34 – Predictions for Healthcare in 2024 | Apple Watch’s Pulse Oximeter IP Challenges | Gratitude for Listeners & Growth Plans for Next Year

Vic: [00:00:00] End of 2023, 34 episodes last six months or so, a little more than six months.

Marcus: Yeah. Pretty good run for, uh, for our, our, our kind of year zero I’d call it. Yeah. It’s been good. We got a good, uh, good slate of things we’re, we’re going to do in the new year. Uh, we’re going to be adding guests to the show, uh, probably by the, by the mid, uh, mid point of January, we’ll regularly have guests on the show and start producing more than one show a week, which is pretty exciting.

Yeah.

Vic: Yeah, yeah, there’s a lot to talk about and bringing in experts from other fields. I think will really just help bring different points of view just to everything.

Marcus: Yeah, and, and, you know, we needed this year to kind of get our act together, figure out how we’re actually going to produce and put together these shows.

And, uh, I think we’ve mostly figured it out now. So, yeah.

Like, how are you feeling? I mean, I, I, [00:01:00] it’s so, It’s always so weird at the end of the year to kind of look up and realize the year is over and you’re heading into a new year and You’re one year older. Yeah, you know and and so is the world and at the same time we’re hurling into this era of Unbelievable technology.

I mean as as investors especially technology based investors the technology that’s on the horizon right now is Whether we’re talking about genomics or, um, all things bio or artificial intelligence, um, the advancements of, of the cloud at scale, computing power, it’s, it’s just, it’s just such an unbelievable nexus of, of technology of what could happen.

And it, and it also feels like that’s overlapping with an industry that is as ready for disruption as it’s been in the [00:02:00] last 50 years. very much.

Vic: Yeah, yeah, I think that’s right. The, uh, it’s been kind of a wild year. A lot has changed in the last 12 months, and I agree. I think we have incredible technologies that we don’t fully understand.

We don’t even partially understand, right? We’re just sort of getting a peek at what they’re going to be. Um, and health care is in need of change, certainly. And then I think our culture, which is more than healthcare, but healthcare is very intertwined with culture. Is going through transition as well. You have different generations that sort of believe society should do blank.

But those beliefs are not the same. From boomers to X to millennial to, I mean, it’s just a different perspective based on when you were born. Right. And that, it feels like that’s gonna change maybe next year? Maybe in the next couple [00:03:00] years. I feel there’s a ton of change. We’re gonna start seeing technology come to the fore and be actually useful.

We’re And then society is going to figure out how, how do we integrate this?

Marcus: I mean, I feel like in many ways, Facebook and the iPhone have kind of kept us together as a society in terms of, you know, those two technologies being something that the boomers can understand and use. You know, that kind of connects them to Millennials and Gen Z, even though Millennials and Gen Z don’t really like Facebook.

That’s not the point. The point, the point is, at least it’s a, it’s a common ground, right? It’s a common ground. But this next wave of technology is going to leave the boomers behind. They’re not going to understand this at all. Um, and it, look, it’s hard for you and I to keep up. We’re Gen X. I mean, I, I think a lot of, a lot of people in our generation are, uh, probably getting outpaced as well.

Vic: And I mean, that’s why I like doing this podcast. There’s a lot of news flying around. Every day, and [00:04:00] it’s hard to keep up with it all if you don’t pay attention and then kind of have a conversation with someone else who also is following it every week. Mm hmm. And if you’re younger, you’re sort of naturally interested in new things, and you’re not as set in your ways.

I mean, I’m 53, and I have to work hard to keep up. I think the boomers are, they could work hard to keep up, but it’s just harder and harder as you get older.

Marcus: Yeah. Yeah. So I don’t know. I mean, uh, it does feel like over the last 30 days on the fed side of things, things have stabilized a little bit, which I think gives me, hopefully you as well, A little bit of hope that we, we can turn a corner next year and get a little bit back to normal in terms of the work we do in terms of the capital markets in terms of, uh, startups being able to graduate from round to round and, and, uh, progress and bring the innovation into the market.

So I’m hopeful of that. I’m hopeful that a lot of the [00:05:00] dislocation that came from COVID 19. It has largely washed out. Hopefully 2024, there’s not like a whole bunch of reverberations, whether it’s supply chain or banking or, you know, any of those kinds of issues. Hopefully, a lot of those things have sort of been worked out by next year, and hopefully the only real thing we have to worry about is, uh, an election.

Vic: Yeah, it’s going to be the last election where we have. You know 80 year olds running I think I think I think that’s right and um, Someone will get elected. I’m not super excited about any of the candidates But yeah, we’ll go through that process and the country will pick someone Uh, which as much as I complain about the choices is the the best alternative compared to other governments.

That’s right there Um, yeah, I think on the fed side I am relieved that they’re at least signaling they’re gonna be more accommodating, maybe do some cuts. [00:06:00] I think we still have, we just have a change in the way people do their work. So the commercial real estate market hasn’t really changed. There’s still a lot of empty buildings in downtown areas that have to be figured out, but hopefully the Fed will navigate this soft landing.

Um, I, I think the first few months of, 24, still going to be pretty tough in startup land. Yeah, for sure. Sort of, I think it’s going to be kind of first half, second half, if you, if you kind of survive through the, the winner, um, winner in the season and also winner in the capital markets. I think mid year, it’s going to start opening up and there’ll be.

You know, fewer competition for customers and employees and capital and startups can grow better. So I’m hopeful. I think our portfolio is hanging in there pretty well. And then hopefully there’ll be spring and they’ll start growing again.

Marcus: Yeah. I think if my portfolio is any indication, you pretty much know where things stand across your portfolio and whatever’s going to happen in [00:07:00] Q1 is already kind of priced in, baked in and you’re looking to the future.

Vic: Yeah, I think there still are some Hail Mary’s being kind of thrown out there. Let’s figure out how to raise a little, another round of money that maybe, maybe they’ll work, maybe they won’t, but it’s going to be finished by Q1. Yeah. And then we’ll

Marcus: work with it. To all those Hail Mary’s good luck and God bless.

And, uh, let’s dig in. Yeah. All right. Uh, only one story that we’re going to cover today, which is the apple. Halting of, uh, bringing their watches, uh, into the United States for sale. Um, it’s not, the actual halting is not really taking effect until after Christmas Eve, so it’s not really going to affect, uh, holiday sales, not in, not in any meaningful way.

Um, but this is really an intellectual property issue, and it’s an intellectual property issue that’s not new. Um, the AliveCore I think was the first time we heard about an issue between Apple and another company, you know, a smaller company around their EKG technology. [00:08:00] Um, and now a second company Massimo has been able to, uh, get the United States to, to block, uh, Apple from, from selling the device.

Vic: Yeah. I mean, I think Apple has endeavored to put healthcare sensors into their watch. And these sensors existed before the iPhone, before the Apple Watch. And so it is a challenge to clear the intellectual property of other companies when you’re using this, pretty much the same sensor. And I think with Massimo particularly, this is not a tiny, little startup that they can push around.

It’s a multi I mean, it’s not as big as Apple, but no, it’s a several billion dollar company. Yep. Uh, much

Marcus: bigger than a live core was.

Vic: Yes. Yeah. And they tried to work with them a lot. I mean, I think it was in 2013, 2014, when they first started. Negotiating and working. [00:09:00] There were some talks they might acquire Massimo and they decided not to.

And I think what happened is they hired a few of their employees and built the technology under the Apple brand. Apple’s going to do what it’s going to do. It is a healthcare story because it’s, um, blood oxygen level is what they’re, what they’re sensing, which is a pulse

Marcus: ox.

Vic: Yeah. It’s an important, important reading, depending on what, what the health situation is.

But I think the bigger thing for startups and innovation and venture capital and established companies is, you know, what, what does the IP protection protect you from, and if it’s not from, um, someone’s stealing two or hiring away two engineers and recreating the same thing, then what, what is it good for?

Right. So I think it’s, I think it’s healthy that the government is sort of pushing back and not allowing Apple to walk all over.

Marcus: I can’t see a world in which the Apple watch [00:10:00] does not continue to sell. Um, I don’t see it being discontinued over this. There will be a resolution for sure. Um, it’s being baked into too many different protocols, uh, out there right now.

So there’s no way that. The Apple Apple watch goes away. Uh, but, but the resolution is going to be something to watch. And I think your point is, is important. Um, I know from my perspective, I come out of 2023, uh, and I come out of the process of invent investing in fund one broadly. And as I think about, you know, what I’m going to do in the future as a venture investor, there’s absolutely categories I’m not willing to go back into.

Okay, for a variety of reasons. None of them happened to be because, you know, the largest tech company in the world took our stuff and squashed it. Uh, however, I, I have had a personal experience as an entrepreneur, um, building technology. I had that experience with Facebook, you know, um, when, when you, when you build.

In spaces [00:11:00] that are likely to be, um, that are likely to be targeted and focused on by these super large tech companies that also have large lobbying efforts and just ridiculous legal resources, uh, You, you really stand the, you really stand to risk losing all of your good effort, especially if the science that you’ve created works.

And, uh, you know, I think that there’s a lot of venture investors who are going to watch this. They’re going to watch how this thing plays out. And as the next startup. You know, knocks on their door and says, Hey, I’ve got this really cool, uh, sensor VCs going to say, I wonder if that’s something that’s going to end up in the Apple watch, right?

And if it is, I don’t know if I want to write that check.

Vic: Yeah, I mean, certainly VCs are going to be worried about, about [00:12:00] Apple throwing their weight around. I think there’s a difference that’s worth. Talking through about building a product that relies on the the apple app store for instance I mean there’s a big fight with fortnite and apple and google because they don’t like the fees On the various app stores epic beat google.

Yeah, they they beat them. Yeah um, and so I think there there’s one thing that I think is if you’re building for A market that is controlled and owned by, that’s different. That’s different. Right. So if we can’t protect intellectual property, I think as a market, we get, we get less invention. And so Apple has plenty of money.

They should license, they should license the IP like everyone else in the world. And if they have to pay a lot, maybe that means it’s really valuable or they shouldn’t, they shouldn’t use the technology. I don’t know. [00:13:00] I understand that. It’s an important thing for the Apple watch, but I think Massimo probably has some good intellectual property.

Marcus: Yeah, I mean, look, we don’t know the energy workings of the deal or, or even the technology. I mean, uh, the result gives us enough reason to believe Massimo’s got a case here for sure. Um, and that there was likely to be some settlement, uh, that will. But again, as you said, they’re a large company. I’m sure this is a very, very valuable part of their intellectual property, uh, portfolio, especially in terms of like how they think about maximizing the value of the company.

And it’s likely that what they are asking from Apple for the use of it is not something that Apple would generally want to pay or give up for. You know, a feature of a device, right? And so there’s probably just a misalignment between how Massimo values the, you know, the intellectual [00:14:00] property and how Apple views the importance of it and their overall, uh, you know, array of products.

Vic: Yeah, there’s no question about that. I, I think there’s, there certainly is a difference of opinion of how valuable the IP is and Massimo’s clearly asking for more than Apple wants to pay. But I think that. The free market system rely, I mean, as a VC, I rely on IP protection and Apple has plenty of resources to bring to bear on a market, but, but they, they need to, they need to buy or license, you know, shell property if they want Sell it.

I think,

Marcus: I mean, I don’t have an Apple watch. Uh, I, I have purchased one before. I know you’re not even, you know, you’re not even in the world. Yeah. Um, I mean, I had one, it cracked way too easily and I was like, that’s it. You know, I can’t buy in that device. [00:15:00] They control 30 percent of the smart watch. Um, space.

I actually have a Garmin, which is a sort of much more durable smartwatch. And I’ve dropped it like a thousand times. It’s still not cracked. You know? Uh, and you know, Garmin’s got a pretty robust, uh, you know, health capability in their watches as well. Yeah, we met the Garmin team in Kansas City. They’re great guys.

Yeah, yeah, they’ve got a very robust capability as well. So, um, look, I think it is going to be interesting as we continue to watch the consumerization of med devices. Right by these really, really large big tech companies taking this technology that means everything for a company like Massimo and for them, it’s a foray into the health space, right?

I mean, you know, it’s

Vic: not maybe no one very low percentage of people buying the Apple watch for that feature, right?

Marcus: If they’re only medical device. Okay, the Apple watch is their only medical device and it’s not like the main thing they put on [00:16:00] any of their marketing Yeah, they’re talking about the Apple watch, right?

So it’s just an interesting sort of clash of values and as we think about Healthcare becoming more consumer. It seems like it’s one of those unintended You know bumps on the road that we’re gonna continue to kind of

Vic: Yeah, no question. I mean, I don’t know a lot of doctors that are that thrilled with people monitoring their health on the Apple watch.

They’re, they’re worried about false signals and false readings. There’s some of that that is valid. I think there’s some of that that is, um, the healthcare professionals sort of liking their traditional

Marcus: models. Well, sure, but, but no, but I think there, there is something really, really wrong with that.

really important to that. I mean, take a blood pressure cuff, for example, right? I mean, you really should be doing like five blood pressure readings, not one, and you, and there’s a certain kind of procedure to it. Now, the problem is when we go into our urgent care, uh, you know, clinics, or [00:17:00] even our PCP often, we’re not necessarily taking blood pressure in the best possible way, right?

You know, it’s not where we’ve had a good amount of time to rest and relax and kind of get ourselves in the right state for it. Um, and they usually will only measure it again if it’s like really high and be like, ah, let’s, let’s check that again. Right? Um, so, so we’re being incorrectly educated by our experiences that we’re having in the clinical theater and that we go home.

We know even less than, than, than the doctors and the nurses know. And we may be using something that’s not even fully medical grade, you know? Um, and using it incorrectly. So I think there’s a real, there’s a good reason for doctors to, to do that because it’s one thing if, if you’re, if Using it over time and you’re trying to track something and you see, you know, I at least want to reach out because this doesn’t look that great.

It’s an entirely other thing if you run it one time or your Apple watch gives you an alert and says, Hey, you know, you’re having an episode. I’ve been in meetings with people where they were, you know, they’ll be like, Oh, you know, it starts like buzzing really loud. I have not seen that. Really? And they get up

Vic: and, and.[00:18:00]

Marcus: Well, no, no. Everybody kind of looks at them and is like, are you okay? One time I was in a room full of doctors and like, you know, this person’s like Apple watch started going off and all the doctors were kind of like, you know, set up and their eyes kind of bugged out. So, I mean, I, I get it. I think it’s just when we talk about the consumerization of healthcare, It’s not this straight glide path, right?

Yeah, this is one of many bumps in the road that we’re going to have to continue to watch out for. Yeah, yeah, no question. All right. So we wanted to take some time, I think, to go through some of the year end articles that were out there. Yeah, right. And maybe not the most traditional ones. But, uh, yeah, I mean, every bank and consultant throws it out

Vic: there.

They’re all similar. Yeah.

Marcus: Yeah, but most of them, we did the work for you. Most of them were awful. But we actually found, too, that maybe you, Won’t typically come across that we want to share with you because they were really really thoughtful. I yeah, I thought Um, but first before we dig into those let’s let’s just quickly run through this modern health care [00:19:00] story Uh brock turner headlines six digital health companies that flopped in 2023 We’ve certainly spent a good amount of time talking about some of these companies, but not all of them So I think it’s worth kind of Reviewing these hopefully 2024 does not have You know, six spectacular flame outs, you know, at this level, but the, these six are pretty big.

Uh, the first one health IQ, uh, chapter seven bankruptcy, uh, 256 million in liabilities, 1. 3 million in assets. Um, this was, uh, AI enabled life insurance startup. All

Vic: these are probably bubble, bubble. Attempts that really didn’t, didn’t pan out. And so it turns out that January of AI. Doesn’t really underwrite risk any better than humans.

Marcus: Yeah, I mean, I can’t get generative generative AI to give me the right answer, you know, two or three times in a row. So, um, I, I, I remember this story because, uh, [00:20:00] the, the, the CEO, um, Moonjal Shah, right off of the heels of this flame out immediately. Got 50 million from General Catalyst and injuries in Horowitz to, uh, create a new company called Hippocratic AI.

So, um, you know, look, there is something to be said, I think, for a CEO who was deep in the trenches of, uh, AI, Gen AI, prior to the whole, you know, crazy buzz. I mean, that person probably, you know, Has learned more than we possibly could know about the space and has made a lot of failures from somebody else’s dime.

So I don’t want to be, uh, you know, throw too much shade at the fact that he was able to raise 50 million from two top tier VCs like GC and A16C. But this was the reason why I remembered it, right? Because I think most people look at this and go, wow, you can lose, uh, you know, almost 300 million and turn around the next day and raise another 50.

Vic: Yeah, and I think, um, I believe. General Callis and Andreessen Horvitz, both were in Health IQ. So, they saw all the [00:21:00] details. They know what mistakes were made. They lost money in that. Probably just wanted to clean up the books. Yeah, right, right. Just wrap

Marcus: that one up. Let’s do another one. All right, uh, Babylon Health.

This is an unfortunate one.

Vic: I don’t know Babylon as well. But I think it’s kind of a similar thing. They went public and then flamed out.

Marcus: This one was connected to Higgy, which we do know. Yes. Yeah. Yeah. No, this, this is the business that, you know, came from the UK and was going to do all the, you know, digital health stuff.

And they were building like a full platform to do that. And they were trying to do too much.

Vic: I totally forgot about the Higgy thing. Yeah. Yes. Yeah. We do know this guys. Yeah, they were doing a ton of things and it just was too much to carry.

Marcus: Yeah, I mean, here’s the, here’s the, you know, money shot right here. Babylon had a monthly burn rate of 15 million. I mean, [00:22:00] you know, that’s a tough burn rate in 2023 to try to make it to the other side of it.

I’m sure everyone just was looking at that like, what? Right. And, and show, show me your growth rate, show me your take rate, like, 15 million? My gosh. Um, Olive AI, I don’t think we need to belabor this one. We’ve spent plenty of time talking about Olive. Uh, once valued at four billion dollars and, uh, sold for parts.

Uh, Kano Health. How much do you know about Kano Health?

Vic: I, I don’t know Kano that well. I, I thought they were, um, like a primary care, uh, Specialist subscription kind of primary care. Yeah membership based primary care. Yeah, okay I think they had internal I mean the model as we’ve talked about that. There’s a lot of successful models Yeah in that space.

I think they had internal issues I mean, I mean as you and I know one of the hardest things to [00:23:00] Understand when you make an investment is is the team gonna? come together well and really, um, really perform in this high pressure environment. So I think somehow it didn’t, uh, didn’t go well on the team.

Marcus: It happens, it happens, uh, and then MindStrong, um, so this was a digital mental health company and just didn’t make it.

160 million, General Catalyst, again, I mean, gosh, man, can we just say General Catalyst had a bunch of really big losses

Vic: this year? General Catalyst, in my opinion, is like, they’ve taken the playbook of just, we’re just going to keep Throwing money at this trying to change health care and big amounts of money, big

Marcus: amounts of

Vic: money, and they learn and they just go at it again, but they’re, they’re destroying value in the process.

I mean,

Marcus: they’re in the arena and I certainly applaud [00:24:00] bold thinking and, and, and big bets, but the results are also, you know, we have to talk about the results, right? I mean,

Vic: they’ve had a lot. I mean, they’re, they’re in. You don’t want to be on many games three of the six there. Yeah,

Marcus: three of the six already that we’ve talked about Yeah, that’s that’s a lot.

That’s a lot and then and then pair of therapeutics. We did an entire episode on on pair This was really really unfortunate. I think it feels like the sting is kind of kind of off this one. Hopefully next year Digital therapeutics can rebound a little bit. Hopefully there’s something that, that really brings some kind of breakthrough to that space, because, uh, I, I think it can lower the cost of care.

You know, as our friend Aaron again, he’s, you know, talked about it can lower the cost of care. So,

Vic: yeah, I mean, I think one of the things we’ve covered this year that I think is, is going to be part of the trends for Next year’s the technology is advancing very [00:25:00] quickly. So, um, things like VR and digital therapies are, are growing in their capabilities really fast.

And our reimbursement models are not, they’re just not designed for that. And so I think part of the thing that we have to figure out is how, how can we get the, The right alignment of who’s paying for this and make sure that it’s, it’s working for the patients and for the people paying the bills. Um, the federal kind of apparatus with FDA and CMS, we covered it with Aaron.

It’s, it’s just not really designed for that.

Marcus: No.

Vic: We have a similar thing with the GLP 1 things right now. They certainly help patients lose weight. Yeah, on the weight loss side. And that definitely has health benefits. Probably over your lifetime, you will cost less money and you’ll be

Marcus: healthier

Vic: and more

Marcus: productive.

And some value based care plans [00:26:00] are covering it. Some. Some have done the math, they’ve run the actuary models, and they’ve said it’s worth it.

Vic: Yeah, and I think it’s related to how fast the employees turn over. Right, for sure. Um, and there really is no Long term underwriting model in healthcare. Most, most plans are year by year.

Um, and so that, that’s an issue that is challenging when you think about digital therapies or other biotech things that Or especially if it’s a cure, like curing sickle cell, we talked about maybe two weeks ago, is incredible, but whoever is the payer for that patient this month, puts the whole bill and then they don’t have all the sickle cell costs and complications for the next 20, 30, 40 years.

Those other payers. Seem like they should share in the sharing in the benefit. So it’s just a structural thing that we have to figure out.

Marcus: Well, may there be [00:27:00] less flame outs in 2024, particularly for GC. Good luck to y’all. Uh, with that, we’ll take a break and let Doug share a little bit about Jumpstart Foundry.

We’ll be right back.

Doug Edwards: Thanks guys. For the opportunity to talk about our pre seed fund, Jumpstart Foundry. My name’s 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 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 [00:28:00] better in healthcare.

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 Dumpstart. 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 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 investing in venture much better. We all know that healthcare is broken. Jumpstart Foundry. 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. [00:29:00] All right, Vic, you found two pretty

Marcus: good prediction articles for 15.

Vic: Yeah, most,

Marcus: most were trash. Uh, but, but two were really good. So this first one is from work week. Um, uh, Blake who runs work week along with, Parth Desai from, uh, from Flair Capital have eight predictions for healthcare 2024.

And I found these to be some pretty thoughtful, uh, predictions. So why don’t we go by one by one? I

Vic: think we’ll have, we’ll have, you know, gives and takes on each probably.

Marcus: Yeah. All right. So the first one is how hospitals mine for gold outside of their core business. I hope this is true. This is one of those predictions that I hope is true.

Um, I, I’ve not seen a lot of proof of leadership. Moving in that direction in any meaningful scaled way, um, so, so I found this to be more aspirational than maybe proof based, um, but I, I, I hope it’s right.

Vic: They have to [00:30:00] find They have to find revenue, they have to find sources of revenue, sources of margin, they’re calling it mining for gold, outside the inpatient acute treatment that they’ve done forever.

Whether they can effectively do that, I, I’m not sure. They say the, the obvious diversity playbook, you know, going to especially pharma, 340B, ambulatory, outpatient, that, that’s been kind of played out. Maybe there’s a little more. Gold there, but not much and so they have to find new new areas And I just think that’s

Marcus: I mean the problem with that is that’s called innovation Right, and you actually have to be good at innovation and you know There’s just not a lot of health systems that have invested in that muscle and in that in that in that area of Of their, their, their [00:31:00] human resources.

I think it’s a cultural

Vic: competency thing. There’s not. Of course it is. Culturally organized to tolerate Um, the uncertainty of piloting something that maybe is not Five Nines reliability. And getting it to be more and more accurate, more reliable over time. That’s what it takes to do a new thing. I mean, what they call out here is dental care, grocery, retail, value based care.

I mean, I just don’t see health, any sales that I know really moving into that.

Marcus: So my prediction would be that, I mean, look, TK from, uh, from Virtua. We talked to him. He’s a D he’s, he’s the chief digital transformation officer, right? I mean, okay. Like that’s an example of a health system that seems to be, you know, taking this kind of approach.

But I think most hospitals are going to be trying to find ways in 2024 to do more with less. I think they’re going to try to find more and more operational [00:32:00] efficiency. I think they’re going to really look to leverage AI, maybe not entirely gen AI, uh, but certainly ambient AI. Uh, robot process automation, um, machine learning in ways that, that automates things.

I, I think that’s what we’re really going to see hospitals doing next year. Um, I don’t see them doing a whole lot of innovating to try to find net new revenue streams because I don’t think they know how to integrate those things. Um, find them, evaluate them, staff them, tech enable them. I just don’t, you know, I just think that that’s, that’s, that’s just not what they are as organizations, generally speaking.

Yeah, I developed that, but that’s going to take a minute.

Vic: Yeah, I agree with that completely. And then to quote out of this prediction, to remain financially viable, hospitals need to quickly diversify their margin creation streams. I agree with that too. But they’re not going to be able to successfully do that.

My prediction is they won’t be able to execute that.

Marcus: Correct. They are going to focus on the

Vic: Yeah, saving [00:33:00] money wherever they can.

Marcus: That’s what they’re going to focus on. GNA, not, not top line. Okay. Uh, second, the second one here, the infusion services market reaps the bounty of a specialty therapy boom. I kind of like that.

Kind of like that idea.

Vic: Yeah. And I mean, our, our friend, uh, Gardner’s doing IVX. I mean, The infusion therapy away from the inpatient facilities in the neighborhood near the home is really, it’s a great experience for the patient. It’s better for everyone, less expensive, and the treatments are more and more requiring IV therapy.

Yeah.

Marcus: Yeah, and, and IV is everywhere. I mean, you hear people talking about, uh, I mean, I remember when we, when we did pro hydration back in the early jumpstart foundry days when nobody, when the only reason you would do that is, you know, you had a hangover, right? You know, you get that now they’re everywhere, right?

I mean, they’re in every gym. There’s concierge, people will drive to your house, they’ll do an IV in [00:34:00] your living room. So, I think it’s just such a ubiquitous thing that people are now very, uh, desensitized to the idea of IVs. And when you overlap that with specialty drugs and the growth of the specialty pharmacy, I think this makes sense.

So, that’s, that’s a, that’s a, hey, good for Doug Gertner. Yeah. Uh, and, and I think that’s an interesting

Vic: Yeah, it’s a huge market. I mean, well, there’s lots of lots of opportunity in that space.

Marcus: Yep, for sure. Number three, dollars dry up for the AI application layer, but stream into the data layer. I think this is a very astute observation, and I think I think it’s great.

First of all, the AI application layer. It’s going to be called the cloud. Y’all, I hate to tell you, but if you haven’t seen what Google cloud has rolled out over the last two weeks, um, and you better believe AWS is going to be doing the same and Azure is going to be doing the same and all these healthcare organizations, they are moving on to one of these cloud platforms.

It’s actually quite a [00:35:00] few, uh, health systems on Google out. I think Google cloud has done a really good job in the healthcare space. Um, the application layer is going to be the cloud, my friends. Yeah, there’s

Vic: nowhere

Marcus: else

Vic: that can scale

Marcus: like no, no, it’s going to be the cloud or it’s going to be Microsoft apps or it’s going to be Oracle apps or it’s going to be like it’s the application layer is going to be the distribution channels everyone already has

Vic: apps and tools and the, you know, interface that you’re already using today, just going to get a lot, a lot better, a lot smarter behind the scenes.

That’s right, but the data layer,

Marcus: this, this, this is the thing I think most people. Who have not been able to spend the time digging into what the AI paradigm shift is actually about. This is the thing I think most of them have not wrapped their head around. Um, and it was, when, when I finally got it, it hit me like a hammer because I, I realized what a massive shift it was going to [00:36:00] be for the, for the talent pool, the technology talent pool.

For as long as computer science has been centered on computer programming, it’s been centered on humans writing sets of instructions, right, and literally trying to tell a computer do X, Y, Z, and here’s the entire decision tree, and here’s the if then else, you know, map for how

Vic: you have to give it step by step by step, very excruciating

Marcus: detail, right?

Exactly. And in AI. The paradigm shifts where you’re not doing that. You’re just feeding it really clean, well labeled data, and it will then do that part, right? And so the data is the code. Mm hmm. The data is the code. And almost nobody has a good data layer for AI. Right. Almost nobody has clean data.

Almost nobody’s got well organized data. There are very [00:37:00] few data engineers out there for what we need. Yeah. Um, especially cloud enabled data engineers, right? Who understand orchestration and, you know, how to take a data lake and moving into a data warehouse and use a big query or you, there’s just, there’s just not enough talent out there who knows how to do that.

So. I think as we start to get some glimpses of how powerful and transformative this can be and I think this is especially going to be true for hospitals as they’re trying to lower the cost of their GNA, there’s definitely going to be some big investments because they’re going to be able to see the ROI, right?

They’re going to see if we can just get our data house in order. We’re going to be able to save in labor. We’re going to be able to kill some SAS licenses, you know, and, and I, I think this is exactly right. I think the data layer is where the investment is going to be for quite, for quite some time. And, you know, until this becomes a competency that, that we, we have not just in the healthcare industry.

I think this is bigger than that. You know, I think a lot of [00:38:00] industries do not have their data house in order, not for the AI revolution.

Vic: Yeah, I think that’s right. The, um, I mean, you’re closer to it than I am, but. My belief is that we’ve been playing mostly with structured data for 50 years, maybe 60 years.

And that basically means it’s in a table, and then the number of sales and the zip code, it’s, it’s set up where the computer knows exactly what’s in that entire column. Right. It’s all zip codes. And for the first time, it’s going to shift to primarily using unstructured data. Yeah. And there aren’t a lot of data experts in drugs because forever we’ve just sort of, yeah, we have all this unstructured mess, but no one knows what to do with it.

And that’s the opportunity now to really, like, gain a lot of insight and intelligence out of that mass of unstructured data. I [00:39:00] mean, I think about all of the, all the surveys that you fill out at a hospital, like, what was the experience like? How did you, I mean, That information, and we’ve invested in a couple companies to try to take it and structure it.

They don’t do anything with it. They can’t, they can’t process it. But there’s a lot of insight in there. And there needs to be systems to sort of gather that. And instead of me like getting a summary of a, a book and then just be reading the summary. Summarizing unstructured data and then feeding in as useful data into the machine that then, um, Feeds the rest of systems, so that’s my interpretation of what you’re saying.

Is that close to

Marcus: right? Yeah I mean, I certainly think that that is that is a part of it There’s more that is not necessary for the listeners to understand. But yeah, I mean you pretty much got it We’re moving from this database relational database world Where really I mean if you think about who was dealing in the unstructured data more than anybody [00:40:00] else, it’s not The people who sort of built the systems for that, the Googles of the world, right, who were just taking snapshots of all these websites as documents and needed to index them.

Yeah, right. And that’s how you got MapReduce. That’s how you got sort of all these big data technologies. It was because of companies like Google and Amazon. The need to get insight out of the unstructured data. Correct, correct. It was, it was out of necessity, right? Because you had to deliver the value.

And so that’s why, that’s why I just think they’re going to be so far ahead.

Vic: The founders of Google or whoever coming up with an algorithm to say this. This webpage is more valuable to the search because there’s more backlinks to it. Yep. The human had to create the algorithm. Yes. And now I think the AI is going to create the algorithm.

You just need to tell it what you want, what you want it to do.

Marcus: Well, of course, because we have so many algorithms that have already been created. The algorithms themselves are source material for the AI. You know what I mean? Like that’s, that’s the thing that’s going on right now. All right. Uh, I think this was my favorite, uh, in here.

[00:41:00] Yeah. Uh, the Value Based Care Toolkit finally arrives on specialty care’s doorsteps. So, I think this is such a smart, uh, such a smart take.

Vic: Yeah, so let’s give some background to this, because I think since the Affordable Care Act came out, there’s been an interest in value based care. Yep. Primarily, that’s with primary care.

Docs as like the quarterback, the medical home, whatever you want to call it. And they were supposed to bring social deterministic health and all kinds of better closing care gaps to provide better value for the care. And there’s been some successes, but there’s a lot of examples where it hasn’t really panned out.

As we all hoped it would, and I think the prediction here is that there’s going to be a migration to the specialized docs focused on taking care of one particular chronic disease state, because there’s much more [00:42:00] opportunity to to really understand that patient. Profile and bring more support, more care to them, and it will lead to savings.

So that’s the prediction. I think that makes a lot of sense.

Marcus: Yeah, and also, there’s a recognition that specialty care is now such a large part of the cost of service provision. And that the cost can swing wildly based on the quality of the service. Of the specialty care network. Uh, you know, there’s a sentence here.

Some risk bearing primary care groups estimate that the quality of their specialty, their specialist referral networks can drive a 40 plus percent swing in cost savings. That seems like a target ripe for value based care, right? A it’s a huge part of the spend B massive variances in cost based on what your network is.[00:43:00]

That seems like a perfect target for, for, for VBC.

Vic: Yeah, I, I, I agree. And we’re, we have seen a few examples kind of bubbling up around this, but I think it is, it’s correct. I totally agree with this. It’s going to really take off in all kinds of specialty care segments and the ones they’re talking about are some of the biggest, right.

Palliative renal cardiology, but there’s, there’s plenty of other ones that are maybe not as. much money as those three. Those are the three of the biggest, but, but there’s a lot of opportunity. So if you’re, if you’re a physician that already are in a specialty, which many are, you can look at your specialty and try to get better.

Marcus: Yeah. And also, I think that means that there’s going to be a lot of opportunity for venture here in this space, whether it’s providing, you know, health IT to help these specialists. Um, you know, operate their business, uh, more, more efficiently [00:44:00] to, to drive more value for lower costs. Um, because obviously if they’re going to be a target of, of these types of VBC, you know, risk arrangements, um, they’re not going to want to make less money, right?

If anything, they’re going to want to make more money. So how might innovation and technology help them do that? Yeah.

Vic: Yeah. And you might need to invest in year one and then you’ll see a huge benefit. 10, 20 X that investment, but not until year three, right? Because the patient you have to install everything, get the patients on boarded, and then you really start to see the benefits.

Maybe end of year one, but probably in future years.

Marcus: Yeah, and then also I would say, you know, Renal care is one of the three up here, palliative care, uh, you know, two of those. I’m not sure if, uh, First Cresce has a cardiologist. Cardiology care business, but certainly palliative care, um, Aspire, renal care, monogram, I mean, you know, full VBC based businesses, right?

So not just technology, but just entering the market with a VBC, VBC model competing. Yeah, I

Vic: think those are even, um, [00:45:00] almost a, uh, carve out of the entire risk. Yeah. Uh, so like we’ll take this patient population and do the complete, we’ll take on the risk and care for them. That’s right. Which is sort of value based care, you know, sort of brought to the, to the, Yeah, but, but,

Marcus: but you can, I mean, I, I think it makes sense if it fits within this, this tank, right?

Uh, so that’s, I think that’s something for us to look at next year, you know, just look across the specialties and see where is there sort of less focus, where might there be some policy focus that, you know, uh, increases over the next, uh, three, four years. Labor turmoil creates permanent side effects, number five, I mean, yes, we’ve been, I feel like this has been our drumbeat for, I don’t know, 10 or so episodes, but no question, labor turmoil is here to stay, here to stay.

Vic: Yeah, it’s putting a lot of pressure on health systems, and it’s here to [00:46:00] stay, and the actual clinicians are suffering, and a lot of them are leaving the profession. Which makes it much worse for the people that are staying. Yeah. So it’s, it’s a, it’s a real challenge. Hopefully there’ll be technology tools that can offload some of the less critical work and allow the caregivers to actually focus on what they’re best at.

But that’s a couple of years away. So we have a, we have this challenge definitely for next year.

Marcus: Yeah. And also, uh, quite frankly, we’re going to have to change workflows. We’re going to, we’re going to have to change, uh, We’re gonna have to change a lot. Technology alone won’t get it done, right? There’s gonna have to be a whole new model of provisioning care with a smaller workforce.

Because that’s what we have. And that’s what we’re going to have. It’s going to be a durable issue. Medicare Advantage mana dries up. We sort of talked about that with Emily last week. Yes, we’ve talked about this ad nauseum. So, uh, we don’t need to go into that one. Obviously, we agree with this take. So that’s, that’s another good take.

Um, we’ll see our [00:47:00] provider M and a gets a lot harder. Digital health consolidates. We’ve talked a lot about provider M and a getting a lot harder. Um, you know, in terms of digital health consolidating, uh, I mean, okay. So they’re referencing Commier and Atlas here to me, that is more. general catalysts doing some cleanup work on their portfolio.

So I don’t know that I would call that digital health consolidating. I don’t know about you, but when I look at my, um, when I look at my portfolio, I don’t think a whole lot about roll ups and tuck ins and things of that nature. I mean, I think there’s still a fair amount of space for value creation, you know, over the next three, four years for my portfolio companies.

So this is one that I’ve,

Vic: I read it sort of differently. I think that there’s a lot of digital health. Startups and even midlife companies that are going to fail that just are not funded appropriately and they don’t have runway and they have some assets that [00:48:00] just are going to be sold off for parts. Yep.

And so that’s what I thought they meant by consolidation that all of the, all of the, um, sort of very aggressive investing that created a lot. Hundreds, thousands of digital health companies, they weren’t all that great, and many of them will go out of business, and then whatever is valuable will get sort of sucked into the ones that are still around.

I

Marcus: mean, I think there’s just something about the risk profile of these companies, right? I mean, they’re burning 15 million a month, they’re burning 12 million a month, they raised a billion, I mean, you know, you’re so fragile. When that’s your posture, you know, when you, when you raise that kind of capital, you’ve got these valuations that somebody is expecting you to grow into it’s, I mean, I think, I don’t know, it just doesn’t map to what I think is what most investors at least by volume, uh, even if [00:49:00] not by assets under management, you know, when I think of most digital health investors, I just don’t think they’re investing in companies with that kind of profile.

It’s a, it’s a select. Group of investors that keep showing up, right? Um, that are writing these Scaled checks with these crazy valuations, with these ridiculous burn rates, with these expectations that they’re going to go just take over a market and, you know, because so and so knows somebody and because we’ve, you know, capitalized this company to the teeth and I just, to me, I would have written this headline a little bit differently, you know.

Um, I wouldn’t have, yeah, I wouldn’t have placed it as consolidation, you know, um, to me, it’s a reboot, hopefully, to me, hopefully, there’s a reboot and we get back to like, let’s build real businesses that create real value.

Vic: Yeah, I mean, I think there, there are, we’ve talked about this previously, there are different stages of the economy, right?

So in 2019, [00:50:00] 2020. You might have had to grow really quickly if you wanted to, you know, combine with a SPAC and then get public and get your money out. And you weren’t really trying to build a long lasting business. You were just building this. You know, uh bubble thing. I mean, it’s not healthcare, but bird just filed for bankruptcy And they’re they’re sort of the poster child for that like fastest unicorn ever.

Yeah, and then Maybe I don’t know if it’s the fastest failure, but now it’s now it’s bankrupt Um, and I think we all knew we didn’t need 30, 30 scooters on every street corner, but it was an arms race of like, who could raise the most money, who give the most deals. And sometimes one group wins. Like another example we were talking about in New York earlier this week is, you know, Uber has sort of, they, I mean, they, they subsidized and really bought [00:51:00] the ride share market.

But now that, that sort of the other companies have fallen away, that they now have an ability to have a real company. Um, but it’s hard to make that transition. And most companies can’t do that. Um, but if you get the timing wrong, right, then you are Babylon and you have a 15 million a month burn, which is fine when you’re trying to grow and go public.

But then when the market shifts, you, you can’t respond. Yeah. So the first part of it, I think health systems, one of the tactics, one of the strategies is to acquire Other systems and growth scale so you can do cost cutting and get some advantage. And that seems to be largely frowned on by the FTC.

Marcus: That’s a fundamental part of their business model.

Vic: Yeah.

Marcus: Uh, and yes, it is being frowned on. The political narrative around it is that [00:52:00] M& A results in, uh, less choice for patients slash consumers and higher prices, full stop. That’s the, the view is this M& A is anti competitive and bad for customers. That’s why they’re blocking it. That’s the political

Vic: narrative.

That’s

Marcus: the political, that’s the political narrative. Um, as, as we’ve discussed in some cases, that may be true. In some cases, that may be true. Um, In some cases, it certainly has been true. I think you can certainly point to, you know, mergers that have had that, that final outcome. However, I don’t think health systems, and certainly small hospitals, have ever been as financially vulnerable as they are, both balance sheet and P& L wise.

Um, and in some cases, M& A is their only way to survive, um, which is, which is to say, to be acquired. Um, if they cannot be acquired, forget the acquirer, if some of these hospitals and health systems cannot be acquired, they will not survive. And [00:53:00] so, um, you know, the political narrative is not sharing that part of the story.

Uh, obviously that’s not as bad. Popular of a story that, you know, a politician will want to tell, uh, but it is, it is the end result in, in many communities across the country.

Vic: Yeah, there’s a lot of markets where there are two or three health systems that are all negative margins. They’re losing money every month, and if they could consolidate into one, certainly there’d be less choice.

I mean, you’d have three systems. Consolidate into one, but it would be viable and I don’t think we’re going to see significant health system failure in 2024. Yep. I don’t think with the political cycle, the pr Presidential campaign. It’s not going to happen next year, but I think in the next couple of years after this cycle, I think we will see significant failures in, you know, [00:54:00] regions of our country that need to have health care systems.

Yep.

Marcus: Yeah, I think that’s right. And then point eight is just generally talking about political health care rhetoric is going to spike next year. And I think, yeah, it’s an election year. There’s all sorts of stuff on the line. Uh, I think the lobbies are already You know, fire it up because of the physician payments rule that came down in November.

So yes, it’s, it’s going to be a hotbed political year next year. And that’s kind of, that’s kind of an easy one to end on, but, but I think, I think that’s right.

Vic: Both Democrats and Republicans think healthcare is a winning issue for them. Biden certainly has gotten his, his platform of healthcare things all documented, but I don’t think it really is that different.

I mean, they, they all. We’re going to end up defaulting to the existing regulatory structure in FDA and CMS, and so I just don’t think it changes that quickly.

Marcus: Yep, [00:55:00] agree. We’re going to quickly shift to, uh, somebody I’d never heard of before, but you found it. Yeah, he’s I followed him a little bit. He’s okay.

Good. Okay. So, so this guy, uh, Dr. Raihan Farooqui, uh, he posted this on LinkedIn, his 2024 health tech predictions. And I was reading through them and I was like, this is great. He actually published it, uh, December 6th. So he’s clearly been thinking about it for a while. Uh, but let’s just quickly run through his, his list of things here.

Cause I thought, I thought it was a good list. Yeah. Uh, totally focused on health tech. So the first one is a VC backed health tech company will IPO and it will be rocky. So his basic thinking here is IPO markets have been totally frozen for 18 months. They’re going to start to thaw next year. I think that’s probably right.

Especially as the fed starts to turn and pivot, um, and that it will be rocky. I mean, when have health tech IPOs not been Rocky, uh, you know, the ones that I think about mostly are, uh, Oak street and, um, the whole Teladoc, uh, uh, What did they [00:56:00] merge with? What did Teldoc merge with again? Um, I thought it was Omada, which he’s talking about again.

No, no, it wasn’t Omada. Um, it was, it was the other one. It’s a seven wire deal. Livongo. Livongo. Yes, yes, yes, yes, yes. Livongo. Similar to Omar.

Vic: Yeah.

Marcus: So, so yeah, I mean, look, there’s a, there’s a bunch of, uh, potential IPOs next year. He’s got, uh, Komodo included health sword, Omada and Alidaid. All, all sort of big names been at this, you know, for six, seven, eight, 10 years.

Um, and it’s, you know, it’s probably time for some of those to, to get onto the market.

Vic: Yeah. Yeah. I mean, I, I’m biased cause I really hope this is true. Um, as I’ve said, I think the first half of the year is going to be hard, but I think you certainly could see an IPO in June. June, maybe the summertime is not that good of a time.

September. Um, that’d be great. I’m hopeful that,

Marcus: uh, number two fundraising boom in Medicaid, senior care, women’s health and infrastructure 2. 0 totally [00:57:00] agree with all of these. Uh, I mean, I know the senior care is a little bit weird cause we’ve been talking about the, the Medicare advantage, but I, I see that as a, as a space that.

It’s going to need innovation, uh, to change the cost structure because it’s going to be a harder spot to make money. And the seniors have to be cared for. They’re still going to be cared for. So I think we’re going to see a lot of Medicare Advantage moving to MSSP. Um, and I do think there’s going to be some really big investment in that space.

But probably the big things on this list are, uh, Medicaid and Women’s Health. Those are two really, really big ones. We see that happening. Our last deal that we did in Jumpstart Nova is both a Medicaid and Women’s Health deal, May, focused on maternal health. So yeah, obviously I’m biased because I’m investing in these spaces, but I very much agree with this take.

Vic: Yeah. Yeah. I agree on Medicaid and Women’s Health. I don’t know what Infrastructure 2. 0 really is. So, I mean, he sort of defines it as [00:58:00] B2B SaaS companies that are doing value based care enablement. I guess that’s infrastructure? I wouldn’t have called it infrastructure. So, I don’t know if I agree with that one.

But the other ones I agree with.

Marcus: Agreed. Agreed. I was much more focused on Medicaid and women’s tech. Okay, the third one. Startup M& A at scale will not happen. I agree. I think we just talked about this, right? You know, I don’t think there’s going to be some mass consolidation and consolidation. Uh, agree here with Dr.

Farooqui, uh, for beginning convergence of climate and health tech ecosystems. I actually really hope this is true. I’ve got a lot of friends, um, from the, uh, from an organization called Nexus that I’m a part of, part of the impact society for Nexus. And the vast majority of the entrepreneurs in Nexus are climate entrepreneurs.

Gosh, I really hope that this is true. And I hope I get to do more work with them. They’re working on such cool things. And, uh, you know, uh, Senator Frist, right? I mean, all the work that he’s [00:59:00] doing with the Nature Conservancy at a global level. I mean, I think his reason for joining is he sees the connectivity between what’s happening in climate change and health care, and he sees massive implications for the health care, uh, You know, uh, industry and for, you know, the health of communities as, as the climate continues to evolve, um, temperature wise.

And so I hope that, I hope that we can expand our definition as investors of healthcare into climate and for that to be viable and accepted. I, today, I don’t think that’s true, but I hope that in the future we get to expand and collaborate more with, with the, the climate tech ecosystem.

Vic: Yeah, I agree. I mean, there’s a lot of.

Similarities, but it’s, it’s a lot of regulation, a lot of government involvement and things are, um, take a long time to mature. And so all those things are true in, in health care and true in climate tech. And then I think the, [01:00:00] um, the built environment and our natural environment around us. can have, you know, either positive health attributes and help the population or negative, depending on how it’s, how it’s managed and worked with everything from, you know, the sun’s much more dangerous.

To, uh, you know, floods and natural disasters and the way we build our cities and you can’t, you can’t easily go on a walk. I mean, there’s a lot of, there’s a lot of connection points on many different levels that could make it, could make it good. Um, so I haven’t seen a lot of, that’s the first time I’ve seen it really.

So I, I, Maybe he’s, uh,

Marcus: Well, he, well, he’s, he’s, he’s referencing, you know, COP28, which just happened. Um, he’s, he’s referencing this organization called the Climate Health Innovation and Learning Lab. So I think, I think it’s probably coming off of COP and probably discussions that happened at COP. I think there are [01:01:00] probably a lot more health conversations at COP28 this year than there have been in the past.

Um, and, and again, he frames it as beginning convergence. So he’s, he’s not being hyperbolic

Vic: in terms of It’s not going to all come to fruition in 24. No,

Marcus: no, no. But again, I’m excited for beginning convergence. I think that’s awesome. I mean, if it, at some point over the next five years, we get to the place where we see these things as a bunch more integrated.

That’d be amazing. Yeah, it’d be really good. Uh, number five, healthcare macro conditions worsen. Yup. Uh, he starts talking about something you, you were talking about from the last list. Physician suicide is up. Clinician burnout, burnout is at an all time high. Twenty five, twenty four million people will lose Medicaid coverage, um, with the unwinding that’s happening.

I mean, nurse, more nurses will strike. Yeah, I mean, it’s, it’s a rocky time in our industry.

Vic: Yeah, it’s, um, he’s calling it macro conditions. Yeah. The, the basic economics of running a health system don’t work, right? The, the way that [01:02:00] they use their human labor, the workforce. is not efficient enough for the, for the revenue they get in.

And the time it would take to reorganize all those workflows, it has to be done, and, and they have to do it well. They also are treating patients that come in every day. And so, I mean, you and I live it. I understand all the different sides. And there’s a lot of good people trying to, trying to figure it out.

But the conditions are getting worse and worse and worse. And our, our healthcare workers. Doctors, nurses, nurse assistants, all of the clinical staff is really taking the brunt of it. And that’s not fair, but we have to figure out some way to solve it.

Marcus: Number six, AIC’s uneven adoption in parentheses and continued heated debate.

I think that’s right. Yeah, I think that’s exactly right. Um, you know, we’re gonna, we’re gonna keep up with, uh, Dr. Kapoor [01:03:00] at Virtua to, because he’s somebody who’s on the ground. I think we’re going to try to bring Dr. Schlosser if we can, we haven’t asked him yet, but I’m just putting it out there, you know, it’d be great to get him on here because he’s doing a ton of work in the space and, uh, and he’s a friend.

So hopefully Mike, you’ll, you’ll come on the show. Yeah, I know that

Vic: anthropic who’s focused on healthcare. We need to try to bring in, but yeah, there’s, I think he’s exactly right. There’s going to be uneven adoption. Um, I mean, I think there’s uneven understanding even what it can do. And then there’s an uneven ability to bring for techno, like not everyone has a Dr.

Schlosser to really bring it in. HCA is really ahead of the curve as far as their understanding of data science. We should see, we should see if Edmund would come on the show. Yeah. Because Edmund really kind of helped them set it up before Chatti Pratik existed. Totally. Totally.

Marcus: Um, okay. Number seven.

Probably kind of an easy one to make a call on. Another health tech bankruptcy or scandal will unfortunately emerge. I mean, [01:04:00] yeah, like 10. Yeah, likely, um, you know, he, he points out some other ones here. Uh, we, we just talked about Babylon, but he talks about bright and cerebral, you know, those were two that weren’t on the previous list.

Yeah. Um, cerebral probably should have been honestly. Yeah. Um, so yeah. Uh, number eight, verticalized payviders. We’ll keep on buying. We talk about this all the time, all the time. I just wrote an article in it and that got published. Yeah. Yeah. Yeah. I love that. Right. Yeah.

Vic: Defragmentation piece. Yeah. I mean, the.

The thing that I think is unfair is the FTC is blocking health systems. And they have allowed payers to, to acquire. So, you know, payers are doing it in a way that they’re diversifying what they’re doing into providing care. That’s the point. And that is seen as positive, but I’m not sure that it is any different.

Hey, look,

Marcus: no. The, the providers have every opportunity to diversify as well. [01:05:00] The pay, the payers are literally laying out a strategy. That is, that is working. Yeah. In terms of getting mergers done. I mean, this gets back to the whole, you know That’s interesting. So This is back to the whole provider Health system, health systems No, the, the first prediction in the last one about health systems mining for gold and new This is why I was like bearish on that.

I was like, you’ve got the playbook. The paywriter playbook is not only for payers. Yeah, right. You know? So if they wanted to do it, they’d do it by now. They’re not doing it. It’s an allowable playbook.

Vic: Yeah. Okay, well, that’s fair. I mean, they, health systems should do it. I agree with that. And, uh, Humana looks like they’re not merging with Cigna.

So, there’s, maybe there’s opportunity there.

Marcus: Yeah, there is opportunity, for sure. Um, private equity, number nine, private equity will have a record year of healthcare dealmaking. I think that’s right. There’s so [01:06:00] much capital that’s been sitting on the sidelines most of the year. There haven’t been a lot of big P.

E. deals done in 2023. It’s time for deal making to happen in 2024, right? You know, we had to shake out the, the, the whole, um, Uh, KKR, uh, stuff that, that, that rolled out. What, what’s the, um, what’s the flame out that they had partnered with AmSurge physician group? Um,

Vic: yeah,

Marcus: um, so many things to remember. I’m like, my brain is dead.

It

Vic: starts with an E, right? Yeah, it’s N sign. That’s not right. It’s uh, Envision. Envision. Yeah. Envision. Thank you. Thanks for being my brain. I can’t remember anything. Yeah. Physician group. Physician group. Physician like, uh, appointment.

Marcus: Yeah. So, so, you know, we had, we had that flame out. We’ve, we’ve had, it’s several physician group.

Yeah. Flame out this year, right? And those were, those were all PE back. So I think PE kind of laid low this year and I get, I get the feeling that next year they’re going to, they’re going to roll out pretty. I also

Vic: think PE needs to have [01:07:00] clarity on the debt markets and the IPO markets. I don’t think they need rates to come down, but they need to be confident that they’re, they’re not going up anymore.

And then they need to have an ability to place debt at a fixed amount. And then they need to feel like there’ll be a open equity market in a couple of years. And so I think, I think the Fed sort of pivoting and saying, we’re done raising and we’re now looking at cuts opens up the PE market for, for next year.

Marcus: That’s right. That’s right. Uh, number 10 chapter two of the GLP one wave ensues. That one feels like a kind of easy one. Obviously it was such a strong part of the second half of, of 2023. It’s obviously going to continue. So I don’t think there’s much to say there other than, yeah, I agree.

Vic: Yeah. The thing that he points out that I think is really smart is the, the off level use for addiction of cigarettes, opioids, cocaine, [01:08:00] gambling.

Yes. An addiction mitigator. Right. Right. Which it’s not widely used for that. But that, that, I think that is going to get a lot of attention. Well, I think, I

Marcus: think that At least I don’t know that it’s widely used for that. No, no, it’s, it’s, it’s, it’s not widely used for that. I mean, I think, I think the bigger issue with GLP 1, quite frankly, that he didn’t really point out is price.

The, the, the price is the real issue. Um, you know, and, and how much of it is going to be I

Vic: mean, if you have a gambling addiction, You’re spending way more than 1, 200 a month gambling. Are you,

Marcus: I mean, yes, but again, you’re, you’re talking about, are you going to stay off of gambling forever? I mean, you know, there’s, there’s a long term bet you’re making with this stuff when you, when you talk about these long term issues.

Vic: Yeah.

Marcus: So, so it’s not an easy, super simple price.

Vic: Yeah. And the, and the decision, the falloff rates pretty large. I mean, after I forget this, come off of it. Yeah. Well, and people don’t last more than two months. So. A lot of people are off. I think it’s 50 percent are not on it. Really? Are quitting? Really? [01:09:00] That was a hedge eye.

Emily was talking about that. Oh,

Marcus: okay. We need to get her to give us that information so we can share it. I didn’t know that. Um, 11, Congress will pass meaningful PBM reform. We’ve, we’ve been talking about this.

Vic: Yeah. I think now that CVS has shifted, There’s no question about

Marcus: that. I think that’s right. And then 12, finally, the prove it era of digital health reigns.

I want to read this sentence because this is like these two sentences, because this is us, startups that achieve clinical and financial ROI with unit economic discipline, responsible growth, and eventual profitability will be rewarded real businesses with actualized revenue, scalable GTM, usable tech and clinical rigor.

will get more attention. Amen. Yes. Dr. Farooqui, we’re going to have you on the show next year if you’ll let us. Um, great predictions for 2024. We hope most of them come true. Some of them, not so much. Uh, but it’s been, it’s been a heck of a year. Yeah.

Vic: Yeah. It’s a good, [01:10:00] it’s been a good year. I’m, I’m cautiously optimistic about next year.

We

Marcus: are more good than bad. Yep. Agree. Well, man, thanks for doing all the great work on 34 episodes of like, uh, yeah, it’s been fun. I’ve

Vic: learned. a ton. I didn’t know what to expect, but it’s been a lot of fun.

Marcus: Yeah. You’ve done a really good job pulling together these shows and uh, I appreciate it. And I’m looking forward to kicking off the year with you in a couple of weeks.

Vic: Yeah, it should be. We’ll have a few more guests, more, more content for people.

Marcus: Awesome. Happy holidays, everybody. Happy new year. Thank you for listening again. Please subscribe, share, let people know we’re going to double down on our efforts, both in terms of volume of shows and just other kinds of content.

We’ve got some stuff up our sleeve. So, you know, thank you for encouraging us, uh, reaching out, letting us know that the show was, was good. Letting us know that we got it wrong. Um, you know, anything you did to encourage us to keep going, we really appreciate it. We’re going to do our best to try to help us all be a little bit smarter about health innovation so we can collectively, [01:11:00] uh, make healthcare better in the United States in 2024.