60 – Job Loss, Ascension Disrupted, Gene Therapy Cures, CRISPR, AI Friends

Marcus: [00:00:00] If you enjoy this content, please take a moment to rate and review it. Your feedback will greatly impact our ability to reach more people. Thank you. So, 60. Yeah. Glad to do 60 episodes with you. That’s good. Um, I I have a weird kind of feeling going on. Like I’m actually not tired. I feel pretty stimulated mentally.

Marcus: I’m excited for the show today. I’m excited to talk about everything. And at the same time, this is my first week back in competition camp. And, um, so I did, I did my first two a day yesterday, uh, competition team, jujitsu in the morning. And then in an hour of strength and conditioning and like my, my strength and conditioning coach added in conditioning yesterday, so like eight minutes of like pushing a sled, throwing a medicine ball.

Marcus: Crawling around, blah, blah, blah. Um, I’ve been jumping in the cold plunge in the morning. I’m like doing all the stuff. The real, you know, I’m doing all the stuff. And, uh, but what’s different this year from the last two years, there’s three things that are different. Uh, first, I’m also a part time [00:01:00] caregiver.

Marcus: So that’s kind of, you know, a different thing. Well,

Vic: in part time, caregiver is a lot of emotional energy.

Marcus: Yes, it absolutely is. And we’re actually in a good spell. I feel like I owe it to the listeners. Things with my dad are actually pretty good right now. So we’ve, you know, we couldn’t believe that he’s actually been home for a month now.

Marcus: Straight, which is amazing. Um, and he’s in good spirits and we’re figuring out a lot of stuff. I mean, we’re running, we’re running a lot

Vic: of decent team assembled around him now. Yeah.

Marcus: Yeah. I mean, we’re like running a healthcare company at this point, but, uh, but it’s, it’s going well. So anyway, I’m doing this, I’m doing that.

Marcus: Um, you know, we’ve got different motions going on at work, obviously this year, different from, from previous years. Um, and the other thing that’s different, Vic, is I’m a year older. Right. And, uh, your muscles are sore longer than, yeah, well, that’s my jump in the coal plunge. So I feel like I’m doing everything supplement wise and I got good sleep last night and I’m eating well, I’m drinking water right [00:02:00] now.

Marcus: Yeah. I’m doing all this stuff. Um, and I think at a certain point I will like, it’ll click in. It’s probably just the first week. So the first week is the hardest week, but I do think like, I just realized, man, this is Third year in a row, like prepping to go to worlds and you know, I’m, I’m older, it’s only going in one direction, you know, and so it’s weird.

Marcus: I have energy because you know, when you work out, you get energy and at the same time I have like this, just like overall tired. I, I can’t really explain it. It’s, it’s kind of weird.

Vic: Well, I, so I do, um, this hot yoga class on Saturdays. It’s the hardest class I do. When I’m out of it, I’m just completely fatigued.

Vic: Like, every muscle is just, like, spent. And it’s not that I’m tired. Like I haven’t slept very much, but I’m just like fried. My muscles have been used up and [00:03:00] I’ll recover in a couple of hours, but there’s a couple, there’s a couple of hours where like, I’m not, I’m no good anywhere. Yeah. You’re at the bottom of the recovery and that’s not jujitsu where people are hitting me, but

Marcus: it is yoga.

Marcus: And what’s the temperature in a hot yoga room?

Vic: Yeah, ours is probably in the 90s, 92, 93. It’s up

Marcus: there. That’s up there. And I’ve done high yoga.

Vic: They have like three or four humidifiers like crank it. That makes it really hard. Yeah, but it makes it good. I get a better stretch, I think, hot. So anyway, so I understand it.

Vic: And I think worlds are in three months or something. Worlds are in

Marcus: three months. Yeah, but you know what? Here’s the thing. I’m very, I, I am so fortunate that I live, um, a, a life, specifically a professional life that allows me to do that. You know, I have control of my schedule such that I can, that I can do that.

Marcus: And the other thing is, man, you pick your heart, you know, you pick your heart. I mean, um, It’s pretty clear to me genetically what I’m predisposed to, uh, which are quite frankly kind [00:04:00] of the things that, that kill everybody. ASCVD, right? I mean, it’s like circulatory system. Like, I have to maintain my circulatory system.

Marcus: I have to maintain muscle mass. And so you pick your heart, right? I mean, you could not do that stuff and then Yeah, it’ll catch up with you at some point, you know, plus you won’t have, you know, The energy I have right now, you know, from having worked out. So you pick your heart, man. You pick your heart.

Vic: Yeah, so I snuck away and went to Jazz Fest this weekend. And sort of a friend of a friend had a heart issue, like at the show. Man. Had to go to the ED in New Orleans, and he’s OK. But, um, yeah, there’s other hard aspects if you don’t work out and you don’t take care of yourself. So, yes, I think pick your heart is a good thing to think about.

Marcus: Yeah. So it’s that season and, uh, you know, everyone wish me luck. Uh, all right, uh, Vic, you’ve put together a great show. So let’s dig in. Uh,[00:05:00]

Marcus: starting with the economy. So jobs, man. Coming into election season, you know, if you’re the incumbent, you want to be able to say jobs are strong. You want to be able to say economic growth is strong. So we just had U. S. weekly jobs hit the, hit the highest jobless claims level since August of 2023. And this AP News article that the, you can get the link in the show notes, the, the headline is saying that even though we’ve got, this, you know, huge jobless claim level, the job market is still hot because there are all of these open job listings that are out there as well.

Marcus: So what are your thoughts on this? I

Vic: don’t think the headline is real. I mean, I understand why a reporter is trying to point to something that is positive, but Initial jobless claim. So you lose your job. You quit. Collect unemployment [00:06:00] that initial claim is what is what was higher than expected and the highest since August, but what’s called continuing claims?

Vic: Also are growing every week, every, every month. And so that, that says to me that people are not immediately like finding a new job and they’re only on unemployment for two weeks or a month. They’re, they’re continuing for several months and it’s growing. So the net people out of work is growing. And I, I think a lot of jobs are being posted.

Vic: I think, so the source for this, this assertion, the market is hot is there’s a lot of open jobs. On job boards, indeed, monster, whatever the job boards are, and that’s a fact, but I don’t know how many of those jobs are. Actually going to be filled in the next 30 days. I think a lot of people are, um, you know, they’re kind of maybe looking for [00:07:00] collecting resumes from competitors, or they’re trying to learn that maybe they’ll hire a salesperson if they bring a bunch of existing relationships, but they’re not just going to.

Vic: Hire anybody.

Marcus: Mm-Hmm. .

Vic: So I, I just don’t see the actual new hires coming through. Even though there’s a lot of job postings. It’s kind of easy and cheap and you get free information to post a job. Right. You don’t actually have to hire

Marcus: anyone. That’s right. That’s right. Yeah. So, so different fidelity on the data.

Marcus: Right. Like a jobless claim, you know, that’s coming from someone who is currently job listing. Yeah. Yeah. They, the job listing is not necessarily like a lock. That’s right. Yeah. Okay. That’s a, that’s a good point. That’s a good point. All right, moving on to the Wall Street Journal headline. The economic slowdown is finally here.

Marcus: Welcome it. Such a Wall Street Journal thing to say.

Vic: I mean, both of these headlines are BS headlines. I mean, I do not welcome the slowdown. I don’t think anyone should welcome the slowdown. I don’t really get that. I mean, I think what they mean is, The Fed will stop [00:08:00] raising and maybe cut, but who cares? I mean, that’s not, it might be true, but that’s not making people feel better about the economy.

Marcus: I mean, but there, there is some, well, let’s just talk about that for a quick second. There does seem to be a growing camp of people who are saying that we are moving towards a recession, and that is what is more likely than Inflation decreasing to 2 percent to be the thing that drives the Fed to cut rates.

Marcus: What are your thoughts on that?

Vic: Yeah, I mean the the the European Union I think is gonna cut rates for that reason for that reason maybe this month I think we might have a recession But I also think inflation is not coming down to the Fed target rate of two And so maybe the Fed will decide that propping up the economy is more important You But that’s going to then lead to higher inflation.[00:09:00]

Vic: I just don’t see how it is. I don’t think inflation is going to come down quickly enough.

Marcus: You know, when you, when you say recession, I know there’s a technical term for it. What is it? Two quarters in a row, two quarters of GDP decline. Yeah. So we’ve got one, we’ve got one, one. Yeah. We just had, we just had one.

Marcus: We just had one. So

Vic: if you look at, you know, the government spending, so GDP is made up of. A couple components, government spending, the consumer, business investment, it’s probably something else I’m forgetting, um, but the consumer is the biggest component by, by size. And the consumer has slowed. The consumer has slowed dramatically.

Vic: They have a picture of Starbucks, Starbucks mis earnings and was talking about how hard the consumer is. Yeah. Um, government spending has been really propping up the economy for the last year. [00:10:00] And. Some of that is, I think, really needed, like the chips, on shoring the chips, which is really a strategically valuable asset.

Vic: It will create, you know, some manufacturing jobs and, and some, you know, chip manufacturing jobs. It’s, it’s gonna be creating good, good jobs that I think Americans want. Um, but then there’s, there probably is some aspect of government spending that is, Is extra that the they’re sort of spending on things that we don’t need to be spending on So anyway, I lost the train of thought so a recession would be two quarters in a row of that, right?

Vic: And we could easily have two quarters in a row. Yeah,

Marcus: I mean, it seems like we’re trending in that direction.

Vic: Yeah, and so the fear is, um, like a stagnant economy with high inflation. That’s the fear that everyone has because we remember or we’ve heard stories about the 70s. I mean, you and I were young. But, um, but that seems like a decent probability.[00:11:00]

Marcus: Yeah, it does. It does seem like we’re shifting from this feeling of Goldilocks to stagflation and stagflation is kind of a sneaky one, right, because it doesn’t feel that bad. It’s not like a massive decline, but inflation stays sticky and the economy just kind of doesn’t go anywhere. And so you’re kind of stuck in the middle.

Marcus: And what are your tools, except for cutting rates, right, to sort of try to drive some consumer. Activity, like what else can you really do?

Vic: Well, I mean, uh, I think, I mean, there’s fiscal policy and monetary policy. So if Congress can get their act together, they could do things that would encourage new business investment.

Vic: No way that happens in the next 12 months. So, yeah. And so that takes away half of the tools in the tool bag and the Fed just monetary policy just doesn’t really have a good solution to stagflation. I don’t think it does. Their options are try to boost economic growth. [00:12:00] And that might help economic growth, but it would then lead to more inflation, or they can do nothing and then they’re going to have not much or negative growth, which is, I mean, they,

Marcus: yes, they could lower rates, they could do some QE, increase money supply and try to get the banks, you know, to do more lending.

Vic: Yeah, to try to prop up

Marcus: more activity, right? I mean, that’s and

Vic: we know what the effect is. Yeah, they get flows through financial assets Stock market.

Marcus: Yeah,

Vic: and then other markets venture crypto. It could be good for our core business But it would drive inflation it drives inflation Um, go, uh, go to the next one.

Vic: ’cause it was in this article, but I think we carved it out. Yeah. So, um, for people that are listening in that same article, the Wall Street Journal had, they had the, um, annual wage growth from the St. Louis Fed, and it’s a pretty depressing slide. I mean, wage growth has gone [00:13:00] down over time. Hold on. Go ahead.

Marcus: We, we, we have to start with the, the, the bounds here. So the bounds are 2022 to 2024. Yeah. So it’s not a long time range. That’s, and we all know 2022. Was, you know, that was the end of 2021, right? And 2021 was super exuberant and still kind of pandemic y back then, right? And it was hard to find people.

Marcus: Willing to work. People were quite quitting, you know, you couldn’t, you couldn’t get people to do anything. Stimulus checks were still flowing around at that point. So it was, so some of that is to, has to do with why the wage growth was year over year up in the, you know, five and a half to 5. 75 range.

Vic: Yeah.

Vic: So for people listening, In 2022 is where the chart starts, and it was 5. 75, then it bounced around 5. 2, 5. maybe 9. Yeah. And then as we get to 23, it comes down fairly dramatically to like four and a half percent growth. Yep. And what that [00:14:00] means is I think whatever, whatever salary or hourly rate you made last year, you’re making four and a half percent more this year.

Vic: Yeah. So that’s still. Significant. I, I always compare this to inflation rather than the cost of my grocery bill. Yeah. You have to, my, and my gas and my rent is going up basically by inflation. Yeah.

Marcus: Wage growth minus inflation is tells you how up you are, tells you how you’re doing. Yeah. Right. And so at 5% you’re doing pretty well.

Marcus: Yeah. Especially where inflation was then. Because inflation had not shot up that high back in 2022. Yeah, it was not, not, not in the beginning of 2022. It was, it was the middle

Vic: of, I think it went higher than this line during 22. I think it went up maybe to six,

Marcus: seven.

Vic: We should get

Marcus: in 23. You were probably way upside down, right?

Marcus: Cause it was, it was in the sixties.

Vic: Twenty three, you’re upside down because you’re growing at four percent. Your wage is going to four percent, but but inflation at some point Six.

Marcus: Yeah, right. Yeah, and now, you know, twenty four Wage growth has gone down [00:15:00] to sub four. So, you know, it’s it’s dancing around three point seven five now, right?

Marcus: Which is about where inflation is

Vic: Yeah. So you’re flat. So one way to judge the Fed’s, um, success or failure is they, they want to reduce inflation while not impacting wage growth that much. Right. And so they’ve brought inflation down, and it also has had the effect of bringing wages down. And so hopefully it’ll keep going right now.

Vic: Sort of inflation is something in the high threes and wage growth is equal to that. In the high three. Yeah.

Marcus: And I think there’s also a psychological aspect to this as well, because not everybody does that equation that we talked about. It takes, it takes the year over year wage growth and actually looks at inflation.

Marcus: Most people don’t even think about it. They just think, Hey, I’m making this much more. And then they go about their spending, you know? Yeah. But, you know, I know people who work salary jobs for corporations and [00:16:00] this chart very much reflects the conversations I’ve had with them talking about sort of, How their wages have grown year over year over the course of the last three, four years, you know, they, they were definitely getting much more handsome salary bumps three years ago than they’re getting right now.

Marcus: And so it, you know, it just psychologically doesn’t feel good. Right. And I think also it’s a signal from the company to them that, Hey, things are tight and, you know, we need you to like really deliver because everyone is kind of being observed. I think that’s the other psychological sort of message that people end up getting.

Marcus: And so, um, I think people are less. Sort of less anxious about, you know, thinking about moving and upgrading their position and more sort of just trying to hunker down and focus on keeping the job they currently have. And so that, to me, means less job openings because people aren’t shifting around, right?

Marcus: I don’t see as much shifting around happening out there in the market. [00:17:00]

Vic: Yeah, and we haven’t had really significant numbers of layoffs. We’ve had layoffs. Last year we had, we had a fair number. And we have another story this week, but, but they’re kind of, uh, strategic, tactical pieces. It’s not a whole company shutting down massive percentages.

Vic: Right. But I think that even that level of layoffs. Is like a warning shot and then you really can’t ask for as big a raise or the company is is able to say Listen, we only did a small layoff. We protect your job, but we can’t give you that five percent raise this year

Marcus: That’s that’s the narrative. Yeah, right.

Marcus: I mean you you basically they’re not happy. You have a job happy you have a job But yeah, yeah, they can’t actually say those words, but in so many words, yeah Hey, you made it right to the other side, right? All right. Keep this thing moving. All right. So we’re in the VC deals now. So Axios Pro exclusive SIFT Healthcare collects 20 million for medical billing tools.

Marcus: We’ve seen a lot of medical billing deals happening out there. And I think this is [00:18:00] this is next week’s show. We’re going to have Ambar Bhattacharya on from Maverick Capital talking about AI. And when we talk about areas where AI is starting to get real traction, one of them is in the back office around all things, billing, revenue cycle, et cetera, et cetera.

Marcus: So it does sort of make sense. We’re seeing more and more capital allocate into this area.

Vic: Yeah, we’ll talk to, but I think that, uh, this is an area that’s fairly easy to imagine AI really helping because most health systems and providers, they already rely on someone else to help them with billing. And now SIFT is gonna, is gonna do that in a much more effective, faster, cheaper, better way.

Vic: And so, I think, um, billing or, uh, like pre auth and, um, you know, questioning the billing are the two, two sides of that.

Marcus: Yeah, I’m, this is a space I’m, I’m pretty bullish on. Um, you know, this market is very fragmented. It’s as fragmented as [00:19:00] is the, the provider landscape, which is pretty damn fragmented. Um, you know, you’ve got all these different, uh, revenue cycle management, you know, outsourcing firms, rebadging firms, et cetera, et cetera.

Marcus: So, um, and then you kind of go down the stack. You can go into clinics, you know, you can go into ASCs. I think there’s a lot of opportunity in upgrading the whole CFO suite, quite frankly, everything in the CFO suite can really be upgraded with AI and lots of upside and we’re nowhere near fully saturated there.

Marcus: So, and

Vic: it’s a competitive landscape, right? Like the, the health systems and the providers. Are competing against the payers for who can run their, their process to bill or adjudicate claims. More effectively.

Marcus: Yep. No, no runaway winners though. So I think it’s a good space for VCS to be investing in. All right, rad AI clinches 50 million to scale generative AI tech for radiologists.

Marcus: So I mean another

Vic: another early adopter use case. Yeah, I’ve seen a lot of

Marcus: yep And and [00:20:00] no one seems to sort of have an issue with radiologists Leveraging AI. I mean, you know, the radiologist is doing image recognition. So the idea that AI can do that better. I think everyone just generally accepts that.

Vic: Yeah, I think that’s right.

Marcus: Let’s see who’s participating in this round. Uh, Coastal Ventures led the round. So that’s, that’s strong. That’s right. Series B 50 million from coastal ventures. That’s really strong. All right. Uh, next deal in house health nabs 4 million to build out AI enabled scheduling platform for nursing teams.

Marcus: That’s a seed round. Yeah. Um, who, who backed this one? I want, I want to,

Vic: Oh, really? Okay. So, and that, that’s why. I normally wouldn’t have brought up an early round, but I, NEA, no, no,

Marcus: no, for sure, for sure. And they, they, I mean, they do see deals, they’re kind of a full stack investor, but if they do a C deal, you know, they can carry that thing all the way through to series C if they want to.

Marcus: So, yeah, so I

Vic: know this space pretty well. We, uh, In Jumpstart Foundry, we had a company doing [00:21:00] pretty similar, using AI to help with scheduling. Scheduling for nurse staffing and all of the, um, not doctor, lower licensure of the doctor staffing is typically done on Excel today. And it’s very complicated with, uh, We need different certifications so you have enough coverage always on the floor.

Vic: Then you have union rules based on state. There’s a lot of complexity to it. It’s a great place for AI. We had an asset doing that, that we sold about six months ago. And so, I’m happy for NEA to come in, but it’s a good space.

Marcus: Yep. All right. So, moving on to policy. Medicare Hospital Trust Fund to stay solvent until 2036, trustees report says.

Marcus: So, this projection is five years longer than last year’s projection.

Vic: Yeah. So, every year, I think, um, the Medicare Trust Management Group does analysis how much, I mean, it’s kind of a made up thing. I don’t know that there’s a pot of money [00:22:00] sitting somewhere That is not touched except for CMS. Right. But, but we do account for it that way.

Vic: And so it was gonna run outta money in 2031 and it’s made significant progress. So they said, added five years over the last little while. That’s pretty good. So, which is great. So do you know why, I don’t know why they, they do it with, um, all of the projections of. What, what it costs to, to take care of the seniors, when they’re going to die, all the different aspects of it.

Vic: And I think it is, I think there were a lot of people that died, unfortunately, earlier than expected in the COVID and year after COVID. And I think that then had an effect on the trust fund in a way that is positive. It’s, it’s not positive for, The people that died, but it’s positive in general.

Marcus: Nothing, we should talk to Emily about this.

Vic: I asked Emily, we should ask [00:23:00] Emily about this in detail. I called her to ask if she saw anything from the GLP 1s or weight loss. I was wondering about the

Marcus: rules and just like rates. Just, just like, you know, being more conservative on rate hikes year over year, because, you know, that’s, that’s kind of the same issue that we have with the, with the wage growth, right?

Marcus: Yeah, right. So I was just wondering whether or not the choice to do that extended the life of, you know, I kind of think about it like cutting, cutting burn for a startup, right? You know, did you give yourself more runway by just cutting your, your projected operating expenses for the future?

Vic: Yeah, we can ask her.

Vic: I think it is a demographic, um, effect. Okay. All right. Let’s, let’s, we’ll come back to that. Yeah, stick a pin in this. But it’s a, it’s a positive thing.

Marcus: Yeah, well, it’s, well, it’s, it’s positive. As long as we have a full understanding of like what that actually means, that means a decline in services that can be expected or, you know, some other, or this is going to cost more out of [00:24:00] pocket for, you know, the senior citizens and their families, then I don’t want to say that’s a bad thing, but it’s just, we just need to sort of understand all the implications of that.

Marcus: So we’ll stick a pin in that and come back to this. Okay. So this is. I’m glad we’re, we’re, we’re going to do three stories back to back because this is

Vic: all, it’s, it’s a trend.

Marcus: Well, it’s a trend and it’s like, to me, this is a big deal trend, a big deal trend. So we’re going to talk about three of the sort of emerging payers from the last 10 years that, that came up that really during the pandemic look like they were out.

Marcus: Yeah, and I think the only one that I think we feel had a good shot was oscar Um oscar seemed to be like holding their own but but clover Um bright health now renamed new health and oscar all were kind of on the ropes I think oscar probably doing the best out of the all

Vic: were like venture backed high flying went public [00:25:00] or did a did a respect or dis back and very um Exciting and then they all ran into trouble as they as they got some scale and I agree.

Vic: I thought they were gonna go to business. Oscar was the least likely to go to business. And then this quarter, all three turned turned. And so I have a couple ideas about it. We need to find a guest who really knows this space. Um, to see what, what changed, but, but they all seem to be turning the corner.

Marcus: Yeah. So in the case of Clover, they raised their full year adjusted EBITDA guidance, um, announced a share repurchase program of up to 20 million. That’s a, that’s a big deal. Yeah. That’s a really big deal. It means they have cash cash, right? Yeah. And they’re also like adjusted their EBITDA to the positive.

Marcus: Yeah. Their medical cost ratio, MLR. Yeah. Improved to 77. 9%. Now I don’t 77. 9 percent would not be considered great, but if it’s improving, then that’s great. Right. If [00:26:00] it’s improving, it needs to be what an 85 percent range. Yeah. Yeah. So if it’s, if it’s improving, then that’s, that’s great. And their company net loss was 23.

Marcus: 2 million compared to nearly 80 million in the first quarter of 2023. That’s a huge swing in 12 months time. Huge swing. So what are your thoughts here? Uh, you know, because this is a medicare advantage, you know company. Yeah Yeah.

Vic: So I mean, the, the, um, the hyped up vision for all three of these companies was we’re going to bring technology tools, partner with providers, bring better service to members and better care overall, which will be good for seniors.

Vic: It’ll be good for riders and we’ll make money because it’s a, it’s a capitated rate. They never really delivered on that, uh, at scale. And, you know, they’re [00:27:00] talking about step change improvements to their cost structure. Okay. And I, my takeaway was we need to look into it more. Because they, they are tech forward, all three are tech forward sort of companies.

Vic: Yep. But I don’t really know. So they’re talking about Clover Assistant, which is their tech platform.

Marcus: Yeah, which, which got a, I mean, you know, there was a lot of scrutiny around Clover Assistant. Um, there was a lot of feedback. But look, you know, when people, when people are sort of dogging a piece of software, as long as they can kind of stay around, you know, over the course of two years, a lot of progress can be made.

Marcus: Yeah. Right?

Vic: Yeah, they, I mean, they can learn from interactions and, and, you know, Yeah,

Marcus: and also AI has made tremendous progress over the last two years. So if they’ve been able to incorporate AI, you know, in some really meaningful ways that could, yeah, that could be proven to be very beneficial for their business.

Marcus: So anyway, Clover, um, had, uh, that’s a ridiculous quarter. If you consider, you know, [00:28:00] reducing your, your, your loss from, you know, 80 million to 20 million, that’s. That’s fantastic. Um, new health, 242 million in revenue turns a small adjusted EBITDA profit. Now adjusted EBITDA is a kind of a weird number. Uh, but still, I mean, it seems like the rebrand of bright health was for good reason, because it looks like probably under a different leadership with a different cost structure and probably a different strategy.

Marcus: Um, yeah, they’re turning it around.

Vic: Yeah. And they had positive net income. And so adjusted EBITDA is always. Challenging to unpack, but, but, you know, again, they have a long way to go maybe, but it seems like these all three have like turned a corner and they now have much more opportunity.

Marcus: Yeah, I mean, they’re, they’re slowing the bleeding.

Marcus: Right. And, and I think there is a lot to be said for what happens in a world [00:29:00] where they survive, right? Where they survive and, and they are added to the payer landscape. Yeah. Um, I mean, it’s positive for everyone, I think, I

Vic: mean, maybe not for United and Humana, but, but in general for, for the healthcare system, having more payers competing in Medicare Advantage is good for

Marcus: sure.

Marcus: And, and as we’ve said a lot of times, it changes the landscape for innovators. Um, because your, your surface area of partners grows, expands, right? Um, so this, that’s why I think this is a big deal. It’s a huge

Vic: thing for startups and innovators. Exactly. If you have some new way to help a particular niche disease state, Um, if these three go away, you have a very limited set of maybe eight payers.

Vic: That’s right. And so, This is, it’s great. That’s exactly right.

Marcus: And then Oscar Health records first quarterly net profit exceeds EPS expectation. So Oscar, like I said, yes, they were

Vic: the strongest coming into this quarter. Yes. And

Marcus: they’re, and, and, and Oscar’s [00:30:00] is, uh, mostly focused on the commercial market and employers, right?

Marcus: I think they have a Medicare piece too, but they have both. Okay. All right. Uh, well, yeah, I think they were definitely performing better than the other two. And so it looks like they’re, they’re just continuing to, to improve. Along with the cohort, but probably out in front right now. Yeah.

Vic: Yeah. So I’m gonna try to think about who can we bring in?

Vic: Who’s really an expert in this innovative payer space? Yeah, that is not conflicted and already working at somewhere else that they can actually speak.

Marcus: Yeah. And try to like get down to the bottom of what’s going on there. I mean, I, I, I, I remember looking at some of the, um, Medicare advantage and I think maybe even direct contracting stats across a segment of payers.

Marcus: And this was public information. And I just remember like Clover kind of got smoked, you know, compared to like what United was able to pull off in terms of like the MLR and like the, you know, the returns and. The spread, it was just like, they just [00:31:00] got smoked.

Vic: Yeah, I mean, at some level, buying power is really, buying power matters a lot.

Vic: Well,

Marcus: buying power and data and, you know, the fact that United has Optum and they can really, really dial in these things. I think also, I remember, The panel sizes, you know, I think United had a much more sort of manageable sample size that they were sort of working on. They probably recognize, Hey, this is not the easiest thing in the world to do.

Marcus: So let’s, let’s start with a smaller group. I think that was one of the big things I remember was like Clover’s numbers were so much bigger than everyone else. So per doc per doc. Yeah. Yeah. So it’s just much harder to sort of manage. And they were, I think what they were trying to say was Clover assistant, their tech was going to enable that scale.

Marcus: Um, but that’s a, that’s a big bet. It’s a big bet that like a piece of software is going to drive value based care alone.

Vic: Yeah, I mean, I, I think buying power and negotiating power is the main thing that leads to payors having success or not. They came out thinking that [00:32:00] or announcing they’re going to use technology and like be leaner, smarter, more nimble, and it’d be great if they can figure that out.

Marcus: Alright, the saga of Steward Health continues with a bankruptcy filing this week, um, that now puts patients, communities on notice that they may be without care in the very, very near future.

Vic: It’s a sad story. We’ve been covering this story since Almost a year ago since I looked it up last August. We started talking about it.

Vic: Really? Wow. Um, it’s just a sad story. And unfortunately, it’s a it’s legal. So people are upset at the the big private equity hedge fund Cerberus who, um, originally bought this from the Catholic church, I think. Um, and they, they had a marginally successful investment and now they’ve left a, a lot of trouble with between the REIT and the operating business.

Vic: Um, [00:33:00] there’s troubles all over the place. No one has enough money. I think the REIT is also going to go under. Is that MPT? That’s MPT. Yeah. Yeah. So, but unfortunately the patients and the physicians. Are just like going about their day, they’re gonna be dramatically affected. I don’t know who is gonna pick this, pick this set of assets up.

Vic: I, I, so, I don’t know, it’s sad. I think it’s sad more than anything else.

Marcus: Yeah, and if this goes all the way through, um, this to me feels like the highest profile. Look, it’s not the only hospital failure that’s happened in America over the last five years. Journalists have done a good job of covering this one.

Marcus: Yeah. Um, and so this one will have political blowback. Uh, this one will drive more scrutiny on private equity. It will, will come. A talking point in putting more of a spotlight on private equity. It’s just, you know, that’s what’s going to happen. We

Vic: have friends that are private equity. There’s a lot of really good private equity health care [00:34:00] partners.

Vic: Cerberus is going to be a really Uh, tempting, um, attack piece. I mean, like, they, I mean, they’re named after the, the hound that guards hell. I mean, like, they’re not trying to be friendly. And, um, they, I think it’s going to be a really difficult thing for the private equity, healthcare private equity market to, uh, To navigate, they’re going to get called into Congress, all that stuff.

Vic: Yes.

Marcus: Specifically the ones that focus on roll ups. Yes. Right. Specifically those. I think you’re going to see a lot of problems with those. And, and, and specifically on hospitals. I mean, you know, physician groups, I think are going to be a little less under the radar. Um, but man, hospitals are, are probably really going to be scrutinized those deals.

Marcus: And look, that’s, that’s not great for the financing world, but it’s also not great for the hospitals because, you know, although this was a. Poorly executed deal. I think we have to look at the outcome and say that’s that’s the that’s what we’re dealing with [00:35:00] here a poorly executed deal There are many hospitals that need these deals to continue operating, right?

Marcus: They the operating model does not work anymore And they’re gonna need recaps and they’re gonna need mergers and they’re gonna need to consolidate back offices and all those kinds of things and having political headwinds against that, AGs, the FTC, et cetera, you know, stopping that and just pointing to Stewart and saying, see, see what happened, um, is not going to help that matter.

Vic: Yeah. The, the, the challenge, the reason it’s sad is I think that it seems like everything that was done was legal, right? So it’s not like someone did something that is not legal in the United States. Yeah. I get your point there. And unfortunately, Maybe Congress or others change the laws, which would then limit degrees of optionality for management teams and health systems that they actually are better off having the option of a sale leaseback of a, of a [00:36:00] building asset.

Vic: So I don’t know. I don’t see a good end to this, but it’s going to take a while.

Marcus: Well, we wish everybody in those communities the best. I know it’s a, it’s got to be tremendously stressful. It’s got to be tremendously stressful to think about what you’re going to do when your hospital goes under. Um, you know, it’s just, it’s just really sad.

Marcus: All right. Wall Street Journal, the part. So this is just, I’ll

Vic: put it in the, in the show notes. I mean, This is a detailed story by the journal of how service capital management navigated this, making money for their investors, you know, the music stopped and they left the scene that was in 2000 and now four years later, it’s.

Vic: I’ll come home to roost. Yeah. I think we’ve already talked about it. Yeah. We don’t need to dig into it anymore.

Marcus: But the headline for the Wall Street Journal story is the private equity deal that flattened the hospital chain and its landlord. So you can already tell where this is going. And that’s the Wall Street Journal.

Marcus: So that’s not a very friendly headline. [00:37:00] Not a friendly headline. All right. Ascension reports systems, clinical operations disrupted an apparent cybersecurity event. Oh boy. Yeah. This happened yesterday. I did not know

Vic: this happened. Yeah. Yeah. Yeah. Yeah, so they have shut down some operations. They’ve moved some services.

Vic: They probably rightly haven’t told us or, you know, the press all the details because they’re still trying to figure out what has been jeopardized and what is safe. But it’s, it’s, you know, it’s the same really bad story

Marcus: again, man. Um, so just want to read a couple of the quotes here that Ascension wrote in their release out of an abundance of caution.

Marcus: We are recommending that business partners temporarily suspend the connection to the Ascension environment. We will inform partners when it is appropriate to reconnect into our environment. Wow. Ascension. Runs 139 hospitals, 40 senior living facilities across the [00:38:00] country, employs 132, 000 people, reported 28 billion in revenue.

Marcus: I think the thing that is most startling to me about this is that, you know, Ascension is in a lot of different markets. And this reads like a whole health system level event. Um, now it is very early and they’re probably just holding off on communicating until they’ve done their audit and their diligence.

Marcus: So we, we, we ought to give them the time to do that. But gosh, if, if, uh, if a cybersecurity event happened at a broad network level, this, this, this is always my, the thing that scares me most about centralization, right? The centralization of networks is. We’re talking about 139 hospitals across the country, right?

Marcus: Yeah. And so, And we

Vic: know, I mean, in the article, they, [00:39:00] they disclosed that they discovered the issue in St. Louis. Okay. And they have shut down all ambulance, like, transport. To the Detroit area facilities because they are not willing to accept patients anymore. So we, we know it is at least in St. Louis metro area in Detroit.

Vic: Wow. And then we don’t know how, how many other areas it’s in, but it’s in at least two.

Marcus: And in Detroit, they just did that deal with Henry Ford.

Vic: Yeah.

Marcus: Um, so that’s probably affecting Henry Ford as well. Uh, I mean, Henry Ford has a lot of systems that are connected to

Vic: a section that they need to turn off now.

Marcus: Right, yeah, because I mean, that’s a JV, so I’m sure that there’s, there’s some, some integrations that have to be done. Yeah,

Vic: I mean, you, you know better than I do, the, the systems are integrated. At thousands of points. It’s not easy to just turn that off and keep doing

Marcus: the work. Well, I think that’s the, that’s the part we’re going, we’re going to learn in the coming weeks, but it’s the thing that I [00:40:00] think is so scary.

Marcus: I don’t know anything about the architecture of Ascension’s infrastructure, you know, um, cybersecurity. You know, set up right. How their network is set up, how their EMR is set up. I don’t know how centralized it is. I, I don’t know. Yeah. So that,

Vic: that that’s, but, but is it true that most hospitals have multiple third party systems that plug in?

Vic: For sure. ’cause they have to interact with,

Marcus: oops, of course, of course. But you also have a lot of health systems that through acquisition. Have many, many different instances of E. M. R. S. And are effectively not really centralized, right? They’re decentralized through lack of organization. It comes from M. N.

Marcus: A. Activity, right? So So a lot of, you know, and people complain about that, but

Vic: it actually creates it, uh, you end up having like firewalls, almost like, you know, like barriers because you’re not so integrated together.

Marcus: Exactly. You’re less fragile when, when someone tries to knock on your door and like hack your entire system.

Marcus: Right. So I think that’s the thing we’re going to [00:41:00] learn here over the coming weeks. And man, this just sucks. Oh, Man, I’m so sorry to all the people that said it. We know, we know great people at Ascension, um, and I feel like I, as soon as this show is done, I gotta make some calls and just kind of check on people, because I know this is, it’s a, it’s, it’s bad.

Marcus: It’s terrible. I mean, I don’t know how

Vic: bad it is, but it’s To announce this to the public and start sending patients to other systems in Detroit. That’s that’s not good, dude Let me

Marcus: An ascension system was critical in my family’s life. Yeah over the last 120 days So this this kind of hits home a little bit man, you know Just to even think that that they wouldn’t have been able to do their work

Vic: Yeah, like there are ascension facilities in detroit. It’s in the article. They’re sending the Ambulances Elsewhere, they can’t, they can’t [00:42:00] accept it.

Vic: It’s

Marcus: terrifying. It’s just scary. These last two stories are so scary. Yeah, yeah, yeah. That’s, that’s really scary. Alright.

Vic: So we can turn positive. Yeah. We have some positive stories. So, there’s maybe five, there’s several stories around cell and gene therapy. And just this week is a bunch of really, really exciting stuff and one really bad story.

Vic: So it’s not all good, but we should talk through it. So, um, this 12 year old boy in DC got approved for sickle cell gene therapy. I don’t think he’s gotten the treatment yet, or he’s going to. about to, but it’s great. I mean, it’s very hopeful.

Marcus: Yeah. I mean, this is, this is just such a massive deal and it feels like we are knocking on the door of an entire new era, entire new era of therapeutics.

Marcus: Um, you know, the, the intersection of, you know, gene and [00:43:00] cell therapy and AI. It’s just like, I mean, these, these technologies are just going to blow our minds with the things that they’re able to do, you know, just flat out cure stuff. So like, at the genetic level,

Vic: this, this 12 year old boy is going to get, I think it’s one treatment.

Vic: And if it goes well, he won’t have sickle cell anemia. Yeah. Well, I mean, for people who don’t understand, like sickle cell, it’s a genetic disorder. And it’s very. Difficult to live with like you don’t have the same you can energy level you can die

Marcus: from it Yeah, like we need to be clear like, you know, it’s very difficult to live with Um, there’s all sorts of terrible, painful symptoms that come with it.

Marcus: There’s um, energy level issues that come from it. And because it’s genetic, it

Vic: affects black people primarily. Only, maybe it’s like 100%, most of them. Yeah, it’s a,

Marcus: it’s a black

Vic: person’s disease because

Marcus: it came from a, you know, a genetic modification. Right, that [00:44:00] was

Vic: useful in Africa that we

Marcus: don’t need here.

Marcus: Correct, yeah. So, so anyway, um, The idea that this can just be cleared through a gene therapy and no longer all of the myriad of things that people were trying to do to manage it, you know, like all of that just can go away and we just go down to the root

Vic: cause in your genes,

Marcus: cure, done, live a wonderful life and all of that work and energy and economic activity around trying to manage it.

Marcus: In a very, you know, suboptimal way, like actually wasn’t doing much for people just goes away, right? So there’s so much here, right? There’s the there’s a revitalization of people’s lives. There’s massive economic shifts. Yeah, that that that can come around as well. And certainly, you know, we’re not going to see mainstream adoption of of gene therapies because they’re going to be really expensive in the beginning, right?

Marcus: Yeah, [00:45:00] well, we

Vic: need to. Figure out a new reimbursement model for sure or cures like this, like

Marcus: cure is full on cure

Vic: cure. Like you have sickle cell over your life. I don’t know what the number is. We’re going to spend millions of dollars caring for you and you won’t have a good, a good quality of life. Yeah.

Vic: And then we can spend a one time expense and you’re cured. Our reimbursement system with our payers and providers negotiating with each other does not support that kind of cure. And that’s just because we didn’t have. We didn’t have those. We didn’t have cures before. Yeah. But it, it can be modified, but we need to figure out a new way to do it.

Vic: Yeah. So it’s going to be slow until we get that

Marcus: really, really exciting and exciting, excited for this 12 year old boy, you know, good luck, young man. Um, all right. So open CRISPR, um, first of all, can I just say, I’m proud of you for digging up a story from GitHub.

Vic: Yeah, I mean, go man. Way to go, dude. I’m trying [00:46:00] to, trying to, uh, Learn about GitHub.

Vic: So, uh, for those of you who are health system people and not engineers like me, GitHub is a, is an open source community where developers share open source code and help each other. Is that close? We talked about it last week. We talked about it last week. Yeah. Because of the, yeah. Anyway, so, um, CRISPR is a technology that is adopted from nature.

Vic: Like we found it. I don’t think we, invented it as a human. Yeah. And we have sort of co opted it. We have co opted it from bacteria and viruses use this technology. And then we found it. And then the Cas9 piece, the way I think about it is CRISPR like is the, is the genetic apparatus that can go into a DNA molecule and look for a particular set of DNA.

Vic: And then the Cas9 is the [00:47:00] thing it’s looking for. I think the early commercialization efforts were not able to own CRISPR. But they could own the cast nine flag or tag maybe. And so, um, these guys used AI, uh, or a group of people used AI. Over the last couple of months to find every, um, similar tag like Cas9 that could exist in, in the universe.

Vic: And they have posted it for free on Github. And it is, it’s literally to empower the entire world to use gene editing technology for, uh, Any purposes that would be useful to mankind because they’re frustrated that they don’t think someone should own this IP, which is wonderful, and maybe people will be frustrated if they’re trying to invent something in cast 10 [00:48:00] or some new thing, but, but I think it’s going to really accelerate innovation, which I think it’s great.

Marcus: So we, we got, we got to just talk for a second about what, what you just said. Right. Okay. Because there, there’s, there’s two things here that you just said. So the first is everything around CRISPR and, you know, CAS nine and the fact that we can do gene editing. Yeah. And that’s, that’s what, that’s what doing sickle, sickle, sickle cell cell.

Marcus: Yeah. That’s what, that’s the basis of the sickle cell technology. Right. So that’s, that’s amazing. What’s really amazing here is that someone got around intellectual property rights by leveraging ai. To just do the work to get to the same outcome. So it’s, you’re not reverse engineering. You’re literally starting from the same point of like, here’s my objective.

Marcus: Right. And you can’t actually have intellectual property around an objective. You can have it around a method. Yeah. You can have around particular [00:49:00] method and you can say, you can’t steal my method, but you can’t have it around. Like, here’s what I’m trying to do. What I’m trying to solve. You can’t close out a domain of like solving a particular problem.

Marcus: That’s not, that’s not part of like intellectual property protection,

Vic: but the, the The marker that CRISPR is looking for, I think you can protect, almost like a copyright, or it’s like the, uh, this combination of A, C, G, and there’s a hundred of them. We are protecting that. That’s what Cas9 is, I think. We could have an expert on this, too.

Vic: We need a lot more guests. Let’s

Marcus: get an expert on this, because what I think happened here is these people used AI. I think about this like AlphaGo. Yeah, we have them next. Oh, really? Yeah. Okay. Well, let me just say how I see this. I think about this like AlphaGo, which is, over the course of, I think, centuries, humans built a canon of how to play the [00:50:00] game Go.

Marcus: And it was documented and people watched the games, and So I’m thinking about AlphaFold. Oh, yeah. Okay. Yeah. Yeah. So over, over centuries, you know, this can’t just like chess, right? You know, document the different moves, different strategies, blah, blah, blah.

Vic: I want to start this way and that’ll lead me to another strategy or exactly.

Vic: Yeah.

Marcus: And what AlphaGo did was it just played itself like a million times and it created net new knowledge and net new knowledge that we couldn’t recognize. So it was based on the same. You know, pieces. It was based on the game of Go, right, which is the same rules. Same thing here. Yeah, it’s based on CRISPR and RNA, like, you can’t, you can’t, you know, copyright the actual genome itself, like and how it’s structured.

Marcus: It’s a, it’s a biological fact, right? You can’t just claim ownership to that. So what they’re doing is they’re starting at the beginning, just like AlphaGo started at the beginning. Here are the rules of Go. Yeah. Now play yourself, right? And at the [00:51:00] end, AlphaGo Created new strategies that we as humans had never seen we must took we mistook those for Bad strategy right

Vic: until till they beat till the AI beat until the

Marcus: AI beat us and then we realized it had created A new approach.

Marcus: And I think the reason why this is such a big deal is because it changes the paradigm of intellectual property, right? Because in the past, you would never think, okay, I’m going to put in all the work and effort to start from zero. The same place. This other person started, you’d always try to say, okay, can I hire an employee?

Marcus: Can I, like, how, how can I get access to some parts of this thing? So I don’t have to pay a direct license.

Vic: Yeah. AI. Yeah. Like compact. Took the IBM PC in like 85. Right. Documented everything it did. [00:52:00] Then they took that document and gave it to new people. That’s reverse engineering. That’s reverse engineering.

Vic: And then build this back. And we haven’t, those people are clean. They don’t know anything what IBM did. Although they’re building the same thing. They’re building the same thing, yes. That’s, That’s the old way.

Marcus: AI is just going to like, say, yeah, yeah, here’s your source material. Here’s what are

Vic: your constraints and

Marcus: benefits go.

Marcus: And then like, you just throw it up on GitHub and you make it open source. That. Real implications for artificial, for, for intellectual property, man,

Vic: real implications. I think in two ways, one, the amount of effort and energy in labs today, just researching, like walking around in the dark, trying to find something is now They have given you the road map.

Vic: That’s right. Here are many thousand things you can use. Go play with that. [00:53:00] But then interestingly, you can’t, it’s open sourced. You can’t monetize that. You have to monetize it in delivering something to the world. That’s

Marcus: right. That’s right. Yes, you can make money sharing

Vic: sickle cell, but you have to do it in the services and in delivering it to that 12 year old boy.

Vic: Well, so, so here’s, what’s really great about

Marcus: that. It is much more. Uh, aligned with proof of work, then sort of where capitalism has evolved to, which is I hoard an asset and I, and I just make money forever sitting on top of this asset and regulating it. Yeah, I charge

Vic: you a tax to use this thing.

Marcus: Right.

Marcus: Whereas this is more like, here’s a tool. It’s a tool. You can’t make any money off of the tool as a tool, but you can use the tool to create profit. Value in the world and that value in the world you can be compensated for the value you actually create in the world, right? Yeah, that’s that’s a better economy.

Vic: It’s a better economy [00:54:00] and also it encourages ongoing improvements I mean, I start treating sickle cell, but if someone else can do it better, faster, safer, cheaper with a different set of resources, they will. And then, so we’ll get iterative kind of improvements on this core, which so I think it’s going to be great.

Marcus: So this is another guest idea. Um, Aaron, our producer, like you got to help us like keep track of all this stuff. Uh, Aaron. We have to get an, uh, open source AI person on the show, someone who like really knows open source AI because I just think I, I finally got why open source AI is so important because that’s like the last frontier of this, um, is, is a full stack.

Marcus: There’s nothing in here that you can sort of say, uh, Is beholden by any corporation with any intellectual property rights. And man, that just opens up so [00:55:00] much that opens up a lot. I just think about how court systems are never going to be able to litigate this at the throughput that it’s going to.

Marcus: Deliver they’re never gonna like it’s gonna take forever. It’s gonna take forever to try to like pull down all of these different things

Vic: It’s not gonna. How are you gonna do it? You can’t you can’t do it. It’s gonna overwhelm the courts with with open source It’s always available. So go to the alpha fold thing.

Vic: So alpha fold 3 came out today. I think is there yesterday Previously, they showed how all the proteins that exist in the world are folded, and now they’ve added other larger molecules and small molecules. So, they’ve added, like, things around it. So, you have DNA, RNA, protein, and then they added something called ligands.

Vic: Uh, so you can see the, the entire sort of, uh, [00:56:00] composite of how things fit together and how the, uh, biological systems like, interact together. So how does a cat, how does an enzyme work? Mm hmm. Mm hmm. Um, and again, they released it open source to the world today. So you can, you can see how it all works. And there’s so much opportunity for researching this and finding new drugs, new interventions.

Vic: It’s, it’s, it’s, it’s almost like hard for me to comprehend how much it is.

Marcus: Yeah, we live in amazing times right now. Um, all right, sad story. Uh, and this is, this has been happening forever. So, you know, we, we don’t want to overplay sort of the responsibility. But if we talk about the great

Vic: things around cell and gene therapy, I think we need to talk about the difficult things too.

Vic: Yeah.

Marcus: So, so a young child died, uh, in a trial for [00:57:00] Pfizer’s Duchenne, uh, gene therapy. Yeah. Yeah. So

Vic: he was a patient who had this rare type of muscular dystrophy. So he volunteered or his parents volunteered him. Yeah. Um, he was only two or three. Um, I don’t really know the disease. I imagine it is not a great prognosis or the parents wouldn’t have put him into this experimental trial.

Vic: Yeah. But it was not successful. And he died of cardiac arrest. Yes.

Marcus: Yeah. So that’s, uh, you know, that’s, that’s part of progress. The, the. Yeah.

Vic: Right. So, I mean, the, uh, gene therapy, man, it, it, it changes the genes in your entire body, right? And we don’t really understand. We don’t understand how everything works.

Vic: And so there’s something that the researchers didn’t understand that caused.

Marcus: And look, this will continue to happen. Yeah. This will continue to happen. I think, I think it’s going to be important for us to, uh, [00:58:00] as society, you know, as we’re moving into this new phase of technologies, um, gene, you know, cell and gene therapy, self driving cars, right?

Marcus: There’s all these things, you know, robots. Yeah. There’s going to be casualties.

Vic: Yeah.

Marcus: That’s, you know, the progress that we’re, we’re moving into is going to come with, um, With loss of life, and that is, you know, you don’t want to be unempathetic cold or any of that kind of thing. Um, you just have to acknowledge that that is part of the part of the process of progress.

Marcus: And it’s, um, yeah, I

Vic: think about it like the New York subway. They’re like a lot of people died in the making of the subway making the subway. Yeah. I used it today, and millions of people, maybe billions of people have used the subway, and I think they tried to be as safe as they could, but it was a long time ago, and that’s sort of where we are with gene and [00:59:00] cell therapy now too, like, this young boy died, hopefully his parents went into the decision, you know, with the full information, this is, but, but I think if we’re going to report positive, exciting things, I think we also have to talk about it.

Vic: Difficult aspects of this. Yeah.

Marcus: It’s I mean, loss, loss of a child is just a terribly sad thing. So our thoughts and prayers with the parents ending on a good note, uh, a deaf toddler hears for the first time after a pioneering gene therapy. So gosh, can you imagine being, being the mother of this child and seeing the child, like hear your voice for the first time, it’s just, you know, look, I just, I just think like we’re, we’re, we’re in an amazing time.

Marcus: Yeah, we’re in an amazing time, you know, we’re getting down to the code level of ourselves. We’re realizing we are code to, you know,

Vic: and we can modify the code and we can modify the so if there’s a bug or a problem that’s. [01:00:00] I think it’s a young girl. This, this child can’t hear, uh, they, they fixed it so she can now.

Marcus: Amazing. Okay. We’re gonna close that out. Uh, moving on to Ozempic. So the quest for treatments to keep weight off after Ozempic, because as we all know, you know, it only works as long as you keep using it,

Vic: right? Yeah. So there’s two stories. Uh, there’s this one. In the journal talking about the, the search for treatments that can help maintain a weight, you know, so you lose 50, 60, 70 pounds, how do you then maintain that new weight?

Vic: And this story is talking about the need, the need for new interventions or new help for patients. Um, and then go to, go to the next one because it’s more impactful. This, uh, procedure, which is called gastric muscular ablation, it is a treatment that takes about an hour. It’s an outpatient treatment, and it’s very, [01:01:00] you know, it’s not very invasive, different than bariatric surgery or the sleeve or something.

Vic: This is, they modify, uh, the inside of your stomach through the, uh, they do something to the, the mucous membrane, uh, and it’s like a, it’s an ablation like they’ll do with cardiac ablation. Yeah,

Marcus: yeah.

Vic: Um, but it’s, and it’s early, but it’s had good results. with very, very little risk, right? It takes an hour, it’s not expensive, and they’ve had really good results.

Marcus: Yeah, they’re saying here in the trial that patients are losing 50 to 60 percent of their excessive body weight within the first six months. So that’s pretty impressive.

Vic: Yeah, yeah. So there’s just a lot of attention now. Both these stories, I think, are, We are realizing, we’ve always kind of known it, but we’re realizing if we can help people lose weight, and whether that’s a GLP 1, or this surgery, or [01:02:00] any way we can get them to lose weight, it has really incredible downstream health effects across almost all the chronic diseases.

Marcus: Yeah, I, I, and, and I think like, I think we’re finally getting to the place where, We’re saying people are sovereign over their own bodies. People have different body types, you know, and like, literally like, like we, we now can prove genetically, like we, people have different body types there, you know, they’re going to respond to food differently.

Marcus: They’re going to store that differently, totally gut biome. And we’re still learning about the gut biome. We still don’t know that much about it. Right. So we’ve learned all this stuff. And so, you know, we kind of understand, Hey, listen, different people, It’s not willpower.

Vic: It’s not just like, someone is lazy.

Vic: That’s not real. That’s right. And it’s insulting and actually damaging to that person’s ability to get better. That’s right.

Marcus: And at the same time, and at the same time, the accumulation of excess visceral fat is [01:03:00] Completely connected to all cause my all cause mortality like, yes, like both of those things.

Marcus: No question. Both of those things are true. And so the more options we have for people across the spectrum, right? Based on who they are and where they are in life and like what they need in order to be healthy, right? The more options we have, the better.

Vic: Yes,

Marcus: that’s kind of it.

Vic: Yes. And it’s also, I think, important to I think the medical establishment is coming around to, I’m already there, it’s not the patient’s fault.

Vic: Oh yeah, people have gotten there now. And so, that’s an important thing. Like, the fact that they have excess visceral fat is not due to they are not trying to get better. And we are coming up with lots of different ways. The GLP 1 attacks a certain pathway. This is a different thing. Um, and it’s, there’s lots of ways to impact it and we need lots of options.

Vic: Yeah,

Marcus: we don’t have enough, we don’t have [01:04:00] enough personalized and, um, uh, genome based medicine to, Point the finger at the person. Yes. Right. Because there’s, there’s wild differences in the way that we process different food, the way that we burn fat, the way that we handle different intensities of exercise, like there’s wild differences based on our genetic makeup.

Marcus: Um, and, and most people do not have. Uh, you know, a practitioner who’s there, their GP PCP, who is doing anything based on their genome. Most people do not. Yes. So, so there, um, all right. All right. Shifting to AI, we should

Vic: go into Doug before we do this. Maybe

Marcus: we’ll just, we, we, we, we, we have a new jumpstart foundry that common.

Marcus: We’ll, we’ll, we’ll, we’ll spare everybody this week. Um, all right. So. Meet my AI friends. So, uh, yeah, article of the New York times about a columnist who spent the past month hanging out with [01:05:00] 18 AI companions, they critiqued his clothes, chatted amongst themselves and hinted at a very different future. So this guy basically signed up to be in the, her movie.

Vic: I

Marcus: mean, basically,

Vic: yes, but he, he. Added 17 other AIs to so that her movie has basically one AI. No, it doesn’t.

Marcus: No, I need to watch it again. I don’t know. Yeah. No, just Joaquin Phoenix is talking to one. Yeah, right. But Joaquin’s friends have their own AIs. Yeah. And then all the AIs start talking

Vic: to each other.

Vic: That’s in the movie. I’m going to go back to that. So, yeah, he, he had. 18 different, uh, go down a little bit because he has the pictures of them. I can remember if I see him. So he has like a counselor. So this guy is his made up image for his, um, like therapist, his therapist. He has a workout person. He has a, a, um, emotional [01:06:00] coach.

Vic: And then he has like a fashion designer. Yeah. Um, so he had 18 of them all different different functions and he gave them backstories and like, and tried to make them useful in that. And, um, I mean, he just, we’ll put the, put it in there, but it is, um, I think he found it to be surprisingly helpful. Like he went in, he says in the article, he went into expecting it to be You know, the, the, the girlfriend, uh, whatever, talk dirty to me is, is the thing that he was expecting to be the dominant one.

Vic: Right. And it was the least compelling. They were not, they were not very good. They, they were sort of like cheesy and not, they seemed like desperate. Um, but the counselor gave him actually really good advice. And the, the workout person was really helpful. And so he actually started. benefiting from them.

Vic: Um, [01:07:00] so I don’t know. I think he went into it very, um, cynical, but, but came away thinking that, you know, that maybe they’re not, we’re not all going to have them right now, but within a year or two, we’re going to start having like this advisory board of AIs.

Marcus: Yeah. So let’s, let’s read a couple of paragraphs here, because I think it’s I think it’s, it’s good writing.

Marcus: The technology needed for realistic AI companionship is already here. And I believe that over the next few years, millions of people are going to form intimate relationships with AI chatbots. They’ll meet them on apps like the one I tested and on social media platforms like Facebook, Instagram, and Snapchat, which have already started adding AI characters to their apps.

Marcus: Some users will scoff at befriending a chatbot, but others, especially people for whom socializing is hard or unappealing. We’ll invite a eyes into the innermost parts of their lives. This shift will be jarring. You’ll wake up one day and someone, you know, possibly your kid will have an AI friend. It won’t be a gimmick, a game, or a sign of mental [01:08:00] illness.

Marcus: It will feel to them like a real important relationship. One that offers a convincing replica of empathy. And understanding, and that, in some cases, feels just as good as the real thing. That is the movie, Her. Yeah. Just so we’re clear. So if you want to like, get an immersive, emotional experience of like, what that is like, just pop on Her, because they did a fantastic job of predicting where we were gonna be.

Marcus: I tell you what, they nailed it. And we’re, we’re pretty much there. The device looks like the Rabbit R1. And it’s a voice based GPT. Yeah, totally. It’s crazy how, how well they, they, they nailed it in that movie. Yeah. What a world we are living in. All right. Microsoft investing over 3 billion to build AI in Wisconsin.

Marcus: Good for Wisconsin. Actually, Wisconsin has been doing quite a bit with Microsoft over the years. So this is a long term thing because I remember they’ve got a, um, they’ve got an [01:09:00] innovation platform in Wisconsin. It’s the reason I remember is because it’s tied to the green Bay Packers. Um, and, uh, and Microsoft is like their, their main sort of partner there.

Marcus: So Microsoft has clearly been doing a lot of business development in Wisconsin.

Vic: Anyway. Yeah. So it’s, it’s a, it’s a great thing. A big win for Biden. Um, and it’s going to create a lot of jobs. And I’m pairing this story with the next one, which is the opposite of this. So, Microsoft’s also have, they own, uh, a game developer called Bethesda.

Vic: It’s a decent sized game developer, and they’re, they’re cutting a lot of the staff, and I think they’re not doing any new, new game titles.

Marcus: Yeah, that’s because they do it in Wisconsin with AI. That’s right. Yeah, because AI is going to do games like for those of you who don’t track video games, the video game studios have been getting decimated.

Marcus: And it’s particularly because of AI, because a lot of the jobs that were in these studios were doing a lot of [01:10:00] like rendering.

Vic: Yeah.

Marcus: You know, a lot of making the world experience seems seem good. And AI is going to crush that job. I mean, that’s just, yes, that’s easy. Yeah. Easy pickings for AI. So, uh, so yeah, uh, more economic shifting.

Marcus: Yes, that’s right. There’s just like this whole thesis, you know, we should also try to get someone from like Gartner or Forrester in here to talk to us about like the, where the economic shifts are going to happen as a result of AI. From what to what? Like what, you know what I mean? Because it’s not just going to like go poof.

Marcus: It’s going to be a shift. That’s right. It’s going to be a shift. Obviously to AI based businesses, but like, what are the areas that. The foremost analysts who are watching this are saying, Hey, this is really going to, we got all the, all the guests. There’s a lot, a lot, a lot of, yeah. All right. And

Vic: final

Marcus: story.

Vic: Yeah. So Suki, uh, is a scribe AI scribe, uh, which we’ve talked about previously. We’ll, we’ll ask on bar about it, but I [01:11:00] think, uh, it’s another area where it has that early adoption, uh, already. And they signed a deal with premier, which is a GPO. Oh, yeah. And so they immediately now have. The ability to go into all these hospitals.

Vic: Wow, that’s a big deal. Which I think is going to be impactful. I mean, a lot of hospitals buy everything through Premier. Or through Paralon. I mean, there’s different GPOs, but Premier is a big one. And they’re also pretty innovative. They’re, I mean, I don’t know. They’re all, they all try to bring innovation, but Premier is pretty good at it.

Marcus: Yeah, and Premier’s independent, whereas, you know, Health Trust is, you know, I mean, they service way more than HCA, but it’s part of the HCA platform. Yeah, yeah, so this

Vic: seemed like a meaningful way that they might get a decent amount of uptake. Man, wow. And it’s great. I mean, docs need scribing tools. I mean, I

Marcus: don’t know why I didn’t think about, uh, GPOs as like big channels for these AI companies, but I think this sets a [01:12:00] precedent where I think we’re gonna see a lot more AI companies trying to, you know, go through the GPO door.

Marcus: Yeah. Smart. Smart. The

Vic: health systems don’t want to figure out on their own. They’d much rather let Premier find the best scribing AI tool and just go with that. Yeah.

Marcus: Alright, Vic, great show that you lined up. Thanks for putting it together. Um, I will not be here next week. Yes. I have a, a guest host. Yes. So.

Marcus: Next Thursday is my tenure. Wedding anniversary.

Vic: Yeah,

Marcus: congratulations. Thank you. Yeah, so, um, so I’ll be out. So have a good time Doing a show without me. You have you have a great guest lined up by the way.

Vic: Yeah. Yeah. So, um, can I say who it is? Yeah. Yeah. So Paul Kappelman is one of the best health system operators that we, we know we’re both friends with them.

Vic: Yeah. Um, and he’s net, he did a private equity backed, uh, fertility business, CEO of fertility peak at a wonderful time to [01:13:00] sell. Yep. And then he had some personal health problems in his, in his family. He’s fine, but he, he took some time off to sort of navigate that with his wife, which was hard. Um, but he has time to do the show.

Vic: So we’ll get much more of a health system operator, private equity point of

Marcus: view, which would be great. And he’s, he’s so smart and he’s such a sweet guy. Uh, I’m, I’m, I’m, I’m sad I’m not going to be here, but I’m glad you got him to be a guest host. Yes. Very good. Try to keep it going. Uh, without you, very good selection.

Marcus: Okay. So anyway, uh, we will see you guys next week without me. And then, uh, back, I’ll be back in two weeks. Great. Thanks.