows for, for that. 

[00:17:06] Vic: Well, I mean, I think, I think the, um, the drug companies. Johnson, Johnson and Lilly. We've covered it on the show. They have been pretty smart in their lobbying and legal efforts to try to bring to light that that intent.

[00:17:20] Vic: Maybe it's not being fully fulfilled with the way that's being implemented. 

[00:17:24] Paul Kappleman: And it's not getting back to the patients, which, but that that is understandable, right? Because it was not necessarily intended to make the cheaper. It's to preserve those services and communities where they might get cut right?

[00:17:37] Paul Kappleman: Hey, if you don't have, there are places where, if you don't have 340 be delivering that service, you're having to do it at a loss because of the cost of the drug. So, These drug companies are they're they're still doing fine on these drugs. Um, and to think about that is the drug itself costs more than the total payment, not including the nurses, not including the doctors, not including the [00:18:00] facility, just the drug alone.

[00:18:02] Paul Kappleman: You're getting paid less than that. That doesn't work that. And so health systems would say, well, we can't do that anymore. And then the service gets cut for the community. That's the intent. 

[00:18:14] Vic: That's right. And so we'll see where that fight lands that there's a lot of. Communities where the there's access, uh, in excess of what is required to keep sort of the medical necessity.

[00:18:28] Vic: Right? But we'll see how that evolves. 

[00:18:31] Paul Kappleman: Yeah, I think the other piece, and I think don't want to skip over it is, you know, listen, there, there is, and what we covered here, DOJ, you know, Medicare, Medicaid reimbursement is the big risk, right? That's the one that is, is an unknown. Um, and. You've got kind of a couple buckets.

[00:18:49] Paul Kappleman: We'll talk about physician payments. That's that's a tailwind. Great. Fantastic. Hope it gets finalized. Medicare. I think the big risk is Medicare Advantage [00:19:00] as well as, um, site neutral payments. And for those that don't know. Uh, you have health systems where they have they may have an A. S. C. Or there's an A.

[00:19:08] Paul Kappleman: S. C. In the market, but they deliver a similar service in an outpatient setting an outpatient surgery. But the reason they may be a little more intense, not comfortable doing it in A. S. C. Maybe the patient has comorbidities that They just want them in a hospital setting in case something goes wrong. Well, site neutrality would say, we're going to, we don't care where you do the service, we're going to pay you the same.

[00:19:29] Paul Kappleman: And obviously that could have an impact because, you know, hospitals are staffed 24 7, 365. They've got all sorts of resources, in house this, in house that. And, you know, there's a good reason to have both levels of care. Um, and doctors might want to operate. So that's a, that's a risk for. For, uh, some of our health systems and then the supplemental payments.

[00:19:50] Paul Kappleman: I know you've talked about them on the shows. They're very complex, whether it's or just there's a lot of different programs across the country. [00:20:00] Bottom line is, I think there's a high likelihood that those will. Change and probably change for the worst. Um, now, hopefully it's minimal because I today, you know, Medicaid does not cover the cost.

[00:20:14] Paul Kappleman: And so health systems rely on these supplemental payments to be able to make up for that and still take care of these vulnerable populations. If those go away, it's going to be incredibly problematic or they it's not that they're going to go away. They're going to change. Could it be blocked grants?

[00:20:29] Paul Kappleman: However, it changes. That could have a real negative impact. For someone like HCA, it's not a huge deal, right? I think they said it was 400 million in total supplemental payments. That's a very little amount. For others who have, you know, facilities in states, it could be 50 percent of their or 40 percent of their revenue.

[00:20:50] Vic: Right. And the, um, all of these programs in healthcare have been established over the last 60 years. And depending [00:21:00] on which one we pull out, whether it's supplemental payments, 340B, etc. And they've grown and evolved through processes that you and I have been have been following the whole time. But when when someone like Elon Musk looks at, let's take supplemental payments.

[00:21:15] Vic: So we're doing this tax and matching. It's a super complicated process. That as they look into it, I think 

[00:21:23] Paul Kappleman: they're not going to understand. I mean, you and I, I still, 

[00:21:27] Vic: I've 

[00:21:28] Paul Kappleman: been doing this for almost 30 years and I can say going through the supplemental payments, like, you know, with my CFO, it was, it's one of the most confusing things, the timing of them, how they get paid, how they just depending on every state being different.

[00:21:42] Paul Kappleman: You know, we had Texas 1115 waiver and then new mech. It's just very different. And you remember when we had our. Discussion with an expert in the field, you know, you learn something new every time. So it'll be interesting to see as they dig into these programs. You know, what they walk away with and what they're willing to mess with or not, you know, there's an [00:22:00] last year I would have thought there was a, you know, our discussion that we had with that expert, you know, he was pretty confident that regardless of which way the election went, these were going to be pretty safe.

[00:22:10] Vic: Yeah, I'm not sure about the safe, but safe does not mean protected from any cuts in my mind. So I think it's not, I don't think our system. In all the rural and even some non rural areas that don't have a lot of wealth or areas. I don't know how we deliver care without some kind of supplemental payment system.

[00:22:33] Vic: Um, but that doesn't mean it's going to be set up the same way. So you'll have, um, people that are not positioned, systems that aren't positioned that well. As far as payers, uh, just to get back to this article, Medicare Advantage, PBM reform, and transparency, all those things are going to be really difficult for payers to navigate.

[00:22:54] Vic: Um, I think payers and biotech and pharma probably have more headwinds [00:23:00] than physicians and health systems. Um, the physician and practices are probably, um, the least impacted. I don't think they'll be non impacted at all, but you might even get a reversal of the fee schedule. Uh, what are your, what's your perspective about docs?

[00:23:17] Paul Kappleman: Yeah, I mean, but how many years in a row now? So, you know, the 6. 6 percent proposed is, it's fantastic. It doesn't necessarily get them back because they've been cut. But yeah, so that'd be nice to see. I think that helps. Um, anything that that can be done to reduce him into. So back to what we talked about on the health system side, reducing burden, you know, that's even more of an impact in a physician office.

[00:23:40] Paul Kappleman: Think about a small physician office with five or six employees. You almost have a full time person who's dealing with insurance companies and paperwork. If you if you could lessen that, that would be a nice tailwind for them as well. Uh, so I, you know, I agree. Those are, those are the big things. Making sure that B schedule gets approved and then anything that can be done to reduce their burden with insurance companies.

[00:23:59] Paul Kappleman: Yeah. [00:24:00] By the way, it's part of the biggest reason they burn out is having to deal with all the back and forth related to payers. If you ask them like the least favorite part of their job, many, many of them would say it's, it's dealing with that stuff. 

[00:24:15] Vic: Yeah, right. And then, uh, the digital health is a lot of, uh, focus on really just making sure that, uh, you know, if we extend, I think they'll end up extending telehealth.

[00:24:28] Vic: But if they do, it may not be in the exact same format. Uh, they're talking about. You know, should controlled substances be allowed to be prescribed remotely? There's lots of discussion about that. I want to move on because there's tons to cover. But the summary is there are a lot of proposed changes and a lot of lobbying.

[00:24:51] Vic: And I think you are right that it's mostly headwinds. Maybe it's slightly less bad for health systems than docs. The Wall Street Journal had [00:25:00] a long article about Doge's first rounds of cuts, and not that much has been focused on health care. They're trying to find policies that are Going to be favorable to their base cutting various things that Republican voters like, but sort of hidden in down here is the, um, the N.

[00:25:19] Vic: I. H. grant review. And so I wanted just to call it out. There's a. There's a proposal of capping the overhead percentages for all 15 percent and that is far less than it is today. So I, I've been sort of behind the scenes talking to some active medical centers. One large one that you and I both know people at their average over the past 5 years is somewhere around 70 percent overhead.

[00:25:51] Vic: So the way that works is to say, you have a 100M dollar grant for the direct expenses, which is the investigator fees, but maybe some lab [00:26:00] equipment consumables that you're going to need. Say that's say that's 100M. They do it over five to seven years, so it would be 20 million a year for, for five years.

[00:26:09] Vic: It gets sort of reviewed and evaluated by the, the scientific community that's evaluating these things. And then, you know, sort of approved or not approved. And then after that, there's a negotiation with the institution about what the overhead should be. And at several institutions, it's well over 15 percent.

[00:26:30] Vic: This one that I'm referring to that will remain nameless is Bar higher, and so then the 100, 000, 000, if it was, say, it was 50%. The institution actually gets 150, 000, 000 over 5 years and that excess that overhead is designed to pay for the, the building maintenance and the elevators and electricity and all the infrastructure that is required.

[00:26:53] Vic: But I just think it is. It's just how this government is looking at things that. If the base of NIH [00:27:00] grants has grown, maybe it's grown two acts in the last 20 years, the percentage in dollar terms, of course, has grown because the law of big numbers. There's a lot of operating leverage in these systems.

[00:27:12] Vic: And so I think there's a lot of concern that that's going to be cut. Maybe it's not going to sit at 15%, but it's going to be lower than the status quo. 

[00:27:20] Paul Kappleman: A huge change, right? If you're going from 50, 60 to 15, and how do you do that? It just seems like that there's, there's more work to be done. I hope that it doesn't happen in a draconian way, whatever happens, and if it needs to be reformed, it's not my area of expertise, but I hope it could happen in a responsible manner because, you know, these institutions rely on this and there's vital research being done, but also it's covering, it's covering overhead for other things in the system that mean they may not get paid for.

[00:27:49] Paul Kappleman: So. You know, not my area of expertise, but boy, that sounds pretty draconian as it stands today. I 

[00:27:56] Vic: mean, I think all of this stuff, my opinion [00:28:00] is Trump is coming out with his sort of opening salvo as a way to just to push the discussion. And then hopefully they'll come back to some kind of tearing down to 15 percent over a couple of years or over 10 years or something where.

[00:28:15] Vic: The system can evolve to be responsive, um, but again, it's a, it's a headwind, certainly. Okay, now let's move into health systems. Tenet had earnings this week. You know Tenet pretty well. They have built up through acquisition and organic development, a very strong ambulatory business that was in the earnings, you know, really a big success driver for them.

[00:28:39] Vic: And then they also sold off. Decent number of hospitals. Um, what are your thoughts about Tenet? 

[00:28:45] Paul Kappleman: Yeah, I mean, they, they've done a very nice job in transforming the organization. If you think back to Tenet seven, 10 years ago and contrasting them with HCA, right? Didn't have markets like [00:29:00] Denver, Dallas, Salt Lake City, Nashville, you know, they had, they, they had some decent markets, but they had a lot of markets where they were, didn't have enough presence to have relevance in the marketplace.

[00:29:14] Paul Kappleman: Negotiating power, you name it. So they didn't, they were, you know, maybe number three or four in the market, or they just had a couple assets here and there. And, and that, that was really tough. I think their, their operations were struggling. They were going through financial leadership. They had some compliance issues that they had to deal with, paid a large fine.

[00:29:32] Paul Kappleman: Um, and I think that, you know, they, they, they acquired USPI. Yeah, that was, that was a huge, 

[00:29:38] Vic: Yeah, 

[00:29:38] Paul Kappleman: and they started transforming and saying, listen, let's put our eggs in the U. S. P. I. Basket. Let's really shift towards this. We're gonna keep our hospital portfolio preparing down to the ones where we can make.

[00:29:49] Paul Kappleman: You know, provide good quality have have relevance in the marketplace and make some margin. They probably still have more work to do there. Um, but they've got a different portfolio [00:30:00] instead of assets today. And 1, that's. You know less dependent on hospital earnings and more on the outpatient side. So, you know, it's good They've made good.

[00:30:07] Paul Kappleman: They made good progress. I haven't kept up with them earlier, but you know the facilities they sold which so did they? Listen, it wasn't 

[00:30:14] Vic: really dense in their density, 

[00:30:16] Paul Kappleman: but they got out in new orleans That was obviously a challenging market in post katrina. They got out of you know Facilities in dallas where they just had onesies and twosies, you know, so it was it was kind of a combination of maybe Challenged assets, you know, maybe a, a dot on the map in a marketplace like Dallas, you know, where, you know, three systems, HCA, THR, and, and, and, uh, Baylor dominant, they were the fourth, right?

[00:30:42] Paul Kappleman: So, so stuff like that just didn't, it. You can't you can't do well if you're the fourth dog in the race, right? So that's they've pared it down really focused on operations focused on, you know being good operators, you know Psalm is is into the details. He's a former mckinsey guy. He's [00:31:00] coo And uh, you know, they they're moving in the right direction.

[00:31:03] Paul Kappleman: I think they've got some positive. Um positive momentum So yeah, 

[00:31:06] Vic: I mean the the all the healthcare stocks are um suffering over the last Six months, um, but I think tenant and HCA and others are, they're operators. They're going to do well. Now, whether the market rewards that this quarter or not, is it is not something that I care about particularly, but in general, I think health systems at the day, we're going to have to take care of patients.

[00:31:32] Vic: Someone has to. Lay hands on a patient's do a procedure. Let them recover. We need health systems and tenants a well run system. So 

[00:31:40] Paul Kappleman: yeah, and listen, we didn't have a lot of, uh, policy issues or headwinds for ASEs, right? We didn't it didn't come up in our prior discussion, right? They're site neutrality positive for them.

[00:31:51] Paul Kappleman: That's a tail for them. Supplemental payments. Doesn't really affect them, right? They're not getting them anyway. Medics, so it's just not a lot in their way. And so [00:32:00] it's a good, if I were in a, you know, a publicly traded investor looking at them, like, you know, the more you can de risk your, your investment, the better and outpatient services, particularly ASCs are a little less risky than hospital services right now.

[00:32:13] Paul Kappleman: Yeah. 

[00:32:14] Vic: Yeah. No, on the other side, those are the extreme fierce healthcare had a report. That nearly half it was 46 percent down in the article of rural hospitals are in the red 432 vulnerable to closing and this is the opposite side like rural hospitals. I think by definition are benefiting from the supplemental payments.

[00:32:36] Vic: largely, maybe not every rural community, but many of them, and they don't have that sort of negotiating power with payers or the ability to attract, um, really high powered executive talent or physician talent or the scale, really, to sort of do some of the things that a group like Tenet has done. So this was kind of a scary article to me.

[00:32:59] Vic: [00:33:00] What are your thoughts about the rural hospital community? 

[00:33:02] Paul Kappleman: Yeah, it's it's that it is scary. And, uh, you know, it's there. There are, you know, the haves and have nots, and it's just becoming more polarizing. Right. And, uh, the haves are able to make enough where they can reinvest in the systems. So the have nots fall into 2 buckets.

[00:33:18] Paul Kappleman: 1 that are. Just losing money and holding on for, you know, trying to avoid bankruptcy or closure and the others, you know, maybe making a little bit of money, but not enough to reinvest into their people, processes, systems, buildings, equipment. And that's scary too. So I hope that. It's understood how vulnerable these facilities are before some cuts are made and people take into mind because, yeah, these are the first ones to go because they don't have support network, particularly the rural hospitals.

[00:33:49] Paul Kappleman: They're not part of any network. They're sort of out there, you know, by themselves. I don't, I don't know how they really survive. 

[00:33:57] Vic: Yeah, so Paul, you, you ran health [00:34:00] systems, uh, for a long time. You're not doing that today, but if you are running a rural system, that's not doesn't have an affiliation with a large platform.

[00:34:10] Vic: Maybe there are 4 facilities across. Six counties somewhere. What would you what would they what can you do? How can you sort of navigate this? 

[00:34:20] Paul Kappleman: Well, when you're part of when you're part of a network where you may have son of urban or suburban community hospitals associated with them, then you're part of a network.

[00:34:31] Paul Kappleman: And so there's referrals that go back and forth. You know, you try to keep patients in those hospitals to the best of their ability, right? Usually utilizes services to what they can. So, you know, Keep patients in the community. It's good for the community. It's good for the patients. It's good for that hospital.

[00:34:46] Paul Kappleman: And so you can use the network to help keep those patients, whether that's telehealth specialists going out there and then patients that don't need to be there that need a higher level of care you're transferring in. So it's sort of a hub and spoke model. Um, you got to take [00:35:00] advantage of every program, supplemental program you can, um, and make sure that you're just, you know, running it as efficiently as possible.

[00:35:07] Paul Kappleman: So do you think I don't know what you 

[00:35:09] Vic: did? More an expansion in common spirit or ascension or the, the, uh, advocate, uh, groups like that, that might be interested in those affiliations. I don't know that tenants going to want to affiliate with a bunch of rural hospitals. Maybe they will. I don't know. 

[00:35:28] Paul Kappleman: You know, as I said, the only time we, we did some acquisitions, uh, you know, we acquired some hospitals that were rural small communities, but it really was in the, in the essence of does this build out our network and, and if the answer was yes, and we could say, listen, if the, if, if we can keep this hospital and get it to slight profitability, But it adds power to the network and it, you know, brings referrals into our community hospitals.

[00:35:54] Paul Kappleman: It's it's worth it to do it. Um, I don't know. Ascension's markets well enough to say, are those are there [00:36:00] facilities that they may want to do? But if they're out there by themselves, you know, it's going to be hard to say somebody's going to take on that loss just for a patient. 

[00:36:08] Vic: I think that. You have to figure out some way to get scale and negotiating power against the payers, um, in order to make it viable over the next 10 years, maybe.

[00:36:21] Paul Kappleman: Yeah, so LifePoint's got national scale. They've got some rural hospitals and so do some of their spin offs. But, so that helps, right? Because they're able to support those facilities in a better way. That's great, but they don't have a lot of regional scale. And they're and they don't they don't really use their joint ventures for negotiating.

[00:36:40] Paul Kappleman: So, um, their hospitals are better off because good operators. They're supporting them at the corporate level. They have national scale, but they don't have regional scale and I think you gotta have both. 

[00:36:52] Vic: Yeah, that's right. This was a really. Kind of scary, but interesting article in Becker's, one of our subscribers sent it in to me, [00:37:00] so I appreciate that, um, shout out.

[00:37:02] Vic: If anyone wants to send in stories, it's hard to keep up with all the stories, so definitely send them over, um, but hospital bad debt is getting pretty significantly worse, um, and especially in non profits, so the article talks about, you know, so this is patients, so this You know, paying for services are not paying for services.

[00:37:28] Vic: Um, it's hard to reconcile because we've had, uh, you know, maybe not everyone covered under insurance, but, but a lot of people, I mean, Medicaid is, you know, has the highest rolls ever. Um, the changes to and so what 

[00:37:45] Paul Kappleman: is your thought about this? I don't know. I don't it's it is a little surprising. And so, you know, I would jump to, um, complications in, in, in the revenue cycle challenges, utilization, denials, [00:38:00] uh, are part of it.

[00:38:01] Paul Kappleman: If it's patient portion, you know, it's, it's the middle class, lower class, not having that discretionary income to pay their. Yeah. Copays and deductibles. And that's a lot of what it is, Vic, right? We've, we've probably talked about before, you know, you get, they get a plan, whether it's an exchange plan or through, and it's got a 5, 000 deductible.

[00:38:19] Paul Kappleman: Right. Okay. Well that's, you know, they, they, it looks good. And then all of a sudden I have an emergency room visit and, you know, I don't have 5, 000. 

[00:38:27] Vic: Yeah. So they're on commercial insurance or they're in an exchange plan and they're insured. They're insured. It's not, uh, insurance that our parents had or our grandparents had.

[00:38:37] Vic: It has a high deductible and Healthcare is expensive. So when you have to pay that deductible into co insurance, the thing that really kills people, cause they don't understand it. So they had, they think they have a 500 deductible and they do, but then they have whatever. 15%, 20, 

[00:38:53] Paul Kappleman: 20%. So yeah, before you know it, they got a 10, 000 bill and how many middle class [00:39:00] Americans or below have, you know, 10, 000 of discretionary income, you know, we've talked about before and you've talked about, you know, you basically can't.

[00:39:09] Paul Kappleman: Go after it. It's not necessarily good practice anyway, but it's, you're not, you're not going to be able to do it anymore, which is, you know, go after their credit. So you have a choice, right? Are you going to pay that bill? Or are you just going to roll the dice that the hospitals, the health system is going to come after you?

[00:39:23] Paul Kappleman: So that's, it's got to be that patient portion that's driving it. And maybe, you know, insured is a, yeah. Is sort of a false net. They're insured. They're just underinsured. 

[00:39:33] Vic: Yeah. On the payer side, um, Humana is, they had their earnings. They're coming out with like, much more focus on operational efficiency. Um, I mean, they're, they're the scaled almost completely.

[00:39:48] Vic: Um, government, uh, payer, and hopefully they have enough scale to drive these operational improvements and navigate it. What's your thought about Jimena? 

[00:39:58] Paul Kappleman: Yeah, relatively new, [00:40:00] you know, new leader in Jim, you know, he came from DaVita and then went, uh, was with Envision sort of after some of their challenges and then.

[00:40:09] Paul Kappleman: to Humana. So I don't know how long he's been there, but it feels like a couple years, right? So maybe even 18 months. Yeah. 18 months. Okay. So, you know, let's see, they're going to have to do it because we know, you know, they're heavily, they're MA, right? That's what they're doing is Medicare Advantage and they're going to, they're going to have some headwinds.

[00:40:27] Paul Kappleman: So they're going to have to operate well over the next couple of years to, um, to hold ground or improve. 

[00:40:34] Vic: Okay. So then, uh, Cigna. Is linking executive paid a customer satisfaction? You found the story. I'm shaking. It's a shocking story really to me that. You know, in 2025, they just now are deciding to do that.

[00:40:49] Paul Kappleman: Yeah, right. Uh, yeah, that was kind of my reaction to it. It's like, um, there's never been a time. It's been probably, uh, 20 years that [00:41:00] my compensation at the variable level was tied to patient engagement, employee engagement, physician engagement. And I mean, it's not. This is like your customers, right? If you're, if you're a hotel, if you're a hospital, like, what do you care about?

[00:41:14] Paul Kappleman: You care about what your customers think about you. This says a lot about the state of where we are in the industry and, you know, okay. It's a well run operation. I mean. A 

[00:41:25] Vic: well run operation. How, how would. To me it says that, um, until today. It, it wasn't important for a payer to have customer satisfaction, or at least it wasn't important enough to make it part of the executive comp.

[00:41:39] Paul Kappleman: And, and in what industry is that the truth? It's certainly not the case in providers, right? And I think the, the reason getting to the root cause is that we don't have a ton of choice, right? You're either, uh, you're on Medicare, you're on Medicaid. Or you're getting it through your employer or you're going to the exchange and you have [00:42:00] limited choice or you're you know It's not a choice because you're choosing the lower cost plan So we as customers the customer we don't have a lot of choice And I think that the the providers of that service have had us in a sort of a stranglehold position So it's interesting.

[00:42:15] Paul Kappleman: Um, i'm glad they're doing it. Let's give them credit to say it should be done You know, it's fix it but it is a little bit of a A sad state to say that in 2025, it's the first time it's happening for one of our major insurance companies 

[00:42:28] Vic: jumping into the pharmaceuticals, the new new treatments. Novartis bought Anthos to sort of add to their cancer portfolio.

[00:42:37] Vic: Novartis is, uh, I think, operating pretty well. They don't have a GLP 1, so they didn't get that, like, sort of, uh, you know, huge positive uplift. But they're sort of sticking to their knitting and I think doing a good job. Interesting that they sort of spun it out and then bought it back. Right, yeah. I don't know if you saw We'll put it in the show notes.

[00:42:59] Vic: I missed it, but [00:43:00] you sent it to me and I watched it last night. Yes, and Novartis had this, uh, ad in the Super Bowl. It's titled, Your Attention Please. And it's just a really interesting, uh, you know, you have to do something to get people's attention with all the noise going on. And they used, you know, the oldest trick in the book, cleavage and breasts.

[00:43:21] Vic: to get people's attention, certainly get my attention, uh, to then say, like, let's focus on breasts and breast cancer and screening and treatments, which of course drives their, they have a big practice in that. Uh, what'd you think of this ad? Is this what they should be doing or not? 

[00:43:38] Paul Kappleman: Uh, I don't know. I'm not a marketing expert, but it got my attention to it.

[00:43:43] Paul Kappleman: I thought it was, it was, you know, it was lighthearted. Yeah. Listen, anything that gets. More people if they believe that this is gonna drive screenings, then, and if it shows that it works and it draws attention to the issue, I, you know, it's near and dear to my heart, obviously. And anything that can [00:44:00] drive up people getting screened, I think it saves lives.

[00:44:02] Paul Kappleman: And so, uh, hopefully they'll measure it and they'll see whether it was worth money to expand on the Super Bowl ad. I don't know. That's a 

[00:44:08] Vic: lot of, that's a lot. Okay. And then, uh, the New York Times had an interesting story about four. The sick and dying is in the title, but I think what they really mean is for critically ill patients in health systems and hospitals.

[00:44:23] Vic: There's been studies that music is, is sort of a way to ease their pain and help them heal. And they have a profile on a violinist. Have you seen this work in health systems? Have you have any experience in music? 

[00:44:36] Paul Kappleman: Yes. And a great article. This is one that I should read. It's lighthearted, but it also contrasts, you know, it's not easy to just go in there and start playing music, right?

[00:44:45] Paul Kappleman: Not every patient is going to benefit. Need to consider that there's some. There's some things behind it. So, you know, it was it was fun. I thought a lot about sort of the science and art of medicine and there's a lot of science, but there's there's some art [00:45:00] in there too. And I think the really good practitioners, providers, health systems understand that the healing process is more than just.

[00:45:10] Paul Kappleman: The actual science and technology and the care that's delivered. It's the physical environment. It's the smells. It's the sound. It's the noises and pet therapy and music therapy and art therapy, you know, done correctly can absolutely have positive effects. 

[00:45:24] Vic: Yeah, 

[00:45:25] Paul Kappleman: right. It's nice to see people. Trying things and experimenting with it.

[00:45:29] Paul Kappleman: So anything that gets the patients in a better state so that they're more relaxed. They're receiving information in a better way. Um, 

[00:45:38] Vic: even just like, just the relaxation and can they rest? Can they have their mind taken off their fears for a moment? That's all totally positive. And it's pretty cheap, right?

[00:45:50] Vic: You hire a musician to come in. I know they do it in Nashville because there's so many. It doesn't cost any money or very little money and it's great. 

[00:45:59] Paul Kappleman: [00:46:00] Yeah, most of the time these things are done through volunteers. Uh, art stuff, music stuff, pet therapy. It's all volunteer related. And you know, I think the point in this article was, is it not only did the patients get something out of it, but the people who were doing it get a lot out of it too.

[00:46:14] Paul Kappleman: Right. 

[00:46:16] Vic: Okay. And then let's jump to AI, uh, to sort of wrap us up. So Elon Musk and Sam Altman have been feuding for, gosh, probably 10 years. Um, but Musk offered this week to buy The nonprofit side of open AI for 97 billion. Um, I think this is an effort to, uh, you know, sort of heads. I win tails. You lose kind of proposition that he was putting out there.

[00:46:43] Vic: Like, he'd love to buy it and put it onto his AI platform. I'm sure. Um, but it's also going to really. Make it problematic for Sam Altman to do his conversion to for profit. So it's almost like a strategy test game kind of thing, I think. 

[00:46:59] Paul Kappleman: [00:47:00] Yeah, that becomes sort of the, the bar for fair market value. 

[00:47:04] Vic: Exactly, exactly.

[00:47:05] Paul Kappleman: Hey, somebody, somebody is willing to pay this for it. So yeah, it's interesting whether it's ego or he really doesn't want it to be a for profit. I don't know, or 

[00:47:15] Vic: maybe both. I don't think it matters really. It's sort of, uh, J. D. Vance, our vice president, was in Europe at an AI conference and the Europeans were talking about keeping AI safe and putting regulation in, and J.

[00:47:32] Vic: D. Vance was not constructive in that. He basically said he doesn't want to see a lot of regulation and the U. S. will not be supportive of that. What is your thought about the sort of European and U. S. relations around AI? 

[00:47:48] Paul Kappleman: Yeah, I mean, that's, it's tough, right? And the next, the next story we'll get into is a little scary.

[00:47:54] Paul Kappleman: Related to AI. So, um, that's 

[00:47:56] Vic: hard. I mean, uh, more good or [00:48:00] bad. I think it's probably both the U. S. position starting with Silicon Valley and OpenAI and then our administration now. Is just let's accelerate full speed ahead into all of this technology and kind of paper over the risk. We will figure it out as we go.

[00:48:24] Vic: Yeah, we got to be first. We got to be the best to be first. We got to win. We got to get there and that's going to have unintended consequences that will bring risk and some dangers as we'll talk about in a minute. The alternative is trying to regulate it, and I don't know if regulators can possibly create regulation that will work, given how fast it's changing, but certainly there's a different approach in Europe.

[00:48:49] Vic: Okay, and then we talked about DeepSeek on this show a couple of times. DeepSeek's the new Chinese. AI tool that is, is very [00:49:00] good and free. It's open source. Um, so it's the same quality as like open AI or Google's product or access product, uh, but from the Chinese country. And it's open source. So lots of people now are offering it.

[00:49:16] Vic: I have it on two different sites. I use, uh, but this story is talking about it doesn't have the same kind of guardrails that American companies have chosen to put in around bio weapons or self harm. And that's That's an example of where it can be pretty scary to not have regulation. And I think that's the world we're moving into.

[00:49:36] Paul Kappleman: So, I mean, this is a classic, the good and the bad is so it's open sourced, right? I mean, it's, it's easier to jailbreak is the term they use. Right, right. Is that what it's basically saying is, listen, it's great and less expensive because of that, but it's also riskier. 

[00:49:51] Vic: Yeah. And there's no, um, advice in the article.

[00:49:55] Vic: Just like this is an issue, uh, and [00:50:00] then it ends. And that is pretty scary where, you know, people can learn how to do things in, in biotech. You know, for good, they could try to invent some new cure for something, but you could also invent the opposite of a cure, something that would be not so good. 

[00:50:15] Paul Kappleman: It will happen, right?

[00:50:17] Paul Kappleman: It's going to happen sooner than later where something, I mean, and that's, it's, it'll be sad when it happens, but it won't be surprising that it's a bad outcome because of this. 

[00:50:29] Vic: Yeah, so we'll keep monitoring it. I think we are already with, you know, The genies out of the bottle. I don't think it's going to be possible to put it back, but we need to keep monitoring all these things.

[00:50:41] Vic: And then there's a lot of concern over the legal rights of A. I. companies to. Basically take the entire internet, a lot of which has IP copyright protection, and the AI tools sort of ingest all of that, [00:51:00] and then can answer, you know, very detailed questions, even word for word about, uh, maybe what an author wrote in a book, or what the, some newspaper wrote about a story.

[00:51:13] Vic: Um, and there's a debate around, since it is being transformed into these, let's call them algorithm or parameters. And then used for all different purposes, is that like a, a fair use doctrine where we're learning and then we are able to use this, this information in a new way, maybe, um, but Thompson Reuters did the first lawsuit.

[00:51:40] Vic: I think it was 5 years ago. So it was before any of the generative AI movement. Um, but they won the court battle and the ad company that took a bunch of their leak. It was illegal. Uh, subsidiary had a bunch of legal case, uh, analysis day one that [00:52:00] this AI company cannot use that in their product. And so that that is, um, just something to watch.

[00:52:07] Vic: I think it is listen, I'm a venture capitalist, so I'm in favor of IP protection. A lot of my companies have intellectual property. Um, but I also think that, uh, the genie's out of the bottle, right? So all these companies have already scraped the entire internet and there's billions of dollars that have been put into this.

[00:52:27] Vic: I don't see how it's gonna stop. How 

[00:52:30] Paul Kappleman: did the AI company get access to proprietary data? Was it, like, just out there? And that's what I didn't understand. 

[00:52:38] Vic: Yeah, so the case laws are out there, but then Thomson Reuters has sort of a It's almost like an editorial thing or their view of what you should take away from this that's on top of that or at the, I think it's on the header.

[00:52:53] Vic: And I think. The I just read this story. I don't know all the details, but I think they got [00:53:00] that by paying for the subscription and then and then just taking it. I got you. And then they hired another firm. I was like a workaround to. Do a similar thing, but maybe not as high quality or not as extensive that they also put it to their machines and acted like that was all fine.

[00:53:22] Vic: And they Thompson Reuters 1. so they're going to not be able to do that. Yeah, that's that's different than the gender of AI. That sort of just takes everything in the world in and then you have this machine that. Can quote you, you know the the entire chapter from a Harry Potter book or whatever It just it has it has all that knowledge somewhere in there I think that's going to be a different type of case study 

[00:53:46] Paul Kappleman: Well, it also brings up, you know How much is that proprietary data going to be worth in the future whether you're a health system or?

[00:53:54] Paul Kappleman: Uh, fertility company or Thomson Reuters to say, listen, we'll open this up to [00:54:00] you, AI company. But, you know, here's the cost. Is it worth it to have access to this proprietary? You can't get on the web, hopefully, 

[00:54:07] Vic: right? Yeah. I think there needs to be some. Kind of negotiated settlement, but, uh, just interesting that the first big case was won by the IP holders.

[00:54:18] Vic: Yeah, that 

[00:54:19] Paul Kappleman: makes, now that you explained it, it makes a little more sense than my sort of skimming it, right? Yeah, they sort of behind the scenes pulled their data and used it in a model. That seems pretty 

[00:54:29] Vic: Right, it was before the generative AI transformer model thing existed. So, um, okay, Paul, I know you got to run.

[00:54:37] Vic: Really appreciate you stepping in and, uh, Filling Marcus's shoes. Really helpful with all of this policy around health systems and health care policy. Great to have your perspective. 

[00:54:46] Paul Kappleman: Yeah, man, it was good catching up with you. Miss, miss hanging out with you and Marcus. Uh, and I'm going to come visit you guys when I get back into town.

[00:54:53] Paul Kappleman: Once ski season's over, you'll be back in town. That's right. Hopefully he's, you know, he's raising a lot of money doing whatever he's [00:55:00] doing, uh, over there. Um, and I look forward to catching up with you, but keep doing good work. I enjoy the show. I enjoy listening to it. And, uh, anytime you need me, I'm here.

[00:55:08] Paul Kappleman: Okay. Thanks, Paul. Appreciate it.