3 – KKR Envision Bankruptcy | Debt Ceiling | AI-enabled Ambient Documentation

Marcus: [00:00:00] And we’re back. Welcome to episode

Vic: three of Help

Marcus: Further. Vic,

Vic: what’s going on, man? Hey, I’m excited to do this. Uh, a little bit different this week, but it’ll be fun to test new, new things.

Marcus: Yeah, I’m, I’m, uh, I’m looking at the mountains in Aspen, Colorado right now. I’m at, um, an Aspen Institute Executive Seminar this week, and, uh, it’s been a lot, but it’s been great reading Plato and Letter from Birmingham Jail by Dr.

Martin Luther King Jr. and Confucius and The Prince. Uh, so my head is quite a reading

Vic: list.

Marcus: Yeah. Yeah. And the communist manifesto and the declaration of independence. So my head’s like kind of in the, in the clouds a little bit. So, um, on some of these more, uh, current events in healthcare, you may have to take the lead, but, um, I think we have had a, a, a busy week of activity and, and some good things for us to talk about.

Why don’t we, uh, why don’t we kick it off with the news about KKR and Envision.[00:01:00]

Vic: Yeah. I think it’s important to sort of at least catch up every week. Uh, because there’s a lot changing quickly. Yeah. So, uh, KKR, uh, and Envision, they filed bankruptcy. Maybe it was Monday, Monday or Tuesday. The days kind of run together. It got announced May 15th. So I guess that that was, uh, Monday. I have a, um, headline.

You sure you want me to pull that up?

Marcus: Well, yeah, yeah, go ahead and pull it up, but talk through it. And just a question about this. Cause I, as I said, I’m, I’m dropping in and out from all this Aspen stuff, but, um, did they actually file bankruptcy or have they basically announced a debt restructuring to try to protect Amsurge because this bankruptcy is likely to be real because in the past, I think they were able to, you know, You know, get, get around the bankruptcy.

But now with the rising interest rates, I think that’s, that’s unlikely that they’re going to be able to get around it again.

Vic: Yeah, they, they filed chapter 11 bankruptcy. So that, that [00:02:00] is, that’s done. That’s the news. They put it into chapter 11. They have previously moved assets around internally, in my mind, protecting the, the most valuable assets, which are the, the surgery center business, um, what used to be called AmSurge.

I think they still refer to it as AmSurge. Yeah. That is a very successful and I think really valuable business, but within the 11 billion of debt, there’s the other doc management and emergency department management outsource business. And it is not very valuable. It’s not as valuable. And so KKR has sort of put, I think, most of the debt.

My, my personal opinion is they put a lot of the debt on the, the asset. They view as struggling. And now they’re bringing the whole thing into bankruptcy, but I believe there’s a prepackaged arrangement where it currently [00:03:00] exists with very little debt, just the debt that it uses to run its own business.

And the rest of the debt is with the other side. Okay. Now, the bankruptcy process chapter 11 is a court managed process, but I believe it’s going to, my belief is it will make it through and they will be, you know, two assets, one that has a ton of debt and not much equity value. And then one that has some equity value for KKR and for whoever else is invested.

Marcus: Okay. So there’s three storylines. I want to try to dig into. The first one is the actual KKR deal that brought InVision and AmSurg together. I’m going to run through all three and then, you know, would love your thoughts on it. So the first one is the original deal, right, that brought InVision and AmSurg together.

The second is the No Surprises Act part of the storyline where United Healthcare and AmSurg ended up getting into a [00:04:00] public spat. Um, and it was all around, you know, rates, um, reimbursement rates. And I think even at that time when it happened, you know, Optum was so strong that everyone knew there was not a lot of leverage there that Envision was going to have in that, in that situation.

Um, that was a pre pandemic. You know, development, uh, and then, and then the, the third one being the fact that, uh, envision and HCA have a 50, 50 joint venture called Blesco. And maybe I can talk a little bit more about that one. Um, that, that, that HCA has come out this week and said that this bankruptcy is not going to disrupt their, their, uh, their option staffing joint venture.

So those are three, I think, important storylines that, that come off of this. Uh, the private equity one may be most relevant for you and I. Uh, cause it’s in the investment world. And this was, you know, a big roll up that I think in the beginning showed some promise, but I think pretty quickly after that started to show [00:05:00] some of the weakness and Amsterds clearly was the more valuable of the two assets for a long time now.

So let’s, let’s start with a deal.

Vic: Chris Holden, I mean, Amsterds is a Nashville company. We’ve, we’ve known management over there for a long time and they’re, they’re a great company. And it was formed in the nineties. really related to American Healthways, which turned into Healthways, um, the same sort of group of really connected, really successful healthcare entrepreneurs launched both.

And they both were really successful. Both went public, both had a long, independent, you know, life, And I’m probably biased because I really like the AmSurge former team, which, which, which to your point, with this merger, it was, uh, Envision was the named acquirer, but many of the executives and the CEO, Chris Holden, came from the AmSurge side.

And in fact, they moved [00:06:00] most of the headquarters or headquarters here in Nashville. And so I think that’s true. I’m not sure I’m completely objective, but yes, AmSurge. AmSurge. The team was really strong and um, and it was the more valuable of the two assets in my opinion And it remains to be really valuable just for the audience Most of our audience knows am surge, but they do surgery centers across the country Uh, and it’s a well run business.

It’s it’s mostly I think all joint ventures with docs and health systems And so usually they own a minority state to a small majority state. They own 35 to 65 percent of the surgery center. So they own a lot of them. So that, that’s the combination. Uh, Chris Holden is a really smart and really successful deal guy.

He’s done a ton of deals in the [00:07:00] surgery center business. And I think he was, he had a vision for building the business broader. And what has been running it as a combining company. I think, um, we could dig into that more, but it probably makes sense to move to the second part of it. Yeah. Uh, so the envisioned side of the business mostly manages emergency departments, but they also hire and manage physician groups and doctors practices and the no surprises act is really impactful at emergency departments because You know, your life is in danger.

And so rightly, they, they fix you and you get whatever, whatever anesthesiologist and surgeon and all the, all the things that you’re need, you need to do to, to be saved. They do very, very quickly as they need to, but [00:08:00] often that will result in an out of network, uh, charge. Because maybe you’re hiking in Aspen, and you live here in Nashville, and so your, your doc network is not as robust out there, and there’s no one, there’s no evil person in that, that just is how our healthcare system is set up, uh, and it, and I think for other good reasons, politicians Don’t like when people get bills that they weren’t expecting, particularly out of network bills that can be really high.

And I agree with that in general, but in the emergency department, sometimes that is, you know, 50 percent unfair because, because you, you actually needed the service and you weren’t in your home network, there are some times when it’s. Maybe used to a health systems advantage, and those people would, you [00:09:00] know, should be taken care of.

Anyway, that, that act had the repercussion of really being challenging to the envision side, which manages a lot of EDs, whether that was smart or not smart to include EDs, it was included. And so that’s, um, that’s been a challenge. And then, uh, several payers. Really led by United Health Group, have acquired surgery centers and acquired doctors and are trying to then kind of leverage their market power against other big players and Envision is one of the biggest.

And again, that was, that was probably difficult to predict when they put this together. You know, it was a, it was $10 billion that has been largely lost. They’ll, they’ll get some value, but, but they’re not gonna, they’re not gonna make money on this deal. They’re gonna lose, even, even with the Shell game, the [00:10:00] KKR is very good at, at financial engineering.

They’re, they’re, they’re losing money. They’re losing a lot of money on this deal.

Marcus: Yeah. I mean, I think, I think there’s a, there’s an interesting confluence, and I want to get to the HCA part of the story, but there’s an inter interesting confluence here. Um, private equity coming in with a pretty typical financial engineering playbook, you know, let’s merge these assets.

Let’s find operational efficiencies. Let’s put the right management team in there. Let’s relocate it to the hub of healthcare in Nashville, right? Where, where the dominant business is. We, we execute a relationship with HCA in the market. So that immediately seems like it’s going to be accretive, right? So all these things sort of look like they’re going to play out in the right way.

Way and then two two forces that I think we talk about a lot Um and have been talking about so far on the show one the regulatory environment So that the no surprises act and two the payviders, right? So, you know payers that you know, [00:11:00] not only have scale in terms of you know, the size of their Membership base and their, you know, and their balance sheet, but also now have services oriented assets.

Um, and, and so they have an internal loop where they’re not just checking costs, but they’re also checking outcomes. They’re, they’re, they’re able to check a lot of things, right. And, and they’re combining, uh, you know, both of those sciences and ultimately their actuaries can come up and do research and say, look, you know, These rates are ridiculous, you know, for the outcomes that we’re getting or for the member satisfaction that we’re getting or etcetera, etcetera.

Right. So, um, I think again, you see these situations where if you are not. Um, you know, an outstanding operator vis a vis HCA, which I want to now get to, um, with a clear foothold in fantastic markets and a part of the business that the pay riders generally at this point have decided they don’t want to be in, which is, let’s just call it generally the acute setting, um, the acute hospital based setting, uh, then, you [00:12:00] know, you could be in the crosshairs, right?

I mean, you know, the wrong combination of, uh, regulatory You know, um, you know, agendas and and pay Vita agendas can make any provider entity very, very vulnerable. So, um, I think that is a general just trend to look at. And it’ll be interesting to see how private equity firms look at this and make general decisions.

Decisions around what kind of businesses they want to invest in in the future and which kinds they don’t want to invest in in the future that that is material to venture investors like us. Um, but just to quickly talk about HCA. So HCA, uh, went into a joint venture with Envision, uh, in 2011. 50 joint venture.

Uh, they called it Belesco and it was really around, You know, staffing their their E. D. S. Um, and I think what’s interesting. Obviously, we know how strong HCA is a month ago. Um, you know, Sam Hayes and that that HCA announced that he took over 90 percent ownership of that joint venture, [00:13:00] right? So the writing has been on the wall around the envision situation for a while.

This is not new news. Um, and the idea that HCA, especially on the heels of a fantastic quarter quarterly earnings report, Yeah. Announce that they’re taking a much, much stronger position in the joint venture, i. e. signal into the market. We’re taking control of this thing. Um, and also, oh, by the way, this thing is throwing off a billion dollars in EBITDA.

So like the way, the way that we’ve integrated it and implemented it into our systems is very, very functional. Um, I think just shows again, how operations like HCA also have positioned themselves to navigate these types of environments. And at the end of the day, You know, unfortunately, Envision and KKR are left holding the back, right?

Like, you know, if you look at over the course of a more than decade long joint venture, um, while Envision is filing for bankruptcy, restructuring the debt, um, HCA is just fine. All of their, you know, all of their operational integrity in place. And if anything, [00:14:00] it now puts a piece on the board and surge in their market.

And we’ve already seen in recent times where HCA acquired a significant Portion of Brookdale, right? So, you know, as these as these private equity, you know, oriented assets, you know, get into positions where they could be targets, especially when they’re in the same town as, as HCA, um, they’re in place. So I don’t know anything about

Vic: it.

I think that’s, we don’t know inside information about the, I

Marcus: have no inside information at all, but I’m just looking at, you know, how HCA has operated.

Vic: Right. But I’ll point out tenant bought us surgical partners. And it has been really successful for tenant HCA has, of course, watched that, um, I think the locations, the geographical footprint that I think they would be highly interested in more well run surgery centers in their footprint.

And I think they won’t be interested if it’s not in their footprint. That’s just my, so [00:15:00] it’s not clear if, uh, they’ll sell it all. Answer will sell it all. It may be strong enough to be an independent company like it was previously. Uh, they may sell off pieces and parts. Um, I think you’re exactly right.

That, um, there is, we’re starting to see clear differences between a well run health system with aligned incentives. And delivering great care and also being financially responsible and financially healthy. And then there are a lot of systems that are not those things. And Envision had many partnerships with other health systems that were not, didn’t run their EDs very well.

And that makes a significant difference in care, but also in the bottom line. And in the number of times you get hit with the No Surprises Act plane. HCA is the poster child for a railroad hospital. And all the health systems need to Get their act together and and [00:16:00] try to move towards that.

Marcus: Yep All right.

Let’s uh, let’s keep moving because uh, my aspen schedule is is calling Uh next thing I want to I want to make sure we cover is um the debt ceiling So they’re I mean obviously storyline on the debt ceiling has for months been, you know, danger will walk will robinson I mean, it’s been really pretty scary um the game of chicken that we’re playing and and I think part of what makes it so scary is that You Uh, we all have to admit we’re in a moment in our, uh, in our government history where, uh, it does not seem that our leaders, uh, in Congress are able to collaborate, much less communicate.

Um, and so there, there’s been, I think, more questioning now than in previous years as to whether or not they really would play this game of chicken all the way through to the end. You know, would they, would they? Would they allow the the country to go into default to make a political point? Um, and and then and then try to blame the other party, uh for for the [00:17:00] fallout of that And so there has not been much good news on that front I would say until this week and I don’t know I don’t I want to stop short of calling it good news But at least the signal, um from the white house That the conversations have begun to become productive.

Um, and that sort of being paired with Yellen’s serious warning that we have two weeks before we’re, we’re, we’re out of cash and we’re in serious trouble. Um, so, so you’ve been a little bit more tuned into the news. You tell, tell me your thoughts on it.

Vic: Yeah, I think if I had trust in politicians to try to do the right thing, this would not be even a topic we should talk about, or like, the dead ceiling, of course, has to be lifted.

There’s no question about that. Um, you and I were talking before the show, they sort of have both pulled their guns out and walked into this, to the center of the street to talk about the [00:18:00] negotiations. And you’re absolutely right. Biden came out yesterday and said it was very productive or some, some kind of non committal but positive sign.

What I, what I, I’ve been looking into it a lot because I’m nervous about it. I think it’s not, I don’t have trust in either side. I think there are wings of each party that are very extreme and don’t want to necessarily come to a reasoned middle ground. And so that makes me nervous. They should get to an answer.

Uh, but there is, it’s not, there’s no deal that is in pencil and paper. Like it’s, so it’s, it makes me nervous that we have two weeks left and there’s not really an answer that, you know, holding your gun pointing at the other side, anything could happen and it would be really difficult. And I’ll just, I pulled up the, uh, maybe I can share my screen again.

I pulled up the, um, credit default [00:19:00] swap. So the market assesses these things. With a credit default swap. So this is the chance that the United States would default on its debt and people, you know, they buy insurance basically, and other people would sell insurance and you can see, you know, for decades, it’s been very low.

In 2011 was the last time it got up to like a 80, 80 basis points. And we’re now, it’s never been this high in the history of doing credit default swaps. And that’s not a good sign. Now it doesn’t mean anything other than the market is worried about this because I don’t think the market has trust that our politicians will actually do the right thing.

So we’re recording this on Thursday morning, uh, the 18th. They might come out this afternoon and fix it all. Um, but [00:20:00] we’re gonna have to watch it. Unfortunately, I’d rather just not worry about the debt ceiling and don’t build health care assets.

Marcus: Yeah. Last week, uh, I was in San Francisco at an Axios event, their BFD event.

And, um, TPG CEO was interviewed by Dan Primack, um, John Winklered. And the last question was about the, the, the debt ceiling. And, uh, Winklered said he’s more wary than he’s ever been. He said, you know, he said, you know, I’m hopeful and I think cooler heads will prevail. But, um, he did acknowledge that this government does appear to be more willing.

To to push a political agenda and less willing to communicate and so I think you’re seeing that reflected in the credit default swap Um, you know rise, uh, which is which is obviously

Vic: Reflects what we talked about with emily last week. I mean the no one has confidence in our elected [00:21:00] officials, unfortunately from either side And so that’s just really that’s kind of scary in itself And there are points in time when we need them to do their job.

And so hopefully they will

Marcus: Yeah,

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Marcus: All right, we’re back. Um, so We we didn’t dig into it last week much at all. But uh, I think ai continues to be a major storyline Of of this day and time. Um, I think there was There’s always something coming on coming out every week. I think last week the big storyline was barred Um, you know having a big release now being much more publicly available being tied into google’s real time data set So that was I think in gen pop that was the big [00:23:00] ai storyline But there are storylines in healthcare as well that we’re constantly tracking.

So So, Vic, you’ve been keeping up with this. Run us through what’s going on in AI right now.

Vic: Yeah, so, um, I’m going to do it pretty quickly because not everyone is interested, but as we talked about last week, we have to figure out productivity gains in healthcare. AI is the best way to, to get there, I think.

Um, and I’m just going to run through several things pretty quickly because it, um, there’s a lot going on. Um, and so this slide is about the pace of improvements. So in, in late November, it might have been November 30th or December 1st, Chad GPT came out. It has got all the attention in the general population.

Everyone was playing with it over the holidays. It is sort of the standard. And so this graph is showing a new competing models. These are large language models that would do exactly what Chachi Petit does. Um, and how good they are [00:24:00] relative to that. And of course, Chachi Petit may keep going. I’m sure they’ll keep going, but I want to point out just the pace of change.

So Facebook put out a thing called llama in February that was 68, 70 percent as good. Um, and then some folks at, uh, Stanford sort of improved it, uh, two weeks later and got to about three quarters as good at GPT. And then a, uh, open source community invested $300. My teenagers have that much money. Mm-Hmm.

put and got 92% of . And as you said, Bard is, uh, Google’s platform. They came out last week and 93%. I mean, so the pace of this is hard to get my head around. I mean, you and I have done tech investing, VC investing in health [00:25:00] care for a long time, and things don’t change this quickly, even in software.

Marcus: No, listen, I mean, if, for me, if there’s no other reason for us doing this show, it’s to have a weekly touch point to check where we are with AI.

I mean, it’s just. It’s just absolutely ridiculous. Um, and, and, you know, as I look at the source on this image, uh, the article does also prompt me to bring up, uh, the, the, the tagline that we heard from last week, which is, yeah, yeah, there’s no moat, right? Google said they have no moat, but neither does anyone else.

Um, and, and that really is a, that’s such a disruptive reality to this technology different from. You know, so many technologies that we’ve seen over the last 15 years. Most of these technologies we’ve seen in web to have been significant, significant moat creators, uh, you know, whether they be marketplaces or they be networks or they be, you know, really, really valuable [00:26:00] databases.

They’ve been moat creators and this one, it’s impossible to present where the moat is going to show up. So that’s why it’s so hard to be sure that the investments are actually that accretive unless you then think about applying the technology to existing software through distribution. And that’s where you start to feel like Microsoft and Google start to really run away with it, right?

Because they’ve already got the install base on. Google search, Google docs, um, you know, Microsoft office teams, things of that nature. So, uh, that’s, that’s where you start to realize.

Vic: Trying to figure out, is this a continuing innovation like something that would make the existing tech companies continue to dominate?

Meaning it is going to create a whole new set of big players that we don’t know their names of yet. And I, I don’t, it’s not clear, [00:27:00] but, uh, that no moat comment was leaked out of a Google, um, they’re pretty well connected in the tech world. All of these things that we’re showing right here are being offered free today, except for chat GPT.

And so you can get for 300, you can create something that’s 92 percent as good, um, you know, on your laptop. And so I don’t know how much. They’re going to be able to charge at Microsoft and chat, TPT, but yes, they can, they can reinforce windows and Microsoft office, Google can protect search, um, for a time.

Um, but then I think I want to just quickly run through some other applications, there’s a lot in healthcare going on, but just to give people a perspective. So this is a hedge fund like product, uh, that was started about a week ago. Is that right? I mean, it’s, it’s a week, maybe it’s 10 days at this point.

Uh, they’re using chat GPT to do trading. They were on [00:28:00] CNN as it says there, and in a week or maybe it’s two weeks, 10 days, they’ve got 13, 000, almost 14, 000 investors and seven and a half million dollars. And so that that’s the kind of pace of change. I’m sure they’ve, you know, increased it since, since I made this slide this morning, um, we had the first really interesting advertisement.

So Coke did, uh, uh, about a one and a half minute commercial, um, using AI tools and the Coke advertising partners, uh, really around artwork. It’s called masterpiece. I would encourage people to go watch it. It’s, it’s a minute, minute and a half. And of course, it’s showing Coke and a lot of different, um, artworks, and they did it very quickly, uh, using a free model from, uh, Stability, uh, which is an open source platform.

But they did have credos that they paid to do it. [00:29:00] Um, that same company, Stability, released their Uh, animation. So so they did a stability diffusion, which was the first really impressive image generator generating. They now have an animation generating tool. So you can say, I’d like to see a cat in a scientist in a space setting crawling along a table, and it does a full animation for you for free.

And it’s incredible that that was came out this weekend. And now, and now we’re seeing health care is starting to adopt it as well. So that’s what’s interesting, really, to our business and to our audience. Uh, the first place we’ve seen a lot of traction, again, HCA is going to be in this story, uh, is in the documentation.

Documentation is really a time consuming, Aspect of delivery medicine. If you want to get paid, you have to document your work in [00:30:00] the electronic health record or electronic medical record. Um, and that’s been mandated by the federal government. So everyone uses the M. R. S. Um, this was a study by Athena health.

Um, but I think it’s consistent. So by by practice type, you can see that there’s a lot of hours being spent weekly. And so orthopedics are spending 18 hours a week. That was your way in 18 hours a week. So, you know, it’s, it’s half of their week. If you assume a 40 hour week is purely in keying stuff in or like with a microphone dictating, uh, what you’re doing.

Okay. So that that’s, uh, that’s a lot of time back to our productivity question. Right. Um, and so. HCA announced, um, that, uh, they’re partnering with Augmedix. Um, which is an ambient powered A. I. Tool. [00:31:00] So it sits behind the scenes, listens to what the doc is doing in the engagement of the patient. And then it creates the documentation ready to be inserted to the M.

R. Doc reviews it much faster just to review what’s there. Maybe makes a quick correction. The A. I. Tool begins to learn with the corrections And, uh, our friend of ours at HCA, Mike Schlosser is in charge of innovation. He’s leading this. They’re, they’re testing it, right? So it’s, it’s, uh, the pilot, um, but like medics is publicly traded, which is an interesting, um, thing.

It’s small in San Francisco. Um, and it doesn’t, I didn’t want, I didn’t want, we have not much time, but there’s a whole list of other startups using this technology and again, it’s so cheap that we’re going to have a ton of trials. And it’s going to really make an impact.

Marcus: Yeah, uh, well, first of all, that’s an incredible rundown of everything that’s going on in AI, so thanks for, uh, capturing that while I’m [00:32:00] Yeah, no, I was just saying, thanks for, thanks for capturing all that while I’ve been up here in the mountains.

Yeah, yeah, no problem.

Vic: You’re learning about, uh, you know, uh, philosophy and cool things, and that’ll be helpful too. But there’s a ton of, uh, news and we’ve been holding the, uh, the April news, it didn’t seem like there was enough traction, but Epic in mid April, um, right after the HCA announcement. Um, partner with Microsoft and they now embedded chat GPT in all their, in all their EMR systems, uh, which is like you said, distribution sometimes wins the game, right?

And Epic has, it’ll be interesting to see what Sterner does. And then the last I’ll mention is 3M. 3M is kind of behind the scenes in healthcare, but, but they do a lot of HIS, technology systems, kind of behind the scenes that make health systems [00:33:00] work. And they formed a collaboration with Amazon. Amazon has not released a full large language model, I think because they sort of guessed correctly that that wasn’t going to be a moat that would really make a difference.

And they’re trying to, you know, sort of provide the cloud services to anyone that wants to utilize this stuff. 3M is partnering with them. And so that, um, I know we are short on time, but just to give people a quick update, uh, they really should go watch that animation, go watch the Coke video, check out what HCA or EPIC, I mean, these are not groups that do, uh, trial things that are, that are just Just research projects.

These are serious healthcare organizations that are jumping into this. And I think everyone should be learning about it.

Marcus: Yeah. And I guess maybe just one final word I’ll, I’ll offer before we do have to wrap up, um, is that I think [00:34:00] the, the way that we work being changed by AI, um, is something that people are going to have to work at, I think eventually, and the way I would kind of liken it is.

You know, thinking about how seamless it is now to work on your phone and those gestures, right? All the gestures you do, you know, pinch and zoom, um, you know, swiping, these things were not natural things that we did when the iPhone first came around. Right? So there is this, there’s this transition that we have to go through.

I actually wrote my first business article, um, In partnership with AI, uh, I did an angel investment in this tool called type. ai, not, not investing advice. Um, but I did it because I wanted to force myself to have a vested invest, uh, investment, uh, a vested reason to learn, right? So I’m using this tool to try to learn how to write with AI because it’s not comfortable for me because I’ve written a book and I write a lot and I like to write on my own.

Yeah.

Vic: You have to learn a new it’s a new interface. It’s a new way. [00:35:00]

Marcus: Yeah, it’s a new interface. And you’re having to sort of and also like it’s not perfect. Right. And so one thing I think about there. And the reason why I know that it’s it’s a pilot and Dr slasher will do a great job with with his team at HCA on figuring out how.

The positions, you know, workflow changes is it is a fundamental workflow change. It will not be a situation where you’re talking and then you can just a hundred percent trust, you know, what the output is, where we are shifting to being co authors and editors with the AI, right? And that’s just a different mindset than you being the full on author and maybe not even editing, right?

Because you trust yourself on that first draft so much. It’s a very, very different mindset, writing versus editing. And so I think even when we look at the animation or the image, you know, generation stuff, all these things put us more in the in the role of an editor, you know, and a curator and and a discerning mind and an evaluator as opposed to an author, [00:36:00] a creator, and that’s that’s a shift in mindset that is going to take some time to work through.

So as much as you encourage people to go view the. The, you know, the Coke commercial. I also want to encourage people to start to try to do real work with these tools, right? So you can start to get a sense of how your workflow and how your mindset will have to shift in order to accommodate how this new technology will change the world.

Vic: That’s that’s exactly how I feel. It is going to change the way we interact with each other and with health systems and with technology. Hey. And my, my belief personally is I need to learn how to leverage this technology. Uh, like I learned to use a cell phone and we all have seen our older parents or grandparents, whoever, um, maybe adopt cell phones five years after us.[00:37:00]

And it’s a hard learning curve. And once you’re through it, you don’t understand, Oh, you just pinch here. But, but when you don’t know what pinch the screen means. I mean, those aren’t words that in the 1990s meant anything. You can’t pinch a screen. Right. It doesn’t actually pinch. Uh, and then we start reusing words.

And so, uh, the reason to kind of bring this up, and I’m diving into how would I design an agent to take action for me, um, every night wake up and do something, um, for the same reason you’re trying to write something. It’s just a, Playing with it and getting your hands kind of dirty and seeing where does it not work is the only way I think to really start to learn the interface and then circle back.

So I agree completely.

Marcus: And I think there is a psychological aspect of it. And I think this is probably the Aspen experience for me, but I would say, you know, changing and adopting these tools, there is a bit of. Um, there’s a [00:38:00] bit of grief, I think, in the loss of a sense of identity with the way that you worked in the past and the time and effort you invested to be able to be competent and be valued in the way that you worked in the past.

And so, That’s why voluntarily leaning into that and just dealing with the grief proactively as opposed to it being thrust upon you Is going to be the preferable way, but i’m not sure the grief is avoidable. I i’m i’m telling you i’m feeling it And in writing, you know, I I take great pride in the skill that i’ve developed around writing And I want to continue that because I feel that there’s personal benefit to that process.

But I know that not all writing is the same, you know, some writing, especially business writing, you know, I don’t know that I would use AI to like write my book, business writing, certainly, you know, AI can be a helpful tool for that.

Vic: There’s no question it is sad. I mean, I, I think I’m pretty [00:39:00] good at Excel modeling, right?

So I, I’m proud of that. And I’m sad that I believe that that value in the world is going to deteriorate over time. And I was telling my son, you know, so I have two teenage boys. I was telling them this story and then I’ll let you go to actually learn something. But, um, when I started as a VC, I got a job at Massey Birch, an old, uh, very established venture firm because of my skills with Excel.

I didn’t know venture very well. They know it at all. I was my first job, but they, one of the partners, there was using a slide rule, which, which, you know, is not as good as Excel, just like. Clearly not as good, and he was not willing to give it up, because he had invested a long time in the 70s and 80s building that skill, and he was really good at using a slide rule to calculate things, and he could calculate much [00:40:00] faster than I could on paper.

But I killed him in Excel because I, because Excel is a better tool. It’s a more powerful tool. What I was saying to my teenage boys is that they’re going to, they’re going to come up in the world being 16, with this new set of tools. And it won’t be hard for them. Just like Excel, it wasn’t hard for me. I have to lean in and really teach myself, force myself to do this.

Cause it is going to be hard for me to. Abandon a tool like Excel and whatever tools you’re used to using, you need to think about, you know, how is this going to change? Because AI is going to change. I mean, um, thunder from, um, Google is calling it fire. He thinks it’s like the invention of fire and it’s going to change everything.

But. I don’t think we can stop that. We should have to like try to educate ourselves so that we know what’s coming.

Marcus: All right. So on that note, um, man, thanks for doing, uh, so much [00:41:00] heavy lifting this week, putting the show together. Appreciate you. Um, and, uh, we’ll be back.

Vic: Yeah,

Marcus: yeah, yeah. I’m coming back. I’m coming back.

We’ll, we’ll be back in the studio next week. I’m looking forward to it. Um, and until then, risks and disclaimers, this is in a, this is not investment advice, we’re just two VCs trying to figure out the world, and, uh, And, uh, you know, hoping that you benefit from listening to our conversations about it. And, um, thanks for listening.

And please tell your friends to subscribe, share this with somebody. We’re just getting off the, you know, out of the blocks. And, um, the way that this show is going to grow is by not just you listening, but you sharing it with somebody that you think would benefit from it. So please do that. Um, give us five stars on, on iTunes or, um, you know, give us a like or subscribe on YouTube.

We are on YouTube. We do this on video as well as audio. So you may be listening to this on our podcast feed, but just know when we talk about images or graphs or any of those kinds of things, they’re on the screen because we’re doing video versions as well. Um, and thanks for being along on the journey with us this, uh, try to figure out where health is going.

Vic: I’ll just chime in. Yes, give us five stars. Also, give us [00:42:00] some feedback. If you want to hear more of something or have questions or less of something, let us know. We’re still evolving this.

Marcus: Yeah.

Vic: All

Marcus: right. Until next week. See ya.