137 – Inside the UnitedHealth Crisis & What It Means for Healthcare’s Future

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Vic: Wild week. A lot, lot going on. Yeah. 

Marcus: There, there is a lot going on. It just, it just doesn't really stop and I've, I've ceased to have an expectation that it's gonna stop, but some of the stuff just is, uh, kind of take your breath away kind of stuff, you know?

Um, just thinking about the implications for the broader industry as it as it happens. Um, yeah. 

Vic: Yeah. I think that we will dig into it. That's right. The, the UnitedHealth story is sort of, you know, the first, second, third, fourth main story this point. Totally. Yeah. I mean, 

Marcus: we, we have a lot of other stuff we're going to talk about.

Yeah. Yeah. Which I'm excited about because, you know, there are many, many other things happening, but there, there are so many aspects of that story to include. Uh, the, the questions around the validity of. [00:01:00] The, um, the story Yeah. As well. Like it's, there's so many things, right. Um, that are there, uh, that, that we, we have to, you know, try to parse through, but all of it just feels, I, I don't know, man.

I, I mean, it, it feels like, on one hand we've been talking about how this industry has got to, um, face the music, you know, based on the growing, expanding costs mm-hmm. Sort of year over year. Yeah. You know, growing from 2 trillion to 4 trillion, like that would be fine if the, if the customer was not the government and not the American taxpayer.

Right. So obviously that's, that's kind of a problematic thing. But now that we're sort of in that reckoning, you know, and you're just like, I mean, how, how does this work? How is this gonna function? How are we gonna get to the other side of this without real, uh. Real impairment [00:02:00] to the healthcare system, to, to jobs, to the care we can reasonably expect, um, as, uh, as citizens.

It, it's, it's just, uh, you know, and I, I, I know everyday people aren't thinking about it every day, but those of us who are in the industry are thinking about it every day. And it's, you know, I, I think, I think people are kind of locked up and frozen. You know, I mean, I mean, of course you, you, you say, we'll get through it, you know?

Yes. We will get through it. I, I know that part. Um, but not, not without tremendous pain, right? 

Vic: Yeah. That the, the, so I remember, um, Brad Smith was involved in the first Trump administration. He's doing something now with the, I dunno the details of it, but when he got back from DC to Nashville mm-hmm. We were chatting, we had dinner, and I was just asking like, what, what's it like.

And his comment was, it's really fun, but also it is like, to [00:03:00] have that impact is, is, uh, enriching or fun. 

Marcus: Mm-hmm. Mm-hmm. 

Vic: But there's this, this weight that you have all of these 330 million people that need to be taken care of, and so you can't make change. He was saying I couldn't make the change I wanted to make because I have to mean what he, he now is you have to keep flying the plane while you're making all these changes.

Right. Right. And there's real humans that are getting care every day. And that, I think that is the best way to sum it up. Like we're trying to make changes to the system that, that I think needs change. Right. But, and maybe even it has to be done quickly to have an effect. Right. That's what a lot of Republicans would say.

But I think that, um. There's side effects or there's, there's people that are impacted too. Yeah. Which is just hard. 

Marcus: Yeah. 

Vic: Yeah.[00:04:00] 

Marcus: Let's start with the economy. Uh, I think there was some good news this week. Yes. Um, so, so it's, it's been a, it's, it's been an interesting two weeks and I feel like, uh, we didn't, it didn't get covered last week 'cause I think it happened Friday and now that we're here, um, I'm not sure that you, you have it in here, but I, I do want to at least reference that.

Uh, the end of last week, there was a Saudi us, um, uh, trade summit, uh, that happened in, in Saudi Arabia. I think it was Monday. Was it Monday? I think it was Monday. I thought it was Friday last week. Because Trump's still over there now. Yeah, 

Vic: yeah, yeah, yeah. He's in Saudi Qatar and Uua e Yeah, 

Marcus: yeah, 

Vic: yeah. Um, do, do you have a story for that?

I don't have a story on it, but, but, uh, the Saudis, I think it was 90 billion, but there were no healthcare companies in there. No. They agreed to, uh, they signed kind of letters of intent. There weren't a lot of details in there. Right. With a bunch of us, uh, companies that went over with [00:05:00] the Trump entourage.

Right, right. Uh, yeah. That was Monday. 

Marcus: Yeah. So, I mean, I think that that is, that's material. Um, you know, as you know, I, I spent the week in Yeah. In Riyadh and learned a lot. And so I was not surprised to see that summit take place. And I think, um, over time, Americans are going to understand more and more the prominent role that, that, um, the kingdom of Saudi Arabia is going to play in and, and the global economy.

Yeah. It's not, you know, it's, it, they are, they are a real G 20 global economy player. Um, and, 

Vic: and getting them. Investing capital and their energy and having trade back and forth. There's an, there's a group that's coming to Tennessee looking at investing a bunch of money here, um, compared to going the other way towards Asia.

It's just really good, I think for, for the US and, and for the Middle 

Marcus: East. Yeah. And, and, and look, if you've never been there, I mean, I guess what I can say is there is very positive sentiment and it's historic, longstanding positive sentiment in Saudi Arabia for [00:06:00] America. Yeah. You know, it's, it's, it's a, um, it's, it's a deeply embedded thing.

And so, uh, yeah, none, none of that is surprising, but it is really noteworthy. Mm-hmm. It's really noteworthy, um, as we talk about the future of the economy. Okay. So let's, let's move on to the US China trade deal because we, we had tariffs in excess of a hundred percent, um, yeah, up until this week. And, uh, now they are down temporarily.

Was it a 90 day, 90 day 

Vic: pause to. Allow both sides to negotiate. Negotiate. Yeah. Uh, which was great. They announced it Sunday night, I think, at like 1:00 AM mm-hmm. Uh, central. Yeah. Because they were in Switzerland. Um, they were in sw. Yeah. Right. Yeah. Um, and really positive, and the stock market was very positive on it.

Um, and that's right. There's a lot of details to be worked out. Sure. So it's 90 days of a pause, uh, but a, a really good sign. Yeah. 

Marcus: Yeah. So, so that's a good thing. Um, anything else you wanted to mention about, [00:07:00] about tariffs, sort of taking a backseat for a second? 

Vic: No, I don't think so. I mean, I'm happy to have a little breather for 90 days.

Marcus: Yeah. I've listened to a few podcasts and, and it, you know, uh, it feels like the general sentiment and these podcasts were kind of investor podcasts, right? Mm-hmm. It seems like people are a little worn out by the tariff stuff and they, they would like for Trump to turn his attention to the budget, um, and, and domestic matters.

Mm-hmm. And, and leave the global trade stuff alone for a minute. Um, I think they feel that, uh, whatever point he was trying to make, he's, he's, he's made it as, as much as he could make it. Um, and he, he's gonna have a win out of this 90 day reprieve. Take the win and, you know, turn to the budget, you know, turn to the budget.

'cause there's plenty of work to be done there. Uh, and I think generally speaking, he'll just have more kind of, uh, support, uh, there on, on, on budget matters. Then he will necessarily on, uh, you know, continuing to fight these, these tariff wars that just freak [00:08:00] everybody out 

Vic: constantly. Yeah. I mean, I think he has reset where we're gonna have a 10% tariff on most countries that we, we didn't have last year.

And so. Uh, whether that revenue comes out of the US consumers as a sort of quasi sales tax or it comes from farm producers, I think the reality is probably some mix of those things. There's gonna be more revenue coming into the federal government. Yes. And if they then really focus on cutting money out of the budget, they, they probably could have a pretty good, uh, work on the deficit.

I think. Um, I didn't put a lot of stories in, but the House and the Senate, both, I think one of the house committees worked 26 hours in straight Tuesday and Wednesday this week trying to get their work on the, uh, reconciliation bill done. So that's still going on. I, I'm pretty sure Trump is pushing the [00:09:00] Republicans.

In whatever ways he influences them. But, but they have to go through that process in, in Congress too. Yeah. 

Marcus: Yeah, that's right. Alright. Uh, mild in April, inflation captures early stages of tariff effects. Wall Street Journal, CPI was up 0.2% over the month while annual inflation was 2.3%. So 

Vic: yeah, real, I mean, very positive.

Positive. The Fed, um, said last week we had, we had Rick Aon here, so you missed it. But, um, they, they just held everything flat waiting for more data. Yeah. This is really positive. I mean, it's still, of course not at their 2% level, but it, I don't think it's ever getting to the 2% level. Which 2.3 is basically two.

Pretty, pretty good. Yeah, it's basically two. Yeah. And so, um, I don't know. I wanted them to cut last time. I think there's much more risk. Downside, then ups, then it's getting overheated, but we'll see. 

Marcus: Yeah. But definitely positive for the Fed. Yeah. You know, in there and the long arc of Yes. The work they've been doing to try to manage inflation, uh, Microsoft slashing [00:10:00] thousands of workers, including management jobs.

It's the 3% cut to the, to the workforce. Um, Microsoft is the most valuable company in the world right now. Yeah. I think that's right. Yeah. And I, I, I think I'd heard that they overtook Apple. Mm-hmm. Yeah. Um, and, uh, this will probably make them even more valuable. Yeah. Right. 

Vic: Yeah. And I think it's, it's just, um, I mean, it's not a huge story, but I think it's just indicative of these, uh, big tech.

Titans. The big, big companies are they keep doing the layoffs, they're doing really well, and they keep doing layoffs. They keep doing them. And I think the reason is that their investments in technology to run their own business are more powerful. That's right. So the people they have are more productive and they don't need as many people.

That's right. And that's a trend that I think is going to just continue. 

Marcus: Yeah. I mean they, they, they've all been really clear, you know, whether it's Jensen or Satya Yeah. Or, you know, they're all really clear, like, you know, Benioff, w we have a digital workforce Right. Today. Today they have a digital [00:11:00] workforce, and we're gonna, you know, towards the end we're gonna talk about Yeah.

How that starts changing the way that management teams are working. But, um, yeah, they can, you know, delivering great results on a quarter over quarter basis. And, and also, and simul simultaneously, you know, lowering expenses. Yeah. Right. Alright, moving into the VC rundown. Uh, this is on Axios Pro and exclusive Clarion Lands, 27 million to fortify hospital supply chains.

Really strong group of investors around the table. Uh, north Zone was the lead, but they were joined by General Catalyst Ali Corp. Uh, Kaiser Permanente Ventures, Texas Medical Center Ventures in 1984 Ventures, um, total funding 43 million. Um, and this is focusing on, uh, sort of improving the outdated hospital supply chain, uh, management systems and that are, uh, running things today.

Vic: Yeah, so it's kind of like a, um, int intelligence system on top of the. You know, ERP systems that got put in place in the nineties. Yeah. You're not [00:12:00] gonna rip 'em out. Yeah. You don't rip 'em out. You just sort of build a, a layer layer on top of that and then they take other data fees and try to make it all more effective.

Yep. I think it's really, it's needed. So I think it's good. 

Marcus: Yep. Next story is, uh, from HIT consultant. Lio secures 11 million to scale care coordination platform. So this is Fulcrum Equity Partners. Uh, we like the folks at Fulcrum and uh, uh, Brody. Jason Moore's a venture partner there, and, uh, this is $11 million series B round.

I liked it because they're focused on, uh, the discharge process and I can't stand a discharge process. Yeah. So this is great. Let's get some technology in there to fix this. 

Vic: That's right. I mean, it is really complicated. As you know, what skilled nursing, what home health, what rehab health, where should the patient go?

Where do they want to go with their family? And some options have religious pieces, some don't. Um, and then who has availability? That is a constantly moving target. And so it's a really complicated, if, if oleo can solve it, [00:13:00] that that's a huge benefit. 

Marcus: Yeah. Yeah. It's, it's, it's really, really difficult. And, uh, it's the, the data is, is not in any streamlined manner where case managers can effectively predict for the families when they're, you know, trying to plan for a discharge Yeah.

Where they have a likelihood of being able to get into. Right. It's, you find out in that moment. Right, right. It's just, it's just hard. It's just really hard. Yeah. So, uh, I'm, I'm all for any technology platform that can, you know, improve that, that really Yeah. Painful process. Fierce biotech, j and j and Eli Lilly joined $85 million financing for newly unveiled gene editing biotech stylus.

Not necessarily a very, uh, unique name. Uh, stylists medicine is unsheathing pending a mission to develop NextGen in vivo genetic medicines. And, uh, they were founded with a clear clinical direction and product relevance. Looks like a bunch of fancy words mean it's a biotech company. 

Vic: Yeah, it's biotech, it's a gene editing, which [00:14:00] has been, you know, really limited to CAR T for cancer treatment.

Yeah. And they are trying to broaden into other, they're certainly gonna do cancer, but also other, other diseases. Um, I think gene and cell therapy are really, um, gaining momentum and so it's 

Marcus: one to follow. Uh, I hope so. I mean, uh, it's, it's, I mean, the number of assets that are in the pipeline versus the reality of getting into the market versus the reality of the manufacturing, you know, capabilities that we currently have and the cold chain and all the, yeah.

And the data systems usually have 

Vic: to use the patients. It. It's like a reverse logistics reverse challenge, which is hard reverse. Yeah. Yes, 

Marcus: yes. And I mean, that's, but that's kind of across the board for the gene therapy stuff. It's like you're, it's, it's, it's not a, it's not small molecule. Right? Right. It's, it's dependent on their genes and you gotta pull, you almost 

Vic: need to push it to the edge and have it have the process.

They be done at the hospital, but they haven't we got that yet. We're nowhere close 

Marcus: to being able to do that. Right. So, so, I [00:15:00] mean, look, I mean, I, I, it feels like the, I don't, I don't wanna call quite, call it hype because I think the, the, the, um, efficacy of the, of the science is ahead of our ability to actually deliver it from a operational business perspective.

Yeah. That, that feels like the problem. And also how do we pay for it? Because it's super expensive. Yeah, right. Okay. We're getting this post from x directly from, so mite AI at so mite ai, S-O-M-I-T-E ai. Uh, and they have built an, uh, an AI model that will create any cell type for any person. It's a foundational model for the human cell.

Vic: Yeah. So this is sort of in the same theme as the last story. They have created a, an AI model that instead of predicting text, uh, the next text thing, it's, it produce how, how cells interact and how cells are put together in order to, they're saying a thousand times faster and more effectively predict what cell therapies [00:16:00] or gene therapies would be effective.

And so obviously it's, it's a model that is just now coming to light, but. But promising. And there's a lot of, really, it's a Silicon Valley sort of who's who of investor group. 

Marcus: Yeah. 47 million round series A led by Coastal Ventures and then, you know, sci-fi, VC Chan, Zuckerberg Fusion fund. Right. On and on and on.

Right, right. So, incredible group around the table. Nice size round. Um, you know, I would say actually kind of a small round for a model company mm-hmm. For a frontier model company. Um, but the right people, so they'll be able to get the follow on capital. Yeah. No question. Yeah. Right. Uh, alright. Going back to Fierce Cohere Health Lands $90 million series C round to expand AI use cases.

This was led by Temasek, but they've also got Deerfield defined flare capital. So a lot of, you know, the usual suspects around the table on this one. 

Vic: Yeah. So Cohere is known as a prior auth, uh, support for payers, [00:17:00] which, you know. Made a lot of money, but is not so popular right now. Right. And so they're broadening to, to use that same AI set of technology and data, data to, to broaden what they can do for payers, which I think is smart.

And it builds their, you know, adjustable market and gets them, you know, a little bit away from the, the one of the most criticized parts of the payer market. Mm-hmm. So I think smart. 

Marcus: Yep. Pathos AI raises 365 million at a $1.6 billion valuation. Uh, this is series D, so that's why the numbers are so big. But this is a drug development startup.

Um, and again, using AI for drug development, uh, they're pretty focused in on the, um, uh, the cancer space. Mm-hmm. And, uh, they actually did not, uh, share who the investors were in this round. But, uh, you have to assume that they've got some, some pharma, um, companies that are, that are on the cap table, 

Vic: right?

Yes. Yeah. I think, um. Sometimes when you're in life sciences and biotech [00:18:00] like this, that that's actually a sign of strength. They have. I agree. They have very strong partners and they're not willing to 

Marcus: share. Yeah. Very, very strong. They got 365 million in the door. And they're not telling you from who.

Right? Right. So that's, that's, uh, that's definitely a sign of strength. Previous rounds and were, were led by, uh, uh, NEA Revolution and Builders vc. So, you know, they've got. Plenty of access. Yeah, plenty of access to capital. Plenty of access to capital. Uh, alright. And then the final story for the VC round roundup is not, uh, a roundup, but it's Carta released their Q1 2025 state of the private markets.

Um, in order to get access to this, we're gonna send you a link to the page that, where you can get sort of a, a high level review of it. But if you wanna get the full report, which is what we're, we're sort of talking through, you have to submit your information to Carta and then you, you get this PDF download.

So we, we can't give you a link directly to that. Yeah. If you want to get access to it, you'll have to give them your information. Yeah. You gotta 

Vic: give your information. It's free, but you have to, you know, give your data. Yeah. 

Marcus: Yeah. So, so I mean, high level, we, we walk through this before we mm-hmm. We press record.

What were your thoughts on, [00:19:00] on trends that you, you picked up in the report? 

Vic: Yeah, I think it's, um, maybe in the seed stage, in the, a really early stage kind of where we invest. Yeah. It's, um. Maybe a slight down quarter or kind of a hard quarter. It hasn't gotten a lot worse, but it's not getting Yeah. Better.

Yeah. Maybe, you know, moderately worse, but not off the table and then the later stage B and later seems to be improving. 

Marcus: Yeah. So, um, let me say how, how you respond to this. It felt to me that, that maybe for the first time as I've been reading these reports, it really looks like seed is starting to soften in terms of capital availability.

Mm-hmm. Round counts and amount of capital Yes. Going down. Um, and I think that that is reflective of seed funds are not necessarily, you know, yeah. Uh, either flush with cash or able to currently raise in this, in this environment. Right. So, yeah, I mean, I 

Vic: think a lot of. A lot of [00:20:00] funds in general and a lot of seed funds are, are either out of money or out of money and not gonna be able to raise another fund.

Marcus: Yeah. Yeah. So, so yes. So that was kind of my read on that. Um, series A continues to be difficult. There was the, the divergence of, you know, the number of, of deals done versus the median valuations. Mm-hmm. Um, so median valuations are up both on seed and series A pretty, pretty meaningfully. And you know, we, we sort of hypothesized that is because the bar is higher now.

Yes. And in order to get the round done, if the bar is higher than the quality overall is higher and that's bringing that median valuation up. Not necessarily people are happy to pay more, but they have to pay more because they're not willing to do the riskier deals anymore. 

Vic: Yeah. 

Marcus: Right. Yeah. 

Vic: Fewer deals are getting done.

The ones that are done are later more mature and worth more. Yeah. Um, the other thing that, you know, it's part of me maybe. Hoping, but, but I think it's [00:21:00] true that you see the venture markets improve kind of from the, from the exits to the late stage, and then A and C are last to really improve. Yeah. Um, and we saw, you know, meaningful uptick in exits.

It's not back to the boom time from three years ago, but, but up from last year. Um, and then the later stage rounds are also improving. So there's some hope that that will then begin over. It's probably a 12 month lag, so over a period of time that'll start to filter into the earlier rounds. Yeah. 

Marcus: Yeah. Uh, the other thing, exits actually were up slightly for the quarter, which was, which was a nice thing to see.

Right. Um, I feel like those were the big, the big trends that we noticed, so That's right. You know, kind of not that surprising. Uh, but we're not, we're certainly not in a recovery and, and especially not, when we look at deal count, deal counts continue to go down, right. Yeah, 

Vic: that's right. And the other thing that is, um.

Just was surprising to c is the, the time from C Oh yeah. To a [00:22:00] is I think it's two years. Two years. 2.1 years. Yeah. Just over two years. Yeah. Which is not a lot of companies are planning for that. No. And so not a lot of firms are planning for that. Yeah, that's right. But, 

Marcus: but you know, as, as we, we were marked, it does reflect what we're experiencing in our portfolios.

Right. Like it, yeah. So it's kind of 

Vic: a two year run. Right. I, I'm gonna start talking to my portfolio. I think we need to start planning for a two year. 

Marcus: Yeah. And, and, and by the way, like you're not, when we talk about planning, we're not talking about raising a larger round, we're talking about capital efficiency.

Vic: Yeah, 

Marcus: that's right. Right. You, you know, you're, you're gonna have to somehow become the best of the best in a two year window with much more capital efficiency. Right, right. So, 

Vic: yeah, that's right. So when you're raising your seed round, we would normally say, you gotta hit these benchmarks. Yeah. In order to raise the a.

Right. And I would before. This report, I wouldn't have modeled it on two years, but now we have to. So you either need to spend less money [00:23:00] every month or raise more. There's not a lot of money hanging around, so you're gonna have to some combination, but probably spend less every month, 

Marcus: probably spend less, uh, moving into policy.

CMS proposes crackdown on money laundering, provider tax policies. This is modern healthcare. They put modern money laundering in quotes. And of course we're, we're finally at the moment where we're talking about supplemental payments and, um, the quote unquote loophole, uh, that exists there. And as we've talked over several sessions, I'm pretty sure we've had Emily on to, to Yeah.

Walk through the mechanics of this. Yeah. Um, this is billions of dollars for many, many, many health systems. Right. You know, it's hundreds of billions in aggregate, but like there are specific health systems for whom this is more than $1 billion Yeah. Of, of revenue for them. 

Vic: Yeah, that's right. And, and it's.

It is very complex. But despite that, the media and lobbyists and the [00:24:00] government, frankly, have been educating everyone about it. And I think that's because the, they're gonna really make meaningful change. And so it's coming kind of through the health committees now, uh, but there's gonna be significant limitations on, on what, what can be done.

Marcus: Yep. Yep. Sorry, I just saw a number one story. Yeah. So I'm, I'm just winding that up for us once we get there. Yeah. Uh, okay. That was this story. All right. Moving to the next one. Drug makers avoid the worst case pricing scenario for now. Um, so basically Trump is backing off of, uh, you know, strong policy adjustments around, uh, the pharma industry.

Vic: Yeah, I mean, I think the, um, this. Price controls or price restrictions on pharma is, has turned into a, a trade with other nations, uh, negotiating point. So there's gonna be some kind of, um, leveling between what the us, you know, healthcare industry pays [00:25:00] and what is paid in Europe and the developing world.

And we pay a lot more. And so they'll either pay more as well or we'll pay less, or probably some combination of the two. But that's, that's better than feared for the drug companies. 

Marcus: Mm-hmm. Mm-hmm. Mm-hmm. 

Vic: Yeah. 

Marcus: Alright. Uh, this is a, uh. An opinion piece in the New York Times, a guest essay. However, it's not a third party opinion.

It's a first party opinion. So, uh, the, the title of the piece is Trump Leadership. If you want Welfare and Can Work, you Must. Um, and then when you go to see who wrote it, uh, it is in fact the, the Heads of Health and Human Services, CMS, the Secretary of Agriculture and the Secretary of hud, um, so Robert Kennedy, me, Oz, Brooke Rollins, and Scott Turner.

And basically collectively they are, uh, a pining and, uh, sort of, uh, a little bit forecasting for you. Mm-hmm. Uh, that work requirements are going to be part of the [00:26:00] changes that are coming to, um, to the quote unquote welfare programs. 

Vic: Yeah. And two, um, at least two takeaways from a one is, um, the Trump administration is speaking directly to the people in any way it can, it.

These, these four heads of agencies together wrote this piece. They didn't trust a reporter or to translate for them. And that's different than than other administrations as far as I can remember. Maybe it's happened before, but, 

Marcus: and this is at least the second time, RFK has done this. Yeah. In, in the short time he's been in the seat.

Vic: Yeah. And I think he did it before on Fox News they were elected too. Fox. 

Marcus: Yeah. Yeah, yeah, yeah, yeah. But, but, but, but I mean, as the, as the secretary. 

Vic: Yeah. Yeah. 

Marcus: He did the first one on Fox News and now he's doing one on the New York Times. 

Vic: Yeah. Right. Yeah. And I, I think it's probably healthy. I, I don't know.

I mean, they're the people that are making the decision, so hearing directly [00:27:00] from them is a, a direct source at least. And then the other thing that I took away is they spend a lot of time really making a case that, um, if you're able to work. It's a almost like a, um, self-esteem thing. And even though it's, um, maybe not fun when you first have to go look for work in, overall, it's better for even the people that are forced to get jobs.

Yeah. And whether you, you believe that or not, that's a, that's a kind of interesting way to position it. 

Marcus: Yeah. Well, I don't think that that's new, and I think that's gonna come across as pretty patronizing to many when they read this. Yeah. But, but regardless, I mean, that, that's, that's the, that's how they're rationalizing their position and that's their job is to rationalize their position and to provide something that's a little bit more ideological than just purely, Hey, we have a money issue and we can't give up.

Yeah. I thought it was the same money 

Vic: mean that's before, so That's right. They positioned it in a way that [00:28:00] was better than I was expecting. Right. Yeah. Okay. Okay. 

Marcus: Yeah, yeah, yeah. I, I, uh, I, I think, I think the adept reader will find that to be patronizing, you know, uh, set of. Commentary, but whatever, whatever.

Yeah. Um, okay. So now moving to Healthcare Finance News, uh, $715 billion, Medicaid Cut Passes, house Committee and Reconciliation Bill. And here we have our common Sense work requirements, uh, in place. 

Vic: Yeah. So the, uh, by the way, 

Marcus: common senses in quotes, that was not, those are not my words. I'm, I'm reading from a, I'm reading from a, you know, a script here.

Vic: Yeah. So the health Committee on Energy and Commerce, I don't know how they get to do the authoring, but they were in charge of this part and they worked for 26 hours straight. I don't know why it took that long, but they, they were negotiated a bunch of things and came out with sort of pretty close to what the head written in the New York Times Op-Ed.

Marcus: Yeah, yeah. [00:29:00] Uh, seems to me there's a little bit of coordination there. Yes, yes, for sure. Uh, okay. Uh, a little bit of internal, you know. F Jousting, uh, RFK Junior is driving his own subset of the Make America Great Again platform called Make America Healthy Again. Uh, and that is kind of the, the music, the sheet music that the entire HHS is, is gonna be singing from while he's in the seat.

Uh, and you know, he started talking about, uh, unnecessary ingredients in food and starting to ban some of the food coloring, you know, things he is tackling Roundup and other pesticides that are regularly used and, and can be connected to chronic disease, potentially even cancers. Um, and other Trump officials are balking at that.

Just citing how integrated it is into the current production, uh, model that we have for food in America. 

Vic: Yeah, that's right. And I think it is, there's a tension there. I mean, getting rid of the, the food dies, you know, the companies that [00:30:00] are making these cereals and foods and other things, they already have the formulation for other countries and so.

It's, it's a change, but they know how to do it. Getting rid of Roundup and other pesticides. Um, it's not clear how farmers would grow the same volume of crops that they grow now. And so, um, that's where the tension is, or where the debate is back and forth. Yeah. 

Marcus: Yeah. So, uh, you know, so something we'll need to watch, but I, I, I find this particular internal squabbling to be somewhat predictable, um, because I feel that, you know, RFK Junior.

Was, was never, uh, an easy add for Trump, right? Mm-hmm. It was always, um, a calculated political deal that was made. Um, RFK did a great job of building a sufficient base to be, uh, a meaningful mover in the election. And so when he came over, um, he, he wanted something, he got that thing, and [00:31:00] he's being consistent with what he wants.

So on that level, I, I at least appreciate Yeah. Um, that he is not just, you know, he's not changing the, he's not changing with the wins, right? Yeah. He's, this is what he came in with. He's doing that thing, and of course, it's not gonna make everybody in the Trump administration happy. Um, so we'll see how this plays out over time.

Right? Yeah. We'll see how it plays out. Uh, to that end, um, CMS has rolled out, uh, their initial sort of salvo for what CMMI is going to be going forward. Uh, again, as I said, it's gonna be underneath the banner of Make America Healthy again. You know, you and I read through it and it reads like it's basically.

Value-based care, um, with a, with a different, I don't know name. 

Vic: Yeah. I mean, it is, um, first of all, I, I was sad, not surprised, but sad when the CMI program was, was going to maybe go away. And I'm excited that it's not, they're gonna still do innovation Right. And try to try to [00:32:00] innovate. Right. 'cause we need to innovate.

And when we read the whole report, which we'll link in the show notes, it is talking about aligning financial interest, getting to the root cause of disease, prevention, prevention, food, exercise. And if you were in the other party, you might call that social determinants of health. Right. And, uh, value-based care.

Right. Right, right. They don't use those words, but, but a lot of the portfolio companies that. That I have in my portfolio or that I see out there that are doing really interesting work around trying to address social determinants of health or try to get healthy food to people or help them, um, get to a doctor's appointment.

Um, I think a lot of those things can fit into this new C-M-M-C-M-S Innovation Center, which is not CMMI, 'cause that program is no longer, but it's, it's very similar [00:33:00] to the, the old. And so I think great, really good to see that they're still doing innovative things and we, we need to get people healthy and aligned financial interests.

And so That's good. Yeah. You can call anything you want. 

Marcus: So, so, so did they actually kill CMMI? 'cause they're saying here that the, the author of this piece on cms.gov is the director of the Center for Medicare and Medicaid Innovation. So did they, did they actually kill cm? MII, I don't know. But even whether 

Vic: they did it or not, it's, it's just, you know, it's, it's.

Reborn, reborn as the innovation center. Yeah. Whatever. It's, it's, it's, it's the same 

Marcus: thing. I, I, I very much agree with you. I, I, I, I do, I, I, I guess I will say that, uh, I think there is a, there is a difference to the edge, um, from a Make America healthy again perspective versus this, the, the social determinants of, of health per perspective.

Mm-hmm. Um, there is, and, and by the way, when I say this, I'm, I'm simply giving you my [00:34:00] analysis. Yeah. I'm not saying which one I think is right or which one is wrong. Um, I remember, I remember early in my, uh, in my relationship with Bruce Greenstein, I was, I was in the University of Austin, um, and there was this event that they threw and, and Karen DeSalvo was there and he was there and a bunch of other people there, and they were talking about social determinants of health, and I remember him.

Uh, taking issue with social determinants of health. Yeah. He didn't like the term, he doesn't like the, the word determinant, right? Yeah. Um, I can't remember what he wanted to put in place of it. I think it was drivers or Yeah. Or something. It was 

Vic: drivers of health is what? Drivers of health. Yeah. 

Marcus: Yeah, yeah.

And, but, but I think that. It's important, it's important to sort of focus in on that, because I would say the determinants is more of a like, Hey, these are the things that determine your health. Yeah. Right. Versus saying, these are things that influence your health. Uh, and, and it feels to me that, you know, the Make America healthy again, is more [00:35:00] focused on the individual, the individual's role, obviously making it easier for them by not poisoning their food.

Right. You know, not giving them food, you know, pesticides and, and food coloring and other things like that. But also highlighting, you know, the importance of behavior, right? Like not just focusing on environment. And this was something Rick was talking about in last week when you guys were talking, um, you know, focusing on the behavior component of it.

And so. I think that's important too, you know? Yes. I think that's important too. And I, and I, and I, I think that, uh, hopefully over time, these two different perspectives, which are both valid, you know, can start to integrate into a more holistic, complete and effective, uh, approach from, from the government on what we need to do to get to a more preventative healthcare system.

Right. Because I think both sides have a, have a, a proper case to make. 

Vic: Yeah. I, I, I agree completely. And I think the words matter. The words matter. And what Rick and I were talking about last week, I think is you sort of bring up again now, like, make people healthy, make [00:36:00] America healthy. Everyone's in favor of that, of course, I think.

But, um, making it possible for people below some income level. To access healthy food and access enough time in the day to exercise and how is it realistic? Mm-hmm. I think that needs to be sort of brought in and woven in as opposed to sort of just the assumption that if we, if we provide healthy food, everyone will automatically pay more to get it.

Mm-hmm. And so there's a balance there. Um, and I don't have the solution, but, but I think at least there's an innovation center that's, that's working through these things. Yeah. 

Marcus: Yeah. And to the payer section. Yes. We have one story to talk about and three different stories on this story. Uh, so UnitedHealth Group, the story started this Thursday, Tuesday, so story started on Tuesday, then reading from the Wall Street Journal, but many different outlets covered it.

Uh, the headline here [00:37:00] is UnitedHealth, CEO is out sending shares plummeting. Um, Andrew Witty steps down after the stock price, which was fairly resilient. Um, you know, it was resilient in the face of the change healthcare hack. Yeah. Uh, it took a hit after the murder of Brian Thompson, but actually came right back after, you know, some, some good earnings reports, right?

Yeah. I mean, it had gotten just shy of $600 in April of this year, right. 

Vic: Back basically back to, its close to its all time high. 

Marcus: Yes, yes. Um, but, but basically in a month's time, in a month's time, the price of the stock has been cut. And more than half. Yes. Um, and so that's, that's just a staggering result.

And it feels like things, it feels like information flow is [00:38:00] very unevenly distributed right now as it pertains to UnitedHealth Group. So we started with Andrew Witty, stepping down. This is clearly, you know a fact, we all know this 

Vic: well. Yeah. And we might go back 'cause to, to lose half its value. They missed earnings on April 17th.

Marcus: Yes. And, and and they and they lost. They cited, 

Vic: yeah. They cited their, uh, MLR ratio being bad. We were on this show saying that was a bad kind of harborer for the whole industry. But then other things came out and they were fine. 

Marcus: Other were fine. Yes, yes, yes, yes, yes. So I 

Vic: agree information. They're very opaque at United.

And Well, they, well they've, they've, they've got so many data pools and so many businesses may, I don't mean they're intentionally opaque. Yeah, yeah, yeah, yeah. There's a lot I 

Marcus: want, there's a lot of business lines. Oh. There's a tremendous number of business lines there. I mean, you know, it's a very comprehensive business.

And then on top of that, they've got a fairly healthy investment portfolio. Yeah. Their [00:39:00] balance sheet is very robust. Right, right. So there's just a lot going on there. Yeah. So, 

Vic: so they missed earnings and the reason they gave, let me say, this was not occurring to other payers. That's clear. Yeah. 

Marcus: Well, we didn't know that when they did it.

Right, because they came out first. Yes. But then the others came out and it was like, oh, actually their MLRs were not as damaged or impaired. 

Vic: Right, 

Marcus: right. 

Vic: That's 

Marcus: right. 

Vic: So that they lost, so they went from 600, which is about something like 400 billion Yeah. To 4, 4 25. So they lost a significant amount of value then.

Yes. And then yes. So then we get to Tuesday. And the CEO stepped down for personal reasons. Yes. And the stock lost another 10%. Another 15%. 

Marcus: Yeah. It looks like right now it's sub 300. 

Vic: Yeah. Well that, that was two. It went down and then the next story came out and it went down again. 

Marcus: Yes. So the next story, um, which is this?

Is that today? [00:40:00] No, yesterday. Yesterday. Okay. So the next story, I think it's yesterday. I don't know. It might be today. Um, I thought it was today, but this is all happening. Yeah. Pretty quickly. So the next story, uh, which was Wall Street Journal, the, the headline was, UnitedHealth Group is under criminal investigation for possible Medicare fraud.

Now, you and I have been talking to others in, in the industry and other analysts. And Vic It is, is there, is there. Uh, so the DOJ declined to, to comment. Right, right. Um, but certainly this is the Wall Street Journal. Right. So I, so I think the, the thing you and I were trying to talk through was we were trying to see like, okay, DOJ has not commented, but it's a really big deal to use the word criminal in a headline Yes.

About a company as, as big as [00:41:00] UnitedHealth Group. And so, um, and 

Vic: yeah, and I, I called and, and there were 

Marcus: questions right. About like, is are they Right? You know? Yeah. Is, is this, is this actually happening right now? 

Vic: Well, so I, I called, you know, friend of the pot, Emily Evans, to ask her, 'cause she's, I think the best healthcare policy person that we can call her cell phone on easily and said, what's the burden to get to do a criminal.

Case in Medicare versus versus civil. Versus civil. And in any criminal case versus civil, whether it's healthcare or not, the, the burden of proof is different. You have to sort of prove beyond a reasonable doubt in criminal and in civil, it's, it's a preponderance of the evidence. So it's a much lower evidential threshold.

That's true in all kinds of cases. But then in Medicare, you also need to prove intent. And so [00:42:00] if they, if DOJ decides to pursue this, they would have to prove beyond a reasonable doubt, doubt that someone, some individual at UnitedHealth Group intended to commit Medicare fraud. Meaning they knew it was not appropriate, the reimbursement bills, they were per in.

Um. That is very different than, so there's a lot of Medicare fraud that occurs. And usually it is a, a debate or a argument over, um, maybe like the degree. So in a lot of, um, surgical settings there, there's 2, 3, 4 degrees of a procedure. Sure. And, um, DOG will say to a, to a health system, you, you seem to be claiming a level [00:43:00] four more often than your peers.

And we think that is not appropriate. Right. But it's not intent. Right. And then they settle they thing And we 

Marcus: covered, and we covered this, that, that story where, where, because Wall Street Journal was actually the, 

Vic: well, that's, there's been fights over the broker inappropriate 

Marcus: things. Right. Which is also No, no, no.

I'm not talking about that. I'm talking about the differences. I'm talking about degrees. Yeah. Thing be because of, 'cause 'cause what they were comparing was UnitedHealthcare and, and Oh yeah. Providers outside of Optum versus UnitedHealthcare and providers inside of Opt Optum. That, that was the story on the term.

Yeah. So it's 

Vic: sending a nurse to a patient's home and having him or her do an interview with the patient, collecting their health risk assessment and then coding them for the, the factors that they have. I that is not Medicare fraud. Now, if they [00:44:00] were. Uh, not reporting accurately, or they didn't even in fact go to the home and they were just making up those interviews.

Yeah. That would be fraud. Yeah. Um, it is shocking to me that this was going on in intentional way to defraud the government. Well, we don't, but we don't 

Marcus: know. 

Vic: We don't know any, we don't know anything. Well, 

Marcus: I, I, I, I, I mean, look to me the, what, what I'm, what I'm kind of responding to is the Wall Street Journal put out this story.

The headline uses the world word criminal. Um, I. And the DOJ declined to comment and the impairment to the stock price was material like, I mean, sub 300 Yeah. Right now. Right. So it, it, it's, it's just, it's just like, this to me, just feels like we are out on the edge of this story right now, and I'm sure in the coming weeks it will all land.

I mean, we will figure out what was [00:45:00] what and you know, was the Wall Street Journal, right. Were they not? Right. You know, what, what's the, what's the details here? But it's just one of those things where, uh, the, the impact to the company and the company shareholders, given the lack of comment from the DOJ, which seems, I don't even know, like how, how, like, how, how common is that for.

For a media source to highlight potential criminal investigation from the DOJ. But the DOJ did not comment on it. And, and I'm asking because I'm not, I'm not, I, I don't track the DOJ that closely. I 

Vic: don't know. And I will say that it's my guess that the DOJ hasn't made a decision where they feel comfortable stating publicly one way or the other.

Right. Right. They don't think it is appropriate Right. To say, yes we are, or no we're not. Right. That's my guess. [00:46:00] But I, I don't, I'm certainly not an expert at this. Um, and the Wall Street Journal is one of the few news outlets in the world that I had held up as like a really. High esteem, they're journal the times.

Sure, sure. There's, there's very few that, that are still, at least by me, considered a very trustworthy brand. Yep. And I find it hard to believe that they would put this kind of title out without, without significant sources. Without significant 

Marcus: sources. 

Vic: But it also is hard to believe that, that UHG was doing this.

So, I, I don't, I I think you're right. We're, we're out on the edge. I don't know what's gonna come up, but it is, um, given where UHG already was Yes. With the public [00:47:00] opinion, which you and I have talked about. We talked about it, yeah. Is very unfair. But is what it is. This is, this is terrible. It's very damning to the stock.

Now, it also might be true, but it, but it's, it's just. It's gonna be hard for them to recover from. 

Marcus: Yeah. Yeah. I, I just, it's, it's, it has just been, uh, it's been incredible to see, uh, what, what the storyline has been for this company, you know, since, uh, the first quarter of last year. Just kind of the hits keep coming.

Yeah. It's, it's just been, you know, and, and, uh, yeah. Alright, so let's move to the third story here, um, which is, Steve Helmsley has replaced Andrew Witty, uh, as the, as the CEO in this process. Um, he, uh, he was the chairman. Yes. Yeah. And he was CEO for a long time. Yes, yes. So, so he's, 

Vic: he's the only one that can come in.

Marcus: Yes. So he, you know, they, they've [00:48:00] brought in sort of a, a, a veteran and as someone who's, you know, held in, in high regard Yeah. To step, yeah. He knows all 

Vic: the people in Minnesota. Witty was sort of an outsider. Yeah. Elmley is, is the insider to 

Marcus: Totally, totally. Yeah. Because Witty came from the uk. UK and he never, and he was, he was on the Optum side.

He was never on the insurance side of the business. Right. That's, that's right. Um, so yes, uh, this, this is a return to a more conventional leader for the company. Um, and, and if there's 

Vic: anyone to, I mean, modern Healthcare's title I think is right. Legendary. Helmsley takes over UnitedHealth mid rough seas.

If only any captain who can shepherd them through this, it's helmsley, whether he can or not. I mean, there it's pretty rough seas. Yeah, 

Marcus: yeah. 

Vic: But he knows all the people in Minneapolis and. Help build it. 

Marcus: Yeah. And, and I, I guess I would say, um, and I want to be [00:49:00] sure he, he was the chairman. Yeah, he was, he, okay.

So he probably is chairman now. He's chairman and CEO Well, that's what I mean, that's what I mean. So, so I, I, I would actually say that's a very, uh, good sign that the acting chairman steps in as the CEO, um, even in an interim capacity. Because to me, that's kind of a, um, nobody's running, you know what I mean?

For the hills, uh, the, the chairman stepping in is, you know, the chairman, chairman was already sort of most, uh, libel person, you know, just director stuff. I mean, so I, yeah, it's better than if he didn't step in. Well, no, I mean, it's also better than, than like trying to find somebody else on the management team to step in.

Yeah. I guess, I guess that's my, that's, that's what I'm really trying to compare it to. Like they didn't. Bring in somebody else from the management team. It's the, the chairman came into that seat, right? Yeah. So that's that. I mean, I think symbolically, [00:50:00] I think that that is a strong move. 

Vic: I don't know. I don't know.

Helm believe it. I know people like one degree removed from him. I think he views it as like his family. Like it's, it's his, his company. He was, he was CEO for a long time. Even if they have done a bunch of bad things, I think Helmsley would want to come in and try to do what he can to make it less bad.

Sure. And if he thinks they're being wrong, he'd want to come in. And so I'm not sure it signals that there's, there's no fire with all this smoke. No, I, I mean there, well, I, I, I, I hope you didn't 

Marcus: pick 

Vic: that up from what I was 

Marcus: saying. 

Vic: No, I, I just thought you meant it was good. It was a good sign that he was coming in.

It, maybe it's a good. It's better than the alternative, I guess, but it, it still could be really bad. 

Marcus: I, I, I, I guess there's a lot of different ways you could go about replacing a CEO and I think the chairman and a past CEO stepping into the, you know, acting, the active chairman and a past ceo EO stepping into that role, I think is a, he didn't up very strong.

He didn't 

Vic: step in the stock [00:51:00] would be a lot lower. 

Marcus: That's, I think that's very, very strong. Yes. I think that's very strong for the company and a shareholder. So, yeah. Um, I'm a shareholder that, that that was the point, the point I'm a 

Vic: shareholder and I have not bought today. Um, so I mean, I think we need to wait and see.

But, but yes, he, if anyone can fix it. 

Marcus: Helm. Yeah. Alright. That's all we gotta say about that. Um, because I'm sure next week we'll have a lot more to say yes as more things, you know, uh, get clear Moving into health systems. Not a whole lot of stories here. Kaiser Permanente is 16.1% year over year Q1 revenue growth file following the rise acquisitions.

This is good. I'm cheering for Verizon. My friend Deepak is running the value-based care programs over there. Um, I want Verizon to do great. Yeah. 

Vic: To. 

Marcus: I agree they're doing well, and hopefully they'll keep going. Yep. Uh, okay. Uh, this is coming from Med City News, Amata Health Files to go public. Will it be successful?

So the articles talking about how Hinge Health, um, you know, said that they were gonna go with the IPO in [00:52:00] March. It's kind of stalled a little bit. I mean, obviously these markets have not been fund markets Right. To try to do an IPO and so Yeah. Right. It, it's, it feels unfair to, uh, I don't know that it's a negative 

Vic: sign on 

Marcus: him.

Yeah. It feels unfair, right? It feels unfair to pick on the company given the state of the markets over the, you know, over the last 60, 80 days. 

Vic: Yeah, I think that's right. It also will be interesting to see if ADA has a different experience or the, it's all the same. Yeah, that's right. Because it's, it is a, the IPO market is just closed.

That's, that's very different than h just having 

Marcus: trouble. I think these, I I find these companies to be very similar. Yeah, I agree. In, in their success and their brand reputation. They both have that Amazon partnership mm-hmm. Uh, that Aaron Martin is sort of stitching together with all these best of breed digital health companies.

So they seem very much analogous in terms of, you know, their position in digital health. So maybe Oma Health benefits from timing, uh, as opposed to Hinge Health. Mm-hmm. You know, obviously the stock market's all green right now and Yeah. You know, we got [00:53:00] the, we got the tariff stuff relaxed for 90 days.

Maybe they try to like sneak it in window, you know, uh, that, that might be the, the, the best plan for them. Uh, okay. Moving on to the next story into the pharma world. Eli Lilly says the trial patients lost more weight on Zep bound than rivals. Wegovy. You know, Lilly just continues to, uh, show that they are the, the dominant player in the lip one space.

Vic: Yeah. They, they, now, they funded it, but they did a, they did a clinical study where they compared their product. To rivals. 

Marcus: Yeah. As they needed to. Yeah. 

Vic: Yeah. And, and, and they did much better. And so their custom using their product, patients lost 20% versus 13%. Um, I think it's, Lou is really strong. They're on like firing all cylinders right now.

Marcus: They're, they're crushing, uh, bear shares jump after jump, not jump, jump after results. Beat expectations on pharma, strength, higher sales and pharma and consumer health were offset by a drop in crop science. So Bear Makes, makes Roundup, [00:54:00] by the way. Yeah. They 

Vic: bought Monsanto. Yeah. Which I don't know if that was a great idea.

Not great for the brand, but, uh, not great for the brand, but they did so well on the pharma side that it, it sort of outpaced all the troubles in Roundup. 

Marcus: Yeah. 

Vic: Yeah. 

Marcus: Uh, alright. Moving to Med City, I think this is our last story on pharma. GSK makes a big liver disease move with $1.2 billion deal for phase three ready mash drug.

You know, mash is kind of tough. 

Vic: Yeah. 

Marcus: Tough liver, you know, condition. Um, and, uh, phase three, ready. That's, that's pretty good. Yeah. Yeah. Yeah. Fairly de-risked at that point. Uh, let's see, what can we tell about this? This is a bar, Boston Pharmaceuticals, uh, asset. Mm-hmm. And, uh, I mean, it feels like a billion is around the, the buying price.

I feel like every time we, we talk about one of these single assets, assets being purchased, it's like a billion been single 

Vic: assets sort of, um, being acquired, but not the whole company, like licensed in or in this case they're buying one of, of several [00:55:00] assets. 

Marcus: Yep. So, alright. So this is, uh, this is this kinda special interest health in US story.

A baby is healed, this is New York Times. A baby is healed with World's first personalized gene editing treatment. So this is a nine and a half month old, uh, who had a rare condition and, uh, was, you know, treated in a, in a CRISPR modality, right? Yeah, 

Vic: I think cured. So, um, he had a, this cute picture too, genetic.

Um, defect where his body could not process, uh, ammonia. And I think it's one, one of the genes. And so he was in the nicu and in ICU 

Marcus: it affects one and 1.3 million babies. Yeah. So that's how rare it's, yeah. 

Vic: Yeah. And so, um, there was very little hope. Most babies die in the first week with this genetic defect, and none of them, if they do live, they have [00:56:00] all kinds of problems.

And so, um, researchers approached the parents with trying to cur cure it with, with, you know, gene editing through crispr. And there were of course a lot of regulatory hurdles and, and a lot of science to be put together. Um, but when he was four months old, I think he got his first treatment. They gave a very low.

Those to start. Uh, 'cause uh, no crispr gene editing had been done in humans. This was the first human, I think. Um, and it, it worked. And so now he's cutting three or four other treatments, um, and he should be cured for life, which is incredible. 

Marcus: It's amazing. It's amazing. Yeah. I mean, listen, I, it, it would be great if we can figure out the cost part of this, if we can figure out the cold chain part of this, if we can figure out, uh, the manufacturing, you know, part of this.

But this is obviously, I [00:57:00] mean Yeah. You know, it's just, this is so incredible. This, it's so incredible. 

Vic: This, this boy is gonna have a life. And do all kinds of great things and his parents 

Marcus: will get to raise him. Yeah, yeah. You know, it gives me chills. Uh, that's awesome. That's awesome. Uh, okay. AI rundown. New York Times, your AI radiologist will not be with you soon.

Experts predicted that artificial intelligence was still radiology jobs, but at the Mayo Clinic, the technology has been more friend than foe. Well, first of all, uh, Mayo Clinic leans into everything. And so, yes, of course, you know, when you lean in, you get to partner with the technology as opposed to be replaced by it.

But also, I mean, I think, uh, for the most part, radiologists are, are already very sort of, uh, first adopters on technology. And so as a, I think as a general rule, they're not gonna be the ones to be replaced. They're gonna be the ones that continue to evolve what it means to be a radiologist leveraging these technologies and finding new and novel ways for them to provide value from a human perspective.[00:58:00] 

Vic: Yes, and I think because they are. Their job is really translating technology to other doctors and to patients. Yes. Starting with X-rays and then MRI and then ct and now ai, on and on and on. Um, their job is, is that, and it has start, you know, it was with imaging at first, which is where you get the name radiologist, but, but now that now it's sort of lots of diagnostic tools, not only images, it's, it's a lot of images that have been significantly affected by technology, including CT and MRI.

Um, and so I choose to view this as kind of a prototype or a, a, um, lesson for other doctors and obviously, and for me, for just how can we work with AI successfully? Right. Right. And instead of throw up our hands and say. [00:59:00] AI is not gonna affect venture capital and I'm not gonna learn about it. Instead, what, what Mayo Radiologists did that was very successful is they leaned, as you said, they leaned in, they're using AI to do their job more effectively.

And there's lots of aspects of a radiologist's job measuring the volume of a kidney was the example they gave in the article that you can do with the image and there's math involved and the human can take measurements and then do the math, but that's not the best use of the radiologist's. 45 minutes to go through that calculation.

And now they have got AI to do that and then they can use their judgment and their experience to do other things. And it really just upleveled what they could do as a radiologist. And you're right, they have, they're sort of evolving how they. For themselves to find their role. But I think every [01:00:00] specialty can do that if they choose to.

So, um, maybe some specialties won't, but, but I think that's up to the doctor to, to think through it. 

Marcus: Yep. Yep. Agree. Uh, okay. Open AI and partnership with several other, you know, folks, I think Harvard and, and some other academic institutions, uh, they created something called Health Bench, um, which is an evaluation system for AI and, and human health.

Vic: Yeah. And so they have taken 5,000 common health interactions, what they call it. So the example they gave is, um, a neighbor sees his neighbor, you know, on the ground in the front yard and calls 9 1 1. And so they sort of have that interaction and then they have doctors. Assessing and responding the way that they think is best.[01:01:00] 

And then they use that to train ai and then they sort of iterate it around that. And so if you go down, um, almost to the bottom, you can see the, um, sort of the comparison of doctors versus the ai. Keep going. It's, I think it's the last one. Okay. And so you can see like over time the, for people that are not watching, there's um, sort of how would an individual, um, doctor sort of assess an emergency referral is the top one.

And of course there's a range, right? And, uh, some doctors do it well, some don't do it well. Yep. Um, and they have a score scoring system. And then they now have a way to, to determine where is AI and which version and how are they doing. And so one, they have sort of. Taken a realistic, uh, healthcare setting, 5,000 of them and created a training, uh, infrastructure maybe.

And now they have benchmarks [01:02:00] and a way to see how the AI's doing. And in general, it's tracking largely similar to the individual human physicians. It's not significantly better, but it's also not really worse. And of course it will keep getting better over time. 

Marcus: Mm-hmm. Alright. I thought this was an interesting story.

We talked earlier about the digital workforce growing and Moderna, um, has merged its tech and HR departments and so now they're what would typically be sort of your chief people officer or Chief Human resources officer is their Chief people and Digital technology officer. And this is because they have a blending of human resources and digital resources and they just need to manage all the resources under one roof.

Vic: Yeah. Which. Uh, I had not conceived of that before reading this article. Right. But it's pretty interesting that you would, you would combine your human resources and, and technology resources together. 'cause they're, [01:03:00] they're sort of doing jobs for the company. Um, and I think that's gonna be more and more common as we have agents and other, other tools out there.

Marcus: And you think about sort of the emotional and psychological aspects of it, right? Like you don't want the chief people officer to be anti ai, right? So you kind of have to have it roll up to them, right. So that they can help their human workforce with the psychological challenge of like working alongside a digital workforce, right?

Yeah. And what that looks like. And you know, you don't want it to be, the humans are over here, the chief technology people are over here. Right. And like they're fighting because that's not what you want. Yeah. So to me, that was what I pulled away from me. I was thinking about how do you do this in a way that helps the humans?

Find a way to, to do this that isn't so, um, I don't know, just so negative. 

Vic: Yeah. It helps the humans that are working. And if you go back to the Mayo and radiologist [01:04:00] example, I think the Mayo Clinic now can do radiology reports for many more groups. They can take many more cases in and that someone has to manage that, that body of work and sort of allocate their people time and their tech time.

And yes, having someone sort of over that who can empower the humans and keep them motivated on doing what they wanna do, but also take away things that are maybe not why they got into radiology to do this, measure the volume of a kidney. Um, I think that's, that's optimistic. It's an optimistic take. 

Marcus: Yep.

Uh, perplexity is valuation surge to 14 billion in a new funding round. So, uh, perplexity, keeping up pace with, uh, many of the other big, big AI companies. Um, they're not a frontier model, but, uh, they're probably, they're easily one of the biggest apps, um, that is, uh, sort of a front end to, to these types of models, [01:05:00] uh, you know, 14 billion.

Uh, how, how does that sort of, uh, compare to some of our, our, our vibe coating rounds that are happening? The cursors and the windsurf and stuff like that? Behind, behind them? Yeah. Yeah. 

Vic: Um, they're coming out with a browser, which was kinda interesting. Um, that makes sense for them. Yeah, I, that's right. I, 

Marcus: I think perplexity should do all the front end things when it comes to surfing, searching.

Yes. Like they should do that for sure. That's right. Um, and, and you know, the, it's interesting, I've talked to people who, because of the way that they market and they distribute, um. Like associate certain, uh, evolutionary features in AI with perplexity. So, for example, I feel like Perplexity did a really good job on marketing, deep research.

Mm-hmm. And people have some, some subset of the people out there are associating deep research with perplexity when every, when everyone has it now, they don't have it. It's, it's [01:06:00] not, it's not, I mean, it really was, was was deep seek first. Right. You know, that that really Yeah. Blew that out of the water.

And now open AI has it and Cloud has and blah, blah, blah. Um, but again, I, you know, this is where Distribu distribution and brand really do matter. Yeah. And interface, you know? Yeah. Alright. All right. Databricks purchased neon for $1 billion. 

Vic: Yeah. So I had never heard of Neon before and I'm fairly active in the space.

Um, and so for people that don't know, neon is a. Um, open source database provider, and because it's open source, of course you could buy the, uh, Postgres SQL for you could, you don't need to buy it, but they make it much easier to use. And then they are, uh, kind of tuned or designed really for, um, AI agents to quickly put together a set of data that they need for a [01:07:00] period of time.

Might be a short period of time, could be a long period of time, um, but in a very automated way, and you can set the guardrails where you want it. Um, so it's, I think it's a, seems like a great purchase for Databricks, which you know, is sort of the huge database data lakes and databases and um, the combination I think is pretty interesting.

Marcus: Yep. Agree. Uh, alright, pen, penultimate story. Uh, Brett Adcock is the founder of Figure Robot, which is, uh, one of the leading robot companies out there. Uh, he's one of, I don't know, 300 different, uh, accounts that I have in my, my, uh, AI list on, on x. Uh, I normally see him pushing stuff about his robots, but he did this really cool rundown.

I don't know if he does a weekly rundown, but he did a really cool rundown. And, uh, there were a couple stories here. Worth, worth, uh, you know, pointing out. Uh, I think that. You know, Gemini had had some new, new features released this week, uh, on the image generation. Mm-hmm. Side of things. Meta dropped some new [01:08:00] models, uh, Microsoft updated copilots with pages, which is a canvas like feature.

Uh, we, we got some details on Eric Schmidt's new, new backed future house, um, which is his AI company. So I think the most important thing here is we're gonna put a link in the show notes to this so you can get just a total download. Yeah. Almost a reference of, yeah. A reference of everything that happened this week.

And it, and I, what I like about it is it gives you a sense of like how ridiculously robust the innovation is in this space. Yeah. It's just crazy. Every single company is coming out with stuff every week. Yeah. Every week. That's right. The pace of, of innovation in AI right now is just dumbfounding. So, uh, alright.

Final story. Wall Street Journal, apple to support brain implant control of its devices. So, uh, I think I. Elon has done a very good job of making brain implant control synonymous with Neuralink. Yeah. Uh, but we are not talking about Neuralink here. We're talking about a company called Syncro. Um, and, uh, apple is working with them on [01:09:00] making the brain computer interfaces, uh, available to people with disabilities.

Vic: Yeah. And it, it is, um, it's incredible to see it start to become more normalized now. So when Neurolink came out, it was sort of cutting edge and interesting, but definitely science fiction ish. Um, and I just think when Apple and Apple Vision Pro bring something to market, it's just a much bigger adoption possibility.

Yep. 

Marcus: Agree. 

Vic: Um, and so they, they are showing what it could, they have a patient with a LS, uh, using, he's the first user of it. Um. And it's, it's, well, there's a lot of promise. It's early and you still have to put a, you know, you put a stint into the brain, so it involves a surgical procedure. Um, but it, but it's, it's getting much more normalized.

There's now multiple companies pursuing this, which will be healthy to, you know, [01:10:00] kind of have hopefully positive peer pressure and, and make them all do better. So I think a good, a good story. 

Marcus: I mean, when I think about, uh, all the stories, we just covered a couple of themes. Our science and technology right now is unbelievable.

Vic: Yes. 

Marcus: Unbelievable. Right? Uh, CRISPR brain, you know, brain implant control mean Yeah. We had a baby who would have died. It's just unbelievable. Right. You know, and then 

Vic: this guy with a ls, he can't, he can't walk, he can't experience things. And he has now experienced them through the Apple Vision Pro. Yes. They had a, him talking about going to the Alps, even though he can't.

Go to the Alps and, and he is experiencing it. Yeah. 

Marcus: So, you know, just absolutely incredible. Um, and then also our industry and government stuff. Really, really hard. Really hard. Um, that's kind of, that's my takeaway for this week, you know? Incredible [01:11:00] promise. Yeah. In technology and incredible challenges when it comes to government matters and industry affairs.

That's right. The future is bright, but we have to get there. Yeah. And it's, it's hard. Very hard. Very hard. Uh, Rick did a great job last week. Yeah. Yeah. It was fun to do with him. He was awesome. Yeah. This is his first time, right? Guest? Guest, so Yeah. 

Vic: Yeah. We did, we did a. You know, a show about AI and radiology.

Uh, by the first time Coasting did a job. I know it's a proper host. On the rundown though. Yeah. He brought like all the guest host, he brought all these notes in, which is great, great to see. And then we go through so fast he couldn't refer to them. Yeah. But he, he knows all the stuff backwards and forwards.

Marcus: Yeah. You know, but they, they all like, wanna like prep and everything. And I'm like, listen, you're not gonna be able to refer to your notes. Do not Unrepped, I'm for the show. Like, don't, don't worry. Just come in and talk. You'll, you'll do fine. Yeah, you'll do fine. Yeah. Um, alright. But you know, these guys have higher standards for how they're seen in public than I do.

Right. You know. Well, and you've also done it a lot, Dennis. So, uh, alright, great show. Thank you as always. And uh, see you next [01:12:00] week.