125 – Market Chaos, Healthcare Cuts, and AI Breakthroughs—What’s Coming Next?

[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. All right. Lots going on in the world, Vic. Yeah. Kind of a crazy time. Yeah. Uh, stock market. What's your read of it? 

[00:00:19] Vic: I'm trying not to look at it for the next couple of months.

[00:00:21] Vic: I think it's going to be, uh, incredibly volatile. Up, down, up, down, probably more down than up is my guess until at least the summertime. 

Yeah. 

[00:00:31] Vic: But. I think any day with news out of D. C. or something happening could, could pop up and then comes down again. So, yeah, 

[00:00:39] Marcus: yeah, it feels, feels like a moment to just kind of like.

[00:00:43] Marcus: Hold your nose turn away and focus on the real world. Yeah, real work For sure. I had a good time in Miami this weekend. 

[00:00:51] Vic: Oh, yeah. Yeah. How was Miami? I forgot about that How was South Beach? 

[00:00:54] Marcus: It was great. It was great. It's the weekend before Spring break so it wasn't totally insane. You don't want to be 

[00:00:59] Vic: there during 

[00:00:59] Marcus: [00:01:00] the heat of 

[00:01:00] Vic: spring 

[00:01:00] Marcus: break.

[00:01:00] Marcus: I'm too old for that Yeah, so no, it was uh, the weather was fantastic and then came back to great weather here in Nashville, too So that was beautiful, you know, that's it's just been a nice nice seven day stretch and I don't know I'm just kind of feeling like Coming out of a hard season, honestly, you know, and, and feeling like I have a little bit more space to breathe and think.

[00:01:21] Marcus: And, um, so generally I'm, I'm feeling pretty positive, even though I know the world is, you know, especially the finance world is kind of upside down, but personally I feel pretty good. 

[00:01:31] Vic: Yeah. I mean, you know, I, I, uh, I read both right and left publications and watch both right and left TV news. And so it's, it's a bipolar world.

[00:01:43] Vic: I mean, I think I'm probably one of the few people in the world that watches both. And it's crazy just to think that like the storylines and the positioning are. Almost exact opposite. 

[00:01:54] Marcus: Yeah, I which which is you're better than me. Is this this is why I I I really have opted [00:02:00] out Altogether. Yeah, I mean I'm i'm on You know, i'm on a variety of different highly curated newsletters.

[00:02:09] Vic: Yeah, 

[00:02:10] Marcus: and um that are like Really thoughtful and I wouldn't necessarily more long form long form analysis. So newsletters, podcasts, I pretty much have abandoned television at this point. I just think it's it's just honestly like a subpar format. 

Yeah, for 

[00:02:28] Marcus: everything we've now got on the internet TV, just it's just not as good.

[00:02:32] Marcus: Um, and then, uh, you know, I'm still on X, which is, is a necessary evil. Um, it's the only place to kind of stay up to speed on AI and crypto stuff. And also, I think there is a, a heavy dose, especially if you're talking about international news, like, you know, if you've curated your lists, uh, you really can get great international news there.

[00:02:53] Vic: Do you use the pro dashboard? Yeah, that's, that's the 

[00:02:56] Marcus: best 

[00:02:56] Vic: thing about it. Queued up with different [00:03:00] different lists and different stuff. 

[00:03:01] Marcus: I've got a list called g20 And I went and I got the leader of every g20 come country 

[00:03:08] Vic: Oh interesting, 

[00:03:09] Marcus: and then if but if they if the leader doesn't have an account I went and got the foreign ministries account and put it in there.

[00:03:14] Marcus: So I'll share that list. Yeah, that's pretty good It's it's it's helpful man, you know, the American narrative. We just we just get so Bogged down in it and then you like go check the g20. You're like, oh, man, there's a whole big world Stuff and it's like it's actually Yeah. You know, to know the whole world is not totally consumed with what we're doing over here.

[00:03:34] Marcus: Yeah. So anyway, we got a, we got a nice, nice, uh, show stuff to talk about. So probably, probably about time for us to dig in. Uh,

[00:03:50] Marcus: so breaking news, which, uh, by the time you listen to this will not be, but literally just hit the wire, uh, the Democrats have cleared the way for the GOP bill ending the threat of the shutdown. [00:04:00] 

[00:04:00] Vic: Yeah, this is a huge concern lifted. I mean, there's all this every few years. There's a shutdown dynamic that I'm tired.

[00:04:10] Vic: I think everyone's tired of. So I'm happy that they have just put it to bed. And importantly, we will cover it in the show. There's some important health care things that that we needed to get included in the continuing resolution, which got include, or I think it hasn't totally patched it, but they're planning to do it tomorrow.

[00:04:27] Vic: So, 

[00:04:29] Marcus: so, uh, let's, let's rehash the jobs thing. Last week we covered the ADP. And it showed everything being down. Um, BLS came out and the number was 151, 000 jobs last month. So missed, but not kind of the miss that was signaled by ADP. Right? 

[00:04:47] Vic: Yeah, it wasn't as bad as I feared after ADP. Um, but it wasn't super strong either.

[00:04:55] Vic: So, uh, it missed expectations. And then, uh, some of the [00:05:00] down new, not the headline thing, like hours worked and. You know, the participation rate, which is who's even looking for jobs, those things moved in, in not great direction. So it's definitely a deteriorating job market. But not as bad as I feared. 

[00:05:15] Marcus: Yeah, so I mean, just something to watch.

[00:05:18] Marcus: I don't think that it's definitive in any way about, you know, where we're headed from a job market perspective, right? Um, all right. So now let's, let's start a little bit of just discussion on the analysis that's out there around, uh, Trump and the markets. So. The headline of this New York Times story is an untradable market.

[00:05:36] Marcus: Trump sows profound uncertainty for stocks. The, uh, the consistency and the, the commitment to tariffs, you know, just the market's uncertainty about how that will actually play out, you know, is that a winning strategy or not, um, is, is driving incredible volatility in the markets and driving up the 10 year, uh, bond yield.

[00:05:59] Vic: I [00:06:00] don't know if the 10 year bond yield is up. It might be up today. It's up today. Okay. Yeah. Yeah, I think that the, I mean, Trump supporters and Trump himself will say, trust me, I will negotiate a deal through all of this craziness and it will be, it'll be good in the end, but that uncertainty and. Lack of at least transparency into what the plan is.

[00:06:29] Vic: Is there a plan other than I'm going to try to reset the terror structure so that the U S pays a lot less markets are very, I think they don't like that uncertainty and the whipsaw around where it's, I can't even keep, keep straight of it's 20 percent then it's. 200 percent then it's reciprocal and it seems to change day to day.

[00:06:52] Marcus: Yeah. Well, it's real time tit for tat. It's basically like, um, it's, it's, it's jockeying and it's, [00:07:00] it's trying to assert. Um, trying to assert global dominance, you know, um, in terms of making sure the world understands the leverage that America has by way of its economy and military. Um, yeah, and we have a lot of leverage.

[00:07:19] Vic: Sure. Whether Trump can use that in a way that is positive for Economic, the economy, and then the stock market is unclear. 

[00:07:34] Marcus: Yeah, 

[00:07:34] Vic: totally. So, so yeah, I think it's un, I think it's an UNT tradable market. It's hard. I mean, Trump can say one thing at 10 and nothing at 11 in the morning, and the market's totally different.

[00:07:43] Marcus: Yeah. So it's, it's, I've never heard the term UNT tradable before. Yeah. Uh, yeah, he, he, he is the driving force, uh, and sort of his posts on truth social, yeah, can, can immediately move the market. Scott Besant, the United States treasury secretary, [00:08:00] uh, has given his first long form interview slash sort of presentation to CNBC.

[00:08:07] Marcus: It's 20 minute, um, Discussion. So we'll, we'll include the link in the show notes and we will not play all 20 minutes now. Uh, but a couple of sort of highlight words. Um, detox is kind of the one that I think everyone is, is, uh, is, has latched onto. This is his reference to the, um, the American economy and its dependence on government spending.

[00:08:31] Marcus: And that government spending, you know, kind of propping up the economy and, and look, I mean, I think you can look over the last three years at some of those great GDP, you know, numbers that we turned in. And when you crack it open, you say, okay, how much of that was due to government spending? Um, it was a significant portion.

[00:08:50] Marcus: So. And so if, if your commitment is to decrease government spending such that you will improve our standing with regard to the deficit, [00:09:00] um, then, you know, detox might not be a terrible way to sort of frame, uh, what we were previously doing, you know, being drunk or addicted to government spending. 

[00:09:12] Vic: Uh, yeah, I think.

[00:09:13] Vic: Scott Besson has a lot of experience. He's he's been a hedge fund trader. He's been in bond markets He's a market participant who now has come into government office. So he knows the markets better than I know them But I think detox can take a while And so the fact that he's positioning it as detox I think is a pretty clear state and he says in the interview Wall Street has made You know, significant returns in the last two years, and they may not do that.

[00:09:42] Vic: Well, this year, something that would be exact quote, but something like that, um, and that he and the Trump administration are really thinking more longer term and more focused on Main Street and interest rates, which I think is code for. [00:10:00] You should expect it to be at least very bumpy and volatile in equity markets.

[00:10:06] Vic: And I think that means it's going to be, they're not worried about equity markets. I don't think they're trying to do whatever they're trying to do, but it's in Trump's first administration. I felt like, and I think a lot of people felt like, at the end of the day, he's going to care about where the S. P.

[00:10:27] Vic: 500 is, maybe not every day, but at the end of a month or by a quarter, and Besson and several of the Trump, uh, cabinet are going at lengths to say that they're not focused on that now. You know. I don't know if that's good or bad, but it just is. 

[00:10:47] Marcus: No, I, I actually wasn't going to weigh in from a good or bad perspective.

[00:10:51] Marcus: I was just going to say that through the pandemic, you remember sort of the, the rise of Ray Dalio, [00:11:00] um, not as an investor, but as a prognosticator around. Kind of this very topic, right? You know, the, the, the large debt and credit cycles that we get into around the world, the, you know, the smaller cycles and then the larger cycles that we get into.

[00:11:14] Marcus: He 

[00:11:14] Vic: has a new thing now that's really scary. 

[00:11:16] Marcus: Yeah. And how countries go broke, right? And You know, it feels to me like Besant is sort of speaking from the Dalio, you know, scriptures a little bit. He's basically saying, like, listen, we're, we're, we're at the head, we're at the tip of the spear of the, of the next big cycle and really serious stuff has to happen, um, to avoid a collapse, quite frankly, you know, and that's, That's how, that's how I internalized it.

[00:11:49] Marcus: But of course I've been, you know, listening to and reading and watching the Dahlia stuff for five years now. Right. So, um, and listening to, to Friedberg on, on all ends, sort of like hammer [00:12:00] this home all the time, you know? And so I, I guess to some degree, the fact that this is happening for me and I'm sure for you too, cause you've also been consuming a lot of that content.

[00:12:09] Marcus: Like it's not that. Out of left field, you know, to hear it, it, it, it's, it's awesome in the true sense of the word to watch it happening in real time. It's like, now it's not like this thing in theory where we're looking at a little cartoon explaining how the world economy works. And now we're like literally in the middle of it and seeing the VIX kind of consistently being above 25 percent it's like, it's like, wow.

[00:12:34] Marcus: Um, you know, here we are, but yeah, look, I mean, I, I think. I think regardless of what party was in place, any party that decided it was going to be the one that was, that in its administration was going to take on this challenge, this would be the, these would be the talking points. You know, I'm trying to sort of de partisanize it a little bit and say whoever was going to actually take on the [00:13:00] big world debt cycle challenge would be using words like detox.

[00:13:05] Vic: Yes, 

[00:13:06] Marcus: and 

[00:13:09] Vic: the U. S. Treasury has to refinance 4 trillion in the second quarter. The second quarter. 

[00:13:16] Marcus: I mean, like, it's just even, I can't even wrap my head around that, man. 

[00:13:20] Vic: I mean, it's 4, 000 billion. I still can't even fully comprehend that. He's gotta do that in 90 days. April 1st through June 30th. So, it's not surprising they want the interest rates down.

[00:13:35] Vic: Like, they've saved a ton of money. Yes. And then I agree with you that any president trying to correct our debt issues and our, honestly, our spending issues has to attack the entitlements and has to attack defense and what, [00:14:00] I mean, I'm not really a fan of Trump's style, but ending the war in Ukraine, if he can end the war in Ukraine, pulling our support for it.

[00:14:14] Vic: There's a lot of Republican politicians that would not be able to do that. No way. Because the defense industry. is, is a big Republican supporter. Hold 

[00:14:25] Marcus: on. Yes. And I would say that's more of like a Republican class thing. I mean, I would say when you get into the base of the Republican Party, I think a whole bunch of people are, were anti Putin and pro Ukraine.

[00:14:41] Marcus: Yeah. There were a lot of Ukraine flags flying around in Florida when I was down there to vacation and those people are Trump voters. Yes. Okay. So I, I, I think it's more just like Trump has an ability to buck Republican norms and, and pull the party along with him. [00:15:00] That is, it's a one of one. Yeah, it's a one of one his ability to do that.

[00:15:04] Vic: Yeah. And so if we have to go through even. Say a year of detox if we cut the defense spending and we're gonna talk about health care They're they're coming after a bunch of health care thing There's gonna be hard on our business and our listeners But but I think every it's not fair to say you should cut every other department and not not what I care about So we cut all all government spending.

[00:15:29] Marcus: Yeah, and you have to like how can you not look at the biggest line? I know right that that part is just like that's not yeah, I'm serious 

[00:15:35] Vic: Yeah, so if they can if they can achieve that It'll, it'll be great for us markets. It'll be great for the interest rates. It'll be great for equity markets next year.

[00:15:49] Vic: Maybe not this year, maybe late this year. I'm, I'm hoping the Trump administration is successful at all these things, but they're trying to do a lot in a very short amount of [00:16:00] time. Agree. 

[00:16:02] Marcus: Um, so inflation actually eased up a little bit, which we're going to have to watch this carefully. I don't think we have anything conclusive at the moment.

[00:16:11] Marcus: The tariff things are still largely threats, you know, and they haven't actually. Come in place tariffs should be inflationary and in many, many ways, um, until they're not, but that's a, that's a period of time, uh, to, to reshore manufacturing and get our own internal supply chains to the place where things are, you know, as efficient leveraging AI and robotics and blah, blah, blah.

[00:16:36] Marcus: That's, I don't know, that's 24 months or something like that. So moving forward with the tariffs should in fact be inflationary. And, uh, we were discussing it on the jumpstart insight call earlier today with Emily in the foundry. Um, one, one of the Foundry founders asked the question of, you know, could we be headed into stagflation?

[00:16:54] Marcus: Right. You know, because Trump will not rule out a recession. Yeah. And at the same time, he's moving full [00:17:00] on with the tariffs and it's like you could have the intersection of, you know, inflation plus a recession and that's, yeah. You know, that's really hard. Right. So, uh, I'm happy to see that it cooled in February.

[00:17:14] Marcus: It was lower than expected, but watch this space to me. This does not feel conclusive at all. 

[00:17:21] Vic: Yeah, I, I feel much better about inflation than you do. I think that, uh, terrorists are inflationary period, but the amount of job cuts that Doge is bringing to the federal government is deflation and the cuts in spending is deflationary.

[00:17:40] Vic: So yes, I'm, I think if we get a recession, it'll be because all of those people lost their jobs. They stopped spending. Mm hmm. I don't, I don't think we would get stagflation. I think there's a chance that we have very little inflation and, and a [00:18:00] recession. And then the chance that somehow these tactics magically work out in this better trade and growth.

[00:18:08] Vic: Um. And then we would have to be worried about inflation again in the back half of the year. But I don't know. I think that there's so much cost cutting and job losses that I'm expecting in the next few months that I'm not so worried about inflation because of that. But that could be wrong. We'll 

[00:18:25] Marcus: see.

[00:18:26] Marcus: Yeah. We'll have to see. All right, moving into VC, uh, virtual musculoskeletal care provider, Vori Health NAMS, 53 million. This is from Fierce Healthcare. This is a Series B funding round to build out a physician led solution for musculoskeletal care. Um, the round was led by NEA, backed by Alicorp, Intermountain Health, Intermountain Ventures, Echo Health Ventures, Max Ventures.

[00:18:49] Marcus: That's a good group. 

[00:18:51] Vic: Yeah, yeah, yeah. 

[00:18:52] Marcus: Yeah, 

[00:18:52] Vic: it's a good company, good group. Um, interesting. We'll have another story in a minute, but this, [00:19:00] um, you know, musculoskeletal rehab, um, orthopedic space is, is hot this week. What's going on? 

[00:19:08] Marcus: All right. Next story. Uh, this is on Axios. Motivity gets 27 million from five elms for ABA software.

[00:19:16] Vic: Yeah. ABA is another market that is every couple of weeks. There's something there. It's, it's a, it's a big problem. I don't know how many technologies we need, but 

[00:19:26] Marcus: yeah, I, I, I actually knew this company and, uh, because, because teamwork was in conversations with them. Um, but it's, I actually need to talk to teamwork.

[00:19:35] Marcus: Cause, uh, this is, that's, that's really, so, so the space is largely, um, controlled by a company called central reach. They're like the main player in the ABA space from, um, Uh, from a, from a technology, yeah, yeah, yeah, from, from a EMR and just general case management perspective. Um, so Motivity is a, is I think, uh, competitive, um, uh, with, [00:20:00] with central reach.

[00:20:00] Marcus: Okay. So, you know, and there's Hawaii, which is kind of interesting. I don't see a lot of companies in Hawaii. No, no, you don't. So, so this, this will be something for me to follow up on. Uh, but congrats to them. Uh, let's see, what's next? Hinge Health. Oh, this, this, that's a big one. Hinge Health, uh, files to go public.

[00:20:15] Marcus: So, uh, Hinge Health has had, you know, a lot of really good positive press. Um, I don't know, they're privately held. So I don't know that I know the kind of revenue. But they had had, you know, successful, um, you know, funding rounds. And now they're, uh, they're signaling a potential IPO, which is, that's, that's fantastic.

[00:20:32] Vic: Yeah, it's great. I mean, I, I don't know much detail about them, but, um. But I'm a cheerleader for it. 

[00:20:38] Marcus: Yeah. Again, it's another company in the MSK space. Um, but yeah, they're, they're definitely a leader, um, you know, for sure. And, uh, they're, they're in the defined ventures, uh, portfolio. So, so that's a strong outcome for them.

[00:20:54] Marcus: All right. And, uh, Oh, this is a, from the Wall Street Journal pro private [00:21:00] equity venture investors hope for an IPO recovery in 2025. Now it's on hold. Uh, yes, that is exactly right. Um, you know, I think, I think generally speaking folks in the VC space and even private equity were. Really hopeful that, you know, a Trump win would result in, um, regulatory, uh, environment changes, which, which it is going to write that would relax, uh, the M and a market, and that would create more liquidity and get more capital back in the hands of LPs to allow more funds to be raised and more companies to be invested in.

[00:21:40] Marcus: Because right now we have definitely been on, been on, on a, you know. Very slow drip as it pertains to exits and liquidity. No question. And, uh, you know, we, we started this, this show talking about the craziness of the stock market and crazy stock market is not great for IPOs. And [00:22:00] so, yeah, you know, I think we are into our third real year.

[00:22:07] Marcus: Of private market headwinds. Um, and I don't know how you go through three straight years without a, without some form of industry contraction, right? Like everybody can't make it for three years of headwinds. 

[00:22:23] Vic: No, I mean, I, so I talked about this, I had David Lambert on as a guest a couple weeks ago. I think, I think it posted last week, maybe.

[00:22:32] Vic: Yeah. Yeah. It's live. But we talked about this issue. He thinks over half of VC firms are going to go out of business in the next, I think he said 24 months. I'm not sure. Yeah. I think that's probably roughly right. I think that's roughly right. Um, I, I have a, I mean, I, I personally wrote a letter at the end of the year to my LPs And then I just wrote another letter to LPs and other folks, um, on Monday.[00:23:00] 

[00:23:01] Vic: And it's really interesting, my point of view has changed dramatically. And I can see it, because I wrote it in the letter. At the end of the year Hold on, your 

[00:23:10] Marcus: point of view since the letter? 

[00:23:12] Vic: Well, I wrote a letter on January 1st. Okay, and then I wrote another letter Monday. So, okay mid march, okay Yeah, 75 days.

[00:23:22] Vic: Um, I think over the holidays I made the the error that Trump's new administration would be very similar to his first one hmm, and I believed that and I I wrote about what you're talking about that, um, The M and a markets, it wouldn't be as much regulation and the equity markets would be positive because Trump is a, you know, pro business kind of president.

[00:23:50] Vic: Um, and in 75 days I've changed my. I think it, uh, is because Trump was pretty [00:24:00] quiet after the election before inauguration. And then he came out with this like, something like a hundred executive orders, all queued up. I think almost like in football where you script the first 20 plays, I think he had like 30 days of scripted shock and awe stuff.

[00:24:20] Vic: And he didn't talk much about it before then because it, it ruins the shock and awe. That's my excuse for why I didn't know. I think that's partially true at least. Um, but now we know. And it's very different. And so, this story, and my new letter is not, I mean, it's, we'll navigate what we can navigate. But there's not a lot of frothiness that I see.

[00:24:43] Vic: Not huge exits coming. 

[00:24:45] Marcus: Yeah. Um, as you know, because you're an LP in, in, in the Nova fund, I waited. You didn't push it out because you're smarter than I am. I, I, I waited until March to send my end of 2024 [00:25:00] letter. Uh, and you know, it just gave me an opportunity to digest. Right. Right. Which was smarter. Yeah. I don't know if I'm smarter, but like, uh, I, I had the benefit of being late.

[00:25:12] Marcus: So, um, all right. So the house votes to extend telehealth for six months, sending the funding bill to the Senate. So, um, this is just, uh, kind of a little bit of a behind the curtain on what the Democrats just sort of approved, which is we're going to get more telehealth for six months. I mean, that's not what the telehealth industry wants.

[00:25:30] Marcus: You know, everyone's looking for more. I wouldn't consider myself. Fundamentally part of telehealth, but telehealth is part of digital health and health and healthcare innovation. And we just need this to kind of be figured out. Now I understand six months is, is appropriate because you need to give RFK some time to, you know, work, work with everybody and kind of figure out what It 

[00:25:49] Vic: just got pulled into the continued 

[00:25:51] Marcus: resolution.

[00:25:51] Marcus: Exactly. Exactly. But, but like we We need to get to a point where we're no longer talk about extending some emergency, you know, [00:26:00] trigger and like getting into like, what is going to be the steady state of telehealth? Come on, come on. It's 2025. Like, we're all doing meetings on zoom all the time. Everyone's already been using telehealth.

[00:26:09] Marcus: It's, 

[00:26:11] Vic: I think doctors. Payers, patients, employers, I think everyone believes that telehealth as a way to deliver care, not the only way, but, but one of the ways to deliver care is a good thing. How we reimburse for it is unknown right now. Like for a long time, since it got introduced, it's been the same, the same rates.

[00:26:38] Vic: I don't know if that's fair or not. I mean, it's not the exact same cost. But it's large is a lot of the same cost. Yes. More visibility would be good, but at least six months, it was going to end on March 15th. So, so it's good that it got extended. 

[00:26:53] Marcus: Uh, CMMI to cut participation in payment models estimates 750 million in savings.

[00:26:58] Marcus: Uh, no [00:27:00] real surprise. Yeah, this 

[00:27:00] Vic: was Telegraph, but it's. Sad to see it go. 

[00:27:04] Marcus: I mean, it's sad to see it go if it was very effective. I mean, it was certainly nice to have a, um, an entity with, with, uh, authority to, you know, drive innovative models. But, but I think, I think the, you know, the assessment is in and hasn't been tremendously successful.

[00:27:22] Marcus: Right? So, 

[00:27:22] Vic: yeah, I like. Selling Intuit in my portfolio companies, but it wasn't successful. They didn't have enough or very many successes. 

[00:27:31] Marcus: No, no, uh, provider revenues to drop 80 billion in 2026 of cuts, drive states from Medicaid expansion analysis. Fine. So this is. This, to me, is the current really big story in healthcare.

[00:27:45] Marcus: Um, there's a couple of other ones, but, you know, just when we think about the hospital space, um, these Medicaid supplemental payments, uh, have really been material and in particular over the last [00:28:00] five years. 

[00:28:00] Vic: Yeah. Um. They've grown. I mean, they're. They're much more material even to the for profits, big for profits.

[00:28:09] Marcus: Yes, exactly. Uh, which, which has been a little bit of a surprise for me because I just drew a straight line to the nonprofits because of their payer mix. Right. Right. Um, and I've heard anecdotal stories, but then, you know, you like Emily was, was saying like Tennessee is like in the top. Three or top five states for supplemental payments.

[00:28:27] Marcus: And I was like, wow, that, that just, you know, I mean, on one hand, I get it. We we've never had Medicaid expansion. Right. So on that hand, like I get it, it was a way to sort of drive, you know, greater adoption of, of Medicaid, you know, but she was even saying stuff like, you know, for some of these for profits that the, the Medicaid, you know, um, volume didn't necessarily increase.

[00:28:50] Marcus: It's anywhere near what the revenue increased for. 

[00:28:52] Vic: Yeah, because the supplemental payments are not tied to particular procedures or patient volume. No, no. There's some, I [00:29:00] mean, it's different state by state. It's very opaque, but there is like a number of patients served and how the money gets allocated or something like that.

[00:29:10] Vic: But it's, it's not tied to how many patients they have. 

[00:29:13] Marcus: Yeah. So, you know, really, this is going to be a really big deal because between what Trump has within his, um, Capacity is the head of the executive branch, plus what Congress is seeking to cut out of the budget, you know, over 800 billion, what they're looking for.

[00:29:38] Marcus: Yeah, right. Um, supplemental payments is, you know, number one or number two, it's supplemental payments. And then, you know, the family issue with the ACA, right? Um, those are kind of the two big buckets that you can go after. Uh, I don't see a way supplemental payments makes it through. 

[00:29:57] Vic: I mean, it's 

[00:29:57] Marcus: it's not in the 

[00:29:58] Vic: form it is right now.

[00:29:59] Marcus: [00:30:00] It's not core to the Medicaid program, 

[00:30:03] Vic: right? It's not core, and I believe it was created because there's, there are places in this country where The health systems will have trouble staying open without supplemental payments. 

[00:30:19] Marcus: Oh, well, that's why, that's why it was 

[00:30:21] Vic: created. That's why this is such a ridiculous.

[00:30:23] Vic: And that issue is 

[00:30:24] Marcus: still, we still have that issue. We're going to talk about it in a couple of stories. Yeah, right, right. So that, that's, that's what I'm saying. Like we. We have been talking for a long time about the number of hospitals, you know, shrinking dramatically and we've certainly seen cracks and shutdowns and and bankruptcies and all sorts of like really ugly things, but we haven't seen like The true culling right and and I think the supplemental payment thing has been a huge reason why yeah, we have not seen the culling yet and It feels [00:31:00] like it's upon us, right?

[00:31:01] Marcus: And it's going to be very, very serious. Very serious access to care, employment, GDP. Like it's, it's going to be significant. Um, so yeah, is, is Trump taking a liquidationist approach to the economy? What's the, what's this about? 

[00:31:21] Vic: It's not the term I would have used that what I would have said to you is that he's approaching it like a turnaround venture guy is doing it.

[00:31:28] Vic: Come in and just cut, cut everything you can cut and figure out how to write the ship. Um, and that's certainly what Elon and, and Doge are doing. Um, I, I don't know. I mean, I think it is, um, it's a topic for discussion. Like, is that how we should Cut overhead in the government. Is that the right approach?[00:32:00] 

[00:32:03] Vic: That is not what anyone's used to. So I wouldn't use the term liquidationist. Yeah, I mean that's kind of a funny term that I don't think anyone else uses. Yeah, 

[00:32:14] Marcus: I'd actually never heard that. Yeah, I don't 

[00:32:15] Vic: think it's a that's not the term I would have Yeah, 

[00:32:19] Marcus: okay. Maybe we shouldn't have included that story.

[00:32:23] Marcus: Let's get to real stories. Uh, CMS scraps contracts to upgrade online Medicare system and hands over control to Doge, the agency says. That's not a small deal. 

[00:32:32] Vic: Yeah, so, um, go down a little bit. Medicare hired, uh, some group, I can't think of the name right now, to upgrade their Their systems, CG, CGI, federal.

[00:32:44] Vic: Yeah. And they've spent nine years and 200 million and they haven't delivered anything. And so I'm fine with that. Like let's cut them. 

[00:32:54] Marcus: 14 missed deadlines, zero usable output was produced. Yeah. [00:33:00] That makes sense. And CMS said this, not Doge, right? I think those are. Those are facts. I mean, yes, but I just to be clear, like it means something different to me.

[00:33:15] Marcus: If CMS says it, then if doge says it, you know, I hate to say that, but it does. So, so CMS was who, who said yes. 

[00:33:23] Vic: Yeah. Okay. But then they have. I guess hired Doge to fix this system for them. That part, I was surprised about it. I don't know if that really makes sense. But that's what 

[00:33:40] Marcus: supposedly they're doing.

[00:33:41] Marcus: I mean, all bets are off on this stuff. I mean, these are the kinds of things I don't even spend time trying to like, you know, wrap my head around. Because whoever that vendor was is terrible. Yeah, and also like this, they're just going to do it. Like, Trump will give Doge whatever business he wants to give Doge.

[00:33:56] Marcus: I mean, you know. It's just not worth getting upset over, [00:34:00] right? So, like, it's gonna happen. Yeah, 

[00:34:02] Vic: I mean, I don't think it makes sense to have the Auditor, cost cutting, control body, then pick up the work on the other side, just as a matter of design. But, but you're right. No one cares what I think Trump's going to do what he wants.

[00:34:19] Vic: Yeah, he's going to do what he wants. 

[00:34:20] Marcus: All right. So this Blue Cross antitrust deal, you know, we've gotten inbound emails about it, not from the show. A lot of people are thinking about this and talking about this. Why do you, why do you think this is, this is such a big deal? I think people are surprised that, that several health systems have, have rejected the deal and stepped away and said they'll sort of take their chances and maybe direct, um, you know, legal action.

[00:34:42] Vic: My personal opinion is that Blue Cross has colluded to protect their large employers in each state. for decades. I think that's pretty well established. And then [00:35:00] I think where there's a difference of opinion is that a lot of people related to Blue Cross groups feel like they have great public opinion and goodwill and they do wonderful things in the community.

[00:35:12] Vic: I really like the Blue Cross people I know that work in Tennessee. But I don't know that they have more goodwill than the health systems. And so my view is that the health systems are feeling like The facts are on our side and, and we have as much of a, a patient facing brand as Blue Cross Blue Shield and they should pay more.

[00:35:36] Vic: The damages are much more than three billion. And I don't, I don't know who's right, but, but I think, uh, there's a lot. There's a lot to argue that the health systems can, can sort of put a lot of evidence out there. Sure. Like, would a jury award more or less that? I think they're willing to take their chances.

[00:35:56] Vic: I mean They also are needing money. So, 

[00:35:59] Marcus: [00:36:00] it's, it's another like Yeah, yeah, that's fair. That's fair. They are, they are needing money. I mean, I don't know why 2. 8 billion doesn't sound like that big a number. To me, I mean, because it's across the whole association, right? So everyone's probably got a kid for 

[00:36:14] Vic: a long 

[00:36:15] Marcus: time.

[00:36:15] Marcus: Yeah, 

[00:36:17] Vic: I don't know how many years. I mean, Blue Cross was started in 1920s. Yeah. Um, 

[00:36:22] Marcus: yeah, it's I mean, that's probably why I won't die. Because people just kind of feel like that. The numbers just not enough, not not sufficient. All right. All right. Wall Street Journal. The hologram doctor will see you now. A Tennessee cancer clinic is beaming doctors out to rural areas.

[00:36:35] Marcus: A new model of telehealth that goes beyond clunky video conferencing. So. Yes, finally, the future is here. Um, there is a picture here of a cancer patient and her husband at a West Cancer Center and Research Institute clinic in Corinth, Mississippi, talking with their doctor and the doctor is beamed in and it's a beautiful sort of image.

[00:36:57] Marcus: It's a hologramic image, you know? Yeah, and [00:37:00] if you 

[00:37:00] Vic: squint, it looks like he's sitting there 

[00:37:02] Marcus: in the room with you. Yeah. Yeah. It looks, it looks great. Um, and that's, that's an actual photo of, of the experience that they're having. So, um, I mean, this, this to me is, is exact, you know, you overlay all, all the, the, the scary things from supplemental payments and other, you know, cuts that the federal government's going to make that are certainly going to close down many, many, many, many, um, points of care for people in, in rural communities.

[00:37:26] Marcus: And then you overlay the telehealth thing. And it's just, it's kind of like. You've got to figure out how to extend the telehealth thing permanently. It's, you know, uh, it's, it just, it just would be cruel to not do that, you know, in, in, in the wake of the economic, uh, you know, and access to care destruction that is at this point, seemingly inevitable.

[00:37:45] Marcus: I, I don't, I don't see a real way around it. 

[00:37:49] Vic: I mean, one version of the future is a bunch of. Uh, health systems in smaller cities or rural areas [00:38:00] cannot continue to support their overhead. So they turn into much smaller footprints with telehealth and with holograms and with enough technology to still care for those patients.

[00:38:15] Vic: Yeah. Um, that's one version that would be plausible. There's a lot of employees in those small towns that work at the health systems. That, that doesn't really solve for, but maybe that's not a public health issue. That's just a, that's an, that's an economy issue. Yep. Um, but yeah, I, I think it's good that health systems are continuing to push forward, making it more realistic, making it, you know, there's a lot of empathy, especially in cancer care where you, you want to be able to.

[00:38:51] Vic: have facial expressions and maybe even body language that is hard on Zoom. I think a hologram that looks realistic where you can get more, [00:39:00] more of that in person experience is probably useful. 

[00:39:07] Marcus: Landmark Holdings of Florida files for Chapter 11 bankruptcy. I hadn't heard of Landmark Holdings before this story, but, uh, it caught my attention because it's in modern healthcare, and it's about the health system, and it's a bankruptcy.

[00:39:18] Marcus: So, 

[00:39:18] Vic: you know. Yeah, there's a couple stories that are kind of rough in a row here, but Landmark has five or six hospitals in kind of Alabama, Georgia, and Florida. I don't know exactly where they are. I think they're probably in small ish cities. Um, but yeah, they're, they're Chapter 11. 

[00:39:38] Marcus: Yeah. Um, not much more to say other than I think we'll be seeing more headlines like this.

[00:39:43] Vic: Yeah. Um. This 

[00:39:44] Marcus: show 

[00:39:44] Vic: is 

[00:39:45] Marcus: more. 

[00:39:45] Vic: Yeah. 

[00:39:46] Marcus: So, Prospect Medical's Pennsylvania Hospitals at Risk of Closure, that's another one in modern healthcare. Another one. 

[00:39:50] Vic: Yeah. Yeah. So, they haven't filed yet, but they have no long term solution is what they said in court. Yeah. [00:40:00] Um, it's hard. I mean, uh, I don't, I think there's going to be a lot of these.

[00:40:05] Marcus: Yeah, and, and just, just a quote from the article here where different, different, uh, doctors at Crozier Health said, uh, that the closure will devastate not only our residents, but also the thousands of employees and patients who rely on this network for their well being. Um, that was written to the bankruptcy judge.

[00:40:21] Marcus: And, and, you know, this is, that's, that's talking about, you know, one facility. Right. Right. And so, you know, you just got to start multiplying that. Uh, I, I, I think up to a thousand, quite frankly, you know, um. Yeah. Because that's, that's, that's the kind of scale of closure we could, we could experience.

[00:40:39] Marcus: Certainly could experience. Uh, all right. Another rough story. Wall Street Journal. Johns Hopkins plans staff layoffs after 800 million in grant cuts. And we haven't even gotten to the NIH cuts yet. 

[00:40:53] Vic: No, no. This is before the NIH gets settled. I was, I [00:41:00] was really surprised about this. Because I have Johns Hopkins as one of the top, if not the top medical academic medical center research facility in the world.

[00:41:14] Vic: And I still think that, but they're, they're losing 800 million in grants. And so, um, they're going to have a lot of departments lay off people or shut down completely. It's, it's sad. 

[00:41:33] Marcus: Yeah. And, and then the article goes on to say that they stand to lose another 200 million, um, if cuts go through from the NIH side of things, uh, with regard to the indirect costs.

[00:41:44] Marcus: So we're talking about a billion dollars. I mean, that is, that is a massive, massive cut that honestly, like you got to ask, did Johns Hopkins, like. Game theory and model this [00:42:00] in, in August of last year, they couldn't have, that's a, that's a ridiculously fast turn to lose a billion dollars. 

[00:42:08] Vic: I mean, they're the next paragraph says that they spend 3 billion annually.

[00:42:12] Vic: So it's a third of their spend they're losing. No, no institution can. Can't sustain that without massive changes 

[00:42:21] Marcus: now. So, so again, I mean, just like they're 

[00:42:24] Vic: all involved. They're all in Baltimore. It's going to be really hard on, on the city. 

[00:42:29] Marcus: Yeah, that's, that's, that's going to be very, very tough. Mass General Brigham, second wave of layoffs begins.

[00:42:35] Marcus: And these, these were happening even before all the, all the Trump policies came into place. Um, so yeah, you know, continuing to cite the 250 million two year budget gap that they're working to close. Um, you know, tough. It's not a good set of stories here for the health systems. Uh, CVS's new mini stores go all in on medicine and skip everything else.

[00:42:55] Marcus: 12 new stores are expected to open throughout the U. S. Yeah, this is kind of interesting. That's [00:43:00] positive. 

[00:43:00] Vic: We have CVS going in this direction where they're adding drugstore focused locations. Well, 

[00:43:08] Marcus: drugs. Yeah, that's all they are. That's all they are. No, no, no medication, 

[00:43:12] Vic: right? 

[00:43:12] Marcus: Yeah, 

[00:43:12] Vic: right. Um, and then Walgreens is in the opposite direction.

[00:43:16] Vic: They are the one right, right down the street. Here's no longer has a pharmacy at all. It's just a convenience store. Wow. So, um, I have no idea which is the smarter player opposite directions. 

[00:43:30] Marcus: Yeah, yeah. I mean, I think both organizations are trying things. Yeah, they're both. Need help. Yeah, dealing with some much more fundamental, you know, business model issues and challenges UCLA health Uh breathing new life inhalable gene therapy for cystic fibrosis.

[00:43:46] Marcus: Wow Yeah, 

[00:43:47] Vic: so this is in the new the new uh treatments and like medication stuff. So yeah, they have an inhalable Um, treatment, I, I, I'm tempted to say cure, but treatment for cystic [00:44:00] fibrosis, you inhale it and it uses gene therapy, CRISPR technology to, to modify your genes and cures you of the disease.

[00:44:12] Vic: Which is incredible. And there's a full paper and everything. I pulled it off the UCLA website because they're the actual inventors. But there's all this sad, hard things, but there's also just incredible innovation and, and technology. 

[00:44:30] Marcus: I mean, the science and technology is, is advancing in, you know, in, into some ways that I would say are starting to qualify as like miraculous.

[00:44:39] Marcus: I mean, you know, there's a story like a couple of weeks ago around Um, the guy, you know, the cures blindness. Yeah, yeah. I know. I mean, you know, like, like we're on the, we're on the precipice of some unbelievable things from a science and technology perspective and, and I think we're at the end of a [00:45:00] geopolitical economical cycle and it's just going to be, 

[00:45:06] Vic: yeah, the transition, the transition is going to be hard.

[00:45:10] Vic: Yes. We don't have. The robots and the miracle cures here yet, but we have all the change that's promise of that coming and exciting stories, but we still have to get through next month. 

[00:45:23] Marcus: Yeah, yeah, and this, this thrashing is, uh, it's just, it's just not going to be without hard, hard things. 

[00:45:31] Vic: Yeah, but just to be able to inhale a medicine.

[00:45:35] Vic: And then it, it knows where to go and how to, how to fix all your genes. Yeah, the fact that it's inhalable 

[00:45:44] Marcus: and it's, and it's working at the genetics level. That, that is, you know, mind blowing. Uh, Johnson Johnson MedTech robot gets, uh, FDA clearance for navigation technology. So this is in the [00:46:00] bronchoscopy space.

[00:46:01] Marcus: And it's a minimally invasive technique that allows surgeons to reach airways and suspicious lung nodules. 

[00:46:07] Vic: Yeah, so this is another science fiction that is real that I mean, there's been robotic surgery for a long time, and it's pretty useful, I think, but it's expanding now, so they're doing this long, long maneuvering technique that I think is, you know, pretty hard to do by hand, and you can't often you can't even do it like you would like to do it, um, and of course they use Nvidia's AI tool because that gets a lot of attention, um, but also it's really good.

[00:46:40] Vic: And so, 

[00:46:42] Marcus: yeah, I mean, look to me, I just like seeing more integration of Nvidia stuff into health care in real things used by, you know, these, uh, real deal, serious companies. Um, I, I just like seeing it all becoming more [00:47:00] real, right? It's all becoming more real. The integration has 

[00:47:02] Vic: distribution and they can put it everywhere.

[00:47:04] Vic: That's 

[00:47:04] Marcus: exactly right. The integration of artificial intelligence and robotics. Um, you know, into health care, you know, look, we've, we've had da Vinci for a while and, you know, but like, it's just been a while since, you know, right. Since da Vinci things. Yeah. So having these new things is, is really great.

[00:47:18] Marcus: It's really great. All right. And to Pharma Roche Zealand Pharma strike a 5. 3 billion weight loss therapy deal. So this is the Roche already had a GLP one asset, right? 

[00:47:28] Vic: Yeah, but it is, um, they're adding to that portfolio maybe because it. Is not competitive or whatever but they're sort of they bought things to put with it or to add to it or Um, build a portfolio around.

[00:47:44] Vic: So, um, I don't exactly know the details of how these assets will make their GLP one competitive. That is right now, because right now it's not, it's not that competitive. Right. Exactly. So, 

[00:47:55] Marcus: yeah, I think, I think Abby's got the next. Sort of gen [00:48:00] one coming up, right? That's like, uh, different dosage, different, um, less often or something less often, different, different mechanism.

[00:48:07] Marcus: Is it a pill versus a shot? I can't remember which one is which, but yeah, there's, but it was a fundamentally different, you know, um, method of taking the drug. All right, Novonortis shares fall after latest Cagri Sema, uh, so this is a new drug, obesity drug trial results. So what's, what's sort of the deal here?

[00:48:28] Vic: It, it didn't, um, didn't do as well in the trials as they were hoping to. So I think the goal was 25 percent weight loss. It's in, uh, type two diabetes and they didn't achieve that, that they got, uh, 15. Another, some patients got 15%, some got 22%, so neither one hit the 25. Uh, level that Novo had forecast, or, or guidance around.

[00:48:57] Marcus: Alright, and, and, and Cagrasema [00:49:00] is a combination of semaglutide, that's the sema, and then they have an experimental drug, um, which is called Cagryllin, Cagryllintide. So that's, that's kind of the, the new agent that they were hoping would somehow give a boost to semaglutide. 

[00:49:17] Vic: Yeah, and it, it works okay, but it doesn't work like they had promised.

[00:49:21] Vic: Yeah. Yeah. 

[00:49:22] Marcus: Um, okay. It was Olympics, new frontier, the war on aging research. She just benefits beyond what popular diabetes and weight loss drugs first for treat. They're just going to try everything. Yeah. Yeah. They're just 

[00:49:32] Vic: putting it 

[00:49:32] Marcus: everywhere. Yeah. Yeah. Now, now, now we're going to get Dave Asprey and Peter Atiyah and the longevity guys to start, you know, looking at GLP ones.

[00:49:42] Vic: I mean, I think the. The way I keep up with this is I think obesity is comorbid with aging. It's with comorbid, with diabetes, with kidney disease, with with lots of things. And so if you solve that foundational thing, you [00:50:00] don't age as fast. I mean, that's not probably, uh, that technically accurate, but I think that's, that's the easiest way to think about 

[00:50:08] Marcus: it.

[00:50:08] Marcus: But I, you know, I, I don't know. This is where I feel like we get into, you know, marketing and different categorizations which triggers different revenue streams. Right. You know, that's 

[00:50:22] Vic: definitely what pharma is doing. Yeah. 

[00:50:24] Marcus: Yeah. Yeah. That's, that's, that's what we got. Aging opens 

[00:50:26] Vic: up a new, a new market. It's just a new market.

[00:50:28] Vic: But it's the same drug. And I think it's the same process that the body is using. Yeah, 

[00:50:35] Marcus: guest opinion essay in the New York Times, a new scientific field is recasting who we are and how we got that way. 

[00:50:42] Vic: Yeah, go down to be able to talk about the name of the new field, but it, uh, socio genomics. It is this, uh, it's kind of like epidinomics, which is a field that I understand and I, I think is important.

[00:50:56] Vic: Um, it's that combined with how your environment, like [00:51:00] maybe the house you live in, the water you drink. Um, how you get to work, what your work environment's like, triggers your epigenome to mentallate different genes, express different genes, um, and so there's this combination of how your social environment, the people you interact with affects your genes, and then of course your genes affect your existence.

[00:51:27] Vic: So they're trying to unpack that. I think it's a, it's a really interesting space. It's in the opinion section, um, which is right. It's a new thing and it is not proven yet, but, but I think it's worth following. And I think it does have. A lot of applications to health care because it's a lot of these things manifest as health problems.

[00:51:50] Marcus: The, the author of the article is Dr. Dalton Conley and has authored a book called The Social Genome, The New Science of Nature and Nurture. So for [00:52:00] anyone who's interested in diving deeper beyond the link we're going to put in the show notes, that's, that's the book to go check out. That's right. All right.

[00:52:06] Marcus: Are we ready for AI? We are. Okay. Axios. AI failed to detect critical health conditions in a study. So, uh, duh. I mean, like they'll, they'll keep being these stories, but sure, I mean, 

[00:52:20] Vic: yeah, I mean, um, I think it was pretty surprising to me that, um, how many errors and issues there were. So, um. You know, they only recognized about a third of the actual patient's main disease.

[00:52:41] Vic: Um, and so I think we're, we're assuming the models are going to be accurate mostly with once in a while hallucinations. And I don't think that's not what the data is saying. 

[00:52:54] Marcus: Yeah. I mean, this is a particular study. though. And so, you know, I, I think, [00:53:00] and then this is an article about that particular study.

[00:53:02] Marcus: So, so we're, you know, we're several, yeah, that's right. We're several degrees away from actually getting the, the, the truth of the matter here and how this, uh, what we should take away from this in terms of implications for broad use of AI in the clinical setting. Um, so I, I'd love to know about that, but yes, I mean, look, I, I think, uh, certainly the, whatever the model is, what it's trained on.

[00:53:26] Marcus: All those things are different factors, and at this point, we have so many different frontier models, um, that are, that specialize in so many different things that, you know, need to, you know, be trained or need, need to have sort of, you know, a ton of new data added to it, so its inference is, is going to be, you know, reasonably accurate, that I just don't think even saying AI is Is, is, is particularly precise enough anymore, right?

[00:53:50] Marcus: Don't you agree with that? I want to know what model, what are you talking about? What was it, Gemini or, or was it some specific healthcare model that was, that was designed specifically [00:54:00] to do this and like missed the mark? 

[00:54:02] Vic: Yeah, I think that's fair. To me, the, um, there's so much opportunity using a co pilot kind of design where.

[00:54:12] Vic: Doctors and nurses and all kinds of clinicians, there's a lot of things they do that could, they could be done much more efficiently with a tool that could sit with them and, and help them. And I think we have a lot of opportunity to make huge benefits for reducing costs, better patient outcomes, better, better quality of life for our clinicians without putting a hundred percent of the decision making in the AI.

[00:54:39] Vic: Of course. And so that's my only takeaway from this is that we should be focusing on. Co pilots in medicine. Yes, so that there's a human there who can do a lot more because of the AI But it would not then if there's a mistake it it's um, you know, you have a better chance of catching it 

[00:54:55] Marcus: Yeah, but to to I think your original point about this article, you know, it says here that the [00:55:00] You know, some machine learning models, again, this is not precise, trained exclusively on existing patient data, okay, but I need to know what model you were using, right, didn't recognize about 66 percent of the injuries.

[00:55:11] Marcus: So, that error rate is actually not helpful. Right. Even if, even if it's in a copilot scenario, it's got to be far more accurate than that. To, to actually be an aid as opposed to the nurse practitioner constantly being like, that's wrong, that's wrong, that's wrong. Why am I using this stupid tool? Right.

[00:55:28] Marcus: Like that would send you down the path of the EMR. Right. 

[00:55:32] Vic: Yes. And so I think diagnostic, like the, what is the patient's issue? What are the, what's the constellation of symptoms? And then what's the differential diagnosis? There's a lot of information the AI could gather, but I, I think that decision for a while should be the doctor's decision.

[00:55:59] Vic: There's plenty [00:56:00] of, of assistance that AI tools can give without making that choice. And then it doesn't have to recognize, it sort of Scares the symptoms and all these other things that are helpful but not definitive. 

[00:56:11] Marcus: Yep. Agree. Agree. Alright, moving on to Microsoft. So they have, uh, I don't think they were responding to the Axios, uh, article or the, it couldn't have been.

[00:56:21] Marcus: I mean, there's 

[00:56:21] Vic: no way that Microsoft's PR Yeah. Could move that fast. 

[00:56:24] Marcus: But, but you know, these, these, uh. The need to detect these issues is important. And so they put out something on their healthcare and life sciences blog, uh, introducing clinical conflict detection, safeguards and healthcare agent service.

[00:56:38] Marcus: So, you know, it's like they're working on it. Yeah, they're working on it. 

[00:56:42] Vic: Yeah, that's right. It's, um, it's a big issue because human life's at stake and Microsoft and all the, all the AI companies are working on it. And I think it is largely going to be a co pilot. type of agent system. Yep. Agree with that.

[00:56:58] Marcus: All right. And then final [00:57:00] story. Um, so I learned about this from our good friend, Nick Holland at HubSpot, who is, uh, uh, I think probably the person who's closest to me, who is most on top of all this AI stuff. He's leading AI at HubSpot. And, um, he sent over this AI agent out of China called Manus AI, and it's a general AI agent.

[00:57:21] Marcus: Capable of handling complex real world tasks, uh, to include creating video games. And so on X, there's a lot of talk about the video game creation stuff. Um, but he actually sent me like this, you know, he asked it to run a particular business task and you can see like all the steps it's doing to execute this business task.

[00:57:41] Marcus: And in the end, like produces a result. And this is what you would ask a person on your team to do. There's no question about it. That's all the different websites. Pulls in the information, organizes it, puts it into a Google Sheet. It's unbelievable. Yeah. It's unbelievable. Right? So 

[00:57:57] Vic: the demo, so we have a [00:58:00] demo we'll put in the show notes.

[00:58:01] Vic: Yes. It's too long on YouTube, but they create a competitor DocuSign, which everyone listening probably has used DocuSign before. It's not that complicated, but there's a lot of pieces to it and you have to make sure it's actually the person and all of the complexity to that in it. Produces it. I mean, you know, see, so the amount of competitive entry and the amount of sort of new, new product features, I think is going to be significant.

[00:58:33] Marcus: Yeah, I mean, this is when I saw this, I was like, this is the first time I've seen this. Yeah, right. For me, it was a bit of a breakthrough, right? It was kind of like the first time I had seen reasoning. The deep reasoning thing, except for the deep reasoning thing is just, let me just think a little bit more.

[00:58:50] Marcus: This is, this is not just let me think a little bit more. This is, let me string together a bunch of different aspects of a complex task. And let me show you that I can think [00:59:00] through all the different aspects of the complex task into the component parts. Now let me execute them all. Now let me execute all of those.

[00:59:09] Marcus: And then here is your end result. And, and just. The fact that there's like an audit log of all of that, 

[00:59:14] Vic: it's just, yeah, I haven't figured out how to say this clearly, but there's like the intelligence layer. And you can swap out different models, but there's a large language model that is creating what I'm going to call intelligence.

[00:59:31] Vic: I think that's the easiest thing to call it. Then there's the reasoning that you're just talking about that was sort of new is moving quickly. That was new probably in December. 

[00:59:40] Marcus: Yeah. Yeah. 

[00:59:41] Vic: And then DeepSea came out with it from China. Yeah. Um, And now it's in everything. And now it's in everything. Yeah.

[00:59:47] Vic: But that's sort of another layer. Yeah, it is. It's a different. It is another layer. Yes. It's a 

[00:59:52] Marcus: different thing. It's, it's, it's, don't think quickly. Think deeply. Yeah. Basically, like, you know, like if I send you a [01:00:00] straight prompt, I'm like, think quickly. Right. Yeah. And deep reasoning is like, no, no, no, no. Take your time and actually like check yourself, like, you know, 

[01:00:08] Vic: and create some quick plan.

[01:00:10] Vic: Yeah. Yeah. Yeah. And then there's a capabilities to like take action. Right. Which is more agent, which is, that's where you get into the agent. I think that's sort of the difference between an agent and not an agent, because they can do something in the world, they can post on X, or they can, uh, commit code and put it in a cloud server or whatever, uh, and those three components, I think Manus is, they, they took all three and they made it really strong, and all, all three components work well together, I haven't, I'm on the wait list, I have not in it yet, but, um, it seems great.

[01:00:50] Vic: But China is ahead of us in AI now. They are now. We hopefully will catch up. We have a lot of talent, but. The last month, China's been [01:01:00] like every week coming out with new stuff. 

[01:01:02] Marcus: Okay. So I, I feel like I have to give a friend of mine props on, on this. So I have a friend, um, who he, I'm not sure what he's doing right now.

[01:01:16] Marcus: Um, but his wife is Chinese. His name is, uh, Jeremy Goldkorn and he was writing for this online publication called. Sub China. And it was basically trying to educate the West in particular, the United States on China, but like not the like American Jingo, you know, propaganda China thing, like, like real this is engineering, like real nuanced, like perspectives on China.

[01:01:40] Marcus: And so like, I remember one day he and I went for a walk and he was like, you're into all this tech stuff. Okay. You need to read this book. Um, AI superpowers, China, Silicon Valley, and the new world order, uh, by Kaifu Lee. This book, how old is this book? Marcus, like, uh, let's see here. This is not, this [01:02:00] is not a new book.

[01:02:01] Marcus: Uh, 2018, 2018. I read the book during a pandemic cause we met during the pandemic. So I've, I've read, I listened to this audio book in like, let's call it 21. Yeah. It's called 21. All right, dude. This book was right like this book was right like the like the Suleyman book. Yeah was right You know what? I mean?

[01:02:26] Marcus: Like just and and and the point here's the point that this book makes Which is the same one that the Suleyman book makes it makes the point that like Asia was the first continent to be culturally impacted by AI Because go yeah Like that, it, it, it was, it was, it meant more than existential to them what had happened.

[01:02:54] Vic: Yeah, well, we like watched it for a second, like, we 

[01:02:57] Marcus: always win. Yeah, and for them, they were like, [01:03:00] this is like for this to have happened. Yeah, this is. And so they've been acting like this is a big deal for longer than we have. That's just the truth. And I just think they are ahead of us in a way we, we really have not internalized yet.

[01:03:17] Vic: That's true. And then for, for 10 years, I've been not so worried about China as a global competitor because of their population issues. Sure. Sure. And I think AI makes that less important. Makes that less 

[01:03:32] Marcus: important. Yes. Yes. So I don't know what that means. Because the reason is because the default wisdom was growing population GDP growth.

[01:03:42] Marcus: Right. 

[01:03:43] Vic: Yeah, that's why you can't grow GDP and then it's really hard to support your elderly population if you don't have enough young people and I still hear those assumptions are not true. 

[01:03:55] Marcus: I still hear people saying that and I'm like, are you aware of AI and robots? [01:04:00] Like, do you understand that AI and robots change that that first principle?

[01:04:06] Marcus: Like, that's no longer a first principle. 

[01:04:08] Vic: Right. And no one, very few people understand that. 

[01:04:10] Marcus: Yeah. That's not a first principle anymore. You know? So, uh, I mean, anyway, please check out this YouTube video. Yes. Okay. It's in the show notes. Click on the link. Check out the YouTube video for Manus AI. Um. And we'll put the book in the show notes too.

[01:04:27] Marcus: Yeah, yeah, yeah, yeah, yeah, yeah. This Kai Fuli book. Yeah. I can't believe it. I can't, I can't, I haven't, I haven't read it. I didn't tell you about this, huh? No. I'm very sorry about that. There's a lot of stuff going on during COVID, so I feel very bad about that. But yeah, I mean, this guy, this guy lays it all out, man.

[01:04:42] Marcus: He lays it all out. Yeah. 2018. 

[01:04:47] Vic: We could have been so far ahead. 

[01:04:49] Marcus: Well, listen, we wouldn't have been far ahead, but, um, all right, man. Great show. Yeah. That was good. Talk [01:05:00] soon.