Health:Further

Show Notes

Vic and Marcus starting with Marcus’ firsthand insights from Saudi Arabia, exploring its rapid modernization, healthcare overhaul, and economic transformation. They shift to the evolving landscape of venture capital, questioning AI healthcare valuations and the shift away from Delaware for corporate registrations. The conversation delves into private equity’s changing dynamics, U.S. healthcare policy shifts, and the financial struggles of major institutions like Mass General Brigham and CHS. They discuss AI’s growing role in healthcare and tech, including Meta’s push into humanoid robotics and the mixed reality of AI-powered agents. Wrapping up, they analyze regulatory changes, workforce shifts in federal agencies and healthcare, and how the evolving political and economic environment is reshaping industries across the board.

Links:

12:34 - Fed Minutes Reveal Little Appetite for Near-Term Rate Cuts WSJ

13:21 - AI health-care startup OpenEvidence raises funding from Sequoia at $1 billion valuation CNBC

15:10 - Frontera Health gets $32M for autism therapy tools Axios

17:38 - Posterity collects $13M Series A for male fertility Axios

18:13 - Millie secures $12M to expand its maternity care platform Mobi Health

18:36 - Ex-Redesign Health director debuts Terrarium incubator Axios

19:21 - Leaving Delaware Blog

23:30 - The New Survival Guide for Private Equity: Go Big or Get Back to Basics WSJ

28:04 - HHS is losing thousands of workers under Trump administration probationary job cuts AP News

30:53 - FTC chair endorses Trump's ability to fire commissioners Axios

33:00 - Musk Cost-Cutting Effort Is Being Guided by Health Entrepreneur NYT

49:02 - Humana's CenterWell unit plans further expansion in 2025 Fierce Healthcare

49:59 - UnitedHealth Group offers buyouts to eligible employees Fierce Healthcare

51:04 - CommonSpirit Health logs $135M Q2 operating gain on higher volumes, checked labor spend Fierce Healthcare

52:11 - Mass General Brigham opens FY25 with $54M operating loss; expects layoffs to save over $200M annually Fierce Healthcare

53:07 - CHS’ losses widen in 2024 Healthcare Dive

55:13 - NYU Langone hospital nurses give strike notice Beckers

55:51 - A look under the hood at Risant Health’s value-based platform Fierce Healthcare

58:16 - MultiPlan unveils rebrand as it shifts focus to data assets, tech for providers, payers and employers Fierce Healthcare

59:01 - Lumeris unveils AI tech for primary care Fierce Healthcare Fierce Healthcare

59:48 - Corti AI adds UpToDate integration to its foundation model Fierce Healthcare

1:00:38 - Mark Zuckerberg Bets Big That Real Humans Want Humanoid Rob

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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.

All right, Vic.

How's it going?

Going well.

Glad you're back.

You came back to snowy Nashville,

though.

Yeah.

But it's, it's, it's a, it's a pretty snow.

You know, it's not like rainy, nasty.

The sun is out.

It's not too, too gray out.

It's nice.

So how was, uh, we tried to keep it going here, but I want to hear about Saudi Arabia.

How

was the

trip?

Uh, it was mind blowing.

Absolutely mind blowing.

Um, you know, I, I think that Saudi Arabia is probably, uh, top three places where the American narrative versus reality gap is, is, is like just ridiculously wide.

Um, and, and, and, you know, credit.

Just credit to us on that.

I would say the narrative we have is not necessarily wrong.

It's just old and Um, the kingdom of Saudi Arabia is advancing so quickly.

Um, cause they have this thing called, uh, Saudi vision, 20, 30.

That, uh, that the King and his Royal Highness put together

building of entire cities and it's huge.

Yeah.

They've got these massive giga projects, right.

That they're doing.

Okay.

And, um, the, the, the thing that you realize pretty quickly is.

The fundamental difference between a society that, um, does not run by democracy versus one that does.

Right.

So we have this democratic society and, you know, we're thrashing around.

We're thrashing around like.

Constantly about partisan stuff.

And it just kind of spins up, spins up and don't get me wrong.

I'm not saying like anything is wrong with democracy.

I'm just saying like, you know, there's trade offs, right.

You know what I mean?

So in the democracy, this is what you, you know, you have a lot of the scratching around.

Yeah.

So in a, you know, in a kingdom, the key is really like, do you have benevolent leader or not?

Kingdom

king

or not.

Yeah, yeah, it is, it is completely boils down to like, is the king, you know, benevolent or not, right?

And, um, you know, look, I think the Saudi people would say they have, they have benevolent kingdom right now.

Um, and so they have this, this 15 year strategic plan called Saudi Vision 2030.

They're 10 years into the 15 year plan.

You know, we can't have a 15 year strategic plan in America.

Yeah.

You know, so they have this 15 year plan and they're 10 years in, and it, it has all of these really thoughtful, um, you know, societal and economic, um, And, uh, you know, foreign policy aspects to it, but about health care access building, you know, these, these giga projects, whole just super modern cities, um, as it pertains to us, they are completely revolutionizing their health care system, um, you know, and.

So many of, uh, so many of the, the ministers, uh, and, and the people who work for the ministers, you know, across the, their government, um, were educated in the United States.

So.

The direction they're going with their healthcare system is, I think, one that, not all, because we know that there's not one camp in America around where we should go with healthcare, but it's, it's one that I think a lot of people in America who are in the healthcare industry believe we should be going towards, that they are basically moving to 100 percent privatized ACO model.

Um, so we're, we're already privatized when it comes to, you know, delivering care, they have their own version of the VA there, right?

So.

They have health care for the, you know, the veterans and people in the military, but outside of that, the whole population is cared for by sort of the ministry of health.

Um, and right now it's just like they, they pay for it.

They're not, you know, they don't do cost accounting.

They're not tracking it.

It's, it's not a, it's not a fee for service thing.

It's just a, whatever it costs will pay.

So it's kind of like.

Cost plus maybe, but it's all, but the, but the providers are the government as well, right?

Like today they have private hospitals.

Um, like they just had their first, like HCA just launched on the, on their stock market.

Um, but for the most part, it's, it's UK or London or something, you know?

Yeah, yeah, yeah, yeah, yeah.

But I, but I would, I would say not as advanced as like NHS.

Yeah.

Okay.

Yeah.

Not as advanced as NHS, but where, but where they're going.

Is going to be more advanced, right?

Because, because they're, they're leapfrogging all the models that in the Western world, especially like, you know, UK United States that we've like tried and, and now we're kind of trying to back out of a little bit, you know, um, they're just going to this a hundred percent.

Cluster ACO model.

They have a lot of work to do to figure out revenue cycle and cost accounting and all that kind of stuff, but it's all going to get privatized over the course of the next 10 years.

And they've got it, you know, pretty well phased out.

And, um, it's just, it's, it's super ambitious, but when you look at all the other things that they're accomplishing, um, The building of their financial district, their whole health tech city that they're working on, it's, it's like, you get that they are much further along in the process of, um, getting away from oil dependence.

Um, then, then we might think they are right.

Like, I feel like the story in America has largely been around sports washing, because this is what, this is what we interact with.

Right.

You know, live golf and Ronaldo, you know what I mean?

And just like boxing,

right, right.

Boxing.

Right.

Yeah.

So like, that's what we.

That's what we get to see and feel from Saudi is like the sports part of it, but for, for the, the citizens, it's, you know, it's a full societal upgrade is what they're going through.

sounds like maybe a lot of the people that work in the ministry of health were educated in the U. S.

and they're able to take kind of best practices globally, and then they have.

a king who can say, well, let's build it this way and just start now.

There's a lot to build, but that's kind of freeing just to let's go build how we want it to be.

Yeah.

And the crown prince is apparently, I don't know him.

Um, but the crown prince is apparently, you know, very ambitious when you look at the plan, it's clearly very ambitious, but, but also like we are going to hit these things.

And so, you know, a couple of other things I'll just point out.

Um, the advancing of women in that society, I think it's, it's happening so quickly that it wouldn't make sense that any American narrative could keep up with it.

You know what I mean?

Like, like I, I, when I talk to people here, especially coming back, mostly they talk about women being able to drive.

And some women being able to do some jobs, but like it's, the shift is far more impactful than that.

So when you walk around, you went to a conference, I think when you walk around, there are women, they're just like men, just like in a U S conference.

yeah, for sure.

Absolutely.

Now their society is much more, um, There's no question.

It, it, you know, it, uh, it's a, it's a, it's a nation under Islamic law, and so, uh, you know, every, they're just not, uh, everything is formal, you know, it's a much more formal place.

I wore suits basically every day that I was there to do business.

Um, you know, that you, you don't generally like reach out to shake a woman's hand unless she extends her hand first.

So there, there's a formality to it and a modesty to it.

Um, that is just, it's just baked into the culture there.

It's, it's, it's, it's their fundamental culture and they're not like losing that part of it, but many, many women without, you know, um, headdress, um, now men and women are working on the same floors in buildings.

I think even like two years ago, that wasn't the case.

They were, they were working on separate floors and buildings.

So, um, there's just all these things that are advancing very, very quickly.

Um, women, women are, are entrepreneurs.

Like, I think that's one of the big things that's happened in there.

Many, many women are CEOs of companies and, and entrepreneurs.

And so, um, yeah, it was, it was, it was really, really impressive and inspiring in, in a lot of ways.

Uh, the delegation was timed around, uh, a large event that they have there called leap.

And I had never heard of leap.

Yeah.

You didn't know about it.

Right?

Yeah.

So leap for, well, first of all, it's, it's thrown by informa, which is that big event company that like they, they just bought hymns, for example.

So they, so they throw big events all over the world.

So that gives you a sense of like, okay, how big are they going with this thing?

Right.

It's pretty, it's pretty significant.

It's pretty significant.

And, uh, and the event had hundreds of thousands of people there.

Hundreds of thousands.

Yes.

That's bigger than any event.

Maybe CES is that, but there's no events that big in the U S

it was like CES.

And, and by the way, not just in people, like the quality of the booths that were there, CES level for sure.

And then the final thing I'll say is, um, this was probably the starkest thing for me.

You know how there's kind of like this refrain around in America, when you're talking about investing and people will be like, you know, would you take Saudi money?

Like, like you've heard that before.

Yeah.

I mean, Right?

It's, it's, it's, it's, it's just always like a question that, that like, that like people will, will, will say.

Right?

Um.

American corporations have been in Saudi Arabia for a long time, very well established, very integrated, you know, large, large consulting groups are deeply embedded, collaborating with the government on the Saudi vision 2030.

There was a raisin canes there.

You're saying, I don't know if that's good or bad.

Maybe it's good for health care.

They're going to need, but you get the point, right?

I mean, yeah.

So anyway, um, I just thought that it was, uh,

and, uh, the UAE.

It is already a global center, certainly going to be a global center for commerce, for everything.

Yeah, there's no question about it.

Um, they have an ambition to double their population.

Um, and I think they're going to have two very big sort of coming out parties.

They have the World Expo in 2030 and then they have the World Cup in 2034.

So, um, you know, the world will be going to Saudi Arabia to sort of see all of their progress here pretty soon.

Excellent.

Well, I'm glad you went and I'm glad you're back.

So yeah.

Yeah.

And honestly the travel in and out, there's a direct flight from DC.

Uh, it's like kind of like going to Europe really.

Yeah.

It was no problem.

So anyway, uh, I'm glad to be back as well.

Uh, it was a very intense two weeks.

I had a trip on the front end of that and a trip on the back end of that.

Um, you know, came back, finally got sick, but at least I was home when I got sick.

So that's why we're not in the studio right now.

Um, but yeah, look, it was, it was fascinating.

Um, I made some great friends and, uh, and I'll be going back, you know, um, I'm going to go

check it out too.

Yet for yourself, it's hard to, like you related to me, but it's, it's different if you're walking through the city, like just experiencing it.

It's, it's, it's definitely something that I would encourage you to do.

And I certainly would encourage other people to, um, To go see, see Saudi Arabia.

Okay.

Uh, anything else or you ready to go?

I'm ready to go.

All right.

Let's dig in.

All right.

First, let's start with the, uh, with the fed fed minutes were released after the latest meeting and, uh, what did they say?

It basically says they're taking a wait and see approach.

So they were pretty aligned in the meeting, in the minutes of the meeting.

That they want to just see how the data comes in and they're not in a rush to cut rates or raise rates, right?

So the market really reacted positively to those minutes, not that surprising, but it's good to keep following the Fed because they, you know, move things around.

Yeah.

I mean, not, not, not surprising.

Um, and also they've.

Put in minutes here, something that is not necessarily aligned with, uh, what president Trump, um, is hoping that they will do so that that's a, that's one of many storylines we'll need to continue to track.

Yeah.

Moving on next, uh, to the VC section, AI healthcare startup, open evidence raises funding from Sequoia at 1 billion valuation.

So is, is this a new thing?

Like we're now going to call all the AI companies open something, even though they're not actually open source.

So I don't think it's helpful, but yes, they're open, whatever.

Um, the thing that I was shocked about is they claim, well, first of all, it's a, it's a, it's a unicorn, you know, immediately right away at a billion.

Um, and then they claimed that a quarter of doctors in the U S are using the tool, which I do not believe, but it's in the story.

There was a lot of press around, around this.

So,

you know, you know how I feel about hyperbole and failure to be precise.

Yeah.

So it is, uh, you know, it's a, it's an LOM designed for healthcare.

And I think because of that, it is, you know, likely better suited to help in healthcare settings, but I think that it seems.

Overvalued and a lot of hyperbole, but Sequoia is, you know, Sequoia used to be an incredible brand.

They're still a good brand.

I think they've lost a little of the shine, but a good brand.

Yeah.

I mean, I just feel like decision support for physicians.

Valuing that at a billion dollars just feels it, it, it just rhymes with olive.

That's all I'm going to say.

It rhymes with olive.

Yeah.

That did not end well.

Uh, Axios pro Frontera health gets 32 million for autism therapy tools.

This is also AI, and this is addressing the backlog.

of ABA providers that are available for families who, um, need therapy for their children.

Um, basically while they're on those waitlists, they can, uh, supplement the, the absence of, um, therapist availability with an AI powered assistance for

Yeah,

so I

think the opposite about this.

I mean, I think, uh, An in person, uh, uh, helper, PT, or, or support for your child is, is better, is the standard of care.

But if you can't, if you're on a wait list and you can't get help, it seems like a good solution to, to have an adjunct additional tool to help.

Yeah, yeah, I, I think so.

You know, we, we've, we've got a, um, VA company in the, in the portfolio and there's, this is definitely a space where there is so much room for improvement.

um, you know, uh, all, all the way around, uh, we have, we, we have a very hard time figuring out how to.

Move the needle on outcomes in this space.

Uh, and so right now it's largely a consumption model, you know, because we have a growing number of the population that are being diagnosed with autism.

Um, they, they have special needs.

They, they do need support.

The healthcare industry is sort of, uh, bound to, to provide for them, but there's no pathway from, there's no therapeutic pathway to quote unquote, improve.

Right in a meaningful way that would that would be that would show up via diagnostics that would lower the cost of care, you know, so it's basically like, how much availability do you have?

And we fill all that availability and then we pay, but then we pay pretty low rates because we can't control the cost.

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