118 - DeepSeek is UNLEASHED, Doge’s Shocking Move & Inflation’s Breaking Point! w/ Paul Kappelman

Show Notes

In this episode of Health Further, guest host Paul Kappelman joins Vic to discuss the latest in healthcare policy, economics, and innovation. They break down the latest inflation data and its impact on healthcare, analyze major VC investments in longevity and nutrition startups, and examine policy changes affecting hospitals, physicians, and payers. The conversation covers the challenges of rural hospitals, Medicare Advantage reforms, and potential cuts to NIH research funding. They also explore Tenet Healthcare’s financial strategy, the growing issue of hospital bad debt, and Humana’s push for operational efficiency. The episode wraps with discussions on AI’s role in healthcare, Elon Musk’s bid for OpenAI, and concerns over the risks of open-source AI models.

Links:

2:41 - Inflation Heated Up in January, Freezing the Fed WSJ

5:54 -  Prenuvo adds new health tests to flagship full-body scan, raises $120 million in fresh funding CNBC

8:47 - Startups Fay and Berry Street each bank $50M with growing investor appetite for personalized nutrition Fierce Healthcare

10:26 - Senate confirms RFK Jr. as head of HHS in 52-48 vote Fierce Healthcare

14:12 - Healthcare lobbying 2025: Here are the top policy issues for hospitals, payers, docs and tech Fierce Healthcare

24:57 - DOGE’s First Round of Cuts Went to Trump Priorities, but Bigger Targets Await WSJ

28:20 - Tenet Healthcare CEO touts portfolio transformation, policy change bulwarks on Q4 earnings call Fierce Healthcare

32:12 - Nearly half of rural hospitals in the red, 432 vulnerable to closure, report finds Fierce Healthcare

36:51 - Hospital bad debt is getting worse Beckers

39:31 - Humana putting focus on operational efficiency amid MA headwinds Fierce Healthcare

40:31 - Cigna To link executive pay to customer satisfaction

42:27 - Novartis to Buy Anthos Therapeutics From Blackstone for Up to $3.1 Billion WSJ

42:53 - Novartis Superbowl Ad Youtube

44:07 - For the Sick and Dying, Live Music to Ease the Pain NYT

46:13 - Elon Musk-Led Group Makes $97.4 Billion Bid for Control of OpenAI WSJ

47:17 - Vance Warns U.S. Allies to Keep AI Regulation Light WSJ

48:46 - DeepSeek Offers Bioweapon, Self-Harm Information WSJ

50:38 - Thomson Reuters Wins First Major AI Copyright Case in the US Wired

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What is Health:Further?

Every week, healthcare VCs and Jumpstart Health Investors co-founders Vic Gatto and Marcus Whitney review and unpack the happenings in US Healthcare, finance, technology and policy. With a firm belief that our healthcare system is doomed without entrepreneurship, they work through the mud to find the jewels, highlight headwinds and tailwinds, and bring on the smartest guests to fill in the gaps.

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.

Okay.

Welcome to Health Further.

I have a great guest today, Seema Verma, who is the reasonably new EVP and general manager of Oracle Health and Life Sciences.

Seema, thanks for doing this.

Really appreciate it.

My pleasure.

Thanks for having me back.

I think most of my audience has followed your career, but for those people that have been living in a cave and not, um, maybe just give a quick summary of your work sort of at the intersection of public policy and and corporate health.

Sure, so, you know, I started my career, but I would call the front lines of health care working in a health system.

And this was a health system that served the indigent population.

So we had community health centers, public health department, long term care.

And, uh, really gave me some insight into the challenges on the ground.

And, uh, from there I started my own consulting company.

And a lot of my clients were not only health systems, but then sort of evolved into government, whether it was local government or state government.

And so I spent a lot of my career, even working with tech companies and just kind of building, you know, better understanding around policy issues.

And during that time, I designed, at that time, Governor Mitch Daniel's health plan.

Um, when he left the state of Indiana, then I helped then Governor Pence develop his health care plan.

And then from there, I started helping president Trump, um, during the campaign in terms of developing his health platform.

And so then after the campaign, he nominated me to be the CMS administrator.

So the head of, um, centers of Medicare and Medicaid services.

And I did that for four years.

And during that time we had the pandemic, so you got, you were

in the middle of everything

as, as the world was trying to figure out what to

do.

Right.

I was on the, um, White House COVID task force and so kind of served every day on that.

So beginning to end.

And then, um, after my, my time in government spent a little time in private equity.

And then I've been now at Oracle Health for, you know, almost two years.

Trying to put into a lot of the things that I couldn't get done in government, you know, regulations only go so far.

And so I'm hoping to, to, um, help solve some of those problems using technology.

Excellent.

So let's dive right into the, the, um, topic on everyone's mind right now, which is artificial intelligence, the LLM technology.

Of course, it has incredible promise, but in health care, we need to be cautious to make sure that it's sort of channeled in the right direction.

How do you think about, or how is Oracle thinking about sort of leveraging AI for the providers and for the patients?

Right.

So let me just start by saying, I do think that is a game changer, not only for health care, but for many industries.

And if you kind of go back and think about where we are, um, in 2010, right, the government mandated that we digitize health records and created incentives and spent 36 billion dollars on digitized health records.

And it didn't work very well, right?

We did digitize the system.

We created a lot of burden for providers, kind of forcing them to use these electronic health records.

But then I would say that that data was kind of locked in their computers.

So lack of data

out of paper digitized, but that it didn't go much further.

Right.

It's almost like you just moved from a filing cabinet to the doctor's computer and we were kind of stuck there.

And what's happened I think over this time is there's been better rules around interoperability, but then also there's just been the advent of more advanced.

Data analytics and now a I.

And so we have the ability to really analyze that data better and develop all kinds of insights.

But I think what a I brings us in the short term, at least for health care is that allows us to automate.

And a lot of the mundane kind of paperwork, um, tasks that we have going on, um, in the system today.

So if you think about with healthcare, it's about 25 to 30 percent of the healthcare spend is just on administration, administrative costs.

And so I think there's an opportunity with AI, right, to, to help kind of address that side of the house, whether it's around, um, billing or making appointments or scheduling.

So things that we would say You know, I think it's very clear that, you know, kind of the non clinical decision piece is very straightforward, that there's a lot of opportunities and you're seeing innovators across the board coming out with all kinds of different things.

And then I think the question has become is what is AI's role in clinical decision making?

And you kind of hear people say, oh, is.

Is AI going to replace the doctor?

And, you know, the short term answer to that is no.

We don't see it that way.

We sort of see AI as a tool.

It's another tool in the bag for providers, right?

There's so much information out there.

There's so many, um, new technologies and innovations that are coming out.

So it can kind of help them condense, have more data available at their fingertips.

It can also automate a lot of the mundane tasks that they have to do.

So if we think about the interactions that they have.

With insurance companies, right?

So think about prior authorization or utilization management.

Just a lot of that can be automate, which I think is important.

And I say that because from having run the country's healthcare system when I was at CMS, you know, there aren't these big ideas and solutions.

that are going to fix the problems that we are facing today.

And I think to some degree, the problems have gotten worse.

Um, I think all of us can say we're waiting a little bit longer to get a doctor's appointment, right?

Our doctors are really stressed out.

They're burnt out.

They're seeing more patients.

The patients that they're seeing have more complex issues.

It's a good thing that our population is living longer, but with that comes more complexity of disease.

And so there's a lot more demands on their time.

And, you know, they're spending, after they're finished seeing patients, they're spending three to four hours, what we call pajama time, just doing all the paperwork to keep up with that.

So there's a real opportunity to improve the quality of care that we all receive, right?

When your doctor has real time information about clinical trials or what's the latest innovation, or maybe They're thinking about prescribing a drug, or maybe they just want to take your profile and compare it to people that have a similar diagnosis and get some ideas of treatment options or how you are, you know, what are potential ways to address one's concerns?

And that's where I think, again, I can be brought into.

Be that tool for the provider to help their decision making.

But at Oracle, we believe strongly that there should be a human in the loop.

So at every turn where we're using AI, we make sure that ultimately it is the provider that's signing off.

So some of the technology that we've developed is something called our clinical AI agent.

Really cool technology listens to the patient doctor interaction generates a note.

The Oracle.

Engineers develop this in 6 months using AI to actually develop and write the code as well as the product in and of itself uses AI.

It's been a game changer.

Our doctors love this thing, right?

They're saying, gosh, we're spending less time in the electronic health record.

But in that case, right?

It listens to the interaction, and then the doctor, it generates the note, but the doctor is the one that has to agree that this note is appropriate.

So they can make changes if they want, and then they hit submit.

It's really empowering or augmenting and empowering, enabling physicians and other clinicians to.

Do more spend more time listening to the patient.

Really?

I've heard you and others at Oracle talk about we need to rely on the empathy and the judgment of the clinicians and then empower them to do more take away that pajama time where they're there at 10 at night, you know, keen in something in the into the HR, the old HR and really empower them to do what they love to do, which is really deliver empathetic care to patients.

And just to be able to sit and develop that relationship with the patient, right?

They want to be able to look their patient in the eye.

And today, a lot of our interactions are we, we see the doctor staring at their computer, they're clicking away.

And we're kind of sitting there looking around the room.

And, you know, if you think about what's gone on in healthcare, there's been a bit of erosion of trust in the doctor patient relationship.

We saw that play out, um, during COVID.

And I think that continues to some way, in my belief, is that part of it starts with your doctor's not even looking at you in the eye.

Yeah.

Well, it's even more foundational.

The doctor is so burdened with administrative and data entry tasks that they don't have the time and, and, and flexibility to really interact with the patient.

And I would argue that.

Almost all clinicians would really like to be doing that, but they have so many momentary demands on their time that they're distressed and they're not able to.

Right.

And I think it really takes away the joy of why they went into medicine in the first place, right?

I mean, if you think about it, it's not easy to get to medical school, right?

It's four years of undergrad.

You take, you know, your MCATs to be able to get in, and then it's four years of medical school.

And then there's residency.

I mean, this is not an easy road.

So people that go into it.

have some sort of a calling.

And they don't, you know, I think it's fair to say that none of them go in with the idea that I'm going to be sitting at a computer doing data entry.

That is not, you know, why, why they go into it.

And so it really diminishes, I think, their ability to find joy in their work.

Um, and you know, we, we hear about it all the time, the concept of moral injury and more and more doctors kind of leaving a little bit earlier than they would have normally.

So, so unpack maybe the The Oracle's vision or your vision for what a next generation or an upgrade of the HR system.

I mean, certainly you've sort of taken the Cerner chassis, but you've, you've changed it dramatically and sort of imbued AI and other tools into it.

What's how do you think about what that means?

What is the new Oracle Health EHR be able to do?

Let me kind of start back a little bit to explain the mission that we're on and the vision that we have.

You know, you'll hear Larry Ellison, who could do a lot of different things.

I mean, he spent his whole career in technology and really built a lot of successful applications for whether it's banking or other industries, restaurant, hospitality.

And, you know, Oracle's infrastructure is in pretty much every major business that's out there.

So, you know, they've played that role.

But I think now the thought from Larry is that he wanted to take all of that experience that he's had over these 40 years and all of the learnings and bring all of that to healthcare.

And I think it was his observation, which is correct, was that if you think about it, healthcare really has not.

Evolved where other industries are.

So if you think about banking, for example, you can get your money anywhere in the world.

You can go to an ATM and you can get your access to your bank account, but when it comes to healthcare, you can't really get access to your healthcare record.

And so, you know, to him, a lot of this, wow, you know, we can solve a lot of this with technology.

And so I think from his standpoint as the founder of the company, and he's still our CTO and chairman of the board is, you know, this is the next.

Vision.

This is the next mission mission for Oracle to transform health care.

I don't think we as a company are looking at it as one point solution.

So electronic health record to us is just a point solution, but our focus is on how do we solve the overall problems in health care?

And so the is very important.

It's the center of that because it represents that basic interaction between the provider and the patient.

But in order to solve this problem, you have to go much bigger and larger, and you have to really look at an end to end solution.

And so what we're able to bring to the table is some of the core infrastructure.

We have a database.

We obviously are, you know, um, the cloud computing.

Um, we also have what we call our fusion applications.

So Oracle brings supply chain management, human capital management, ERP.

So all of the.

Financial systems that most businesses would normally have and now we're bringing that together with the electronic health record.

We have patient portal patient accounting.

And then the other big thing that that Oracle really specializes is in analytics.

And so we're able to bring analytics end to end across the entire platform.

So you're connecting your supply chain management to the electronic health record.

So you can imagine, you know, what you're able to do when all of those systems are connected together.

And then we're applying AI across every single application.

So that we are able to leverage the power of artificial intelligence to reduce a lot of the mundane tasks that we see in a lot of the old applications.

So, if we look at the EHR, and, you know, I've been a, a vocal critic of electronic health records long before I came to Oracle.

And, um, in my early time in the administration, did a nationwide tour and went across the country.

And I heard from providers on the front lines and the frustrations that patients were having, frustrations from innovators.

And, you know, ironically, a lot of it centered from the electronic health record.

Patients didn't have access to their data.

Providers, we already kind of talked about the problems with the and so that's kind of one of the first places that we've started is the electronic record and how we can kind of create a new version of that using modern technology.

And then from there, there's all kinds of things that we plan on doing.

But let me, let me start with just the.

And getting at your question, um, what we're doing is building a modern electronic health records.

If you think about it, these 1990s EHRs, um, our competitors and even Cerner's, they were built in the 1990s.

And so 1990s, I don't even know that people were really using cell phones at that time.

Email was very early 90s.

So if you think about it, the concept of building an EHR and that that platform would survive all the way into the year 2025.

I mean, and that's why I think we have problems with the EHRs because they haven't been able to adopt that modern technology.

So what we're doing at Oracle is from the very ground up, you know, what goes into the EHR, there's not a lot of junk data, what's going in there is accurate and appropriate.

And it's built at the foundational level.

So a lot of what we're hearing today is there's this AI model and there's this and that and it all kind of sits on top of like sort

of bolted on to this old system that isn't that good at the core.

Yeah.

Right.

And so it's bolted on and you really hit the, the, the nail on the.

Or the hammer on the nail is that bolted on.

And that's where we're different is that our part is that AI is embedded at every single layer.

It's at the most foundational level.

And so it's, it's revolutionary.

So I'll give you an example.

What does that mean?

So one of the things that we do, which I sort of talked about the ambient, the, the kind of listening to the patient, doctor, patient interaction, and be able to do the note.

Yeah.

The

ambient scribe, uh, use case is probably there.

Fastest adopting bulldog,

right?

And with the bolt on, it means that it's bolted on.

So you get the note.

Then you have to cut and paste into your E. H. R. With ours.

It's all embedded.

So you're it's all conversational.

And so it starts with that.

But then There's, you can basically use conversation to direct what you want the HR to do is you could say, hey, Oracle, bring up this lab result or tell me, you know, the last 5, um, cholesterol scores for SEMA, Verma.

So you're not having to hunt and, you know, going around looking for data and information, which.

Doctors spend a lot of time doing, you're asking.

So the whole thing starts with not only just it's going to do your note at the end of the day, but it's going to help you whatever, with any data you want, or you may say, tell me about the research on X, Y, and Z.

And it tells you exactly where the data comes from.

So you know exactly, you know, what the source is.

We also are able to do summarization.

So we can take the patient's full electronic health record and create a summary for the doctors.

So when they walk in.

They're not trying to figure out, you know, who's SEMA.

It's all very, it's in a nice kind of summary.

So it's easy for them to then take the action.

So at the end of the day, what that means is more time with patients and less time in the EHR.

And then from there, all the workflows become automated, whether you're going to prescribe a drug or a test.

And then it all hooks to all of our other offerings.

So we think about insurance companies, and let's say you order a test and it requires a prior authorization.

We're automating that process, not only in the EHR, but also for the payer as well.

So when they receive it on their end, you know, we're reducing the payer's administrative costs because a lot of times they get prior ops that are not filled out appropriately, or they're not even needed.

So it's kind of this end to end solution.

It starts with the EHR, but it doesn't end there.

Another thing that we're doing inside the EHR, which connects to Oracle's footprint in life sciences is right in the EHR.

We can say SEMA qualifies for these clinical trials.

So we're connecting clinical care to clinical research.

And

right when the physician is talking to you or me about our health situation, they have that knowledge and they can, they can bring it up and talk to the patient about whether it would make sense or not.

They can bring it up, it's right there, or they can ask for it.

So things like, think about all the focus that our country has had around value based care, and it hasn't really scaled, because quite frankly, it's hard for doctors to do it, and part of the barrier is they don't have real time information.

You need to understand that your patient has social determinants, they have problems with transportation, maybe they're low income, and food is an issue.

Well, they need to know that.

information right up front, we can help them identify here's the contract.

Like here's the commercial client and the contract requires you to do X, Y and Z.

So make sure you're doing those preventative services because that's going to impact your reimbursement.

So it's an, it's a whole different way of even doing value based care.

Right inside the E. H. R. And the big thing is you don't need four or five point solutions, you know, and that's what we're seeing in the industry.

And, you know, I think providers are spending a lot of money on technology, but they're not necessarily getting the value

right out of that.

So you talked about when you were here in Nashville, you talked about four.

I think there were four core principles.

You sort of just touched on.

A. I. Seamlessly sort of permeating the entire clinical workflow to really empower clinicians.

Another one was leapfrogging the competition with groundbreaking intuitive like, you are so that you just you just pick up the tool and you know how to use it.

Which we're used to in consumer products, but in health care products are you typically there's a lot of training, uh, maybe talk about that.

So just making it intuitive for people,

right?

I mean, if you think about it, we never got trained on how to use.

Right.

And even a lot of the tools out there and granted an EHR is more complex, but you know, I was really struck.

My daughter started medical school this year and even before she got to medical school, so this is, you know, a month or two before they started training her.

On our competitors, right?

And so if you think about that, like, they don't even know anything about medicine, you know, they literally have not even gotten in there.