53 – Inflation Fears, Healthcare’s Discharge Gap, The Aging Baby Boomer Impact

Vic: [00:00:00] I was flying up and back to Chicago yesterday. And I heard your, uh, guest episode, which was great, with Noah Lang. Yeah. I want access to that. I need to move to either Pennsylvania or Utah. It’s pretty cool, right? But yeah, it’s great.

Marcus: Yeah, and just generally speaking, uh, we should, as a company, check out Stride.

Marcus: I mean, I don’t know exactly how we might Make it work, but it is a beautiful UI. It is very, very easy to kind of quickly tell what’s the right match for you personally with what’s out there. Yeah. It’s illuminating to see kind of what is out there, you know, out, out there on the market. And look, I mean, I just think year over year, the price for us, you know, small businesses like us going on 12 percent a year.

Marcus: It’s like, it’s just, it’s going to get to a point where we’re just going to say. Contribution, please. Like I’m tired, you know, I’m tapping out

Vic: because, well, I mean, I’m already, I mean, of course, I’m co founder involved at jumpstart, but I do not use our benefits because I’m, I’m in an ACA plan and it’s better for, you know, when he does all the decision making and I get to just, I get to agree [00:01:00] or not agree.

Vic: But, uh, she wanted a different set of doctors, different, whatever, different package. That’s the

Marcus: thing. It’s not just premium. It’s so much more embedded in the insurance decision. And

Vic: allowing the employee just to do whatever they want to do with this contribution of money. And then I can take it with me when I leave.

Vic: That’s so much better. So much better.

Marcus: So anyway, uh, Noah, thanks for being on the show. So

Vic: people should, if you haven’t heard it yet, check out that, that episode.

Marcus: All right. Busy week. Let’s go ahead and dig in.

Marcus: All right. So I actually was listening to the bankless, uh, weekly roll up before I came in here. So I’ve been under a rock all week. This has been a big sort of taking care of parents week and also doing important stuff for the fund. Uh, so I’m behind on the news, but right before we started this show, I got the news that inflation is higher.

Marcus: Yeah. From the crypto space that, uh, that inflation is running higher. that there’s now questions around, you know, rate cuts this [00:02:00] year, generally speaking. And so it’s not, which is what I think is not necessarily great because Powell has turned dovish and has been, you know, trying to project that cuts are coming, um, and that they, they are likely to make those cuts, but it sounds like inflation has, is going to make that a challenge.

Vic: Yeah. Inflation was higher than expected. 3. 5 percent and then if you take out food and energy, it was higher, which is kind of confusing to me, but but whatever, because oil is is high right now. And for some reason, food and energy was higher 3. 8 doesn’t matter higher than 2%. And I think the, uh, the takeaway is that, in my mind, This is the soft, I’ll use the word bumpy, soft or bumpy landing.

Vic: Oil’s high and people are now buying stuff, prices have come up a little bit. I don’t think our steady state inflation is likely to get to two. Yeah, but four, I mean, if it’s dancing around [00:03:00] four, that’s not good. Right. Yeah. And so, um, we’ll, we will see. The market was, uh, really upset about it. And we, you know, as you might expect when CPI came out on Wednesday, the markets were down dramatically, uh, various fed talking heads.

Vic: Tried to come in and say, well, we’ll, we’ll, you know, we’ll look at everything. But then, uh, yesterday there was negative news out of China, which in this like reverse weird world meant that the market was happy. Yeah. Right. Because the negative news means you might get a rate cut. Yeah. Even though it’s

Marcus: potentially global leverage arbitrage, it’s complicated, it’s complicated,

Vic: but it just demonstrates how.

Vic: Cool. Reliant we are on this, like, fake thing of the Fed narrative cut being the most important thing. A [00:04:00] slight negative thing in trying to turn the market back. So it’s that two day craziness has been now erased for the next day.

Marcus: All right. Uh, and so that was sort of the headline there. There is this story now, um, in the wall street journal that the headline says fed rate cuts are now a matter of if not just when.

Marcus: So more of the same, but, um, I mean, I think this is emphasizing that we’re, we’re, we’re not in the clear for a rate cut in 2024. Is that, is that really, you know, the, the definitive feedback from the March print that, hey, we thought by March we would be at least more consistently dropping towards two and the fact that we’re not, that it’s higher than, that it feels like maybe it could touch four again, uh, says, hey, you know, Powell can’t cut rates in an environment where it goes back to four, right?

Vic: I believe it’s impossible for the Fed to cut [00:05:00] rates if we’re trending up towards four. And then there’s also an election this year. Yeah. And I also think the Fed’s not going to want to do a rate cut like right close to the election. Right. So you really have June and then I don’t think they will cut in September.

Vic: Because I think, I believe it’s too close. And then there’s a, there’s a meeting after the election in November. So you really have two meetings, and people have been hoping and praying and doing, you know, rain dances to get three cuts. I don’t, unless they did like a double where they went 50 basis points at 75, like they went all the way up, which I cannot imagine.

Vic: I know it’s just, there just aren’t enough meetings. Now maybe I’m wrong about the political thing. I just think they’re not going to want to be like tagged by either side as, as trying to prop up one side or the other. So I think it’s, [00:06:00] I think the article in the journal is right. It, there’s a question of, are we going to get three or two or one or none at

Marcus: all?

Marcus: So, so just, just two minutes here, you know, what are the implications of a flat year? I mean, I, I don’t know why we would cut. I mean, it’s good for my venture portfolio, but yeah. But, but, but, but even aside from that, like we, we have largely repriced things. Um, You know, most of the crazy VC dollars right now are aping into AI deals, but outside of an AI deal, the deals that I’m seeing a lot of discipline on the VC side in terms of, you know, what the multiples are and strict adherence to revenue markers or things like that, right?

Marcus: So. So, you know, it feels to me like for a long term, the VCC has

Vic: adjusted and seems priced appropriately. Yeah.

Marcus: Yeah. So, so, so I guess I’m trying, I’m trying, I’m trying to figure out like what gets [00:07:00] really hurt by a flat year. You know, it feels to me like the real estate market has kind of, adjusted better than I think most people thought they would.

Marcus: Um, I mean, we, we still need to see if there’s going to be larger fallouts. Funny. Uh, we, we just, uh, hadn’t had a story locally that the Ritz Carlton, uh, that, that building, the site actually got sold in foreclosure. Oh, really? Yeah. We’ve been following that story since it started in 2020. Um, so, so like little stories like that are kind of popping up here and there.

Marcus: Right. But, but like who, but that’s what we want.

Vic: I mean, like that is. The process. Yeah. Like if real estate is overextended and no one’s at, not as many people are working in big office buildings as before. Mm-Hmm. , both of those things are true. You would have, you would have some, some repricing, you’d have some, some debt things that didn’t pay off for a bank, but it wouldn’t like created to the entire market.

Vic: It would be worked out and some would buy it out of foreclosure [00:08:00] and it would be okay. Mm-Hmm. . That’s the way we want it to go. I think so. I think the, I mean, the question is what happens if the Fed doesn’t cut? I think that’s what you’re asking. Yeah, that’s the question. And my, my opinion is that we’re in a, you know, what’s called a K shape economy.

Vic: I don’t know if I love that term, but, you know, just, it just signifies that if you have, let’s say more than 30 percent of your net worth in, you know, financial assets on Wall Street, you’re in okay shape, right? Your health has gone up. Your stock market portfolio has gone up. And you already have a lot of money anyway, so you’re okay.

Vic: Yeah. And it’s the people that don’t have, they don’t own a house, right. They don’t have any stocks. Right. They don’t have a portfolio. Their 401k has, you know, $20 in it. Yep. All zoomers, basically.

Marcus: All, all, all Zoomers. And then people who, you know, are at certain socioeconomic levels, but like generationally, all the Zoomers are in this bucket.

Marcus: Yeah.

Vic: [00:09:00] Yeah. So. They have done everything right, right? They went to college, they took on debt, they got their jobs, they’re now paying their debt down, and they are losing ground. And so,

Marcus: and the dollar’s being debased, right?

Vic: Inflation is going up. And inflation is going up. Yeah. And even at 3% sounds even 2%.

Vic: Let’s say 2%. It still means that everything that you buy today is 2% more. That’s right. It’s not going down. No. And so that’s the negative. It’s um, it’s, it’s socioeconomic thing. It’s like, it’s like for the lower part of the K, they’re already struggling. They’re gonna struggle more. Mm-Hmm. . I don’t know how the Fed will navigate that because if they cut rates, you’re going to have inflation take up and the stock market tip up.

Vic: I don’t know if it helps the bottom shape of the K that quickly. Yeah, and so they’re kind of in this like, you know, catch 22.

Marcus: Yeah, and we’re going to end the shows we always do with AI stuff and AI doesn’t help that either. Yes, um, I think AI accelerates the K.

Vic: It [00:10:00] accelerates the K. Accelerates the, uh, net profit margins to large corporations that are largely capital.

Vic: You’re good. If you own some of that, right? That’s what I mean. If you don’t, all it means is like some of the value that the work is being done accrues now to not to the workers anymore, but to more. Yeah.

Marcus: Oh, okay. Let’s move on. That’s depressing. All right.

Vic: Your stock before

Marcus: they’ll be good. No, but listen, we’re going to have like

Vic: fires in the street.

Marcus: Yeah, exactly. Exactly. Yes. I’ve got a, I’ve got a 25 year old 23 year old. So, you know, that’s, that’s who I’m, I’m looking out for. So we’re, we’re circling back to this story about CMS and the Alzheimer’s drug. I mean, we, Heard a lot about it during the 2020s. It was like the main story outside of COVID during that time.

Marcus: Um, haven’t heard about it for a while, but look can be as the name of the product. Uh, and now we’re getting a report that saying the spending on that drug could hit 3. 5 billion next year. So. What happened here? Because I feel like this story dropped out [00:11:00] of the headlines for two years. You know, we just, we just heard about the dissonance between FDA approving it and CMS actually being willing to pay for it.

Marcus: Um, and now we’re hearing 3. 5 billion dollars, uh, of spending on it by next year.

Vic: Yeah, I think we’re going to have Emily in for our quarterly talk next week. Yeah, next week. We need to talk to her about this. I think that, so this was the first time that I was aware that FDA approved a drug that CMS didn’t want to pay for, didn’t agree to pay for.

Vic: And I believe there are different stages of the approval. I don’t, and this is what we need Emily for, but I think there’s like a, Tentative, that’s not the right word, but like a pending further de further statistics, further evidence approval that the FDA has put in place to get people their medications as quickly as they can where it’s safe, but they haven’t maybe done as much work as they’d like to do eventually.

Marcus: On the effectiveness? I mean, safe is one mile marker. And [00:12:00] then effective is a, is an entirely different one.

Vic: Yeah, I want to be careful about saying something I’m not sure about. But, but the, um, it got its full on. It’s actually right on the screen right now. I got it full approval in July of this year. No, 2023, 2023.

Vic: Yeah. Well, so last year, last year, last year. But this first came up like two years ago. Yeah, that’s right. And so there are different shades of how the FDA approves. I think. And we can talk to Emily about that. But

Marcus: yeah, we talked a lot about that during our digital therapeutics run.

Vic: Yeah, right. Exactly.

Vic: Exactly. And so I think it’s in like the very complicated, you know, multi stage process of how FDA and CMS works. But this is an ongoing story in general, without the details that I think we need to cover. And really, all of our listeners need to cover that the FDA is no longer there. Automatically, [00:13:00] FDA approval does not grant you all CMS coverage.

Vic: Um, and, and the country is spending a ton of money on this and all the GLP 1 things. And there’s a lot of money spent on these pharmaceuticals.

Marcus: Yeah, but, but it is this like really. Crazy, um, tight funnel where when you get to the end, I mean, if you can get through the gauntlet, the numbers are astronomical, right?

Marcus: I mean, to your point, FDA approval means a variety of different things. And this is why I think FDA consultants are so valuable and why, you know, um, just having the domain expertise before you actually start investing capital in this space is so important. Um, It’s a reason why we’re not heavy into the space in terms of like, you know, our investment activity, very

Vic: political opaque.

Marcus: Yeah, it’s a hard space, but my goodness, like on the other side of it, the upside is unbelievable, right? I mean, because, because really for two reasons. One, there’s there’s. Always going to be pent up [00:14:00] demand and really, really large numbers of patients who are suffering with the different diseases that these, you know, new therapies can, can provide some relief or maybe even cure.

Marcus: Right? So that’s, that’s sort of the, the, the healthcare human reason to do it. The other side is it totally shifts capital, right? It disrupts. I mean, it’s like what we were talking about with CKD and the idea that these GLP ones could totally disrupt the dialysis industry, you know? Yeah. And that’s. you know, we’re talking about publicly traded companies, you know, uh, and moving all of that capital away from these facilities into these drugs that are, you know, it’s not just better quality of life, but so much more efficient to deliver, um, the service that from a healthcare service perspective.

Marcus: So, um,

Vic: Well, that, I mean, that’s true. I think it’s also true that we need to have a Discussion and there’s no one in DC that can have a discussion outside of soundbites. What is CMS supposed to be covering [00:15:00] and not covering? Right, so, so it is a drug that is safe. The FDA will discern that. It’s effective, FDA can help with that.

Vic: Maybe they will agree to that, maybe they won’t. But then there’s a value discussion.

Marcus: Yeah.

Vic: And I don’t know that, if there is a value equation or a process at CMS, I don’t know what it is. It’s not clear to me how This should be viewed.

Marcus: Let’s let’s say that it’s

Vic: going to be a discussion with, for Emily. I was going to say, let’s,

Marcus: let’s, let’s put a pin in that.

Marcus: Let’s save that for next week with Emily, because my, my belief, and this is believing, you know, that our government, uh, actually works better than most people think it does, um, does have those value discussions. It’s just really opaque in the bowels of an agency that we don’t have time to read through all the, you know, all the paperwork.

Marcus: So

Vic: maybe Emily can help us with that. That that’s the. Reason I have no frame of reference to 3. 5 billion is [00:16:00] is okay or not. Okay. Yep.

Marcus: All right. Next story in the mpj Um headline healthcare on the brink navigating the challenges of an aging society in the united states So i’m living this so why don’t you tell me like what?

Marcus: What this story is telling me that I don’t already know. Well, nothing.

Vic: Okay, but but nature is It might be the best scientific publication. It’s one of the top five in the world for, I don’t know, several hundred years. And so when Nature comes out with a story about how the U. S. healthcare system Is not able to deliver the care for all of its people, even though there’s nothing new as far as we all know, the system is, you know, very complex and overbuilt in some areas and doesn’t have enough capacity in other areas.

Vic: We know that we talk about every week nature publishing a story about it, at least to me, got my attention.

Marcus: [00:17:00] Yeah, well, we can, we can stop there and let me kind of tell you what I’ve learned this year. And this week, I

Vic: mean, you’ve been learning this week.

Marcus: Yeah. Yeah. Let me, let me tell you what I’ve learned this year.

Marcus: So when we’re talking about aging, what’s behind aging is a discussion about death and death is not a topic most people want to talk about. It’s just not a popular topic. And so, uh, if you are not initiated in the club, you’re not going to spend a lot of your time talking about it. You know, I remember The I remember kind of the first time that I ever heard the term silver tsunami, you know, and it just sounds like this catchphrase, you know, without without fully appreciating, uh, what a tsunami feels like this is not dissimilar to like hearing about a tornado and never seeing the damage that a tornado does.

Marcus: Right? I remember, uh, right before covid hit. Um, when the tornado ran through, uh, you know, North Nashville, Germantown, East Nashville, right? And I remember driving over there and being like, holy [00:18:00] shit. I’ve, you know, I had a number of buildings. Oh, and, and they’re just just gone, just gone. Right. But if you’ve never seen it and you’ve only ever seen it on TV, TV does not have

Vic: the

Marcus: scale to really help.

Marcus: You don’t understand. You don’t understand what’s actually going on. I would say this aging situation, this aging crisis is very similar to that. Um, and that’s why the silver tsunami is actually a pretty good. It’s actually pretty good title for it. Okay, because if you’ve never experienced it or you’re not in it, you don’t know.

Marcus: You’re not having conversations about it and, and, uh, it’s unevenly distributed, right? So, you know, uh, I happen to be the responsible child for my parents. Um, you know, my, my two, Sisters are half sisters, so we share a dad, but we have different mothers. They are right now actively deep in the process of caring for their mother, right?

Marcus: So, so they, they can’t just drop. They don’t have

Vic: significant capacity. No, they do not

Marcus: have significant capacity. They can’t just drop everything they’re [00:19:00] doing to come down here. So, you know, it’s largely resting on myself and my wife, who, by the way, is also, you know.

Vic: Has her own family. Yes.

Marcus: And, and is, and is very, very deep in this process herself, right?

Marcus: You know, what you realize once you actually get into it and I’ll just, you know, say I have to be one of the best connected people in Nashville in terms of healthcare, you know, networks

Vic: connected and educated and

Marcus: I sit down on this podcast every week with you. We talk about it, right? You know, so I, I know a lot about it and I’ve got people who are literally You know, great, great friends of mine who run, uh, uh, assisted living facilities, hospice facilities, blah, blah, blah.

Marcus: So your dad is, I’ve got people that I can call to sort of ask all these questions. Every single day I am learning, uh, what the silver tsunami actually means. And what it means in terms of what aging people go through, [00:20:00] right, as they are in the process of dying, which is, which is a process that you don’t have a timeline for.

Marcus: Right. Um, you know, one of the best things that it’s

Vic: not linear,

Marcus: it’s not linear. Yeah. One of the best things that my buddy, Nick, uh, our, our friend, Nick Holland, you know, uh, said to me at the beginning of this process, cause he had sort of lived it a little bit more than I had, uh, was that this is not a project.

Marcus: Right. And that was really, what did he mean by that? In a project, you can project manage it, you kind of control the inputs and yeah, there’s some variability, but like you said, a deadline, you work, you know, you think about the iron triangle, right? You know, your scope, your time, your resources, you know, and you kind of manage your project along those, those different, you know, you can have

Vic: a

Marcus: some level of control.

Marcus: Yeah. Yeah, that is not what’s going on here. Okay, that is not what’s going on. So let me give you an example of something that literally this morning I [00:21:00] was talking to my wife and she was talking to someone who had lived this and was like, Oh yeah, like this thing. So, uh, my dad was discharged. Uh, from skilled nursing facility.

Marcus: We had a, we had a great, you know, uh, experience at, at skilled nursing facility we were at. So he was, he was discharged. And because of the nature of discharge, it’s a, it’s a really difficult thing because at any moment, it could not happen. Right? You know? And so because of that, let me finish. And the timing of it is hard.

Marcus: Yeah, well, let me finish. Because of the Because you cannot control or 100 percent predict that a discharge is going to happen, the people you would work with to get the home set up, so this would be home health, home care, PT, you know, getting a follow up appointment with your PCP, none of that will actually lock in until at a minimum you have a discharge date, but the discharge date only really signals when everyone else will come in.

Marcus: Come to see you. [00:22:00] Okay. And in between that time, there’s something that people who have lived through it call the gap. And in that gap you go from full 24 7. Yeah. You’re in skilled nursing. Yeah. Very comprehensive 24 7 service. And if you’re in, if you’re in a good facility, I mean, it’s great, right? Yeah.

Marcus: You’re going from that to nothing. Nothing.

Vic: Well, you, you and Rachel,

Marcus: which is effectively nothing. Yeah. Right. Okay.

Vic: Uh, and, and you’re going through your own. Oh, dude. Grieving, processing, thing, I mean, it’s a, it’s very complex. You should not be the service provider.

Marcus: And the person, the, the, the aging person knows this and they feel this and like, do you, and they are, you know, somewhat helpless in this situation.

Marcus: So what’s sort of a natural response to that? Anxiety. You think that’s good? For any of this.

Vic: No,

Marcus: it’s brutal.

Vic: Yeah,

Marcus: it’s absolutely [00:23:00] brutal, right? Um, but that increases heart rate because all kinds of issues cause all kinds of issues, right? Um, and, you know, you think about anxiety for young people, you think about anxiety for adults completely different.

Marcus: impact on an aging person who’s already, yeah, they’re already pretty, pretty fragile. Um, and, but then, you know, you get the people there from the discharge and then maybe the person feels better. Right. And so it’s this rollercoaster ride that you go on. You never could properly, you know, Handle it all yourself all and then, you know, did you actually take the whole day off?

Marcus: Did you, you know, did you properly give yourself the space to navigate it? Anyway, I’m taking up a lot of time here. Let me

Vic: just make sure I’m understanding. So the gap occurs because the skilled nursing facility says we are planning to, we’re planning to, which is the key word, planning to discharge your dad at 10 o’clock on Wednesday.

Vic: And [00:24:00] they don’t, you Actually do that.

Marcus: No, no, no, no. They try to do that. They do it. They do it. The problem is not that they don’t do what they say they’re going to do. In my experience,

Vic: it doesn’t happen at 10. It’s like, it happens later. They need to get another thing. They need to do whatever. So they just, it works perfectly for that.

Marcus: Yeah, I’ve done five discharges now. So 10. Yeah, yeah, because I was there to pick him up. I’ve done five discharges so far this year. So I can tell you, I don’t think any of them were delayed because of the facility.

Vic: Okay. So home health or other search riders. Won’t show up at noon. No, no, no. I don’t even understand if you haven’t been through it.

Vic: Yeah,

Marcus: you are thinking about this like a project. Right, right. This is my point. You’re thinking about this like, oh. Yeah, it’s so far and I don’t even know what question to ask. Everyone does what they’re supposed to do. Okay. But with everyone doing what they’re supposed to do, there is a natural built in gap.

Marcus: In that process, because when you get the person home, they’re not home [00:25:00] health isn’t coming that day. They’re coming the next day. So there’s a that’s how they design it. It’s they will not come the same day. There is a 24 hour gap because why would they schedule to come the same day? If they don’t know for sure, the discharge is going to happen that day.

Marcus: They just don’t know until it’s happened. You see what I’m saying? Yeah. They have to wait until it’s all the way done. Your home, and then they can say, okay. Discharges happen. That’s like a, that’s an, that’s an actual event, an important event that triggers all sorts of stuff and health insurance and Medicare and blah, blah, blah.

Marcus: It’s like, okay, done. Now we can move to the next phase, right? Okay. In that, in that short gap, dude. Yeah. It’s like, you know, a black hole can swallow you in that 24 hours.

Vic: Even if I was thinking, yeah. I mean, I’ve struggled with discharge out of inpatient. Yeah. And there’s a lot of people that have to sign off on it.

Vic: Yeah. And I think properly, but it [00:26:00] creates a lot of complexity about exactly when. Yeah. But you’re saying a different thing, which is you can’t even really get people there Until the he’s been discharged and then they wait to the next day. Yes.

Marcus: That’s the protocol.

Vic: Yeah That’s the protocol and that creates a 24 hour gap there.

Vic: Yes um, which is

Marcus: We we have not even gotten into all of the resources that have already been poured into Supporting my my dad, you know, through this process and supporting us as a family. We haven’t even talked about that. Okay. Which has been significant and for which we’re really grateful. Um, nor about what we will need in the future, which because it’s not a project, there’s no predictability to it.

Marcus: It’s a person’s life. Okay. Yeah.

Vic: It just, you have to figure it out as you

Marcus: go. Yeah. Yeah. And back to the K shape economy.

Vic: Yeah, dude, you got paid on Wednesday, even though you weren’t here working. That’s what I’m saying.

Marcus: That’s what [00:27:00] I’m saying. So, so you compound all of this stuff together, man. And America has no idea what it is in for.

Marcus: Like, because my, my parents are older. They’re not boomers. Right. My parents are in their mid eighties. Okay. America has no idea what it is in for. You overlay all these different trends, this AI thing, this like zoomers want to be influencers thing that just the inherent difficulty and challenge of this system.

Marcus: Right. Dude, we were in for it. We, we are in for it and it’s going to be hard and it’s going to be bad and, and one of the, and I’ll just end where I started, which is one of the worst parts about it is. It all really is about death, okay, which is not something people want to talk about. And so until you are initiated in the experience, you will not get the guy.

Marcus: There’s a reason why I’m talking about it on this [00:28:00] podcast because I want to try to make a practice of being more communicative about this because I’m kind of shocked by. How much I’m learning on a day to day basis that I just did not understand, and I’m 10 years deep in this industry, you know,

Vic: I mean, I was in a board meeting yesterday, okay, the other company that I’m one of the larger investors in that is a messaging tool for the post acute.

Vic: Okay. Space. Yep. So, I’m supposed to know this stuff, and I didn’t know about the 24 hour gap thing. It’s just, it’s hard to find this information. I didn’t know about it

Marcus: until yesterday. Yeah, right. And then this morning, I’m talking to Rachel, and, and, and she goes, Yeah, I was talking to a friend, and I was telling them everything we were experiencing, And, and that friend said, Oh, yeah, the gap.

Marcus: Yeah, and like now I know what it is.

Vic: Yeah, and I’ve been thinking about like, how can, how can you and I tell [00:29:00] this to someone else who’s at that skilled nursing facility today and could at least prepare themselves emotionally? Not that they could do that much, but they know this is coming.

Marcus: There are things they could do.

Marcus: There are things that it’s pretty hard to find the information, though. I mean, no, no, no, no. I’m saying. I’m supporting what you’re saying.

Vic: If we provided them information, Correct. They could

Marcus: get ready, yeah. And, as a broader thing, I would, I will say, as great as these facilities are, On on caring for people, the discharge is abysmal, and I think it’s because they don’t get paid for it.

Marcus: Yeah, um, and and I don’t think that that feedback or ratings around discharge is in any way, shape or form material in their in their PNL. Right, but but dude, these are things like. These are things they could [00:30:00] do on a week before the day they come up with a discharge date. Okay. They could talk to you as the responsible person.

Marcus: Okay. Who’s the responsible person. All right. Here’s a shopping list. Here’s a list of things you need to get. If you can, if you can afford it, here’s a list of things you need to get to get into the house that will minimize the transition that will make the person feel when they get home, like they’re moving into a facility that is somewhat similar to what they have here right now.

Marcus: Right, dude, they do not do that. So you’re running

Vic: to CVS target, whatever. Like that day to get stuff. Totally. Yeah. Totally.

Marcus: Yeah, but based on things you experience when they get home because you’re not with them, so you don’t Yeah, you’re

Vic: like,

Marcus: shit, I need, I need this thing. Yes.

Vic: Yeah. Yes, exactly. And then the other aspect is I think You could talk to your dad and say, there’s this 24 hour period.

Vic: That’s going to be a big transition. You could help with his anxiety. So you knew ahead of time. Yes. But when you’re in the middle of it [00:31:00] and stressed about the thing you don’t have, you’re not in a position to do that very well.

Marcus: No. So anyway,

Vic: nature studied it and they came up with the same thing you have uncovered, which is it’s a, it’s a, it’s a challenge.

Marcus: This is, this is a massive, massive, massive issue.

Vic: And, um, so this is. Important just because, you know, big health systems, big payers, the government will read nature and it’s sort of like a credible source. I think the thing

Marcus: I need to kind of understand, and then, then we got to move on, because obviously, I mean, because of everything that’s going on, I actually don’t have a lot of time for this podcast, but, but, uh, you know, the, the thing I need to figure out, I need to start having some conversations, but I don’t want to have them right now because I’m so emotionally lit up about it, is I want to understand better why The discharge process is so bad and so, and from my perspective, so thoughtless it like five for five, I’ve had no problem getting them out of there on time, but I feel it and I am someone who feels very [00:32:00] capable, you know, like, Uh, you know, somehow, even through everything that’s been going on here, I’ve managed to keep my workouts up.

Marcus: I’ve managed to, I’m here, I’m here on time doing the podcast, you know, all the important meetings and stuff like that. I’ve been able to sort of manage all those things. Um, I’m pretty goal oriented. I’m pretty project oriented. I’m pretty like checklist oriented.

Vic: Yeah. I mean, I think that you had a pretty good thread to pull, which is no one’s paid.

Vic: There’s no incentives to make it better.

Marcus: It’s, it is, uh, I guess what I would say is. If this happens as a wave throughout society for millions of people, you know, the amount of Mental and emotional anguish that is created like that. That’s the part. That’s not really No one no one is quantifying that piece the amount of Suffering you have to then undo and serve with therapy with all these other things [00:33:00] It’s just it’s crazy It’s crazy, man.

Marcus: Um, so yeah, when I’m not so loaded up on this, I, I do need to start to have some more conversations to learn because I, I am still in the learning process. I, you know, I’m not going to run in there and try to ape and hero and fix this thing, but. Clearly, uh, there is a massive opportunity to improve this situation.

Marcus: Yes. Big time. Alright. I

Vic: have lots

Marcus: of ideas, but let’s keep going. Yeah, thanks for letting me, uh, Alright, so, um, Are You Fit For Your Age? This is actually a really good segue. Man, good job ordering this show. All right, so Wall Street Journal, um, in the health and wellness section has a headline, Are you fit for your age?

Marcus: Test yourself with these exercises. So your cardiovascular fitness, strength and balance can give you a read on how well you’re aging. So what, Vic, what, what would they say here? So they

Vic: give you concrete things to test. Yeah. Right, VO2 max. Yep. That is hard to test on your own, but you can definitely get that test done, but keep going [00:34:00] Other benchmarks are important.

Vic: Like, can you do a 12 minute run? So can you run for 12 minutes or do one mile in walking? Okay. And that’s a yes or no, right? Like you can push ups. Yeah. So this is very, very binary. Yeah. Well, the pushups is, is less binary. Keep going down. So they give you a range. What I liked about it is like. So I’m, I’m between the 51 and 60.

Vic: And so I need to be able to do over 30 pushups. Okay.

Marcus: To be, to be considered,

Vic: to be considered excellent.

Marcus: Okay.

Vic: You know, I think that is

Marcus: helpful. Yeah. I mean, look, 30, that’s, that’s not nothing. Yeah, that’s right. 30 is not nothing. I actually think that’s a, that’s a decent metric and that’s 30 at one time, right?

Vic: Yeah, yeah,

Marcus: yeah. 30 just like

Vic: go sit down and lie down and do 30 right now. That’s not, that’s not nothing. Okay.

Marcus: Yeah.

Vic: So anyway, um, and then. There’s several of these, a plank, um, So, I thought it was a decent [00:35:00] attempt at kind of a holistic, all the different aspects of health. Can you get to your feet without using your hands?

Marcus: Yeah, yeah, and this is actually a pass fail test.

Vic: And it’s really, this is a technique that you have to learn, which is not hard to learn. But, um, my, my wife taught me to do this. She just gets up because she’s very fit and probably has a lot of hip mobility, a lot of hip mobility,

Marcus: hip mobility is key to being able to, to simply get up on your own.

Marcus: Like I can’t, my Pilates

Vic: teacher taught me this exact thing he’s doing, uh, which is not as. exciting as Wendy’s just stand up straight, but I don’t have the hip mobility to do it. I can’t. Now, maybe over time I’ll get more flexible, but it’s unlikely at 53. But I can still, I mean, what my Pilates instructor said is you need to be able to sit with your grandkids at the Christmas tree and then stand up and go get coffee.

Vic: Yeah. If you can’t and you have to ask your [00:36:00] eight year old grandson for a hand up. It’s just not the experience you want. Yeah. So anyway, um,

Marcus: No, listen, I think, I think that is, uh, that’s great. Um, I, I, I love that this is, uh, this is in wall street journal. We need more of this. Um, my, my, my little Aspen side.

Marcus: Side project called Aspen Venture in the program. You need to do a venture. Yeah, it’s kind of around this It’s really centered around, you know people 40 and over and in older And their and their fitness and their athletic identity. Yeah, and it’s super important because Yeah, man, the you know The two big things, the cardiovascular system and, and well, three big things, cardiovascular system, um, muscles and mobility, like those things are, are so critical for being able to stave off so much of what we just talked about, you know, and, and there is a point where if you’re out of practice in those things, it just deteriorates and it [00:37:00] gets really hard to come back.

Marcus: Yeah, it gets really, I mean, I

Vic: just selfishly, I. expect to die of a heart attack or stroke or something cardiovascular, or I will fall and break my hip and just go downhill. Those are the two most likely ways given my family history. And so I need to try to do preventative things that help with that. Yep.

Vic: All right.

Marcus: You know, no, let’s, let’s stop. Let Doug talk about Jumpstart Foundry and then we’ll, we’ll jump back in for. Kind of a lightning round of stories because, because, uh, I got to go.

Doug Edwards: Thanks guys for the opportunity to talk about our pre seed fund Jumpstart Foundry. My name is Doug Edwards, CEO of Jumpstart Health Investors, the parent company of Jumpstart Foundry.

Doug Edwards: 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 [00:38:00] to help us find and identify and invest in innovative companies that are going to make a difference in healthcare in our country.

Doug Edwards: Every year, Jumpstart Foundry invests a fund, raises a fund, and deploys that across 30, 40, 50 assets every year, allowing ease of access for our limited partners. to invest to help us make something better in health care. Some of the benefits of Jumpstart Foundry is there’s no management fees. We deploy all the capital that’s raised every year in the fund.

Doug Edwards: We find the best and brightest typically around single digit percentage of companies that apply for funding from Jumpstart. And we invest in the most incredible, robust, innovative solutions and founders in the United States. Over the last nine years, Jumpstart Foundry has invested in nearly 200 early stage, pre seed stage companies in the country.

Doug Edwards: 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 [00:39:00] the fund, making that ease of access, not only with low minimums, but the ease of investing in venture, much better.

Doug Edwards: We all know that healthcare is broken. Everyone deserves better. Come alongside us with Jumpstart Foundry. Invest in making the future of healthcare better and make something better in healthcare. Thank you guys. Now back to the show.

Marcus: All right, Vic. So, uh, rock health released a report on the Q one 2024 digital health funding.

Marcus: I, by the way, just thank you rock health for always coming up with these reports. It makes it easier for all of us in the industry who are, you know, uh, trying to make investments in the space. Um, but anyway, uh, basically. It sounds like Q1 of 2024, when we look at it against previous years, kind of a throwback to 2020, you know, we’ve talked a lot about that.

Marcus: Yeah, maybe go to the

Vic: next one, we have a bigger image.

Marcus: Yeah.

Vic: So, um, yeah, the funding by dollar amount per quarter and by number of deals, [00:40:00] it’s stopped, it’s not a falling knife anymore. Right. It’s stopped coming down dramatically. Yeah. I think we’ve sort of reached a steady state that we had before the pandemic, like 18.

Vic: Yeah. I think that’s what this report says. Like we’re, we’re sort of muddling along and it’s not going down anymore.

Marcus: Yeah. The, the average deal size is, uh, 20. 6 million. That is below anything, uh, In the 2020s, uh, 2020 was, was 30 million. 2021 was 30. 39. 6 million. 2022, 26. 5 million. 2023, 21. 6 million. So, you know, not that far off of 2023, right?

Marcus: Down, but not that far off. Uh, and, and you and I talked about this. I feel that Q1 of 2023 was still a bit exuberant. Like, like the founders hadn’t quite got the deal. Yeah. Deals were still sort of flowing. It really didn’t feel like to me until Q2, where we [00:41:00] really hit the winter. Um, and even though there was a bunch of, you know, forecasting of the winter, it felt like Q2 of last year was really when the winter, we’ll go to the next

Vic: one.

Vic: Cause it shows it quarterly. Yeah. Yeah. Um, so on the left here, you know, of course, there’s a light green 2024, we have Q1 data, and as we just talked about, it’s, it’s lower, but it’s not dramatically lower in deal count. Yeah. It feels okay. Um, Q2, you can see what you were just saying that, you know, in the, um, green numbers and the blue numbers is really, Q2 and Q3 is when it really fell off, kind of fell off, everything fell off.

Vic: Yeah. We’ll see. I’m hopeful that Q2, it feels to me like we’re going to be kind of bumping along, kind of at a steady state now.

Marcus: Yep. All right. And, uh, this story in, uh, Wall Street Journal Pro Private Equity section, uh, talking about, uh, a group called Santa Barbara Venture Partners that has basically taken to the secondary markets of, uh, From a, from a [00:42:00] VC perspective, this is, you know, something that’s been talked about.

Marcus: Carter was really trying to build out a secondary market. I think they’ve backtracked on that when they had that whole, you know, snafu where they were, uh, cold emailing people about, you know, selling their shares. Uh, but this one firm has, you know, in the absence of IPOs has decided to. actively proactively sell their shares on the secondary market.

Marcus: And, you know, it’s generating returns where, you know, for most VC funds, you may have markups, you may have markdowns, but you don’t have a lot of like liquid returns. And so them liquidating, uh, on the secondary markets, whatever they’re able to get for it is returning capital and probably does differentiate them in the market.

Vic: Yeah. And if you carry your. Assets at the proper value. I think by definition you should be able to sell them for some Small liquidity discount in the marketplace. So the fact that they’re able to do this I think means that they’re carrying the the assets in [00:43:00] their illiquid portfolio Pretty close to accurately.

Vic: Yeah, and that gives the lps confidence that They’re getting some money back and then they’re not like over inflating everything. Right. So I think it’s a healthy step. I was happy to see it occurring. I think more of this would be good.

Marcus: Yeah. I think it is interesting because, um, you know, the, the, the, the GP in the article was talking about how he was surprised that more VCs weren’t doing it.

Marcus: And I, I sort of, of course, well, I’m a VC, so I thought, okay, well, why, why haven’t I thought to do that? And I think, you know, initially my response was, well, my. LPs at this point in the fund, you know, at no point did I tell them by, you know, year three and a half, you were going to have liquid return. So I think that’s one thing.

Marcus: I don’t feel like I’ve done anything that’s against what we had originally projected we would be doing. Um, I think the second thing. Is that I, I think we have done a good job of buying equity at the right prices or [00:44:00] making sure that we have, you know, recalibrated those prices to, to be, you know, effectively sold in, in the future, in, in this new corrected market.

Marcus: Right. You know, we’re, we’re not, we’re not, we’re just not looking for unicorns. I mean, you know, we’re looking to build good businesses that can find good strategic homes. And so it’s a credibility thing

Vic: like, so. You also haven’t written up your book 10x. Absolutely not. No. And so if you had done all those things, or you had invested in, you know, a huge multiple, and then you are claiming that now the company is worth three times that, It’s a credibility thing.

Vic: So if you don’t have any exits, people will look at your evaluations in your portfolio very carefully. And it’s either credible or not credible. I, obviously, I’m biased. I think Nova’s very credible. This firm in Santa Barbara, I think they did a bunch of B2C, AI things that are highly credible. Price now, and they wanted to prove that those, those high [00:45:00] multiples are, are right.

Vic: And the best way to do that is to sell it to somebody, you know, just tell your whole, they didn’t sell any entire positions. They just sold pieces. Right. It’s kind of a hassle that doesn’t actually generate return for your LPs. In my mind, so unless you have a credibility problem, I don’t think there’s any reason to do it.

Vic: But if you do it, it’s very easy to then, okay, well, let’s see what we can sell these things for. So I wouldn’t, I don’t think it would help. Your LPs wouldn’t want you to do it because it’s not going to create any value. Yeah,

Marcus: I’m not enticed to do this because I would feel like I’m leaving value on the table.

Marcus: Like that’s not what I’m trying to do here. Yeah. Okay. All right. Continuing on. Uh, I don’t think we can spend a whole lot of time on this, but, but yeah, I mean, the, the, the change healthcare, um, you know, situation, apparently this is from a dark reading. com. So I actually did not see this as a broad, broadly aware story.

Marcus: These are people who I think are very, very dialed into what’s happening in the cybersecurity world. Uh, and, um, and [00:46:00] apparently a group called ransom hub. Uh, speculated to have some connection to AlfV, which was that, or Alpha, I’m, you know, not sure exactly how they’re pronounced. Uh, stole four terabytes of sensitive data from the beleaguered, uh, healthcare company.

Marcus: So, you know, I think, uh, to some degree, here’s what, here’s what I think is going on here. Um, you know, it’s like once, once some of your data has been stolen, it’s just going to be continued to be stolen over and over and over again. So, you know, the dark web is full of everyone’s data at this point, you know, after Equifax, it was over.

Marcus: Right. You know what I mean? It’s like your data, your data is kind of out there. And I think this is probably similar to that, that the headline here says round two, talking about a second ransomware attack, but I think once it’s happened once that’s, you know, you’re kind of always going to be a target and your data is always going to be trafficked a little bit.

Marcus: This is just. Kind of the nature of what happens in these cyber attacks.

Vic: I think that’s right. And I also think it is going to continue for change health care and united for a long time.

Marcus: Yeah. Yeah. But look, everyone else needs [00:47:00] to not get comfortable because

Vic: I don’t think, I don’t think, I don’t know how many U.

Vic: S. When. Apple notified a bunch of Apple phone users, like, proactively, that their phone is being targeted. So, I don’t have an Apple phone, but my wife didn’t get one, but it’s mostly, I think, uh, international. Um, but I’ve never seen Apple do a proactive thing. Like, if you got a message, it means, like, your phone is being used, and they’ve spotted whatever.

Vic: So, yeah, everyone is

Marcus: Crazy. I’m seeing it more. Crazy. Um, all right. Uh, wow. Bright Health. So, um, I mean, we, we were around for kind of the genesis of this, of this company. We, we, we know, uh, co founders of, of Bright Health. And I think it was an exciting time when, when we thought that health insurance may be in for a renaissance and there may be some, you know, and look, there were some super credible people, former, uh, former UHG CEO, uh, the

Vic: founding team.

Vic: Bring a new approach, much more patient. [00:48:00] focused approach to being a insurance provider. Yeah,

Marcus: but the reality is that whole wave got sort of washed out, right? Um, and so someone’s trying to reboot bright health. Is that what’s going on here?

Vic: Yeah, it’s, um, I mean, it went public and has lots of issues, lots of creditor problems, and they moved where they’re located and changed their name, I think, to somehow give them a better chance to navigate this.

Vic: Um, mostly, I wanted to tell the, the audience that, you know, new health. is the old health. Yeah, that’s that’s the point of the discussion. Got it. Got it.

Marcus: And spelled n e u e. So, so, so new health is bright health. Okay, we can keep moving. Oh, here’s, here’s a good story from Medscape. Are you ready for AI to be a better doctor than you?

Marcus: So then I love it because it’s actually got a scoreboard on this article. Right? This is basically the AlphaGo moment, isn’t it? I think

Vic: it’s an It’s the AlphaGo movement for clinicians. So that’s [00:49:00] what I mean for clinicians. Yeah, we’re like all of Asia and AlphaGo players realized when Google beat the champion of AlphaGo, like, Oh gosh, it’s a new, it’s a new world.

Vic: Met Med, uh, Medscape. Is a publication for doctors, and yes, it’s written as, you know, 1, 2, 3, 4, they list 5, I think, different times when really reputable places like JAMA and, you know, other accreditation bodies judged how AI has done compared to practicing doctors. And it wasn’t close. AI lost all of them.

Vic: No, AI won all of them. Yeah, so, sorry, I said that wrong. AI won all of them. Physicians didn’t win any of them. And so they, they sort of start the article off with that. That AI is better than [00:50:00] you because most of the readers are clinicians. Yeah. And then they go to what I think is the real point, which, which, which is the takeaway that I’ve been sort of internalizing over the last year or so is that, um, AI is not going to replace every VC.

Vic: VCs that use AI much more effectively than other VCs are going to replace the VCs that don’t know how to use AI. That’s right. It’s a tool to amplify or augment. What knowledge workers can already do. That’s right. But you have to, you have to really learn it and know how to use it. And, and they have set a whole second half of the article showing physicians how they can sort of internalize, use AI to get better.

Vic: And a couple of docs that are, that are doing that, which is great. And hopefully it will wake up clinicians and they’ll start paying attention more.

Marcus: Look, uh, not, not a surprise to us. Uh, we, we had, we had Tarun Kapoor from, from virtual health on the show. He, he signaled this, he [00:51:00] didn’t say it quite in this way.

Marcus: He, he sort of more framed it around the future of new knowledge being developed. And, uh, In the healthcare field and how it’s simply impossible for doctors to keep up with all the new knowledge as fast as it’s being developed. And so over the long term, we’re going to need AI to be this intermediary as, as a processing, uh, interface for all the new doctors will need that as a tool.

Marcus: So that was, I thought that was a really good way to frame it. Yeah, this is, I think a little bit more direct that, Hey, you know, you verse the AI given, you know, your command of the knowledge. The AI is going to outperform you in diagnosis straight up, right? Okay. And, and yes, to your point, AI is going to beat the knowledge worker.

Marcus: Like that’s what it’s just, it just is. It’s like, yeah,

Vic: it is. And that’s not the competition that’s going to happen. It’s going to be a physician or a health system that is using the AI to do much more, better, faster, have more time with the family, be more empathy. And then give them [00:52:00] many more op. Fixed discharge.

Vic: Um, that’s who you’re going to lose to. Not, not a AI by itself.

Marcus: Uh, speaking of AI, Google Cloud Next was this week in Los Angeles. Uh, I was going to go, but I did not go, but it was as expected. A ton of big updates and announcements. I think the biggest one being that, uh, you know, look, everybody is focused on building their AI supercomputer.

Marcus: Google will, you know, is behind Microsoft in terms of their announcements and their buzz on this front. But that to me is an arbitrage opportunity because, you know, if you are, if you know, Google, you know, They’re fundamentally super strong in, in cloud. Uh, and I don’t mean Google cloud versus Azure. I mean, Google as a cloud business, you know, Google was internet way before Microsoft was internet, you know, Microsoft was desktop and install first.

Marcus: So. Yes, Google Amazon of

Vic: the cloud. Exactly.

Marcus: Exactly. The native cloud businesses. And so, um, Google has built their own chip. Um, they’re building their own. [00:53:00]

Vic: I don’t know why I was, I shouldn’t have been surprised. That was the surprising thing to me that they’re building their own chip.

Marcus: Yeah. Well, well, that’s not new though.

Marcus: I mean, you know, the, the, the tensor chip. They were doing tensor chip before, right? And do you really want to be behind Nvidia on this? I don’t think you can afford to. You have to have your own hardware, like soup to nuts. You have to be building your own computers, uh, if you’re going to be in this game.

Marcus: And so, and Google has been doing that. Yeah, this is not new. Um, so, so they’re, they’re building their own AI hypercomputer. They’re, they’re continuing to bolster the AI capabilities in Google workspace. Um, in terms of Gemini, Sheets, that’s right. Gmail, all that stuff. That’s right. And then also like, if you want to be a coder there, there, uh, uh, Vertex AI is the is the interface that they’re putting all this stuff underneath.

Marcus: So you’ll have these these APIs that will enable you to supercharge your applications if you’re building them on Google Cloud.

Vic: Yeah, yeah. And I think they have a huge advantage with YouTube and Google search. Microsoft bought GitHub, which was brilliant now in hindsight, because they have a [00:54:00] huge advantage in coding, but they’re both competing in all markets, so they have a coding tool.

Vic: And Microsoft has LinkedIn. Yeah, Microsoft has LinkedIn. That’s,

Marcus: people are really underestimating LinkedIn. Yeah. That is, I mean, you talk about the enterprise. Yeah. What an incredible data set that is right? Ridiculous data set. All right. And then just wrapping up, um, sort of on the A. I. Side, Google is partnering with bear on new A.

Marcus: I. Products for radiologists. You know, radiology is kind of always been considered the beachhead for A. I. Just because of imagery, image recognition, you know, diagnosis, all that kind of stuff that happens in radiology. A perfect place for it for A. I. To play a really meaningful role. And, uh, Google. Google partnering with Bayer shows how, uh, the big AI players are going to partner with, uh, you know, world class healthcare companies.

Vic: Yeah, that’s, I mean, this is not surprising that radiology is a place to, to show what AI can do. It’s just to sort of underline that the big tech players are going to find credible healthcare companies to partner with and go to market. Yep. [00:55:00]

Marcus: All

Vic: right.

Marcus: All right. We, we blazed through it. Yes. I got to move on to the next phase of the day, but thank you for putting together the show.

Marcus: Um, and, uh, next week we’ll be back with, uh, with Emily Evans covering sort of Q one and healthcare policy. We’re going to do a deep dive on Medicare advantage because a lot of like stuff is going on in the Medicare advantage space. Uh, and, and we’ll also get some of our questions answered that we covered today, especially around CMS and how that all works.

Marcus: All right. Until next time.