82 – This Shocking TikTok Case Could Rewrite Internet Laws Forever!

[00:00:00] Doug: 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.

[00:00:07] Vic: Okay, excited to do this with you. We have a guest host today, Doug Edwards, CEO of Jumpstart. Thanks for doing this, man. Appreciate it. Man, good to finally be here.

[00:00:16] Vic: I made it in the first 100 episodes. Made it into the studio. Marcus is fighting. He’s going for his third World Jiu Jitsu Championship. That’s right. He repeated last year. He’s trying to repeat again. And so he’s off, uh, getting his mind focused for fights. I think they start Saturday and Sunday. Yeah, it’s gonna be a big weekend for him.

[00:00:38] Vic: He’s been training like crazy. Yeah. So, um, I don’t know. I’m trying not to be overconfident. We’ll see how it goes. But he seemed pretty, pretty good. pretty tight, you know, ready. He’s pumped. He’s ready

[00:00:49] Doug: to

[00:00:49] Vic: go.

[00:00:50] Doug: And he’s definitely ready. Yeah. So good for him. Good luck this weekend, man. We miss you here, but glad to fill in the big shoes.

[00:00:55] Vic: Yes. Yes. We will carry on. So, um, give the audience just a little [00:01:00] bit of your background. You know, you’ve been our CEO for gosh, three years, about three years now. Three years almost. I’m very happy that you’ve taken over those responsibilities. I get to do, um, Things that are more fun for me, like, uh, CIO planning stuff.

[00:01:13] Vic: Yeah. Um. And

[00:01:14] Doug: great podcast.

[00:01:16] Vic: Exactly. Yeah. Uh, what’d you do before Jumpstart? And, uh, what’s your background?

[00:01:20] Doug: Yeah, man. Awesome to be here. And I can’t believe it’s already been almost three years. Uh, but. Probably a lot of listeners and subscribers don’t really know kind of the difference between JHI, our fund brand.

[00:01:29] Doug: Yeah, right. So, Jumpstar Health Investors, obviously, you know, being our parent kind of operating side of the company is really the back office, the ways of which we actually manage the business. And so, coming in as the CEO to manage that, I’ve also paired that with kind of running our pre seed state fund, Jumpstar Foundry.

[00:01:44] Doug: So, that takes up a good bit of my time as well. But now, three years later, you know, lots of skill, lots of growth, lots of investments, building out the team and capabilities has been a big part of it. Keith Focus. And prior to that, spent 20 years on the operator side, almost 25 years on the operator [00:02:00] side.

[00:02:00] Doug: Uh, the last eight before that was actually working as a, in a startup for, uh, healthcare. Yeah. Uh, working on kind of virtual chronic care management and patient navigation care. Care Management Navigation. Yeah. Uh, so did that from kind of cradle to, uh, exit? Yeah. Yeah, you had

[00:02:15] Vic: an exit and stayed on with the acquirer for a little while, and then we recruited you away from that.

[00:02:20] Vic: Man, I went through a few funding rounds

[00:02:21] Doug: and lesson learned, I’m like, man, I need to sit on the other side of the table. Yeah, that’s right. That’s right. Uh, so the investor side of the table is a fun spot to be, so it’s been a great three years.

[00:02:29] Vic: Good. Well, welcome. We, uh, we’ll carry forward without Marcus, uh, this week.

[00:02:32] Vic: Lots to talk about, so let’s dig in. We’ll do the best we can.

[00:02:45] Vic: Okay. So the Fed had its summit at Jackson Hole. And Timmer Powell spoke at the summit, um, and really pretty stark change in his, his tone of his commentary, where he kind of said, um, you [00:03:00] know, the job losses have been significant and he doesn’t welcome any more job losses and really kind of started to pivot towards needing to focus on cutting rates and inflation, of course, is not down at the 2 percent level, but it’s The focus seems to be going more towards focusing on job creation and inflation control, maybe in the back burner.

[00:03:25] Doug: Yeah, I think that’s right. I mean, one of the things I picked up was just the, the, the loss, you know, year over year, almost a million jobs, kind of less from a loss standpoint. But wildly up over what it’s been three or four years. We’ve got many, many more jobs in the country than we did even pre pandemic.

[00:03:41] Doug: Um, but certainly I, I, I took that he, you know, we talked about. No more cooling, uh, and not seeking any or welcoming any, uh, uh, additional cooling in the market, uh, is, is telling. So it’s not a point, I think at this time, it’s about let’s see if there’s going to be a cut. It’s like, what’s it

[00:03:57] Vic: going to be?

[00:03:57] Vic: Yeah, I think that’s right. It seems like [00:04:00] very, very likely, maybe a hundred percent likely there’ll be a cut. Question is, is it 25 basis points or 50? Yeah. I’m kind of hoping for 50, but we’ll see. We’ll see what we get. I

[00:04:09] Doug: think the, I think the last, uh, draft report coming out kind of mid September will be the tell all of how aggressive or soft they’re going to be.

[00:04:16] Doug: Yeah. It’ll probably be the difference between 0. 25 or 0. That’s right.

[00:04:20] Vic: Yeah. And, and so kind of, uh, We have other economic news sort of related to this overall economy. Uh, there’s a story in the New York Times about the geography of unequal recovery. So like different counties, different states, different counties are growing their economies and their jobs at different rates.

[00:04:38] Vic: And there’s an image on the screen of every county, I think, and the blue arrow up. If it’s up, it means that they’re growing. And if it’s, you know, a really big arrow, they’re growing more. And then the reddish orange ones are declining, uh, in sort of job creation. And so we were just talking about jobs in the last story, but it’s spread very unequally [00:05:00] across the, across the country.

[00:05:01] Vic: What did you make of this story? You know,

[00:05:03] Doug: um, maybe, uh, one, I love the graphic. Two, to some degree, kind of not surprised, right? So the big markets where you see a lot of the down orange arrows is really reflective of either large, uh, large markets like big cities or rural markets.

[00:05:16] Vic: Yeah.

[00:05:17] Doug: Uh, and when you think about kind of post pandemic, one, slower to shut down, less slower to respond.

[00:05:23] Doug: And those kind of sub suburban markets, you know, gosh, take Nashville as a great example. You’ll see a lot in that kind of, uh, Sunbelt, certainly in the, uh, Eastern half of the country that’s seen a much greater influx of growth, uh, of jobs. But you can also correlate that over with kind of the population, uh, declines and increases in those markets.

[00:05:43] Vic: Yeah. Yeah, I was really surprised at the New England state. So, um, I mean, upper New England, Maine and New Hampshire, Vermont, just don’t have that many people. But when you get into New York, Pennsylvania, A lot of job losses there compared to the southeast and west.

[00:05:59] Doug: Yeah, when you think [00:06:00] about, I think, the convergence of where people have gone, but also where it’s going from remote workforce and, you know, technology adoption, you’re seeing a lot more of that concentrated on this side, on the southeast kind of sector and mid Atlantic markets.

[00:06:13] Doug: So when you look at the, Gosh, just a footprint within kind of a tri state area of, of Tennessee. It’s pretty impactful. Yeah, the growth and we’ve seen it firsthand Hey, right, we’re living it trying to hire people. firsthand. Yeah.

[00:06:24] Vic: Yeah So I think this this sort of makes the job of the Federal Reserve even harder that they’re gonna set policy for the whole country And yet you have very different realities on the ground based on where people live.

[00:06:35] Vic: That’s right. Okay, circling back to the story we had last week, there was a strike slash lockout of the railroad operators in Canada. Over the weekend, the government required that they go to arbitration and work well there in arbitration. And so they’re back to work, which I think is good, but it makes me a little worried [00:07:00] that the government would just stop the ability to negotiate like that.

[00:07:03] Vic: So anyway, what do you think of this?

[00:07:05] Doug: Well, certainly the union parties would feel the same. It’s almost like It’s an anti kind of conforming to what the reason that unions exist and the team workers exist. I didn’t realize the kind of magnitude of just those two rail systems and the economic impact it had in kind of across North America.

[00:07:22] Doug: Yeah. I mean, it’s a hundred, hundreds of millions of dollars of lost economic value every day that they were shut down. Yeah. Right. So I, I get the need to kind of push, but it does seem a little counterintuitive to how they did it.

[00:07:36] Vic: Yeah, I mean, I think, um, I mean, famously, was it Reagan ordered the air traffic controllers back to work for safety reasons?

[00:07:44] Vic: Back

[00:07:44] Doug: in the day.

[00:07:44] Vic: And it’s somewhat similar where, um, I think they were saying that just the Canadian economy can’t function without these rail lines. With those kind of numbers, I can understand why. So, I think it’s good that there, back up and moving freight. [00:08:00] Hopefully the arbitration will be fair and they’ll get to some reasonable contract.

[00:08:05] Vic: So moving on, the IPO market gets cold feet. This was a story in the journal this week. Uh, we had some encouraging signs of new IPOs earlier this year, but it’s slowed down. The fourth quarter, usually when you get back from summer, traditionally there are several IPOs sort of queued up, and not so much this year.

[00:08:25] Vic: There’s a It’s a slower path, which maybe, uh, we’re all waiting for the Fed to cut. Uh, maybe there’s other reasons. I don’t know.

[00:08:34] Doug: Yeah. I think, uh, the next couple of weeks, it’s historically been kind of the peak weeks of IPO ing. Yeah. Certainly getting ahead of quarter, uh, releases coming out. Uh, the doldrums of, of summer months, and I don’t know if we’re going to see that.

[00:08:47] Doug: Because, I mean, look at, like, what the average values have been. If you can kind of get an idea of about 25 billion on average, uh, that have raised versus the prior 10 years and an average of 55 billion. Right. Yeah. I might slow walk my IPO as well.

[00:08:59] Vic: [00:09:00] Yeah. Yeah. I know. Yeah. I mean, we have a few, there were a few, um, this spring Reddit got out, um, a couple other small ones, but it’s been, it’s been slow.

[00:09:11] Vic: Yeah. I was

[00:09:12] Doug: interested to also learn that obviously the, the Russell 2000 outperforming S& P.

[00:09:16] Vic: Yeah.

[00:09:16] Doug: All right. So kind of the small market or small players and companies in that are really killing it. Yeah.

[00:09:23] Vic: That’s right. And I think that might be, to me, it’s more of an impact of the Manifest 7, which is a lot of the S& P 500 having some struggles this summer, as opposed to the Rossler really killing it.

[00:09:35] Vic: But yes, it’s doing better. Okay, and then we had Nvidia. We wouldn’t normally cover, but it’s such a bellwether now for the entire stock market. There’s so much AI, excitement, and now excitement slash fear or worry. Maybe AI has, uh, maybe it’s a bubble. Maybe we’ve, uh, invested in front of. What’s actually being realized.

[00:09:58] Vic: And so everyone was kind of looking [00:10:00] at Nvidia’s earnings, uh, that came out last night, we’re recording this Thursday at around three o’clock or so. Um, and they beat earnings and continue to really do very well, very profitable. Um, they had one concern with their new chip, the Blackwell chip. They’re having, uh, some supply chain issues and not getting it to market as much They had planned, but it seemed when I was listening last night, it seemed kind of minor.

[00:10:29] Vic: And then this morning, I have a image here. Um, so if you’re watching on YouTube, you can see this is today’s stock price. It started, you know, started the day at 121 or so, and it’s lost value pretty much, uh, almost straight during the day, a little bit up and down, but been, it’s been received poorly. And so I was talking to some folks about, Why that might be, and their comment was the, well the revenue is still growing, the rate of growth, that like second [00:11:00] derivative, how fast the growing has slowed down dramatically.

[00:11:04] Vic: Um, I don’t know, what are your thoughts about NVIDIA?

[00:11:06] Doug: Well, you know, I think this is one just a blip, uh, in terms of timeline. They have certainly grown. I mean, look at that, like, kind of have the next chart, which is a six month chart, right? That one for me is kind of the tell all. It’s powerful in terms of where they were back in kind of late Q1 going into, and then the growth throughout the summer has been impressive.

[00:11:24] Doug: If you look at any kind of close peers or competitors, You’ll almost see the inverse of this relationship in terms of their experience. And these guys are still killing it in terms of market share.

[00:11:33] Vic: Yeah.

[00:11:34] Doug: I mean, they own it, right?

[00:11:35] Vic: Yeah, that’s right. So over a six month period, if you’re listening on audio, first of all, you should watch us on YouTube so you see all of our pretty faces.

[00:11:43] Vic: Right. But it was 80 a share in March, late spring. And then now it’s at 118 as of when we’re recording this. But I did get up to 135. So we’re seeing, you know, kind of a lower high, [00:12:00] um, and now going down again. So it may be that they’re sort of consolidated and they’re going to go up again in the fourth quarter.

[00:12:06] Vic: It may be that in fact the AI boom has slowed somewhat and they’re such a dominant player that, you know, uh, almost like Cisco in the early internet. That’s kind of my analogy for this. For a while, Cisco was all the routers, like, you know, they couldn’t make routers fast enough. And then we got a little bit over our skis as far as we had so much capacity and not much content to put on the internet that Cisco then declined and uh, didn’t really recover for, for years.

[00:12:36] Vic: Yeah. NVIDIA, I think, could be similar to that. We’ll have to see how, how it pans out. Yeah. I think, I think we’re starting to

[00:12:42] Doug: see some normalization. You know, I don’t know if it’s going to go up or down dramatically, but I think over the next six months anyways, we’ll, we’ll start to see it plateau to normal.

[00:12:50] Doug: Yeah. You know, what’s interesting about these guys, if I’d only listened to my advisor to invest it in 2005, 1, 000 today, it’s worth almost 800, 000. Wow.

[00:12:58] Vic: Did your, did your advisor [00:13:00] really tell you? No! I didn’t even have 1, 000 to invest back in 2005. I honestly didn’t know who NVIDIA was in 2005. Unbelievable growth over

[00:13:08] Doug: the life of the company.

[00:13:09] Vic: Yeah. Okay. So moving into the venture markets. We, it was a slow week for VC deals. We only had one, uh, new deal announced. Of course, it’s late August, right before Labor Day. So a quiet time, but AppyJet, they make pre filled injection devices. So pre filled syringes. Yes. Syringe already filled, one time use.

[00:13:30] Vic: Um, This is not new technology, but they’re doing it at a higher scale and, um, maybe more efficiently.

[00:13:39] Doug: Definitely more efficiently, but also doing it for a little bit more of the common ailments, right? So it’s almost preventative of having to go to X to go get visit, get prescription, go to the pharmacy.

[00:13:49] Doug: and all that, they already have it pre built and ready to go. So, you’re talking about ease of administration. There’s a lot of benefits to it. There’s some downside as well. And like you said earlier, it’s been around for a [00:14:00] long time. I think we’re just seeing it more mainstream kind of medicines and purposes.

[00:14:04] Vic: Yeah. Yeah. And I think we’re moving towards that. We’re not there yet. We’re moving towards a much more pre packaged healthcare world where you get this in the mail and you just quickly grab it and you can give a patient a, a, shot or injection without having to slow down much and do the measurement and get it all set.

[00:14:22] Vic: That’s right. I mean, some folks might

[00:14:25] Doug: be allergic to bees and you have those kits that you can carry those around for years. Uh, so similar, think about other ailments. Uh, so it’s definitely ripe for disruption and time for more. It’s coming. I’m not surprised to see them getting, getting good funding. Yeah.

[00:14:40] Vic: Yeah. And then PitchBook came out. with their Q2 report, which was great. The, the summary I think is that the VC markets for fund formation have been very slow and private equity has been killing it. So private equity funds have raised a lot of money, a lot of funds, um, but we really [00:15:00] focus on venture markets.

[00:15:01] Vic: And so let’s talk through the venture markets. There are two slides that I pulled out and we’ll link to the entire report for people that want to read it. It’s probably 15 pages. If you carve out life sciences. Which, of course, we’re mostly focused on healthcare services, digital health, consumer health, um, tech enabled services and healthcare.

[00:15:19] Vic: All of those are bundled under the Other Healthcare VC category by PitchBook. And it’s, um, we have a slide up on the screen right now, goes back to 2012 with both how much capital was raised, which are the blue bars, and then how many funds were formed in that year. And in 2023 There were 34 new VC funds in a total of 4.

[00:15:44] Vic: 6 billion. And so far, of course, we’re only, this is a report as of Q2. So it’s halfway through the year. Yeah. But there’s only been four funds and it’s 200 million. So not, not even half a billion. Very small.

[00:15:59] Doug: Yeah. [00:16:00] Fractional to what it was just a year ago. Yeah. And even in compared to 20, 10 years ago. Yes.

[00:16:06] Doug: It’s a pretty, pretty dramatic drop off. Yeah. And so hopeful for a strong second half.

[00:16:10] Vic: Yeah. It’s worrisome for me as it, for both of us as VCs. Um, I, I’m hopeful that, um, there weren’t that many VCs in the market as opposed to, you know, the alternative with lots of VCs, you just can’t get it raised. Well,

[00:16:26] Doug: and look at the last three or four years of the influx of new.

[00:16:30] Doug: Uh, Venture, uh, Venture Funds, Venture

[00:16:34] Vic: Yeah,

[00:16:34] Doug: record, record levels. Unbelievable,

[00:16:36] Vic: right? 2020, 22, 21, 22. Yeah. 41 new funds, 57 in 21, 42, then 34 last year. Yeah, yeah. Maybe it’s a little revision to the mean. Yep. But four and 200 million seems really small. It’s drastic. And so that, that is, uh, gonna flow through to, to, uh, You know, startups raising money in the next couple of years, there [00:17:00] won’t be a lot of That’s right.

[00:17:01] Vic: new funds formed in 2024, unless there’s a big back end. Yeah. Well,

[00:17:06] Doug: the downstream impact for 2025 and 2026, when they’re in their actual active investing period Yeah. it’s gonna be, it’ll be harder.

[00:17:12] Vic: Yeah. And then the, the other side, uh, graph that I pulled out is the, the size of the, of the funds being raised.

[00:17:20] Vic: And there’s, um, several categories, people that are listening, and there’s over a billion, 500 to a billion, 250 to 500, 100 to 250. 50 to 100 and sub 50. And in most years, they’re pretty even spread across the different categories. Um, typically it is, um, they do it by a percent of the money. And so just the way that the math works, right?

[00:17:49] Vic: The, the smaller funds end up being a smaller percent of the money. Um, but the, this year there’s only been four funds. And all of [00:18:00] them are under 100, So there’s only, there’s two categories represented, the sub 50, and then the 50 to 100. And so it’s a, it’s a thin market out there for new funds and they’re all fairly small.

[00:18:14] Vic: That’s right.

[00:18:14] Doug: That’s right. You know, I think gone are the days, or at least in the near future, of mega funds, uh, in venture, like billion dollar funds. I mean, it almost feels akin to 10 years ago, uh, 2013, right? Yeah, I

[00:18:29] Vic: hope so. I mean, I think, um, having 15, 20 new funds, all that are somewhere, You know, decent size.

[00:18:39] Vic: Zero to 500. That’s right. I

[00:18:40] Doug: think would be great. I think that’s far more competitive and far more available for early stage startups. I think that’s healthier for the, for the system. Yeah.

[00:18:48] Vic: But four is too low. So we need to. Yes. We need to get, get some activity. We need to raise some more funds. Right, right.

[00:18:54] Vic: Okay. So moving into our policy segment, it was great to [00:19:00] see, uh, we have a story from Fierce Healthcare that Northwell and NuVance, their merger that they announced early this year, got approval. So, they are going forward with that. This is in, uh, kind of upstate New York, sort of area. Connecticut. Yeah. Yeah, exactly.

[00:19:13] Vic: Right.

[00:19:13] Doug: I think they both cover the state of New York and Connecticut fairly well. I mean, these are two really large non profit systems. Yeah. Uh, with big, with big footprints. Lots and lots of hospitals, um, locations. I think combined north of several hundred, um, locations.

[00:19:28] Vic: Yeah. I, I think they are both very large.

[00:19:32] Vic: To me, there’s, there’s a pretty clear bifurcation in kind of well run, strong operators in the lead at Northwell and others, um, whether they’re for profit or non profit health systems that are managed well and kind of optimized for the type of care you need today with a lot of physicians owned and, uh, you know, pretty good, uh, network of, of referral centers.

[00:19:58] Vic: You have, you have urgent [00:20:00] care and primary care, diagnostic centers, surgery centers, all feeding into kind of the mothership. That’s right. Um, Northwell has that. NUVANT’s done, didn’t, wasn’t as optimized that way and they were really struggling financially. Like, top line and

[00:20:15] Doug: bottom

[00:20:16] Vic: line, uh,

[00:20:17] Doug: significantly.

[00:20:18] Doug: And so, you know, gosh, if listeners have listened to, what’s this, episode 82? Numbers of episodes talking about the potential future convergence of systems because of the very example here. Yeah, that’s right. NuVance is that. Uh, and I think we’ll see more and more of that. The great thing is, uh, obviously it got approval.

[00:20:34] Doug: This is, this was announced six months ago. Yeah. That they were having. It took a while. Um, but the reality is the economic impact and the access to care in those markets, they have a pretty predominant foothold. So it behooved them to, to want to approve the, the, the, the partnership.

[00:20:48] Vic: Yeah. And I think it’s, it’s, uh, I think there’s a necessary approval review process just to make sure that no zip code is [00:21:00] losing providers altogether or that someone looks at it.

[00:21:04] Vic: But the overall care system in those geographies is much stronger under the Northwell platform with great leadership, strong balance sheet, good operations. Um, pulling in the, the Nance, uh, network of That’s right, providers and facilities. I think it’s a, it’s a win-win. So I’m glad

[00:21:21] Doug: they finally got there.

[00:21:22] Vic: Okay. And then the, on the regulatory front, not healthcare, but I wanted to cover it, uh, because there’s a, there is a section called Section two 30 that covers, sort of protects aggregators and publishers from. Liability. Usually defamement or libel because they’re publishing information, and the concept is that social media or other platforms that are publishing lots of user generated content, they can’t be held responsible for any one user, um, saying something that is defamatory or that would generate liability.

[00:21:59] Vic: Right. And so [00:22:00] for a long time, I mean, it came out in the 90s. 96. 96. Okay. Yeah. Those platforms have been protected from liability. And TikTok lost a case yesterday. It’s a terrible story. Um, on TikTok, there was this blackout challenge, which is a, you know, fixate yourself.

[00:22:21] Doug: Like a physical challenge that kind of almost makes you For how long you can

[00:22:26] Vic: be blacked out.

[00:22:27] Vic: Which seems like a ridiculous and dangerous thing to, for anyone to do. Yeah. Um, but it was on TikTok and a 10 year old, she died trying to win the challenge. Um, which is a terrible outcome. Yeah. Um, but the policy discussion that in, uh, the third circuit court, yesterday, the court ruled that the fact that TikTok uses an algorithm to serve up content [00:23:00] designed to that user, that that, in fact, is their contribution to the content and thus they can be held liable for serving this content to them.

[00:23:14] Vic: That is a huge change. Um, the headline is TikTok isn’t protected from section 230 and the 10 year old blackout challenge death. Uh, but the sub line I really liked, which is WannaBot to pick engaging content and also immunity for liability. You can’t have both of those. You have to pick one.

[00:23:33] Doug: As the third circuit court said, sharply disagree.

[00:23:35] Doug: Right.

[00:23:36] Vic: You’re liable. Yeah. Um, TikTok is. I mean, one of the most valuable aspects of TikTok is their algorithm. It’s very strong and highly automated. I think I thought it was 100 percent automated. It may have some manual interest. Okay. Um. But I think there’s going to be a lot of questions, and where do we draw the line?

[00:23:57] Vic: I mean, what is the [00:24:00] platform suggesting things to me? And what is me, sort of, like, let’s say on X, I’m choosing people to follow and choose, and then it serves me a selection of those. There’s a lot of questions of sort of how we will distinguish between publishers serving up content that someone else published, and now this whole algorithm is the content.

[00:24:25] Doug: Well, I mean, this comes from the Communication Decency Act 1996, man. Yeah, so remember what social platforms were in 1996 and how algorithms played a role in that process? Yeah, and how much has evolved in this just 230 B’s, you know, kind of subsection of that is more recent But it really tries to protect those platforms.

[00:24:46] Doug: It’s it’s time for a little bit of a refresh and reform on that Yeah Uh, because of how much, how much more sophisticated they’ve, and at the end of the day, you got a 12 year old who’s getting fed content. Good, bad, or ugly, [00:25:00] right? We got to protect that. Yeah.

[00:25:01] Vic: You know? Yeah. I mean, children using social media is, is a whole nother topic.

[00:25:06] Vic: It’s dangerous altogether. They should not be using it. Um, children will cheat and tell the system they are 18 when they’re not. It’s difficult to police that, but I think we need to try to do a better job with that. Um, but it’s not clear to me where we’re going to draw the line of what constitutes an algorithm that now brings the whole platform into liability.

[00:25:35] Vic: Um, and what is in fact protected by sort of the free speech. They’re enabling free speech, and I might say something stupid, but it’s not TikTok, Facebook, uh, X’s fault.

[00:25:49] Doug: That’s right. Um, I want us to follow this one, because I’d love to kind of see how this, where this one goes. Yeah. I think it’ll be weeks, months before, you know, anything prevails in terms of how they’re going to [00:26:00] be kind of.

[00:26:00] Doug: Yeah. required to either reform 230B or how TICTAC’s going to respond to it. Um, I’d love for us to track this one.

[00:26:06] Vic: Oh yeah, it’s, it’s going to be an ongoing story. I agree that section 230 needs to be clarified and updated. I think that we require Congress to be adults and act. Yes. And so I don’t know how much confidence I have in that, but.

[00:26:22] Doug: And my only other parting words for this is, you know, parents who are listening, take control of this too, right? We all have a responsibility here, not just laws and policies and. and section 230s to kind of manage this stuff. But gosh darn it, let’s, let’s. Yeah, and it doesn’t matter

[00:26:37] Vic: how much money TikTok pays, that girl’s not coming back.

[00:26:40] Vic: So you need to take care of your children. Yes. For lots of reasons. And adults. Yeah. Everlot Health is a publicly traded company that’s considering going private. And it’s, it’s really a, uh, sort of in the middle of, uh, helping providers and insurers, [00:27:00] uh, sort of navigate to value based care. Yep. I currently have a market value of around 3.

[00:27:05] Vic: 8 billion.

[00:27:06] Doug: Yeah.

[00:27:07] Vic: It seems like they, there’s a rumor that they are in talks for an acquisition or take private discussion. And the shares jumped, um, 18%. This, this company has been, you know, sort of trying to find a secondary exit, uh, for a couple years. They were talking to Walgreens previously. Um, so it’s just interesting to see.

[00:27:32] Vic: I think there’s a lot of value here. I don’t know where they would, uh, they would sell. It’s owned, it’s publicly traded, but a lot of private equity firms are in. Yeah. Yes.

[00:27:43] Doug: Yeah. Yeah. Yeah. Exactly. And they’re looking, so TBG, right? I mean, big player in this space. They’re the potential suitor, I assume, uh, and Clayton, uh, Dubierne Rice, at least what the article kind of references, right?

[00:27:54] Doug: Um, so it’s kind of interesting the health insurer, uh, Elevance also put in with these guys. Are they a [00:28:00] part of?

[00:28:00] Vic: Yeah, they’re, they’re all, I think they’re all, uh, shareholders now. Okay. Yeah. And they, well, the private equity. guys are looking to get liquidity. Yeah, of course. Um, and so I think they’re trying to figure out where to figure out a path.

[00:28:14] Vic: Yeah. Interesting. Okay. So then we have here in our home state of Tennessee, such a good, our Medicaid platform is called 10 care and they lost a court case that’s been going on for years. It first came out before the COVID pandemic. People were kicked off the plat, kicked off and, and, you know, not eligible.

[00:28:35] Vic: Yeah. and didn’t have due process, weren’t notified, or the letters that they were sent went to the wrong address. Um, and so they, they were, they lost the court case. So they now have to, um, figure out ways to do a better job. Yeah. Really surprising, because I, I think if 10K was fairly well run, but this is a lot of damning facts in [00:29:00] this, that they have not been doing a good job keeping their members engaged.

[00:29:03] Vic: Yeah.

[00:29:03] Doug: I think that’s fair. And I think evidence of a little bit of archaic prostheses in terms of how you enroll somebody, still using paper, still using snail mail, still relying on things that are just difficult with too many potential cracks in the system. And when you mentioned that some people kicked off, we’re talking hundreds of thousands of people that actually lost coverage.

[00:29:25] Doug: And never a good indicator when the headline says illegally. Kicked off of coverage from a state ran, uh, you know, healthcare offering, right? Not, not good. Uh, and so when you read an article like this, it’s talking about those disadvantaged, the elderly, children that now don’t have coverage and haven’t for years now.

[00:29:48] Doug: Uh, so there’s definitely going to be some remediation to kind of solve for how do you fix the system, but then how do you make this right? Yeah. Uh, and I think TennCare is going to be, uh, Yeah, no question. I

[00:29:59] Vic: mean, I think that, [00:30:00] uh, I think it’s a pretty hard challenge to reach these people that are moving sometimes.

[00:30:08] Vic: They’re, they’re, don’t have stable addresses or phone numbers. It’s difficult to reach them and 49 other states are doing it. And so, yeah. Yeah. Well, it may be a hard challenge. I think TenCare has to figure it out.

[00:30:20] Doug: They got to figure it out. I don’t know if you caught in the article, too, how they’re recommending to mediate it is through mediation.

[00:30:25] Doug: Yes. Like do mediation first and then let’s fix the problem, right? So they do have to do both. Yeah. So hopefully they’ll do that soon.

[00:30:33] Vic: Yeah. Okay. So moving on to the provider side, health systems and providers, McKesson is buying a group of, a physician group, uh, community oncology in Florida. As far as I know, this is the first time McKesson has moved into owning a physician group.

[00:30:53] Vic: It’s in, it’s in oncology, which of course they have a lot of. Medications for yeah,

[00:30:59] Doug: yeah, yeah, but

[00:30:59] Vic: [00:31:00] McKesson is a drug wholesaler I wanted to talk about it’s interesting to see the drug channel now kind of moving into owning provider groups specialty

[00:31:09] Doug: groups Yeah, right, and they’re taking a pretty big footprint of the business though This the the core ventures is what they carved out to kind of be a focused area as a part of this, Florida cancer specialist Uh, and so McKesson comes in and takes 70 percent of the, 70 percent of the business.

[00:31:25] Doug: Right. Uh, which is a pretty big footprint in, in, in Florida. Um, especially for a drug distributor, you know, based in,

[00:31:33] Vic: not in

[00:31:33] Doug: Florida.

[00:31:34] Vic: Yeah. And so what do you think about the, um, the concept of a drug wholesaler, You know, whether it’s Sperling or Cardinal, there’s three big ones. Owning physician groups, owning hospitals, owning

[00:31:49] Doug: providers.

[00:31:50] Doug: Well, interestingly enough, like, so the other two big players in this space were also vying for this deal. Yeah, yeah. Like, they weren’t the only suitor at the table. Uh, but McKesson comes out on [00:32:00] top. Uh, look, man, we’re going to see more and more of this. Welcome to the consolidation world, right? So we’re going to see much more of this.

[00:32:06] Doug: I think there’s value in it. There’s always going to be downstream implications too, because now you’ve got a McKesson that’s majority controller of a Services, you know, specialty services group in a state and compound that by 50 other states. Do they know that business? Well, are they gonna allow it to operate efficiently and effectively?

[00:32:25] Doug: I think for me It’s more concerning about operational than it is the strategic advantage of a McKesson probably a good move for them

[00:32:32] Vic: yeah, I mean the That’s obvious. To me, that’s the concern. Is that, are they going to let them treat patients totally hands off? Or there’s going to be some shaping of the, um, the formulary.

[00:32:50] Vic: Like, what they’re prescribing.

[00:32:52] Doug: You know, good question. This idea of this core ventures group started because of access issues and cost issues. [00:33:00] I’m hopeful that a McKesson kind of introduction can help fuel what core ventures was actually created to do to begin with. Yeah, I think it, I think it can. Yeah.

[00:33:08] Doug: So I think we’ll see much more of this. Yeah,

[00:33:11] Vic: so they’re looking this started with, um, you know, payers, acquiring providers, and then the providers started to get into, uh, value based care and underwriting. So, you know, we’ve talked about the payvider space, and we may need to sort of rethink that phrase to incorporate the drug channel.

[00:33:30] Vic: We gotta, we gotta think of a higher, much more complicated, uh, thing. Yeah. But it’s interesting to track. Yeah. Yeah. Yeah. Um, and then. On the same sort of note, um, Surgery Partners, which is here in Tennessee, right down in Brentwood, is for sale, and Optum is one of the leading bidders on that. It hasn’t fully been put through, but the rumor is that Optum’s gonna, uh, Purchase it.

[00:33:59] Vic: They already [00:34:00] own the the largest largest. Yeah, they have the largest surgery center business already That’s the SCA. Yes. Yeah,

[00:34:07] Doug: okay,

[00:34:08] Vic: and So SCA has it says here in the article. They have 3, 200 amateur surgery centers and 9, 200 physicians just in that often has other positions too. Yeah, and so this is the third largest And so if Optum buys that, they’ll add 160 centers to their 320 already.

[00:34:30] Vic: Massive growth. Um, so we’ll see. It’s sort of another in the, in the string of acquisitions that, uh, UHG Optum has done. They, they typically in the past have left the operations fairly separated and sort of running on their own, but, but they pull all the data in behind the scenes and, um, so we’ll

[00:34:55] Doug: see. It’s interesting.

[00:34:55] Doug: Well, I’m excited to see, uh, Kind of a local, uh, company that has done really [00:35:00] well. You know, they’ve been around a while. Uh, I think 2015 ish, they went public, IPO ed in 2015, I think. Yeah, yeah, that’s right. I think Bain backed them as well. So, love to see a local, uh, surgery partner. Man, they’ve grown a ton in 10 years.

[00:35:14] Doug: Oh, yeah. A ton in 10 years. So, yeah. And they couldn’t have, you know, if a UHG opt in thing comes through, uh, I don’t think they could have found a better acquirer. Right. Right. Yeah. I guess, right.

[00:35:26] Vic: Okay, so moving on to a couple of large health systems, uh, we talked about Northwell earlier in the show being sort of of that ilk of large, well managed.

[00:35:36] Vic: Advocate Health is, is similar. Different footprint. They’re more in the Midwest. Yeah. They published their, um, first six months of financials. And the net income, operating income, grew five times, um, up to 400, basically 450 million, you know, which was much greater than [00:36:00] the 85 million that they had at the same point last year.

[00:36:03] Vic: So, I mean, this has sort of been an ongoing theme, but the health systems, they’re seeing patient volumes grow very quickly. And the patients are, have higher acuity. They’re more, they need more services, more expensive services. So revenue is growing very quickly. And if it’s well run, these health systems are, are generating profits.

[00:36:26] Vic: Or if you’re a non profit, I guess it’s operating profits, but it’s similar. That’s right.

[00:36:30] Doug: And they’ve done well. I mean, profit wise. Now, Advocate is the combination of Atrium and the old, uh, Advocate Eurora, right? Yes, that’s right. So they came together a couple of years ago, so great to see them, you know, really grinding hard and 2024 is looking like a pretty banner year, you know, kind of post that, kind of 18 month post that consolidation.

[00:36:51] Doug: That’s right. They’re doing well.

[00:36:53] Vic: Mm hmm. Okay, and then Kaiser Permanente, you know, they rebranded, when they bought Geisinger, they [00:37:00] rebranded to, uh, Ryzent, I think is how you say it. Yep. Yep. Um. They recently bought their third asset, Cone Health in North Carolina, and they came out with a plan. It’s in Fierce Healthcare.

[00:37:11] Vic: We’ll, we’ll link to it. Their plan to invest in the platform, and they’re going to invest, um, a minimum of a billion dollars. Yes. In the operations, in the facilities, really growing the capacity, upgrading things. Um, what, what’d you think about this?

[00:37:30] Doug: You know, interesting, you know, the good and the bad. For me, the worry is they literally just consolidated with this Geisinger Health six months ago, right?

[00:37:38] Doug: I don’t know how that’s going. That seems a little early to go out and take on another upwards of a billion, seven, they’re going to invest in Cone because they’ve got a few covenants around a billion dollars on the front end, but then another 400 million for integration and transition, another 300 million for growth.

[00:37:55] Doug: And, and that’s fantastic. Um, just hopefully they’re not [00:38:00] taking and biting off more than they can chew. But I love that, that Kaiser’s, you know, getting further and further into the, in the game.

[00:38:08] Vic: Yeah. That’s great. When they, when they put the brand out there, Ryzen, they announced that their, their intention was to buy four or five systems in different geographies around the country.

[00:38:19] Vic: Mm hmm. And so I think they are planning to, add to Geisinger and Cohn now with other geographies so that they have, yes, you know, eventually the entire country covered or large swaths of the country covered.

[00:38:32] Doug: To get the economies of scale and the benefit of consolidating those together under a rising kind of brand.

[00:38:38] Doug: So they’re really smart about kind of timing and how they integrate and transition.

[00:38:43] Vic: Well, and one of the things that, One of the reasons I follow them is, um, all three of these platforms, but certainly Kaiser and Geisinger were really strong on the payer side, as well as provider. So they have that integrated, um, payvider kind of platform.

[00:38:59] Vic: [00:39:00] Cone was not as big on the payer side, but they did have a payer. Yes. And I think everything that they buy is going to have those two pieces, and they’ll bring their expertise about how to grow it. That’s right. That’s right. Moving in to talk about EPIC. There’s a couple of stories on EPIC. Of course, they had their, uh, big user group conference last week, but they had an interesting shift this week where they, they are moving away from their traditional, uh, data exchange platform.

[00:39:30] Vic: There’s a lot of data exchanges out there. There’s sort of too many, in my opinion, uh, where if you want to share data across different health systems, you can go on to one of these exchanges and do that. For several years. Uh, EPIC has been partnered with, uh, TEFCA, Trusted Exchange Framework Common Agreement.

[00:39:51] Vic: Um, and they are moving away from that, um, and moving to CareQuality, which is, uh, the [00:40:00] largest, and I think gonna, once EPIC moved to it, I think now it’s gonna be the default, um, integrator, so that every health system’s gonna have, I think, gonna have to be on CareQuality, That will probably make it easier to make that system a good way to sort of move data back and forth.

[00:40:20] Vic: But what are your thoughts about care quality and Epic?

[00:40:23] Doug: Uh, I think it’s the shift in what will be in a year or two or three, the new standard, right? I think even for us selfishly as the individual patient, like we have to get there. And we got to adopt the standard and care quality seems like the new kind of the way.

[00:40:38] Doug: Yeah. And it’s, it’s certainly being adopted well. I think we’ll see an influx of kind of growth of that. Uh, and you’re right, trying to, trying to connect a whole bunch of disparate systems together and different platforms together. They’ll have to have a standard and exchange to be able to do that. Care quality seems like it’s, it’s, it’s the right, the right move.

[00:40:56] Vic: Yeah, I think that’s right. And [00:41:00] EPIC had the ability to cause challenges to one system where everyone would be, and I think it’s positive that they’re now joining in with kind of everyone else on care

[00:41:10] Doug: quality.

[00:41:10] Vic: I think that’s

[00:41:10] Doug: right. I think that’s right. I mean, it’s time for this, man. We’ve been, we’ve been talking about interoperability for a hell of a damn long.

[00:41:16] Doug: Forever. Forever. Yeah. So, adopt a DM system. Yeah, pick anything. And let’s go. Right. Let’s

[00:41:21] Vic: go. Okay. And then, uh, Modern Healthcare had a pretty good story about five takeaways from the user group. We covered the user group last week, but I thought it’d be good just to go through the five. So, number one is that, uh, Judy was sort of talking about how fast they’re growing.

[00:41:36] Vic: She in there talked about sort of the market share that they have. Mm hmm. I think it’s even stronger than she claimed, but she’s saying that they have 39 percent of acute care hospitals, 52 percent of beds. Over half the beds in the country. Over half the beds. That’s unbelievable. Yeah. I would have guessed even higher than that.

[00:41:55] Vic: Oh, really? Okay. I mean, it’s really only, you [00:42:00] think about like the three, four? I mean, Epic, CERN, and Meditech, and then after that, it’s, it falls off pretty quickly. Yeah. Yeah. Um, so then they have their data platform, Cosmos, and AI. They really have gone very quickly into AI and data. They collect data through this thing, Cosmos, from every system.

[00:42:21] Vic: Mm hmm. Yeah. And it’s pretty powerful. And, um, I was surprised

[00:42:25] Doug: at the number of apps they have within the Cerner kind of platform that are AI generated. Epic platform. Yeah. That are, that are AI, um, over a hundred.

[00:42:33] Vic: Yeah.

[00:42:33] Doug: I know. Over

[00:42:34] Vic: a

[00:42:34] Doug: hundred.

[00:42:35] Vic: Yeah. And then they’re, they really are focusing on ROI for their customers, which I think makes a lot of sense that they’ve been that way for a long time.

[00:42:43] Vic: They are streamlining the prior auth. Yeah. thing, which is, I think all the back office revenue cycle is, is sort of so ripe for disruption. Yes. And that’s been the number one place that AI is being used. Yeah. Yeah. And then sort of, um, you know, [00:43:00] having fun, they, they are, um, very profitable. I have been frustrated with Epic at times, but, but they take care of their developers and their customers and they had a big event and sort of had fun with it.

[00:43:13] Vic: We talked about it last week, Judy, You know, who’s a billionaire was wearing her Mother Goose costume on stage and having fun.

[00:43:21] Doug: Thousands, thousands of their customers there. It was a pretty significant event. And obviously to realize they’re, they’re not just a U. S. company, right? I mean, they’re in many countries, certainly a global footprint.

[00:43:33] Doug: So yeah, anxious to see where, where the EHR player goes here.

[00:43:37] Vic: Yeah. Moving on to the drug channel, J& J, Johnson Johnson came out this week refusing to continue with the 340B discount program because they claim that the savings are not being passed on to patients. And they no longer are going to [00:44:00] provide drugs at the 3.

[00:44:01] Vic: 40B price. Instead, you have to pay the regular price, and then if you provide discounts to your patients, you can then get a rebate.

[00:44:13] Doug: Discount, go to rebate plan. Yes. That’s exactly right. And I don’t think they’re claiming that they potentially don’t pass along this thing, man, they don’t pass along the savings to the patient, right?

[00:44:22] Doug: When you think about the savings and the discount programs, hospital systems are, are loving it.

[00:44:27] Vic: Yeah, that’s right. They are keeping the difference. The patient does not realize the savings. And at first, I mean, this rule has been around for a long time. At first, it was really designed for FQHCs, federally qualified health institutions.

[00:44:44] Vic: systems, which is a very small patient population, small set of providers. and treating the people that really need help. Very low income folks. That’s right. And it was meant to help that. And then when we [00:45:00] came to the, um, Affordable Care Act, we added any non profit health system to be eligible for 340B.

[00:45:08] Vic: And you’ve seen just a huge explosion of the adoption. Yep. The cost to the drug manufacturers. And the, it maybe needs to be looked at. Not maybe, should be looked at. Yeah. Um, but Johnson Johnson is It’s just not going to keep playing, which I was surprised about.

[00:45:28] Doug: Yeah, I don’t know if they’ll, I don’t know how this is going to turn out, right?

[00:45:32] Doug: Because there’s definitely arguments on both sides of the table. Health system is certainly going to pound the table, like we got to have this, right? Yeah. And I think the discounts are what, in the neighborhood of like 35, 50, I mean they’re pretty substantial. Significant discounts. Discounts. That for me, the part of the solution is pass the damn savings along to the individual.

[00:45:50] Doug: Right. Right? That’s the intent, I think, of the program. Uh, or a, a part of the intent of the program.

[00:45:56] Vic: Yeah. Yeah, so this, uh, the agency that runs it, it’s a [00:46:00] federal agency called Health Resources and Services Administration, HRSA, um, so Fierce Health came out the next day, HRSA and hospitals say the J& J plan.

[00:46:12] Vic: is not supported in the law. You know, it doesn’t, you, basically, J& J can’t do this. And, well, I think that probably is true from just directly reading the law. I spoke to Emily Evans, who, you know, talks to us about policy things, um, before this show, just to get caught up on this. And she doesn’t think HRSA has much enforcement Teeth.

[00:46:35] Vic: Can’t really do much to J& J other than yell about it.

[00:46:38] Doug: Yeah, they are, they are, um, a governing body, but not an authoritative body of power, right? They’ve got no ability to kind of, uh, determine who does what, right? Uh, so that, that makes sense. And is it true, Vic, like, almost a third of hospital systems actually are, uh, 340B eligible in the US?

[00:46:57] Doug: I mean, there’s a significant number of, [00:47:00] of systems in the country that are

[00:47:01] Vic: eligible.

[00:47:02] Doug: Yeah. There’s,

[00:47:02] Vic: uh, really any nonprofit, I think is eligible. Okay. Um, if you have, you know, any patients below a certain income level. So it’s pretty, it’s a lot of hospitals. Yes. But the big, um, most of the dollar flow, most of the volume of the 340B money goes to a lot of academic medical centers.

[00:47:25] Vic: It’s basically the top 20. academic medical centers, they have the infrastructure, there’s a lot of paperwork, a lot of filing, um, you need to do a lot of infrastructure in order to be able to avail yourself of this. So a very small system, I think, would have trouble, not that they couldn’t do it, but they haven’t, largely.

[00:47:48] Vic: And so you’re going to have, um, you know, here in town, Vanderbilt. Mayo and Cleveland Clinic and I mean all the all the basically the top 20 top 30 [00:48:00] academic medical centers nationwide Avail themselves of the 340 B system and you know, I I have no problem with that. It’s it’s legal. It’s part of the law Yeah, they maybe there certainly should do that.

[00:48:14] Vic: Those groups have a lot of lobbying power So you’re going to see, I think, the drug companies and the health system fighting each other.

[00:48:23] Doug: Yeah, I think that’s, I think that’s right. It’ll be interesting here because when you think about those academic medical centers, this is a pretty significant part of their, of their revenue.

[00:48:30] Doug: Yeah. Kind of what would happen. And NIH

[00:48:33] Vic: funding is not declining, but not growing anymore. So it’s not keeping up with inflation. That’s right. And 340B is under scrutiny. Those are two significant, uh, sources of revenue for, for that. And they don’t need any additional headwinds. Oh, right, right. Exactly. So, um, really this, going back to the section 230, this is similar.

[00:48:56] Vic: Congress really needs to weigh in and [00:49:00] change the statute to be whatever the will of the people is through their elected officials. Both the House and the Senate started before J& J came out, have started picking this up and looking at how could we, uh, make improvements to the system. But there’s been no legislation.

[00:49:21] Doug: You know, this, just like a couple other topics, we, we, 30 some year old, uh, legislation, like this has been around, 34B’s been around, 340B’s been around for a long time, uh, it needs to be refined. I mean, think about just the change of the landscape and, and, you know, who now, what, what was approved back then, it’s totally different today.

[00:49:38] Doug: It needs to be reformed and looked at. Yeah. And I think still necessary. And FQHCs

[00:49:44] Vic: need a lot of help. Yes. Um, but I’m not sure that the Action on Medical Su uh, centers need the same kind of assistance? I mean they do great work, but FQHCs are just a very different animal. It’s it’s a much it’s a much smaller [00:50:00] part of the market and they they do need a lot of support.

[00:50:05] Vic: So I don’t know, we’ll see how it goes both the House and the Senate are looking into it. I The way I read J J is They’re sort of, uh, catalyzing this discussion because they’re going to stop paying on October 15th. We’ll see how that goes. There is no chance there’s legislation before then. No, no way. Not in an election year.

[00:50:24] Vic: Right. Nothing’s going to happen. Yeah. And so, but whenever Congress comes back after the election, I’m sure there’s going to be a lot of attention on it. Agreed. Agreed. So we’ll, we’ll post this. I’m not going to go through it, but we have a story about the, um, Energy and Commerce Committee in the house.

[00:50:41] Vic: that was working on how they might affect this change. Again, I don’t think it’s going to happen before the election. It’s not going to happen before the election. Okay, so this is interesting. Pfizer came out with their direct consumer product. Pfizer for all, and it directly connects patients to a [00:51:00] physician in a telehealth setting.

[00:51:02] Vic: And they have some images here of how their phone app works. So it looks really, you know, easy, nice. And then you get your script, you know, doesn’t have to be a Pfizer medication, but they are formally looking for that. Um, and then often they’ll deliver it to you. And so Lily came out with Lily Direct. And this really is, I think, Pfizer’s answer to that.

[00:51:29] Vic: And so, it’s another consolidation play, like, they are now sort of grabbing, uh, merely dis intermediating the physicians, just going right to the drug channel. Direct to the consumer, too, right? Yeah, yeah. I mean,

[00:51:42] Doug: this is actually going to be available for you and me and everybody else, right? We can go on right now, I think it’s live.

[00:51:48] Doug: And it’s akin to, like, we see Startup companies all the time trying to do an app trying to do a solution to kind of make the system more efficient Yeah, bringing together what Pfizer is kind of pushing down right and they’ve got the power [00:52:00] Yeah, I’ll do that. So I’m excited for what Lily’s done what these guys are doing.

[00:52:04] Doug: I think it’s game changer stuff And it looks like a pretty slick and easy app that can do a whole lot for yeah for a lot of people So that’s cool stuff

[00:52:15] Vic: Now we’re going to get to sort of a harder story, but I think we should cover it. So MPOCS, uh, the World Health Organization came out with a health emergency maybe a month ago.

[00:52:27] Vic: New York Times had a story this morning really just showing how terrible it is. And they, they went to Congo, which is the epicenter of the disease. A lot of children affected, and it’s a poor country, poor area already. And they’re not getting enough support, they’re not getting enough services, and so it’s spreading quickly, and unfortunately, this strain is more deadly than the previous strain was.[00:53:00]

[00:53:00] Vic: Um, and it passes, um, More through just contact. You don’t have to be not sexually contact. So kids can pass to each other. I think

[00:53:08] Doug: this, this new variant, uh, uh, Clay, Clay one, I think is what, what it’s called is potential skin to skin contact. Yeah. That’s why we see it more prevalent in kids that, you know, are.

[00:53:18] Doug: probably already undernourished and already have, you know, access. So

[00:53:23] Vic: the video of the, like, infirmary where they’re treating for these patients is just heartbreaking. Yes. I mean, they have a tarp separating one room from the other. And I don’t know, there’s probably 200 parents and children there.

[00:53:40] Doug: Yeah.

[00:53:41] Vic: It is, the best they can do, I think, but it looks really difficult.

[00:53:47] Vic: It’s not the best we can do. Not the best we can do. Not the best the world

[00:53:50] Doug: should do. I

[00:53:50] Vic: mean,

[00:53:50] Doug: that’s exactly right. This is, this is heartbreaking. Yeah. And it’s spreading, man, to your point. I think it’s now prevalent in, I don’t want to say prevalent, but at least, uh, seen [00:54:00] cases in like 18 different countries.

[00:54:02] Doug: Yeah. So it is spreading. It’s been around for a couple of years. It’s been around for a while, but certainly a couple of years, uh, pretty prevalent. Um, and it’s not going away anytime soon unless somebody steps up and helps these folks.

[00:54:13] Vic: Yeah, so, I mean, I wanted to bring it up. It’s terrible images to look at, but I think it’s important to look at them because it’s, yeah, real.

[00:54:21] Vic: Yeah. And I think just as a health care system, we need to think about public health. We need to give some time, resources, capital, support to Africa. One, because it’s, it’s the right thing to do from an ethical and human point of view. perspective. And two, if we don’t take care of this disease there, it’s gonna, it’s gonna spread.

[00:54:46] Vic: And so it’s much better to let’s go take care of the people in these hard areas. That’s the right thing to do. And then also we limit the impact on the Western world. Yeah. I [00:55:00] mean, it’s a global

[00:55:01] Doug: emergency health, right? WHO just announced, I guess, that being the case. 4 percent mortality rate, man. Yeah.

[00:55:07] Doug: That’s real. Um, so, yeah. I almost was, like, reluctant. I’m like, you sure you want to shut this off? I know, I know. You’re right, it’s real.

[00:55:17] Vic: Okay, um, less, uh, less scary. We’re going to switch into the AI. Maybe, maybe it’s pretty scary. Maybe it’s scary, but not, not seeing kids suffer is a whole different level, I think.

[00:55:29] Vic: So OpenAI is raising money again. They’re valuing the company a little over a hundred billion. A hundred billion. Thrive Capital is leading it. Uh, the round hasn’t totally come together yet. It’s an uptick from their last valuation, million billion, 10, 10, 15%. Yeah. Less than 12 months. Right. Yeah. Yeah. Um, so maybe not surprising.

[00:55:52] Vic: They’ve raised a ton of money. They’re going to keep raising money. Yeah. Um, they have, it’s rumored that, that they’re coming out with a [00:56:00] new tool. The code name is Strawberry. Ah. Um, that they showed to our defense Uh, agencies, I think Monday, Monday or Tuesday, because of how powerful it is, they wanted to disclose it ahead of that.

[00:56:17] Vic: Um, but they haven’t shown it to me or anyone else. So, um, yeah, there’s lots of news and lots of rumors around Sam Altman and OpenAI. But, um, I don’t know, what are your thoughts about them raising money again?

[00:56:29] Doug: You know, man, it is no doubt an arms race. Uh, and ChatGBT is, is still killing it. I mean, but the growth and the money that’s going in.

[00:56:37] Doug: You talked earlier about, hey, is this kind of space slowing down or is it stagnant? I don’t think so. Yeah. I don’t think so. Uh, and you know, Microsoft continues to double, triple down. Yeah. On them as well. Uh, and the growth with what is happening with Amazon and Google and their play. Mm hmm. Meta, um, I don’t see it slowing down.

[00:56:56] Doug: Yeah. And I guess I’m not surprised by the valuation and the need for more [00:57:00] capital because it is kind of that ripe time for these top three or four to kind of figure out who’s going to be the lead horse.

[00:57:07] Vic: Because it is an arms race, right? Yeah. We, we just had a, um, meeting with the portfolio companies about an hour ago where we, we talked to a bunch of them about what they’re building with AI and, uh, one of them showed off, uh, What they had built and, um, they built it, it saved, I think it saves about 30 minutes per patient of humanly time.

[00:57:30] Vic: It’s a doctor’s time, so it’s, you know, pretty valuable time. Yeah. But the interesting part was that they did a, she had two interns working on it, and they did a full, like, study of should we use Open ai, Gemini, or claw philanthropic, Claude. Um, and it turned out that Claude’s was the most price, uh, attractive.

[00:57:53] Vic: Okay. And the highest quality. Okay. And importantly, Claude and Gemini both sign a, [00:58:00] b, a, a very quickly. Okay. And, and it sort of fits all the HIPAA requirements. Yep. Yep. OpenAI will sign a, B, a, A. Okay. their timeline was not quick. You had to go on this wait list and it was so bureaucratic that they just, they never finished it.

[00:58:18] Vic: Early stage companies don’t have that kind of time. Yeah, they don’t have that kind of time. So, uh, so it is, there’s, there’s competition at all different fronts. I mean, I think the, the pricing was, like 5 a month for what they were doing. So Claude was the cheapest, but you know, whether it’s 5 or 8, I don’t know that it matters on a monthly basis.

[00:58:35] Vic: Not compared to what the alternative is. Right, right. Exactly. But the BAA and a quick answer to the BAA is really important. That’s a game changer.

[00:58:43] Doug: It’s little things like that that are going to kind of help companies kind of win at the race. Um, and man, I’ll tell you, we’re seeing a I don’t know that there’s a deal we’ve seen this year that doesn’t have some capabilities, if not.

[00:58:56] Vic: Yeah.

[00:58:56] Doug: Uh,

[00:58:57] Vic: I mean, if they don’t have AI capabilities, they’re putting something [00:59:00] in to, to try to raise money. It’s just what, yes, that’s right. Um, okay. And then the last story, uh, NTUs ai, uh, they’re working with Northwestern Medicines kind of periodic surgery processes. So all of those communications. To make sure the patient is, uh, not eating the morning before, and that they have a ride home, and all of the prep work that goes into that, um, Cuventis is now doing with this AI operational assistant that sort of reaches out and, and gathers all the information, makes the notices, helping the doctors and the clinical staff focus on, The, you know, higher value things, which is incredible.

[00:59:40] Doug: This is where the rubber meets the road. We’re starting to see it now in action. Yeah. In, in assisting, yeah, operating kind of side of this, we’re going to see it across the whole system. I was surprised. This thing calls patients. Oh, yeah, yeah. This thing makes outbound calls for, I mean, all of it. Yeah. It’s amazing.

[00:59:56] Vic: In the, in those limited use cases, right? Like you need to call this [01:00:00] patient, remind them about what they eat the day before, what they, you know, it’s like a set of things. Have you tried, you should, I’ll help you get a try. We know someone that has one of these. Oh, cool. Cool. It’s, uh, it’s incredible. Yeah. I can’t tell the difference.

[01:00:12] Vic: Like it’s not. Yeah. They, it’s, it discloses that it’s a bot, but if you didn’t have that, it’s the same as someone, as a person calling. That’s amazing. Good. That’s all we have. Thanks for doing this. So it was a good show. Lots going on. There is a lot going on. It’s interesting, the policy, the different policy dynamics kind of weaving into the Kind of the M& A and the changes in the landscape in the health systems, payers, and now drug channel.

[01:00:40] Doug: It’s amazing. I’ll tell you, man, it’s moving quick, uh, and there is a lot. Uh, certainly humbled to be here. I look forward to Marcus coming back. Yeah. Uh, but this was great, man. Had a lot of fun.

[01:00:50] Vic: Thanks for doing it. We’ll keep covering this stuff. Have everyone have a good Labor Day. Uh, hopefully Marcus will be a new champion again.

[01:00:57] Vic: That’s right. And we’ll see you next week. See

[01:01:00] y’all.