22 – Chronicling Healthcare’s End Times: Rite Aid, HealthComp, Pharma, FTC & Government Shutdown

Vic: [00:00:00] How’s it going? It’s going well. We are twins today. It’s like the movie twins, you know, that movie with, uh, Danny DeVito. Can I be Schwarzenegger? No, sorry. You have to have a black belt, I guess. For those of you watching on YouTube, you can

Marcus: see what we mean. Yes, we’re, we’re literally, and the fault is mine.

I’m wearing the Gatto for, uh, for Halloween today. I went, I went to Louisville last night and was on a panel today at the aging 2. 0 optimized conference, which was great. Shout out to Tammy York and, and all the folks in Louisville, they put together a great event. Thank you for having me. It was really fun.

Great, great panel talking about this stuff. Literally we talk about every week on the show. So it was very easy, but there was some really cool people on the panel,

Vic: new people there.

Marcus: Yeah, yeah, yeah. No, a bunch of people I’d never met before. So I had a great time and I look forward to. Um, growing those, those, uh, relationships.

You work for the healthcare uniform. [00:01:00] Yes. Yes. I mean, I was gonna say that, but I had a blazer, but it’s, it’s your blazer. I was literally like, I was just dressed like you. And, uh, so yeah, we look pretty stupid, um, on the video today, but we have some good stuff to talk about. Right. All right. So let’s get to it.

Let’s start with Rite Aid. We talked about Rite Aid. It feels like two months ago or something like that. We talked about Rite Aid and. This was,

Vic: we knew this was coming.

Marcus: Yeah, they were threatening bankruptcy. Um, and here they are, they are now announcing that they’re going to shut down hundreds of stores in bankruptcy.

Um, so lay out the story. What’s going on?

Vic: They have, uh, over 3 billion in debt and the creditors are basically taking over. They’re, they’re losing money every quarter and can’t keep up with their debt payments. And so there are two 2, 100 stores. [00:02:00] And it’s not clear how many are going to close, but the creditors will not allow them to continue managing something like four to five hundred of

Marcus: them.

Vic: So those are going to be just shut down. Creditors are taking over, but presumably if they use bankruptcy to clean up The opioid, you know, lawsuits that they owe over a thousand. Yeah. And some, some bad leases that, you know, probably were priced in a different real estate market than today. They’ll clean that up through bankruptcy and then operate 1, 500 stores.

75 percent of them. But I think the bigger story is they tried to sell this. Property to basically everyone, right? Walgreens was not allowed to buy all of them. So they, they bought a piece that, that the regulators allowed them to buy and no one else wanted to buy them. I don’t think at almost any price, certainly not for equal to the debt.

Marcus: And also certainly not [00:03:00] prior to bankruptcy with. With all the stuff, all the stuff, really bad leases, a thousand lawsuits, you know, and all the bad PR that is associated with those lawsuits. Um, so I mean, we, we, we spoke before the show about some different themes that we’re not quite ready to roll out because I think we, we are still developing them, but we’re now in show 22.

Um, we’re clearly seeing some. Some themes emerge, uh, in all of our discussions that we’ve had and we, and we try to weave stories together, uh, from week to week, but certainly, and I want to say this, cause we’re going to talk about a bunch of stuff that’s, you know, somewhat difficult, but I remarked to you that I feel that.

What we are chronicling on this show week to week as we discuss it, and I don’t know that I really saw it this way until week after week, we left the show talking about things that we said. Wow, that feels really negative. Right? Um, but I feel like we are chronicling the end of a [00:04:00] certain model of the health care system that ran for 30 to 40 years.

Its end is not coming. I think We’re watching the end right now. The end. End the end. This is the end. This.

Vic: We’re in the end.

Marcus: Yeah, we’re in the end. And in the end, it is not going to transition immediately because, you know, look, these contracts are multi-year contracts. You know, there’s all these employees.

There’s all these patients. I mean, there’s a lot of people. People are getting sick every day, right? You can’t wholesale change it right away. But I think what is happening is the, the model that was the predominant model for 30 to 40 years of aggregate a bunch of providers into health systems, and then create networks around those health systems, and then sell those networks to employers and have a payer administer that relationship and process the claims that fundamental [00:05:00] lattice work.

Is torn to shreds right now. It is not working and we’re seeing it just implode and come together into new partnerships and new mergers and, you know, old partners warring and new partnerships forming all of this is, is the forming of the new healthcare industry, and we don’t really know what it’s going to look like yet.

There are some emerging models coming from it, but Rite Aid. This is part of the end. This is part of the end. Yeah, I mean,

Vic: the neighborhood drugstore was where, where you went to get your medications for 100, 150 years. And I think there’s sort of. Maybe three, I don’t know, segments of the healthcare history, right?

There’s, there’s before the Social [00:06:00] Security Act of 1965, you know, which is decently long ago when for profit healthcare was allowed, and HCA was created immediately thereafter. And before that it was all nonprofit based, either charity or government, well, usually city hospitals, but, but any kind of government.

And then with that passing and creation of Medicare, there was a huge opportunity to create businesses. And my, you know, obviously we’re capitalists, but my view is that the business entry was, was healthy in the sixties and seventies. It sort of made all the. Charitable organizations get more operationally excellent, strengthen them.

And now they are also very large. They’re nonprofits, but there’s a lot of revenue that flows through nonprofits. And as we’ve talked about, I don’t know if we’ve been on the show, but for a lot of years from 65 until 82, [00:07:00] it was cost plus. I wish I had been a venture capitalist in the cost plus days. Every dollar you spend, they send you your dollar and 20 back.

Uh, and then in 1982, when the, um, boomers started coming of age and their parents were getting elderly and needed care, we, we had a economy a lot like today. And the first major change Um, called DRG codes where we said, we’re not doing cost plus anymore.

Marcus: I would just want to stop you, but I put my hand up.

I just want to stop you because you said we had, we had an economy a lot like today. I hadn’t really connected those two things, but I just thought back and I was like, Oh yeah, we sure did. Carter, Volker, Reagan, like, yes.

Vic: Right.

Marcus: Okay. That’s yes.

Vic: So maybe I should have

Marcus: spent more time on that. But just, just spend a minute on it because I hadn’t thought about it until you just said it like connecting the fact that DRGs came in that same [00:08:00] window of time that, that, because I think it gives a little bit of credence to us continually talking about the, you know, the financial markets, right.

And the economy and how that does shape and affect and create a force. Forcing factor on the evolution of the healthcare industry, right? It starts breaking things. It starts breaking the way that things are working and forcing new models to emerge. And I hadn’t thought about those greater economic implications that were going on there.

But we had runaway inflation, runaway

Vic: inflation, people mad. at the government from all different sides for different reasons. Interest rates, Volcker, as you’re saying, he, he increased interest rates dramatically. I think the Fed funds rates got up to like 15%. Big geopolitical issues. Yes. Yeah. Huge. Uh, you know, the, some Several hundred Americans taken hostage in Iran.

And my view that it’s not at all validated with research, [00:09:00] but the society doesn’t really want to change healthcare policy. It’s, it’s someone’s relative getting treated. Like it’s so important and so central to how we navigate our lives.

Marcus: And it feels like a rug pull. I mean, you know, we, it’s a promise. You don’t want to break the promise.

Yeah. That’s the, that’s the issue.

Vic: And no one wants to deny any kind of care to the patient in front of them right then. And so my view is that without, uh, the kind of macroeconomic and financial forces forcing change, change doesn’t happen. It seems like we have a lot of the same dynamics in the economy, right?

Like we have people striking like in the seventies, we have high inflation and yet we also have high interest rates and we have a very opinionated, fairly strong fed chairman who appears like he’s going to keep rates [00:10:00] high for a long time. Both sides of the aisle are fighting and then that filters down into our local politics I mean you almost came to have a conversation about one of the things I love about this podcast is we can talk about challenging emotionally charged issues, but not be Throwing insults at each other, right?

And you and I don’t agree on everything But we I think agree that we like each other enough that I I trust that you’re being honest and there’s not a lot of places in the world where You The politics don’t, like, pollute everything and you can’t even really have a conversation. But we’re not trying to win anything here.

Yeah, that’s right, that’s right. So, that environment caused, um, DRGs. I can’t remember what they’re, what they’re, it’s, uh, Diagnostic something groups. Yes, oh my gosh, but we went from whatever you spend on this procedure We’ll send you all that money plus some for your trouble to saying this procedure costs Blank, and [00:11:00] that’s what we’re going to pay diagnosis related groups Yeah, there was a lot of hand wringing and worry at that point But for nashville it when the interesting thing about nashville is that you know, of course hca is here And the city led the for profit It of healthcare.

And then when DRGs came out, my, my original firm, Massey Birch, uh, funded a whole bunch of very focused healthcare services companies that didn’t try to do everything. They got really good at one DRG code, or maybe a suite of things around orthopedics or heart care or whatever. And then it turns out you can give better quality and lower your cost to deliver it if you specialize at that.

And so the, the. The health care council here in Nashville has that family tree that exploded all in the 80s because The government set rules, we’ll pay you X, and if you can [00:12:00] deliver this procedure for less than X, you keep the difference. And, I think we’re going through another transition, just like you’re saying, the ending of DRGs, basically volume based reimbursement.

And I, I think I know where we’re going, I think it’s going to be some kind of value, assume risk, and deliver the health for this patient population. For this dollar amount. For this dollar amount over the next 10 years or something. Over

Marcus: this period of time, under these conditions that are agreed upon.

Yes. That, I believe, is the only place we can go. It certainly feels like the place that there’s the most traction and the place that people are orienting themselves around. Yes.

Vic: Yeah. Unlike 82, the government has not come down and said, like, this is the only way we will reimburse care. Right. That might happen [00:13:00] in some future administration, and we weren’t paying attention.

And. In the late 70s. So maybe there were similar signs. It’s hard to know, but, but I think this is the end of that 40 years of reimbursement based on diagnostic related groups, and we’re going to have the birth of some new thing.

Marcus: And there’s, and there’s so many forces right around the end. Right. So one of the things that I, and why I think it’s related to Rite Aid is something as simple as real estate, right?

I mean, real estate has just gotten to be really expensive. These, you know, these leases, the cost of, of the lease is just. Eating into the margin you might have the cost of the labor, the availability of the labor is eating into it, and then you add on to that the flanking competition from online that doesn’t have any of that, right?

It’s just, you know, It’s a, it’s a [00:14:00] patchwork of partnerships and delivery services and, and fulfillment, you know, partners and a online front end, you know, it’s all of those forces together are just eating away at the viability of your neighborhood drug store. And we’re talking about Rite Aid, by the way, we’re not talking about the true neighborhood drug store that was

Vic: also suffering, right?

Marcus: Exactly. I mean, if Rite Aid is, is going bankrupt and shutting down, I mean, you can only imagine what’s happening to the independents.

Vic: I mean, it’s e commerce versus regular commerce, right? Like it’s been. It’s been very clear, and just take books, because that’s the easiest one. The book, the neighborhood booksellers don’t exist anymore.

And I’m part of the problem. I buy books on Amazon. And it goes right to my Kindle. It’s very convenient. But it’s not great for, there’s a great local bookseller called Parnassus here in town that I, I love it when I go in there. And I should go in there more and give more money to them. Systematically, the [00:15:00] general population, it’s cheaper, faster, easier.

You get more value.

Marcus: You probably go at least once a year during the holidays, because it’s a great place to go buy gifts for people. Yeah. And it’s bad. I prefer, cause

Vic: I’m old. I like to browse bookshelves and I’ll see a book that I wouldn’t have necessarily thought of. Yeah. Um, I like that being a touch it, it used to be, I mean, in the eighties and even nineties, you couldn’t get your medication any other way except going to Rite Aid or going to another drugstore.

That was the source to go to. And now it’s very easy to do mail order or lots of other ways. And so the. Alternatives have increased and they almost all, I think they all have lower cost structure.

Marcus: So the thing that I, we, we couldn’t find any good data on, and then we’re going to move to the next story, but we couldn’t find any good data on where these Rite Aid stores are located.

But, um, what I worry about is, [00:16:00] If in fact, no one does want to buy them. And it sounds like, you know, they’re going to shut down something like a quarter of their, of their footprint. Um, which is, let’s see here. They’re going to shut down 400 to 500 stores out of their 2, 100. Okay. And then they’re going to find a way to either liquidate, um, or I don’t know.

They just. The rest just melt away, right? You know, the rest of these stores that they have, but it’s going to go to creditors at the end, at the end of the bank, the creditors

Vic: are going to operate the stores with lower debt load. Yeah. But for how long they pay it off and

Marcus: then they’re going to

Vic: close them down a little bit at a time.

Marcus: Yeah. I mean, that’s if they can actually lower the debt load, you know, can, can they turn a profit? Right. Um, but what I worry about is, you know, How many, how many places around America is the Rite Aid actually the point of access for care?

Vic: I don’t know that. And the concern, I mean, one of our employees went to a Rite Aid to get checked and it was important in her [00:17:00] health.

It was very important. Right, and not that we wouldn’t have sent her to another urgent care, I don’t know. Place, but she could just walk across the street. Yeah, we’ve been a lot harder. That’s that’s the thing That’s what I’m having mind the access you can anyone can get medication sent to them But that like I have a worry and I don’t have a primary care doc.

Yes I don’t know really where to go and I’m just gonna walk into the right aid on the corner There’s going to be some number of patients that don’t get seen, and that’s going to be bad.

Marcus: Moving to our next story, a big private equity deal, really big private equity deal, uh, new mountain capitals, health comp and Marlin equity partners, Virgin pulse to merge.

So this is a big deal in the employer space is a 3 billion merger. Um, and I think importantly, it’s got backing from both Blackstone and JP Morgan, both very, very large finance players who each have their own, [00:18:00] uh, Uh, employer based, uh, healthcare initiatives. So really, really big deal and showing the continued push for employers to improve the results and the yield they get from their healthcare spend for their employees.

Vic: Yeah, no, no question. And it’s really interesting to see, I mean, when you talk about the payviders every week, and this is a very significant. Competitive threat to, to, to pay VITORs, right there. The employers are a significant piece, it’s not the only piece, but it’s a significant piece of the margin for health plans.

And this group is going to go directly at the employers, be very focused at that. And as you said, these are big private equity players. They don’t partner up that much. I mean, they’re not like venture groups where they often pal around, and I think it’s really a [00:19:00] credibility stamp and like a signal to the market that this is, you know, A great place for very large employers to go compared to a payer.

They’re going to compete directly with other payers for the commercial book.

Marcus: Well, look, listen to these stats. The combined company will be led by Virgin pulse, chief executive, uh, Chris McCulloch and will serve 20 million users and more than 1000 self insured employers. So that’s, that’s massive numbers.

That’s a, that’s a big, big number. Payer right there for sure. Right. I mean, 20 million users. Um, so, so I think you’re right. I think this is the sign of, of more players into the space and an emergence of what this new model that we’re talking about, you know, is going to continue to look like I wanted to, uh, dig into health comp a little bit because they, there are very large TPA.

We don’t talk about TPA being third party administrator. We don’t talk about TPS very much, but just kind of, we know what Virgin pulses, Virgin pulses is a. Big wellness platform, uh, [00:20:00] rally health was, it was another one. Um, so we, we know about the players in that space

Vic: by USG. Yes.

Marcus: Yeah. Rally was bought by UHG.

Um, we’ve got one in our, in our, in our portfolio. So hooked. So, you know, this is space. We, we believe in the space on the wellness side. Um, but, but health comp is a big TPA and one to look at like, what, what are the components that they sell to, to employers? Um, so when you look at the services. Uh, they’ve got health comp core, which is a cost management solution.

Um, that’s all around the claims and the benefits and data analytics, uh, health comp elevate. Uh, that’s clinical services and member interactions. That’s member engagement on the clinical side of things. Health complete their wellness solution. I think they probably have. Taken, you know, Virgin Pulse to kind of take that whole thing over.

Yeah. Um, and then, and then this fourth piece, uh, I think being really interesting health comp, a solution that cuts costs, not quality. Right. So this is making things much more efficient. So, um, this, [00:21:00] this. Infrastructure. These are the kind of key value propositions that employers are out here looking for.

They’re going after the mass market. And, uh, you know, when you look at who they work with, they work with brokers, employers, networks, providers, members. Um, so I think you’re right. I think they are going to. Storm the, the large enterprise employer market, because that’s who they’re designed for. Um, and, uh, they will be a competitor to pay virus, but there’s probably going to be more players in the space.

Yeah.

Vic: We don’t talk about TPAs mostly because they serve the fringe. Like it’s typically small, um, niche players serving small business. And they’re not super competitive with their offering their network. They just don’t have a lot of. Uh, assets to compete with a big ASO, which does the same thing. So all these services are to a large self insured employer that is, they’re underwriting the risk.

So this is [00:22:00] not like insurance that individuals might get. The company holds the risk, but this is the, the networks of docs, all the systems to adjudicate the claims and manage it all. And the big payers have kind of dominated that space. Anything over a couple thousand employees, mostly the big payers have had.

That’s right. And this is what’s interesting about the four PE firms coming together and all these services and their scale. So then they can go head to head with anybody. And for any of the biggest employers, which will be good. Um, and it’ll be interesting to watch.

Marcus: Yeah, and there are more folks in the space.

Um, CDNR’s got a pre health. They put together Caslight and VeriHole Health for this. So, this is going to be a very, very competitive space, right? Um, you know, just in terms And, you know, you could probably even show a world in which These two platforms work together. Cause I know Morgan health is involved with, with pre health as well.

But the point is, there’s a lot

Vic: has equity health for their portfolio. There’s

Marcus: a lot of innovation happening in this [00:23:00] employer space. And I think we need to continue to watch this space. We’re mostly seeing stuff at the enterprise level. But the SMB space, I think, is going to be a ripe space for innovation.

Certainly at Nova, we’ve got, I told you, we, we’ve aggregated three companies in this space and wasn’t even part of our initial investment thesis, but I’m really seeing a lot of opportunity here. What

Vic: I’m trying to think through is I think a lot of employers want to simplify their benefits. And that worries me as a VC, right?

Cause I, I often am finding, and I have in my portfolio, we’re funding point solutions, which are much better than the broad solution. But they’re not, they don’t simplify anything. They, they add another brand, another way to, to help.

Marcus: Yeah. So, you know, got me thinking about, I don’t know, roll ups, TPS, things like that.

So, uh, things to noodle on. Okay. Uh, now to just kind of talk. A little bit about the therapeutics world. We we’ve, we’ve been starting to unpack this. We talked a lot about just generally speaking, biotech and all the challenges that are happening in that space, uh, with regard [00:24:00] to it being, you know, not a friendly capital market for it right now, but there were two stories this week, both in the wall street journal that I think illustrate just the general difficulty in the current market.

where we stand around advancing the therapy space, even for really, really large players. Um, so the first story is a great story. Uh, well, not a great story in terms of what it’s talking about, but, uh, I think a great story to illuminate the problem. An important story. Important story is probably a better way to put it, uh, talking about antibiotics.

And I think most people have anecdotally. Totally heard and maybe have even experienced, uh, how antibiotics seem to be less effective year over year. Right. Um, and the bacteria is getting more and more resistant to we over, we

Vic: overuse them. Yes. We use them in our food supply. We use them in our human health too much.

And that has resulted amongst other things with the. Bacteria getting [00:25:00] immune to some aspects of, of the antibiotics.

Marcus: I, I for sure got a bug this summer, and was prescribed antibiotics, and I could not Tell any impact really for the first time. I mean, I’ve always felt like at the end of the antibiotic, you know, um, uh, protocol, you always got to finish them all.

Right. So I’ve always felt like at the end of the protocol, I noticed a significant difference in my abilities, my body’s ability to clear out whatever was going on and this summer at the end of it, I was like, It’s like another two weeks of, of just feeling like I’m just like fighting through this bug.

So, um, so this story really resonated with me, but so what I thought

Vic: before I read the story, I thought it’s a hard problem and we just can’t figure out how to make a new antibiotic. And that’s not at all. Right. Yeah.

Marcus: The problem is the businesses that are in fact creating new successful [00:26:00] antibiotics to deal with these evolved forms of bacteria.

Um, they can’t get to viability, you know, look, when, when, when we talk about the pharma industry, Uh, people have very visceral responses and, and, you know, they typically will refer to big pharma. So to, to be fair, much of the critique happens when we’re talking about quote unquote big pharma. Yeah. Um,

Vic: showing me a TV ad about something I don’t know that I need.

Yeah. Right. Yeah.

Marcus: Yeah. Show, you know, all the constant TV ads or. The margins that they may, or why does insulin cost as much or whatever, whatever the thing is that people are talking about in terms of big pharma people, I think, who are not in the space may, may not appreciate how many small companies are trying to get new therapeutics across the line and can never get there.

And as hard as it was before in the new Jerome [00:27:00] Powell, uh, non Zerp era. It’s basically impossible, um, to get these things, uh, across the board. So there’s this really ugly chart here, um, of changing company stock prices after FDA approval. And basically it is just down into the right, uh, after one year, all of these things after approval, all of these things, you know, drop somewhere in the range of 60 to 80%, uh, of their stock price.

Vic: Yeah. And the, um, the problem is the way that we market drugs. is not conducive to this kind of therapy. The whole point of new, very powerful antibiotics is you wouldn’t overuse them, so that they remain potent and when you actually need to save someone’s life, you have it. That means that you don’t sell very many of them, but there’s no real motivation for a hospital to Begin trying it and so I think [00:28:00] once you get approved the story around once we get approved We will have great sales gets them public in the in the zero interest rate world Not anymore, maybe and but then they don’t get the sales that they expect and so it Falls apart.

Then there were several, like maybe six or seven. So people that are listening, there’s a lot.

Marcus: Yeah. I I’ve been beaten into submission, uh, to where now, when people talk to me about healthcare innovation, especially if it’s a founder and they’re talking about, like. How much better this thing is than the current thing for people.

I I’m always trying to figure out like, how are you going to make money? You know, sadly, because I understand that there are countless innovations that have been better for patients that have died. Yes. Countless. There’s no way to properly account for how many innovations that would improve patients lives have died, straight up died, never, never going to get to the market, never going to happen.

Vic: Yeah, you have to understand the business environment you’re plugging into. [00:29:00] And in the antibiotic market, you cannot make money.

Marcus: So here’s a, here’s a, here’s a quick anecdote from this, uh, world’s wall street journal story. Uh, Nabreva therapeutics terminated it’s 60 remaining employees this year and is seeking a buyer four years after the FDA approved its antibiotic Zen Lita for pneumonia.

Nabreva priced a five day treatment of, of. Zen Lita at over 1, 000 generic antibiotics to treat people who develop pneumonia outside of hospitals typically cost under 100 fewer than 100 of the 800 hospitals in the briefer approached bought it. This is a publicly traded company got all the results got all the way to this point and didn’t have product market fit.

I mean, this, this is the, this is the difficulty of this therapeutics landscape.

Vic: And and partially they should have Figured out the [00:30:00] business model. Assuming that they got the science right.

Marcus: I mean maybe but the question is how much of this has changed from the time they started the company because it takes so Many years, right?

How much of this has been the decline and the strength of of health systems, uh, You know financially whereas maybe they were stronger before and they would have adopted something like this but now The economic landscape has changed and they can’t like, what, what have been the changing factors in the last two, three, five, 10 years, the life of this company, right.

That have caused it by the time it got to market to not be viable. That’s another, that’s another real difficult thing.

Vic: Yeah. I mean, unfortunately, I don’t think there are many health systems and I’m being kind when I say not many might be none that are willing to inventory a very expensive drug. Yeah.

For the one time a year when it might save someone’s life. And even though that is their mission, they don’t have the funds to do that. And so they don’t do it.

Marcus: Probably [00:31:00] academic medical centers. You can probably find it in that, in that cohort. Some of that might be some

Vic: of the 100 that did it, but it’s not enough to build a company on, and then they don’t use it very much.

So you don’t get any pull through. You don’t get much pull through. Um, it was interesting that he called out the orphan drug act. I mean, this should be. Included in the orphan. It’s a perfect orphan drug situation. It does not apply to this disease because it’s not technically rare, but it kind of is rare, just not by the definition of an orphan drug.

Marcus: Yeah, so, you know, just just a difficult landscape for for those innovators in the therapeutic space. And, uh, I mean, I, but

Vic: the bad thing is that someone’s going to die today because they have. Mercer or some other resistant. This problem is only

Marcus: going to get worse. But you know, the, the intersection of our weakening effectiveness of antibiotics and also the weakening ability of antibiotics to get to the market.

That’s not a good overlap. Right? Those two trends are not good. [00:32:00] Um, let, let’s, let’s move to one more story before we take a break. Uh, this story also in the wall street journal is talking about a cancer therapy that is life saving, uh, but there isn’t enough of it. Um, I’m very attuned into cancer therapies right now because of, uh, how close it is to loved ones of mine right now.

And, um, and in our portfolio, yeah. I mean, it’s just, yeah, cancer seems to be, um, everywhere, but, um, Yeah. So this was, this was a story that I think you, you asked me a couple of questions about, and I, fortunately I made an investment that made me a little bit smarter about it. But this is about a self therapy that, um, promises to be a major blockbuster for J and J and their partner legend.

Uh, but the big question is, can they increase the manufacturing, right? So can, can they manufacture enough of it?

Vic: Yeah. I mean, in general, the CAR T class of cancer therapies of which this is one has incredible promise for treating cancer. Yeah. And [00:33:00] I have been really excited about its prospects for, for treating cancer in a significant way where many cancers would, would not be terminal and would be more of a chronic disease.

And yet it’s hard to, it hasn’t really had the market effect or the patient effect, therapeutic effect. and this Story is sort of highlighting one aspect, which is the manufacturing is difficult to scale up. And I didn’t really understand why. I mean, just build, go make some, but you have a better view on that.

Or you help me understand.

Marcus: Yeah. I mean, as new as this entire modality is of therapeutics, then you now need to think about the actual manufacturing of it. Right. Which is a whole different concern, which quite frankly, is just not there. And At scale, the infrastructure is not, it’s not there at scale. This was the, this was the, um, the problem that that company resilience that raised over a billion dollars during the pandemic set out to solve, which is recognizing [00:34:00] we have all of these cell therapies that are going to go online.

Um, but, you know, Generating these cell therapies, which are, you know, they’re, they’re individualized to, to a large degree. They’re, they’re dealing with, with the person’s, you know, original cell matter. Yeah,

Vic: they take your

Marcus: blood. I think it depends on what

Vic: kind of cancer is, but it takes some aspect of your DNA.

And the cancer’s DNA, and then they customize a solution for you,

Marcus: right? So there’s a whole cold chain there and back and everything that needs to happen in the facility. Logistics

Vic: both ways.

Marcus: Exactly. It’s, it’s a really detailed, uh, process and there people are building out these, these, uh, you know, manufacturing plants, but they’re not there today.

Um, and I think. And you can’t wait for, I mean, if you have cancer, you can’t wait that long. So you

Vic: kind of need it quickly.

Marcus: Yeah. And, and, and right now, I mean, I think. Cell therapies have not picked up as fast, you know, so there is a bit of a chicken and the egg marketplace issue here where [00:35:00] what you’d really like is to have overwhelming demand, guaranteeing the, you know, the manufacturers, uh, Plenty of business.

Vic: Yeah. So you could build the big facility, invest the money that’s going to pay off over 10 years, maybe.

Marcus: Right. But right now there’s just not that much of it. There’s a ton of promise in the space, but for all the reasons we’ve already talked about, there’s not that much, uh, Viability from a demand perspective that can justify the kind of manufacturing we’re going to need if we’re really going to supplant the current modalities with, um, with self therapies.

Yeah. And so

Vic: we talk about innovation on this show all the time, and most people think about innovation as that, like, Eureka moment. I, I invent something and it makes a meaningful difference to healthcare. But innovation also has to be included in the business model and the manufacturing in the, the way the regulation has to work to keep it safe and also get it to the [00:36:00] market.

This all is included innovation, and I think a lot of times news stories and, you know, sometimes. We spend time on the invention, but the other aspects are, are often more important to actually getting it to the patients.

Marcus: Yeah. So again, the we’re, we’re chronicling the, the end of a, of a, of a current market, I, I am, I’m really concerned about how we’re going to evolve.

Not just how we’re going to pay for and what they’re going to cost, how we’re going to continue to advance the kinds of therapeutics that we’re going to take online. You know, we, we need more cures for cancer, you know, address the cancer, but spare the patient, you know, as my, as my. Friends, Scott Hamilton would say, you know, we, we need better antibiotics.

We, we need a next generation of therapeutics. We, we absolutely do. You know, what we have right now is great, but we need to continue to advance these things. [00:37:00] And we’ve got the science and we’ve got the willing brains to work on this stuff. Uh, we’ve got to be able to find models, business models that will be viable, that will save people’s lives and greatly improve people’s lives.

Yeah. And there’s

Vic: an

Marcus: important

Vic: role for government to give. Guidance around regulation, and then also government can, I mean, they’re doing it in the chip world right now. Yep. Where it’s important for strategic geopolitical reasons to have chip manufacturing in the U. S. And so we’re investing a bunch of taxpayer dollars in that there might be manufacturing capability or infrastructure that could be built.

That would be really helpful. But the government is is a wall,

Marcus: right? I mean, I guess I guess my main thing is, you know, I think about ARPA H, you know, the big initiative that Joe Biden just authorized, and I think it’s great. But if it doesn’t go all the way to the long term viability. Then you have, I don’t know, you know, let’s just, let’s just round it at 10 years, uh, that, that the, [00:38:00] the team that was working on that antibiotic for pneumonia, you know, 10 years of work and probably on the basis of many more years of research.

Uh, but. All to go to the point where it’s viable. It’s FDA approved, but it can’t viable from a clinical perspective, but you can’t do anything with it. Right. Oh, I mean, that is, it’s so much brain power. It’s so much heart and love and work and great science to get to, and it actually works to

Vic: never be able to get to patients.

And this cancer treatment is the same. I mean, I don’t know this particular, uh, journey with, with this self therapy, uh, Treatment, but johnson and johnson may have bought it from another biotech firm. They buy a lot of things So it’s an it’s also 10 years maybe longer And they still are having trouble getting it to market even though there’s demand there’s patients Because they can’t they can’t make enough

Marcus: and we’re talking about johnson and johnson Yeah, like that [00:39:00] that that should that should be the indicator that the cell therapy manufacturing Is going well Landscape is sparse, really hard.

Yes. Yes. We, we have a lot of building out to do there. So, you know, while we’re thinking about chips, we, we probably also want to think about our manufacturing capabilities in this, this new paradigm of therapeutics. All right. With that, we’re going to let Doug share a little bit about jumpstart foundry, and then we will be back to talk about Elevance.

Doug Edwards: Thanks guys. For the opportunity to talk about our pre seed fund jumpstart foundry. My name is Doug Edwards, CEO of jumpstart health investors, the parent company of jumpstart foundry. We’re so excited to be able to talk about, uh, early stage venture investing. Certainly the need for us to change the crazy world of healthcare in the United States.

We are spending 20 percent of our GDP north of 4 trillion a year on healthcare with suboptimal outcomes. Jumpstart Foundry exists to help us find and identify and invest in innovative companies that are going to make a [00:40:00] difference in healthcare. In our country, every year, jumpstart foundry invests a fund, raises a fund and deploys that across 30, 40, 50 assets every year, allowing ease of access for our limited partners.

to invest, to help us make something better in health care. Some of the benefits of Jumpstart Foundry is there’s no management fees. We deploy all the capital that’s raised every year in the fund. We find the best and brightest typically around single digit percentage of companies that apply for funding from Jumpstart, and we invest in the most incredible, robust.

Innovative solutions and founders in the United States. Over the last nine years, Jumpstart Foundry has invested in nearly 200 early stage, pre seed stage companies in the country. Through those most innovative solutions that Jumpstart Foundry invests in, we also provide great returns and a great experience for our limited partners.

We partner with AngelList to administer the fund, making that ease of access, not only with low minimums, but the ease of [00:41:00] investing in venture much better. We all know that healthcare is broken. Everyone deserves better. Come alongside us with jumpstart foundry, invest in making the future of healthcare better and make something better in healthcare.

Thank you guys. Now back to the show.

Marcus: All right, we’re back. So, um, yeah, we wanted to just quickly, uh, recap the Elevance Blue Cross Louisiana story that we talked about last week. Um, because. I think actually some regulators in Louisiana listen to the show. They said, Hey, hold on, hold on. What’s going on? Um, no, but that deal has been halted.

And, uh, you know, I believe it will ultimately go through, but it is, it is halted, uh, for political reasons. We’ve talked about what’s happening in, in various, uh, states with the attorney generals and their, uh, Issues with acquisitions and mergers that are happening. And this is yet another one in Louisiana, the attorney general, um, asked the companies to delay the deal.

Um, but as the companies to delay the deal until a new [00:42:00] administration takes over in January, and he is in fact, the front runner, uh, Jeff Landry, who’s the attorney general is actually the front runner for the government’s race and previously said that he opposes the merger. And so he, he is sort of signaled that this is not something that he, he wants to have happen.

But I think ultimately, um, In the long run, it is likely to happen. That’s, that’s my, that’s my belief.

Vic: Yeah. I don’t know if he tries to stop it or it doesn’t try to stop it, but I think the reality is Louisiana Blue Cross Louisiana needs to join up with somebody. And Elevance is the best partner for a blues plan like Louisiana.

And so if you’re trying to think about what’s best for the citizens, Louisiana, I think it’s. Better to go with elephants. I don’t see why it hurts anyone.

Marcus: Well, okay. Let’s, let’s, let’s still man the, the opposition, right? So, [00:43:00] so the, the constant argument you would get, why, why do people not want mergers to happen?

They think there’s a lack of competition and then they think the consumer loses because the prices go up. Yeah, that’s the, that’s the general thinking there. Um, I think that. That fails to understand that Elevance is not a standard payer, that Elevance is a paid provider with a bunch of embedded services that will accrue to the benefit of the members of Blue Cross Louisiana.

And

Vic: you don’t have two plants in Louisiana joining. No. Elevance is not In Louisiana. That’s right. And they’re acquiring the existing blue. That’s right. I believe, I don’t have the facts. I think Blue Cross Louisiana has significant market share.

Marcus: Yeah. So there are, and they probably, and they probably also have significant vendors that they’re.

You know, outsourcing a million different value propositions to their membership based with that will all become insourced into Elevance and much more integrated. Yeah, yeah. So

Vic: that’s nice. That’s my view. Yeah. At a minimum, more integrated. Right. So [00:44:00] just every merger is not bad. Like, if you are taking away an honest choice where they’re okay, I could choose Elevance or Blue Cross Louisiana, and now I only have one choice.

Right. That’s clearly. You know, a negative for the consumer, but in this case, you, you have a changing of the name with a lot more services. I don’t see how it’s gonna be negative for the consumer.

Marcus: Yeah. Well, we’ll see how this, how this evolves. We’ll, we’ll continue to track it. Uh, and we’re going to now shift into the world of Lena Khan and the ftc.

Yeah. Other regulatory ones who, you know, we also started talking about last week and then, uh, you know, she went on, uh, a, a hunting, went on spear. Yeah. So, um. The first story was around the private equity backed anesthesia provider, which, um, you know, we’ll, we’ll need to see how this one plays out, but it does seem like, uh, the, the, the lawsuit is against us anesthesia partners.

Um, and this is a [00:45:00] Welsh Carson, uh, platform that’s been, uh, acquiring anesthesia practices across, uh, uh, across the state of Texas. Is that right?

Vic: Yeah, they’re, they’re one of the largest in the country. Yeah. They’re a huge practice. They have significant market share probably in most states. But the FTC found some evidence around their practices in Texas that they are claiming the company was intentionally trying to buy up practices in order to get a monopoly position.

And then the claim, which is, you know, needs to be looked at more carefully, is that, that after they established their, you know, significant percent of the market, 80, 90 percent, Of all anesthesia was done by this firm, then they increased prices.

Marcus: Yeah. So increase in prices. I mean, you know, gas prices are up, labor prices are up [00:46:00] inflation.

So, you know, the, the, the quote here from the Welsh Carson representative, uh, says that the FCC’s decision to pursue a civil action against a minority investor of a physician owned company is unprecedented and disregards well settled principles of law and that they are. Disappointed because they ignored the fact that US APS rates haven’t exceeded medical cost inflation.

So it will be interesting to watch this, this one, uh, continue to play out. Um, you know, again, I mean, I think let’s, let’s see here that their profit margin was estimated at 12. 5 percent in 2021 down from 14%, uh, before the pandemic. I mean, we’ll need to watch this play out, but again, I mean, It does seem like we have a lot of complaints around mergers in the healthcare space without acknowledging the context of the continued difficulty of, of generating margin out of this, this old business model.

Right. And, and, and again, to me, this is more of the [00:47:00] end, right? It’s more of the end. I think there’s a, there’s a political, uh, unfriendliness to mergers, uh, certainly within this administration. And, um,

Vic: Well, I mean, I’m, uh, in general, I’m against regulation stopping mergers, particularly roll ups, because I think often you bring together several smaller companies into one larger one, you save on some overhead costs, and then you can give a combination of lower price, better service, and higher profit margins, and that’s better all around.

So, I mean, I’m also a venture capitalist, right? So in general, I have that position and if it is true, and I don’t know that it’s true, they have to prove it in court, right? But if it’s true that they created a strategy to intentionally remove any other bidders from a market in order to. [00:48:00] Be able to have a monopoly position and increase prices from that position.

That’s different than a normal roll up. And I understand that the doctors own it because legally they have to own it. I think it’s, it needs to be proven, but it’s probably largely true that Wells Carson has significant influence in the policy. Now that doesn’t mean anything wrong. It just means that defending it just by saying we’re a minority owner.

Of 300 little

Marcus: practices. Yeah. But, but it’s, it’s, it’s an important thing to make clear to the, to the public that they don’t control. They don’t control it. Yeah. Yeah. That’s that, that, that is important. Um, because the positioning would imply otherwise, if you, if you don’t understand how these things work, then you, then you might not understand that.

And I, and I also think, you know, there is a burden of proof to, to show that the price hikes We’re in fact, unreasonable, right? We’re [00:49:00] unreasonable relative to inflation. That is

Vic: no question about that.

Marcus: That’s, that’s

Vic: a whole

Marcus: different, you know, they’ll have their,

Vic: they’ll have their time in court. FTC, I think has the burden to prove that it occurred.

Yeah. I mean, I, I view them as innocent until they’re proven guilty. It, I think it’s fairly easy to look at other States. Let’s just mean they have other business besides Texas, but just say Texas versus, I don’t know, Illinois. Or any other state and compare how the prices shifted. And did it, I think they have, they claim they have documentation of the strategy.

And so if they have any kind of smoking gun like that, obviously it will be challenging, but we have to see what comes out. I mean, I think P based roll ups in general are generally good for everyone, but you also can, there are, there can be bad actors that do things that aren’t, aren’t right. And if that happened, then [00:50:00] it should be stopped.

Marcus: Uh, next story, which is not. Really? I mean, it is, it is, but it’s not truly a healthcare story, but it’s a, it’s a big FTC story because it is really the capstone project for Lena con. Uh, she has finally sued Amazon. Um, and for those who don’t know, uh, she, she wrote an entire. Thesis planning

Vic: 30

Marcus: years. Yes.

Yeah. She wrote an entire thesis on, on Amazon and their anti competitive behavior. Um, and that was part of how she, she ascended to the role of chair of the FTC. Um, and so we, everyone has been waiting for this, this suit to drop, um, alleging illegal online marketplace monopoly. Uh, but there, there was an interesting, uh, uh, opinion article in the wall street journal.

I think I missed pulling it up. Let me see if I can find it, but

Vic: yeah, I don’t think it was an opinion,

Marcus: but, um, It wasn’t an opinion,

Vic: but it was definitely in, in support of, [00:51:00] uh, the FTC is claiming that Amazon use their prime, uh, membership platform and all of the reach they have with their e commerce platform to limit competition and steer customers to their in house goods.

Or products that were advertised through Amazon. And so that, that sort of relies on two things. It relies on them having enough dominance online that, that there’s no other choice. And then that they are in fact charging customers more for their internal products than they, then you would get otherwise.

Yeah.

Marcus: So, uh, this, this second article in the wall street journal, the headline is, uh, Amazon’s own track record undercuts the FTC’s case. And you’re right. It’s not an, it’s not an [00:52:00] opinion piece. Um, it’s got a really compelling chart here that Uh, just shows how long it’s been since I really tracked Amazon’s position relative to the rest of the market from an e commerce perspective.

You know, back when I was doing social commerce stuff at Moontoast Vic, I used to track Amazon very closely and they, they always were the lion’s share, 50 percent of the e commerce market, right? Oh, four or five

Vic: up to 15,

Marcus: maybe 15. Exactly. So this chart starts at 17, uh, and goes, uh, up until now. And the, the real important.

Uh, change rate of change moment is during the pandemic, uh, where there’s a step change in the amount of e commerce, uh, sales that we have. Duh, everyone can predict that. Uh, it went from probably 155 billion in total us commerce sales. Uh, the, the next jump, the next, the very next quarter is about 210 [00:53:00] billion.

And then it sort of ends the year. And around 230 does not

Vic: go back, but

Marcus: the, but I think the really interesting, interesting thing is that that jump up did not, uh, accrue equally to Amazon. There was a ton of other e commerce vendors who grew significantly during that moment, and it really, uh, It diminished Amazon’s, uh, dominance in the space.

I know they, they, they are no longer relative to the rest of the market. The clear, uh, leader, right? The pandemic has changed that it’s grown e commerce sales quarter over quarter, uh, pretty much every quarter. It’s a, it’s a very nice straight line. And, uh, and Amazon has been relatively flat. I mean, a little bit of growth there.

They’re growing a little bit, but they’re not growing as fast as the market. No, no. The market is growing faster than their growth. In the e commerce space, I

Vic: do think they are the biggest single player. I don’t have facts of that, but I think they probably are the biggest single player, but there’s [00:54:00] this groundswell pulling away

Marcus: from them.

Yes. The market’s pulling away from them, which, which diminishes the, the, the story that they are a monopoly.

Vic: Yeah. And then the other thing that. I just think is interesting is the claim that they’re funneling prime members to their own products is one of the one of the concerns in the claim and there’s a lot of Amazon products.

So there probably is a exception to this rule. But most of the Amazon products I’ve seen are very inexpensive, generic like things and it creates harm with a particular product producer. But it’s beneficial for the, for the market, for all the customers and for Amazon. So the fact that I can buy, I don’t know, pens for a quarter of the price that I could buy pens 10 years ago.

And it happens to be that Amherst, I mean, uh, Amazon makes the [00:55:00] pens that’s better for me. And maybe Bic is upset or someone that makes pens is upset, but those like, um, generic or utility products that like you don’t even really, you know, Know what the qualities are, but I just need the pen to write I think most of the Amazon, it’s like Amazon basics line.

Marcus: Yeah. And, and I’m sorry, but you’re going to have a hard time calling that out when Kroger does the same thing with their Kroger brand stuff. With their ketchup and their pens and their whatever. Yeah. And, and also how, You know, when you use your, your Kroger card or whatever, you get the coupons and it’s for the Kroger brand.

I mean, you know, you know, because they control the whole, the whole stack. Right. So they control the data, they control their own products. They can easily coupon their products. They can track what you like to buy. They can recommend their own products. So Amazon’s not the only player in the market doing this kind of consumer.

So like, and the consumer likes it.

Vic: If, if Kroger is selling [00:56:00] cheaper ketchup and it’s made in the same factory that Heinz kept it made, and I can’t tell the difference now, they may be Heinz fans in the audience, but that’s my choice. I can choose to go either way. I don’t see how the FTC should care.

Marcus: Yeah.

Meanwhile, I really, I don’t know how you would structure the case, but to me, the big thing is really the fact that. You know, the mar the whole online e-commerce business is coupled with the AWS business. That’s where they should have gone. I, I, I, that’s the

Vic: actual achilles heel that they, they didn’t bring

Marcus: up.

I know that, that to me would’ve been the obvious. That’s right. Split

Vic: the, I would’ve just said, you, these need to be two different businesses. Right. That’s the smart tack to make that, that she didn’t make.

Marcus: Alright, let’s keep going. Uh. And then the, the, the Google antitrust. So all three of these stories all this week.

Later this week. Yeah. So, so the FTC kind of went for it. Um, but thi this is framed as DOJ, but certainly the [00:57:00] FTC is is involved in this one as well. Yeah. Um, people have been talking about this one for a while. This is the, the Google, uh, buying the real estate on the Apple iPhone to be the, um, default search engine that you and Samsung use, and Samsung, uh, thereby effectively making.

Google, the only search you use if you are a smartphone use. Yes,

Vic: it comes out of the box in Apple and Samsung that you just click the icon and search using Google and they pay, we can look it up. They pay billions of dollars every year to Apple and Samsung to do this and it. It then makes it very easy to use Google.

And I think this is a pretty legitimate claim. It reminds me a lot about the claims from the nineties around the browser wars where Microsoft was embedding a browser for free and [00:58:00] not

Marcus: just embedding it for free, but also making it default. It showed right up on your home screen. You just, you just clicked it and there it was.

And Netscape you had to install. Well, why would you even do that? Right.

Vic: Exactly. So I think it’s a pretty straightforward concern now, whether they win the case and I don’t know

Marcus: now, I will say just as a technologist and a user of those technologies back in the day, the real problem back then was that Internet Explorer was the inferior product.

Vic: Yeah,

Marcus: so you were getting this bundle thing that was worse and all the website, every, every person who ever made a website hated Internet Explorer, right? Because it was like the worst browser. Everyone just wishes that Netscape would have won. Yeah, that was where Firefox ended up coming from, right? You know, it was just like, In this case, I, again, this goes back to the whole, like, what’s good for the consumers.

I think most consumers just like Google search the best. Yeah. You know, I think most consumers don’t want to use Bing or DuckDuckGo or, [00:59:00] you know, whatever. Like, you know, I’ve used a bunch of different searches and like. You end up going back to Google, I mean, honestly, so I think that’s going to be the difficulty here is just proving that Google doesn’t, in fact, have the best product and that consumers don’t, in fact, want to search with Google, but if they managed to win this one, and I think you’re right, this, this is the one that feels like they have a case to make here.

You pointed out that the billions of dollars that Google pays to Apple and Samsung are a hundred percent margin. Yeah. They go right to the bottom line. And so I think the

Vic: risk is really to Apple and Samsung because significant portion, we didn’t have time to look it up, but a lot of percent of their earnings is that several billion dollars with no cost,

Marcus: any hundred percent margin, billion dollar, right?

Like that’s. I don’t care if it’s 1 billion.

Vic: That’s a hit. And then, as you say, I’m [01:00:00] still going to install the Google search bar anyway. That’s right. It’s the best mobile search platform. That’s right. And so I dunno, I feel like Google wins if they lose and they win if they win.

Marcus: Yeah. I mean, if, if, if I’m Apple and I’m looking to create the best experience for my user, I’m going to put Google search as the default.

Vic: They just like don’t have to pay for it now.

Marcus: Yeah. Yeah. It’s a, it’s a, it’s, it’s an interesting case. All right. Final story for the day. And, uh, we, we have to end with this because it’s going to happen before the next show. Yeah, it’s around the corner. So probably as this show goes live, um, we are facing a government shutdown.

We talked about it last week, so we’re not going to play the prediction game and try to say what is going to be the impact of the healthcare industry as a result of it. But there was a really good story in the Washington post that basically frames up, um, what, what’s generally speaking going to happen.

Yeah. It’s basically what. [01:01:00] What occurs, not their

Vic: ramifications in the future.

Marcus: That’s right. There’s no, uh, official statement from, from CMS. They pointed, uh, to, um, uh, what’s the name of that, that, that organization that always does the studies?

Vic: OMB.

Marcus: OMB. Yeah. Yeah. So, so they, they, they, CMS said, go talk to the, to the office of management and budget and the OMB didn’t respond.

So, you know, nobody really wants to, no one wants to talk about this, but, um, HHS did actually publish a contingency plan, a contingency staffing plan, uh, for, for the shutdown. And so you can, we’ll have this, this, uh, linked in the show notes. So you can go check this out for yourself. Um, but. They, they say pretty clearly that they’re going to retain approximately 51, 000 members of the staff.

They’re going to furlough roughly 37, 000 members of the staff. Um, and so put another way, 58 percent of HHS employees will be retained. 42 [01:02:00] percent will be furloughed. Um, and this will happen as of day two of a funding hiatus. And so assuming the shutdown does happen, um, over the weekend, uh, September 30th being Saturday, then day two, let’s just say it’s around Tuesday to right Tuesday to Wednesday.

Um, almost half of HHS employees will be furloughed. And so I can’t continue to, I can’t, uh, possibly try to imagine what the impact of that will actually be, but will there be an impact? Most certainly there will be an impact.

Vic: Yeah, so there’s kind of two levels. Are the children in Congress going to get their act together and stop this?

I think no. And so, I don’t know what the percentages are, but I think it’s over 90 percent likely that there will be some period of time where we have the government not funded and therefore shut down. That, [01:03:00] I don’t have any inside information. It’s Thursday night, we’re going to publish this Friday or Saturday.

And then the deadline is Saturday night, Saturday night. And so it just takes a while to get things through the, through the bureaucracy and they don’t have enough activity going on. So my belief is we are going to have a government shutdown for some period of time, and they have published what’s going to happen.

42 percent will be for furloughed. And I agree with you completely that I’m not going to predict what happens, but it’s not good. I mean, there’s. 37, 000 people working today that are not going to be working on Wednesday. And they do tons of things at HHS. And it’s all related to health care.

Marcus: I’m just going to say, I really hope they are all working on Wednesday and I hope better angels [01:04:00] prevail and we are not shut down.

I just feel the need to, I feel the need to record that. I feel the need to record that. I hope that we are not shut down. I hope these people are not furloughed and I hope we figure out a way forward and that we can, uh, instill some, some confidence within the American people. That our legislators can actually collaborate and work on solutions together and understand the art of compromise and not put us in a situation where we have to wonder, um, how, how impaired are our national healthcare system is going to be and how that’s going to impact the lives of citizens.

Um, next week. I hope that that is not the case.

Vic: Yeah. And what about the 37, 000 people that are furloughed? They don’t get paid. So it’s, it’s bad all around. Totally. Not fair to those poor people that are doing their job. And so I hope that too, I don’t have much [01:05:00] confidence. Do I think have confidence that after the crisis and we have to furlough people that hopefully will come to a compromise mid next week and the furlough will be a day or two.

I’d love for you to be right in all comes together or, or I hope that’s right. After the crisis, it just seems like, I mean, it’s one of the, one of the, um, us debt, uh, things. Got yellow flagged last time this happened, then they all like scurried around and tried to figure it out So hopefully they will either get it done before Saturday or immediately thereafter.

Marcus: All right We are sending our best wishes to everybody who’s really worried about their Their their jobs and what’s gonna happen next week. I think it is

Vic: important to say that the [01:06:00] CMS payments and doctor’s appointments are not going to be, they say we’ll link to this. They say clearly that’s not affected.

Yes. Do,

Marcus: do, do your research and go, go, go read the articles, read the Washington post article. We’re linking to it in the show notes. Um, it, it does appear that they have, Sort of, you know, stages at which they’re going to, um, meter down staff that is not going to, uh, impact the most essential things, but, but things, but there will be impacts.

I mean, that’s the whole point of it, you know, shutting down the government equals impact. There’s no, you can’t avoid that part of it. So, um, so yeah, you know, fingers crossed that, that, uh, there’s, there’s nothing, you know, really bad that comes out of this. And, and ideally that they figure out a way to not shut down the government, that would be great.

Either way, we’ll be here next week to talk about whatever happened.

Vic: Yes, actually, we, we gotta, we gotta figure out what the government’s doing.

Marcus: Yeah, we’re, we’re, we’re going to be here next week. I I’ve lost the plot on what I’m doing on a week to week basis. I’m like, where, where am I next week? [01:07:00] No, no, no.

We, we will be here next week. All right. Yeah. Until one way or the

Vic: other, we’ll have a show up.

Marcus: All right. Thanks for putting up with man. Talk to you soon.