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Vic is joined by guest host Mitch Mudra, founder of Ladder Health, to discuss the Minneapolis mass shooting, his background at UnitedHealth, and building Ladder to address developmental delays in children. They cover Walmart’s gains during inflation, job market risks, Nashville’s tunnel project, and major healthcare VC deals including LS AI and CAR T therapy. Other topics include AI in back-office operations, sleep and vision tech startups, CMS pre-authorization, CDC leadership turmoil, 340B ...
Vic is joined by guest host Mitch Mudra, founder of Ladder Health, to discuss the Minneapolis mass shooting, his background at UnitedHealth, and building Ladder to address developmental delays in children. They cover Walmart’s gains during inflation, job market risks, Nashville’s tunnel project, and major healthcare VC deals including LS AI and CAR T therapy. Other topics include AI in back-office operations, sleep and vision tech startups, CMS pre-authorization, CDC leadership turmoil, 340B rebate changes, UnitedHealth’s DOJ probe, Johns Hopkins’ contract fight, no-surprise billing costs, children’s hospital layoffs, Quest’s lab joint venture, and Walgreens’ breakup. They also review pharma updates from Novo Nordisk and Eli Lilly, Web3 payment innovations, Nvidia’s growth slowdown, Apple’s potential deal with Google Gemini, perplexity’s publisher model, and the dangers of AI misuse highlighted by a teen suicide linked to ChatGPT.
Guest Host Mitch Mudra - LinkedIn - http://bit.ly/4p7wxnJ
Links
00:45 How the Minneapolis Catholic School Shooting Unfolded WSJ
17:15Walmart Wins Over More Shoppers as Tariffs Push Prices Higher WSJ
18:12 Stagnant Job Market Is a Rising Risk for the U.S. Economy WSJ
19:15 Dow Loses About 350 Points After Record-Breaking Run WSJ
20:05 Boring Co. faces $1.7M annual fee for airport tunnel access in Nashville's ambitious transit plan Nash Business Journal
20:33 EliseAI banks $250M to fire up healthcare automation business Fierce Healthcare
22:37 Wugen woos VCs, landing $115M to bring fratricide-resistant CAR-T cell therapy to market
25:10 Assort Health nabs $50M to automate patient phone calls TechCrunch
25:38 Sleep.ai raises $5.5M to aid in rest with data-backed sleeping insights Silicon Angle
27:34 Eyebot gets $20M Series A to expand eye care access TechCrunch
29:04 Medicare Will Require Prior Approval for Certain Procedures NYT
31:08 CDC Director Susan Monarez ousted one month after confirmation Fierce Healthcare
31:53 White House Says New C.D.C. Director Is Fired, but She Refuses to Leave NYT
35:06 ‘Solution in search of a problem:’ AHA slams 340B rebates pilot Modern Healthcare
37:04 UnitedHealth Ongoing Criminal Probe Is Broader Than Medicare Bloomberg
40:35 Johns Hopkins hospitals, clinicians leave UnitedHealthcare's network amid contract dispute Fierce Healthcare
41:52 No Surprises dispute resolution is creating billions of dollars in extra costs, could raise premiums: analysis Healthcare Dive
43:25 Hundreds of L.A. children’s hospital employees just had positions eliminated
44:54 Corewell Health, Quest Diagnostics unveil lab testing joint venture Fierce Healthcare
45:37 Walgreens going Private Process????
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.
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Your feedback will greatly impact our ability to reach more people.
Thank you.
Okay, welcome everyone to Health further, we have the weekly rollup show.
Marcus has left the country.
He is headed south.
I'm not gonna, uh, dock him right now, but he is moving his, uh, primary location.
I think we'll have more from him in a couple weeks.
Uh, but we have a guest host today.
So I'm excited to have Mitch Mudra, who's a friend of mine, I've invested in his company Ladder Health.
Mitch, thanks for joining us.
It's an absolute pleasure, Vic.
Thanks for having me.
As you know, we cover, uh, kind of the, the news on a bunch of fronts every week.
We're gonna go through the headlines.
Uh, but before we do, I wanted just to sort of note, um, really hard news story.
Um, it's not really a health story, but it is just a human story of the, uh, shooting, the mass shooting right where you live there in Minneapolis.
Um, it probably has affected people, you know, so, um, I just really want to note there's a lot of people suffering right now.
It's a, it's a bad story on all fronts, really.
Mental health, safety, um, gun control, all of these issues and really just, you know, children being, being killed unfortunately, and injured and, and scared to death and traumatized.
Mi Mitch, any, um.
Thoughts.
I know it's pretty close to home there.
Yeah, no, I mean, our son goes to a school with other kids that, uh, brothers and sisters go to the same school as well.
Yeah.
It's just a few minutes from our house.
It's been brutal.
Um, but yeah, it, it's a senseless act.
It's so hard to understand how to even rationalize it.
You know, for me, uh, you know, I thought Jacob Fre, the mayor here, said something that was pretty powerful.
He, oh, I didn't, I didn't hear that because I, I'm, you probably get better at local coverage.
So what did, what did he say?
He was saying, you know, don't just say this is about thoughts and prayers right now.
These kids were literally praying.
It was the first week of school they were in a church.
And I think, you know, that's, I think hopefully the sentiment of a lot of people in our community for sure.
You know, it's gonna take something more than just more thoughts and prayers.
We really need to, yeah.
We're failing our kids as a country.
Yeah.
I mean, it was, gosh, it was less than two years ago, maybe a year and a half ago in Nashville, we had a shooting.
Pretty similar.
I mean, a little bit detail is different, but, but any, you know, came in the school killed people.
Um, we have to figure out a way to stop this.
I don't know what it is, but, but it's, uh, I agree.
We need to try to find a better solution.
Um, so I wanted to note that, unfortunately, kind of a rough way to start the show, but, but Mitch, you and I have worked together in Ladder Health for, um, year, year and a half maybe.
Yeah.
But I maybe give the audience a little bit of your background before Ladder.
Um, I know you started at United or start wherever you want.
Um Sure.
And then, uh, bring us up and give us a little background on Ladder itself, and then we'll jump into the, to the rest of the news.
That sounds great.
Well, um, again, thanks for having me.
It, it's an absolute pleasure.
Um, I've spent almost all my career, as you know, Vic, you know, working on populations that are incredibly vulnerable, that have massive challenges around accessing good quality healthcare.
You know, it started at United, I was actually on the Optum Services side working on this really complex problem that existed then.
It still exists to some extent, but about a quarter of what we were spending in our Medicare kind of senior population were people in the last year of life.
And it was just, yeah.
Unsustainable.
Yeah.
We had very few resources to actually mitigate the sort of disincentives of the current system.
Mm-hmm.
And so we built a model.
I helped build out a care delivery business that was focused on providing doctors, nurses, social workers to go into patient's home and sort of protect them from the hospital.
But it really got my passion and interest around really building out and scaling care delivery models, finding ways to protect vulnerable populations.
Yeah.
Um, yeah, that, that, that's still a challenge.
Today we investment in company called Affirm Health.
Mm-hmm.
Doing advanced care planning there, there's all kinds of needs in there.
It's still.
So there's been a lot of progress made, but we have a lot more to go on that front.
I think we totally do.
Yeah.
One of our kind of first publications of the Journal of Palliative Medicine was what kind of pushed the industry.
So it's exciting to see the momentum, but to your point, yeah, it's a massive challenge that still exists.
But I, uh, amazing time with United there.
I, I left after 15 years though, I wanted to get into digital health and really see, 'cause I was, uh, before I left, I was leading a huge population health business for United, working with other payers, United, other employers, and was on this kind of front end of the digital health space where you were seeing some of the challenges of like.
Lack of patient engagement, lack of ROI, how to justify that.
I wanted to get into an environment where I felt like you could actually see that work.
And I got to know a company actually outta Iceland, these two physician founders, really fascinating.
We're doing work in digital therapeutics and the whole aspect of sort of combining consumer grade technology, how do you build stickiness and high engagement, but also kind of medical grade software, medical device technology that actually has a clinical impact and efficacy for families.
And so, yeah, we were working and really Iceland and Europe are probably ahead of us on that way ahead of us.
Germany is the only market really today that's still pretty advancement.
It comes to prescription digital therapeutics.
We had some, you followed the like pair and click and a Yeah, right, right.
There were failures here.
We had it for a minute, right?
Yeah, correct.
But the structure here is so different.
Germany, uh, some of the system they've set up with something called dga.
Uh, has really a ripe environment for that.
But our business was also focused on working with pharmaceutical companies.
They're the largest in the world on how do you really drive better adherence, but also big payers here in the states to figure out how do you tackle, how do you digitize care management, but also appreciate, there's this really fascinating intersection between the work we're doing with pharma and payers of about 50% of chronic care.
The reason people aren't adherent is medications.
And so if you can solve the medication challenge, you can save significant value there.
Um, and we were working, you know, we were actually poaching folks from King in Sweden.
That's the developers of Candy Crush, uh, the folks that were finding ways to kind of build addictive habits, right?
But we're using it in good ways to apply.
To have healthcare.
Yeah.
You can use that power for good or evil, right?
Yeah, that's exactly it.
Right?
It was fun.
So we, we built, we were scaling that up internationally.
Um, but I ha I was traveling a lot.
I mean, we have, my husband and I we're in Minneapolis.
We've got two kids.
I've got a 7-year-old and a 1-year-old now.
Yeah.
And we were just on the road.
I was on the road way too much.
Right.
I wanted running a global business like that is hard.
Yeah.
It's a lot.
Yeah.
So I, I decided to come back closer to home and wanted to get into upstream and really think about how do you really improve healthcare much, much sooner.
And I got to know not only yourself, but some of other investors that were looking at this pediatric development approach base.
It's fascinating.
As I got to know, it's probably the ma most, I'd argue, overlooked market that exist.
There's about one in four kids in the US right now, under the age of six that have development of delays.
And of those kids, it's fewer than about 4% of them actually get the clinical care that they need.
And it's mostly, so let, let, let me just stop and make sure I'm following that and maybe underline it for the audience.
So do you say one in four kids?
So one in four, 25%.
25%. Uh, so if, if my, if I look at a, a kindergarten class or like a, yeah.
You know, maybe kid, you know, at a church or somewhere or mother's day out class, there might be 30 kids in there, 20 kids, you have 25%, five to seven that, that needed developmental, uh, support.
That's exactly right.
So what is, what does that manifest as?
Like, what, what is the, yeah, what are the symptoms early on?
Like what, what are, what are you solving there?
So like the, one of the most common things like speech delays, one in six toddlers have speech delays.
You know, you have picky eatings, a good, very common one.
We also have things like, we work with a lot of hospital systems in the pediatric side who have NICU graduates.
Every single, the 300,000 NICU graduates has some level of developmental needs.
It could be gross motor related, you know, movement could be feeding related.
All those things need pt, ot, speech.
Yeah.
What percent of of babies are in NICU today?
You know, it's how many percent?
I don't know that, uh, it's a good question.
Okay.
Uh, there's 3000 NICU discharges a year, so I don't know how you divide that from Yeah, yeah.
Okay.
So what, what is, tell the, maybe tell the origin story of ladder.
I think that's a good story.
Yeah.
Well, so you know, it started with the personal experience.
So one of my co-founders, Lizzie, um, her first child, Noah, was a NICU grad and was dealing with a lot of the complexity that a lot of families face.
So as they were discharging, they were, you know, given though, here's the referral for services you need for Noah.
Go good luck, essentially.
And what happens is, yeah, call this number and or go to this website.
Yeah, yeah.
Families facing developmental care on average, or searching between four to seven providers even find somebody who accepts their insurance, let alone where they can get in average wait list for her was about average of what it is in this country.
About six months to get her son in care.
Now she went through the process and gritty and kind of checked around and tried to find other options.
But like it inspired, what inspires us is like the wait times on what is today, a very broken system, a very antiquated system are impossible for families.
It's around six months on average today that most families have to wait to get their kid in.
And that's get in.
Right.
So let's say I have a three month old son who needs support.
Um, just got out of the nicu.
He's only three months old, and now I have to wait six months before I start, right?
So that's.
I mean, I, I would say that's unacceptable, but for a lot of parents, they're not gonna be happy with that.
No.
And if, you know, neural development, 90% of the brain is developed by the time a kid hits six years old.
So like Yeah.
It may not, you're losing that pressure really precious time.
Right, right.
Totally.
Okay.
So did, uh, Lizzie, what I, I know the answer to this question, but did she have to invent some new magical.
Solution.
How did, how would she, what'd she do to try to address this?
So, one of the lucky things, so Lizzie was, uh, plugged into the Boston Children's family and what we were able to identify partnering with them was it was a better model.
Uh, and we really went through the process of building what was the superior quality care of what families who could afford private pay in many cases to be able to go to Boston Children's.
We took all that clinical best practice of superior developmental care and took it outside and used what exists today, but has been dramatically forgotten around pediatric care of the technology and AI use cases to really turn into much of a virtual first delivery model.
So we're able to take that really effective Boston children's model and start bringing at scale to other families.
Yeah.
And, and you came in, uh, maybe a year ago, maybe a little year and a half ago.
Yep.
And your challenge is really take this, uh, kind of bespoke, really special thing that was created in Massachusetts.
Can, can you, can you replicate it in other states?
Can, can you bring this across the country?
Uh, because it's one thing to build it once in one market, and it's different to start creating a model that you can put everywhere.
So maybe talk about what you did in North Carolina and what you learned there.
Absolutely.
Yeah.
So we, we intentionally decided first to go after fee for service.
'cause with 55% of kids in this country on Medicaid, we wanted to make sure we could bring the service to all kids, not just those on a commercial insurance plan.
Yeah.
Because especially knowing this model was virtual first, we didn't have.
Windshield time or brick and mortar costs that a lot of other, more capital intensive solutions had.
So we could do this really effectively at scale, but we wanted to be able to make sure every kid could get this, especially the kids that were really complex.
'cause our, our intention, just like the work we're doing in palliative medicine, was let's continue to publish and show the efficacy of this work in a way that continues to build good momentum around the value of virtual first delivery care in this space.
But we started building out what we refer as these lateral liaisons.
These are local representatives that work with pediatricians.
'cause candidly, that's where families go when they've got questions around developmental care and we help build trust and become sort of the go-to partner with pediatrics when they're looking for options that aren't six month wait lists or longer.
I just got a referral the other day, kids on a two year wait list to get access to a specialist.
So we're able to get these kids in immediately, get them high quality care with some of the best experts and a model that is superior to what they might get in their own backyard.
What was the lead time like?
What was the market education time in North Carolina?
Uh, were you able to get any, um, like academic medical center, uh.
Analogs to Mass General down there?
How, how did you go about it?
Yeah, absolutely.
So we, we both started with the pediatricians, but then we also started working with some of the leading academic systems in the area.
Duke and UNC are two great examples.
Partnering with them, they had huge challenges around ongoing developmental care for kids that were discharging from the nicu.
Different varying levels of what type of support they could provide within the hospital.
But as you're seeing across this country, more and more children's hospitals are struggling through financially, especially as you look at some of the Medicaid cuts that are looming.
So what they could afford to provide ongoing, as well as families who were driving an hour or two to that hospital for the care they received as they go back home to have an option that.
Didn't require drive times, didn't require taking time off work Every week.
We actually meet families where they are allowing us to provide services outside of the nine to five window that most care is provided.
About 70% of our care is actually happening in nights and weekends.
Um, and it allows us to just help with a lot of these kids who discharge immediately, get good quality developmental care right away.
And that sort of halo effect, if you will, of working with these large academic systems helps us power more relationships in the community.
But fascinatingly also, some of these discharges had pediatricians that we hadn't known and can build this sort of interesting feedback loop that allows to build the business, the market.
And then how has the, um, incumbent physical therapist, artificial therapist, how are they reacting to this?
Are, are they resistant?
I mean, do they feel like it's, uh, help?
Is, are you helping them, uh, are they excited to come work there or are they saying like, this is.
New and different.
You're having to teach them.
What, what's the local community, uh, of actually caregivers?
What's their response been?
It, it's a mixed reaction.
I mean, first we see a lot of, uh, for sales signs up, if you will, because of some of the challenges on both inflation for a lot of these in-person models.
So some of the competitions going away, fewer and fewer are accepting Medicaid.
And so if anything, uh, I think there's relief from clinicians to have another option for families who have no other option.
Mm-hmm.
But we're also seeing interesting receptivity.
Some of the largest players in this space who do physical therapy, for example, have wanted to really reach more of their population.
And virtual improves access, but also reduces their wait time.
Allows some of the PT practices who might have economic challenges to really optimize who's in the facility as well as nine month wait lists themselves for a lot of these kids.
Right.
And having a chance to be able to help have an alternative service is something we've been really getting some good traction strategically as well.
Yeah.
And then for the therapists themselves, they, they may be able to do, see more clients, right?
Absolutely.
Is that right?
Yeah.
Yeah.
So you can get paid, they can earn more on ladder, I would think than, uh, the Absolutely.
Yeah.
And it, it lets them operate at the top of the license.
A lot of models that exist today, you look at like early intervention.
These state run heavily regulated models.
There's a lot of paperwork involved in those processes.
And so we're allowing them to just really operate really as great clinicians, getting these care kids the care that they need quickly.
Um, we found our providers love both the flexibility but also the opportunity to work with kids and not focus so much on documentation.
Yeah.
Yeah.
Okay.
And then tell, just finish with, uh, what states you're in now and where you think you'll be in the next year or two years, whatever, you know.
Sure, yeah, we're, we're live in North Carolina.
We've been scaling up in Massachusetts as well.
We'll be launching South Carolina coming up here in the coming months.
Uh, we're just, uh, working through a lot of the insurance coverage work on fee for service, but in the next year we'll go to another two to three states, uh, following year, another two to three states as well, but on a really good path to get to what is about a hundred million a r in the next five years.
So, healthy state of growth, I think.
Um, yeah, but really seeing great traction in the market, excellent receptivity from providers and families around both how bad the need is, but also how effective they're seeing the quality of care they're receiving.
So yeah, super encouraged.
Well, it's great, man.
I really like to see, obviously I'm an investor in your business, so I'm completely biased, but, but I think it's really valuable to be able to deliver higher quality care for the medi, the existing Medicaid rates.
And now you might, you might, uh, strike other negotiated deals with payers in the future, but, but Medicaid needs support at the rates that we have today.
So it's great to see you helping kids like that.
The reality is that, that that's a population that needs innovation.
You know, I think the reality is, unless we start innovating, some of these brick and mortar models are gonna continue to go up.
We have to find virtual, first clinically effective alternatives that are sustainable.
Um, and right now the current system is not sustainable.
And you're seeing the impact on that in rural communities, especially across the country right now.
Yeah.
Yeah.
Well, thanks for the, the little background.
I think it'll be helpful as we go through the stories, people would know kind of where you're coming from more.
So let's dig into the stories here.
So we, as you know, we start with the economy, uh, always.
And so the story here from the Wall Street Journal about how Walmart is winning over shoppers as tariffs are pushing price higher.
So Walmart is, is, um, growing revenue.
They're attracting new shoppers.
Um, I think because inflation's coming up, their prices are more so What, what, what'd you think of this story?
Well, I mean, first you've got, what, two thirds of all Americans go to a Walmart every month.
It's just outstanding.
And so I think one of the big things that comes to our mind as we see,'cause we deal with a lot of the families that, that are, are here, but like any small impact of inflation, they're feeling it right now.
Yeah, it's, it's great to see Walmart try to absorb some of these higher prices, but absolutely.
Are we seeing families start having to make hard trade offs between, can I afford groceries or can I take my kid to appointment A, B, or C?
Right.
Yeah.
And then the next story also in the Wall Street Journal, stagnant job market is a rising risk for the economy.
So, you know, if the prices are coming up, Walmart maybe is gaining share.
Um, and at the same time, it's hard to find a job if you lose your job.
It's hard to find them.
Well, I think what's, yeah, uh, you know, it's hard now, I, I worry about what's happening for Medicaid families across this country.
You see both looming cuts that are gonna likely result in fewer families having access to care.
Uh, you've got, uh, legislation, the recent Affordable Care Act kind of ruling that may impact another 2 million kids On top of that, like we're in a very precipitous environment.
I think right now, the risk of inflation, the risk of, uh, reigniting some of that inflation worries me for sure.
Um, and you're starting to see a lot of hospitals feeling the pressure of that, um, across the country.
It's, it's scary for sure.
Yeah, yeah, definitely.
So we definitely have this, I mean, Marcus and I have been talking about a lot the K shape economy where you have, if you have a lot of financial, maybe more than half your net worth in stocks and bonds and real estate.
Then, uh, in our next story, you, you know, the Dow lost 300 points, but it's been a record breaking run.
So, um, you know, it came down on the first couple days of this week, but the thing I wanted to sort of mention is the top part of the k if you have more than half your assets in stocks and bonds and real estate, you've done well over the last several years.
But if you're on that bottom half of the K where you really rely on your paycheck and not financial assets and you have a big mortgage or you have a lot of debt, you've been sort of the opposite effect.
You haven't got that stock market, you don't have a lot of stock.
Stock market doesn't matter that much to you.
Exactly.
And that's 80, what, 80% of this country right now Yeah.
Are on that bottom half of that K curve.
For sure.
They're feeling it.
Yeah.
Okay.
And then the last story, this is more for our Nashville audience, uh, the boring company.
Marcus and I talked about it here, is, you know, creating a tunnel from.
Downtown Nashville to the airport.
It's lots of controversy.
Some people love it, some people don't love it.
Um, but they have made the next step and they're negotiating with the airport, uh, for an annual license to find a way to kind of come up from their tunnel.
So we'll put a link to the show notes if people wanna look into it.
Uh, let's move into the VC markets.
So, uh, the first story here, LS AI raised $250 million to fire up healthcare automation, really back offices.
Um, what'd you think of this deal?
No, I mean, I think for someone who's lived my entire career in healthcare, the reality is there's so much operational waste that can be solved quickly through technology.
This is where I think we're in the, from a, a hype curve perspective, we're really getting to a place where a lot of these administrative functions for AI are having a massive ROI and impact.
So it's exciting to see, I think this is one great example, but a couple others in the news this week as well.
But.
Huge, huge opportunity to administratively improve.
We even asked, like as a healthcare company, we, part of why we built our own EMR in our space was the build to kinda more rapidly deploy AI type capabilities.
On this back office side, a lot of patients benefit from the build to quickly ch cancel a change an appointment, get a prior authorization done.
A lot of the kind of administrative headache stuff can be done, I think, very effectively with technology today.
Yeah.
So it's exciting to see traction here.
Yeah, definitely.
Pretty big amount of money to raise.
They're definitely going to sort of grab a ton of market share.
Um, but raising $250 million lot, lot of money for what it is, which is automated back office.
I don't know how many barriers to entry there are.
Um, although I have some portfolio companies that are trying to do things in particular niches where they have an advantage.
They think that's what's fascinating too, though.
I think that there is, there are a lot of folks running after this environment right now, and so it'll be curious to see kind of which ones have the right.
Differentiated technology and true proprietary technology.
And what happens, you know, when some of the big guys, you know, you get your behemoth like epic, who I think their recent earnings call their CEO mentioned, I think they've got 200 AI products in the works.
Right.
You know, what happens when they step in, right?
And, and the health system can get these AI, uh, resources for, for no charge.
They're just sort of included in the fee.
That's gonna be a challenge.
So.
Totally.
Okay.
So then we have, um, WGAN, I guess, uh, raised 115 million to bring a CAR T cell therapy.
So this is using CAR T for cancer treatment.
Um, and they have a.
They solve some problem fratricide, which I guess is where the, I don't know, the T cells kill their brother T cells.
I don't know what tric side means.
It, it's like the process today for this cancer therapy, and I'm not an expert, but the, my understanding, so you take kind of your own set of cells and that's used over a couple weeks to develop your own therapy.
Uh, the, you know, cell based therapy.
Yeah.
That's then reinjected back from the body and it's a high risk of the cells kind of attacking themselves by using your own kind of, uh, human, your own body cells, the new model that they've, they've pushed and there's been a lot of really exciting research.
I think this is now the second major use case, uh, around this, uh, this whole model is this idea of like, we're gonna build a universal, if you will, kind of donor set that automatically, uh, prevents or turns off the reaction of the human body, but could have.
Huge implications of the cost.
I dunno if you've been following some of the costs today on CAR T, but like, I think it's about 10% of cases are well over a million, um, per episode.
And so the opportunity, 'cause each one is bespoke, each one uses your own sales.
And so this would maybe be more effective and definitely would be an easier process and less expensive.
Way more cost effective.
And I think like in Medicaid, the families we see, if you're on Medicaid, you're three times less likely to get CAR T therapy today.
Hopefully this opens it up.
That allows you to have access to, to, to more therapy like this.
Yeah.
But this is, this is stuff what also is scary for me as I think about this and some of the other things, the news, it's like, this was the NIH funded bench science.
You know, what's happening, what is gonna happen in the future state?
Yeah.
When we need that next evolution of CAR T. But definitely kind of curious to watch what happens.
We, we will talk about, we have a CDC story.
We don't really have a, a, uh.
Other sides of HHS, but obviously NIH has been cutting funding and, and really cutting the overhead, especially funding.
Mm-hmm.
I'm hopeful that that will be reversed in the future.
And, and maybe I'd like to see a return to investment in r and d.
I'm fine with cutting the overhead.
As long as you give, you know, universities and other research labs, enough notice probably makes sense.
But, but I think we, the government has to invest in the basic science so that we have the next car t the next, the next thing.
And it's not gonna be for 10 years, 20 years, but if we stop doing that, we'll stop getting the science out the other side.
Absolutely.
Uh, so then the next story of Sort health, this is in TechCrunch, they raised $50 million automating patient phone calls.
And so I have a couple investments in this space too.
It is a, it's related to else ai, you know, that we just talked about too.
It's, you know, it's only one piece of, what else does.
Uh, but it is getting to be a pretty crowded space it seems like, for sure.
Yeah.
I think recent was a hella patient just a couple weeks ago.
Announced another 20 million round as well in the, yeah, yeah.
It's every week you see another.
Okay.
And then sleep AI raised five and a half million dollars to, uh, launch a data backed sleep insights.
Do you look at this story or did you think at this?
Yeah, I, this was one.
So like, I don't know, I, part of me pro provocatively a bit is like how much, when did remote patient monitoring quickly flip as quick as it did into this space of true ai?
This feels a bit of AI washing.
I think we're seeing some of that across the industry in the concern, but like even with five and a half million, the level of claims that you see, even go to the website, you see things of, you know, kind of true impact on clinical outcomes.
I worry some of the level of.
Clinical rigor, even having built software, medical device organizations, like what's needed to make sure you've got that clinical rigor to make the claim, uh, that they're making here.
So I just, I'm curious of like, I, I'm excited to see the opportunity to take sleep.
I do agree.
And as a parent who I saw the impact on myself of the, of what sleep does to you and traveling as much, I did the impact of sleep on your performance.
Absolutely.
Do I think we've gotta solve this, how quickly and effectively this data translates to physician behavior and different alternative therapies or activities.
Still, I am, I'm up in the air and so I worry some about how fast we've moved to make the claim around ai.
Personalization in a way that will identify better outcomes.
Yeah, I, I, I agree.
I mean, that's certainly a risk in this case.
I've made a couple investments in sleep.
I think sleep's a huge problem, but being able to actually solve it and certainly the interpretation of what should be allowed to be said in marketing materials or in product materials and what people are bantering about, uh, throwing AI on it, it's magical pixie dust.
I think there's a lot that's gonna happen there.
Um, but interesting to see.
I mean, sleep is a big issue and so I think good to have more people working on it.
Totally.
Okay.
Then iBot, I really like iBot.
So iBot raised $20 million series A. This is a, uh, kiosk that goes into a mall that can give people, uh, eye tests right there in the mall where they are already.
What'd you think of this story?
I love these guys.
I mean, I think generally the concept of both like retail diagnostics, like how do you make it simpler, but like, I think their CEO was saying something in the article of like the balance of speed plus clinical oversight, excuse me, earns trust.
I thought that resonate.
Like, I think as you move from administrative AI into the true world of clinical, having that human in the middle is so fundamental.
I think they've done found the right balance.
It looks like they're using what is tech that's been around for quite a while to understand how to do these tests.
I remember my own experience just getting my eyes checked and it's like so much of that you can automate into a simple system like this and then all you need is a human in the middle to validate the clinical.
And if there's a risk, you, you escalate it.
But I think they're doing it well.
And, and the human, the human in the middle is really valuable.
For the once in whatever, several hundred times that it's really valuable.
But they can also work with lots of these kiosks and lots of patients around the country, I would think.
'cause it, they're not called on that aggressively that much, but they're there if needed.
That's the, that's the balance.
Exactly.
But at least every, so every, there's at least a clinician validating every prescription as they're getting sent off.
And for that human piece, even though virtually in seconds, if you will.
Yeah, they can do it quickly, but it's, but it's, it's the safety check there that I think is valuable.
The New York Times Medicare will require prior approval for certain procedures.
So CMS is running a pilot program where they're going to acquire like a pre-auth in order to get treatment.
This is, um, fee for service Medicare.
This is not Medicare advantage.
Uh, what'd you think of this story?
Yeah, I mean it, this to me, there, it stem just moving into, you know, privatized medicine to some extent.
Really getting, yeah.
Insurers back in the game.
'cause that's what they'll do is outsource it to insurers to do this administrative work on their behalf.
But Medicare Advantage, to your point, commercial insurers, they do this day in and day out.
What I liked about it though was sort of the front end prioritization towards AI as the premise.
So find a way to be able to really leverage technology and AI to fuel how we think about these pilots we think is great.
But it, it does, it puts CMS sort of at odds with clinical care providers in the way that they haven't been, which we always know.
There's that same dynamic between insurers and, and providers.
And so curious to see how this plays out long term.
But it does look like and feel like a lot of what we've seen in Medicare Advantage and other insurers for sure.
Uh, one of the experts in here talks about a backdoor to privatization mm-hmm.
Of Medicare because it's not, it's not literally privatizing it, but you're sort of introducing this control or a constraint mechanism.
I mean, I think there's really, it's a spectrum, but you, you could have the pre-auth.
Approval process be very broad and everything gets approved, and that won't really reduce costs at all.
Or you can try to really drive some savings, but you're gonna, I think by definition, limit access to care.
Exactly.
Yeah.
And, and you've got a lot of lawsuits on the Medicare Advantage side, for example, around accessing care and premature denials like that.
So it's like, what is this gonna look like long term when you ex exacerbate that and what's the, what's the impact on patients gonna be?
That's what I'm curious of too.
We're seeing the delay on families because of the intensification of some of these prior auth hoops that people have to jump through.
So as you expand this to more, uh, is that gonna make it worse?
Yeah.
So now we're gonna talk about the CDC director Susan Monez.
Hopefully I'm saying that right.
So this is an interesting story.
She was installed as a CDC director.
About a month ago.
I mean, it takes a, so she got named several months ago, but it takes a while to go through the confirmation process.
She was confirmed.
She got fired this week and it, it, I believe it is, it's reported here because she was, uh, in conflict with, uh, secretary Kennedy about the vaccine policy.
But then we have a couple stories and we'll link to all of these in the show notes.
So, fierce Healthcare, Rena's story, pretty, I think straight down the middle, sort of just describing what happened.
But then the New York Times has a story saying that, uh, you know, she's not.
Agreeing that she can be fired by Kennedy.
And then they introduced the concept that there was a meeting on Monday where this director, Susan Marez was, was going to talk about vaccines.
But, but that's not gonna happen anymore 'cause she's been fired.
What are, what are your thoughts about this?
Yeah, we don't know exactly where they're gonna talk about then, but what was clear and parallel?
You know, the American Academy of Peds came out with a pretty direct statement that went both to kind of broader populations, but directly to payers as well, to start positioning themselves as an alternative source that's evidence-based when it comes to vaccines.
'cause they directly disagreed with the recent changes in vaccination and kids.
And you can see, and I know it wasn't just, uh, Susan that got impacted a bunch of folks there, but you definitely, yeah.
Several people, um, have, have resigned.
Yeah.
Several top people have resigned, like the heads of various groups there.
Yeah.
Yeah.
We've gotta find a way to rationalize these two.
I think the big thing that worries me most is families are gonna be so confused and pediatricians as well.
Now you're gonna have insurers deciding do I cite, you know, the, the, the federal government?
Do I cite a a p guidance to make my decisions?
How do I really decide what's clinically the best?
Practice?
Care physicians are gonna get confused.
Families are gonna confused and kids are gonna get stuck in the middle.
You're already seeing with measles.
Numbers of deaths have skyrocketed since essentially it was eliminated in 2000.
So it's scary to me to see how we can't, as a country, just have the conversation to figure out how do we get the experts together to agree on a, a stance here.
But these two powerful, uh, pediatric groups not aligning was, was, was definitely a sign.
Yeah.
And, and I mean, I, I sort of am two minds of this.
Like, there there has to be a chain of control, chain of command control, like, so the, you know, in the executive branch, president down through the cabinet to the various, uh, administrative bodies and CDCs in that org structure.
And yet there needs to be.
Sort of space for science to be done sort of outside of politics where we draw that line.
I, it's hard to say, right?
Like in, in for-profit private companies, there's clearly like a, you go work there and you know, you report to your manager and on up to the board of directors and then the shareholders and then in, in scientific journals it should be just sort of, you know, you have a hypothesis and you're running tests and collecting information and then you try to just look at the results.
It's kind of interesting just to see, like, see where this is gonna come down.
But there's definitely lots of loss of credibility on all sides.
I mean, it started with the pandemic and it's getting less and less credible.
The entire, uh, American administrative establishment is losing credibility by the day, it seems like.
Yeah, totally.
Yeah, I agree.
It's scary.
So anyway, sad story.
I don't know how it's gonna end, but it's going on right now.
But you know.
The Monday, two days after this, this drops for publication is when she was supposed to give whatever she was gonna give.
Okay.
So moving into, well, finishing the policy and moving into health systems solution and search for a problem.
This is in modern healthcare, the American Hospital Association, a HA, slammed the three 40 B rebate pilot.
So, you know, at some level, of course they did, they represent a bunch of health systems.
Um, but they are pointing out that the, uh, three 40 B program is relied on by a lot of health systems and it's really not gonna be possible for those health systems to continue forward if, if this pilot were to go across the country.
I don't know.
What are your thoughts about this story, Mitch?
I mean, this is to your point, one area that worries me is rural hospitals in particular, but hospital systems across the country rely on this sort of upfront rebate model to justify access to care, to medications, to other types of care for families, especially low income and Medicaid families across this country.
And so I think that that forcing them to rebate, to sort of float the funding upfront and then collect later that timing issue when margins are thin, getting thinner, especially in rural hospital systems, is gonna probably put more pressure.
So I, I think of the, the fact that what this is gonna have on families too, I think that's right.
I'm, it's very similar to the supplemental payments in, in, uh, Medicaid.
Like I, I don't know that I can defend the three 40 B program as you know, really that logical, but, but it has been going on for a long time and health systems rely on.
Money and they have significant infrastructure expenses and people expenses that you can't change that quickly.
And so all of that is sort of what we're wrestling with, I think.
Totally.
At the same time, we also know we have a spend problem that we've gotta solve as well.
And so, right, the positive is they're signaling, Hey, let's pilot, let's test.
And so hopefully that's coming at a place of curiosity, but the hope would be these groups come together and solve both the financial challenges facing both sides and come together on solutions, how you solve that without putting patients in the middle.
Yeah.
Yeah, definitely.
Okay.
Moving into payers now.
Uh, in Bloomberg this week, UnitedHealth ongoing criminal probe is broader than Medicare.
And so the DOJ is also scrutinized in OptumRx and United is, um, you know, they're cooperating.
They're, they're, they're trying to get to the bottom of everything.
You, you're in Minnesota, you used to work at United.
You have family and friends that are there now.
I don't know, uh, what your thoughts was, or you won't even get into this, but I, I mean, I think if you look into any large company of their, of United Size, uh, if you look carefully enough, you can find something.
I, I don't agree with the criminal side.
So, you know, there, there might be something that was, that was done.
There's a lot of health systems and payers that have all kinds of questions around how they bill, how they do things, how the criminal would mean that it is like.
Forethought intent.
There's knowing that's going on and I'm not sure about that.
What, what are your thoughts of the story, if you want to comment out at all?
Because it's close to home.
Yeah.
No, it's close to home.
But I, at the same time, I think this is like the vertical integration strategy of United, it's one of the big challenges, to your point that they face, they've got their hands in all parts of healthcare and part of it with the intention of really helping improve access for families in more affordable care.
But as you get really good at playing the game within these different businesses, and the government sets these businesses up, it allows the regulatory within them, it's very easy to be able to figure out how do you optimize within this space.
So I, I don't know.
I, I, I agree with you.
I don't know if I, I understand the criminality effect.
I think I hear, and you see in the news.
The, the, this current administration going after pharmacy benefit managers specifically and kind of targeting them as something that, you know, is limiting price transparency that's driving up costs, that this is unnecessary middleman.
I don't know of how aware that positions, but clearly the timing of that push and this DOJ, uh, so is interesting and intriguing at least.
But yeah, I don't know.
United's just had a rough year with, with bt, Brian Thompson, with everything going on with broader DOJ cases, it's an easy target to hit 'em while they're down.
But, um, you know, I, I'm hoping for these guys to rally back for sure.
Yeah, I think they're, you know, some of the most talented people I know worked there or worked there or have gone through there, and I, I think that the entire question of like, should a regulated insurance company also employ the most doctors of anyone in the country on a unregulated basis?
I mean, that's a question about like.
What DOJ, you know, should that be together in the same company or not?
But, but that's not what they're looking into.
They're sort of just, uh, digging into particular silos.
That I think is a broader story that, you know, United has done everything right as far as creating Optimum, which is, you know, we're just really great work in delivering care and is, and is also very profitable.
That's sort of what you're supposed to do.
So, I don't know.
I think it's gonna be a hard couple years for United and if you, if DOJ looks carefully enough at anything, they can find someone, whether it's intentional, criminal things, I'm not sure about that.
Yeah.
And, and the model that've created, to your point, is something everyone's replicating.
You look at the Caroline right, said Ance, it's identical.
You look at human.
Yeah.
Cigna never north.
I mean, there be Yes.
The fact that they did it bigger and better than anyone else.
Maybe should be applauded more than criticized, but Exactly.
And then Johns Hopkins, uh, is leaving the UnitedHealth, uh, network over contract disputes.
Um, you and I were talking before we've hit record and we were saying that, you know, this happens every year.
Someone is, is debating, but, but this quote caught my attention here that, um, U United is saying one of the issues is that Johns Hopkins is demanding the right to refuse treatment to, you know, sub-segments of their population.
If they don't like an employer and, and I hadn't seen that before.
Now it may just be that United is trying to spin a story.
We don't know the details, but have you seen this kinda, uh, topic before?
No, this was, this caught me off guard for sure.
To your point, like I'm so used to the normal back and forth rate negotiation process.
I think that's almost what you saw before.
Now with inflation cost escalation, I'm not surprised to see more payers get back into this old muscle memory.
But this idea of ref the opportunity to refuse selective treatment to different cohorts, that caught me way off guard.
It's curious.
You, I don't know all the details and intention behind it, but definitely this could be a slippery slope for sure.
Yeah, that, I think that is gonna be something just to watch that.
Mm-hmm.
So we'll see.
Okay.
And then this next story is in the No, it's uh, in healthcare dive, no surprises, dispute resolution.
It's creating billions of dollars in extra costs and could raise premiums.
So this analysis was done.
Uh, healthcare dive is publicizing it.
What I wanted to get your thoughts on is, you know, there's a lot of infrastructure expenses, just keeping track of this and fighting over it and, you know, are we, are we actually saving any money here or not?
No, I mean that's what the clear state, right?
It's like two and a half billion EEA each year at administrative expense.
It can't justify the intent behind, it's like this was generally a well-intended consumer protection function, but it was not thought through in terms of how do you operationalize this at scale and appreciate, like a lot of us know that are in healthcare, that there's a lot of wonky operational processes to actually follow through on what they're intending to accomplish.
In this.
You saw the hyper focus on, there were what, 43% of claims that were tied in one of the years to private equity backed organizations.
Like what, what, you know, that was curious for sure.
Yeah.
Well, I mean, I think that there's implications, uh, you know, why are private equity backed organizations pursuing this more, and it, you know, it could be that they had taken advantage before the no surprises Act, or it could be that they're very focused at rigging all the revenue cycle collections they can, or something else I can't think of.
But um.
Yeah, definitely.
There's a, it's a lot of private equity money behind it.
Yeah, for sure.
Okay.
And then out in la this is in, um, KTLA, which is the, a TV channel out there.
I think hundreds of LA children hospital employees got laid off at la uh, children's Hospital.
Uh, you're in, you're involved in in Kids Treatment.
Uh, this was a sad story.
People, you know, 439 people were laid on.
About 6%. This is hard.
I mean, I think I've got coworkers that work in some of the largest systems.
I've got an advisor that's out in California at one of the leading pediatric centers there, and they're facing, I think she was saying 180 million cuts this year.
Another 250 max.
It's just, I think this is unfortunately.
The reality of what a lot of these systems face the, you know, pediatric healthcare and these large systems are expensive on a per patient basis.
And so I, it's terribly sad to see, it's another reason why we've gotta keep pushing to see where can we find ways to drive innovation to occur.
In pediatrics, peds have been forgotten.
Uh, venture capital has what, less than somewhere between 0.2 and 2% of venture funding has gone to peds use cases.
Mm-hmm.
Now is the time to start putting investments in good quality clinical models.
Absolutely.
Like you were saying before, we were talking through the news on administrative items, but I do think peds is a rife space to continue to focus on investment as well.
'cause the more we can build cost effective alternative delivery models, you can build a more sustainable support system for these kids.
For sure.
Yeah.
Yeah, definitely.
Okay.
And then, uh, Corwell.
Did a joint venture with Quest.
This was kinda interesting.
They, they, um, basically sold Quest all of their lab, uh, infrastructure, and then they're gonna offer it to the whole, the whole region there.
I thought it was a smart thing as as hospitals are trying to look for more cash flow and, and less complexity, they probably need to do more deals like this.
Really.
Yeah.
I think you're gonna see more focus on the core of what you can do well around patient care outsourcing this sort of like commodity type service.
Especially something that as we think through the earlier instances of AI opportunity to really optimize, this may not be a core competency of what a health system wants to focus on, but if they can find a way to do it and profitably capitalize on that, seems like a smart move.
Yeah.
Okay.
And then Walgreens, uh, finished their going private process today, I think, or yesterday, I think it was today.
Uh, and they have split up the business into five, uh, different pieces.
So Walgreens, kind of the retail.
Clinics, the Boots group, uh, which is really the European, uh mm-hmm.
Aspects of it, shields, health care centric and Village md.
What did you think of the story?
Yeah.
Mom and dad should never have been married.
I mean, I think this is a long, drawn out, you know, divorce process that a lot of us saw coming that knew the industry.
You know, pharma pharmacy is so, like transactional based, risk-based care delivery models are still relationship driven.
They tried to smash together.
The two of those kind of really different animals.
And you just knew this was challenging from the beginning, at least, uh, some of us did.
Yeah.
Um, so it, it, it didn't surprise me to see, it surprise me.
It took this long to get it through, especially knowing sycamore's intention and kind of focus and where they're great at.
And so I'd be excited to see kinda what this next chapter looks like as they lean in.
Yeah.
Yeah.
I agree.
Okay.
Um, moving to pharma, no Vote Ortis is freezing higher in noncritical areas.
This was, I think, pretty surprising.
And then we had the next story.
Eli Lilly eyes, their, uh, GLP one pill form after phase three diabetes trial success.
Uh, what did you think of these two pharmaceutical stories?
Well, one, I I've been rooting for better results on the kind of oral option for GLP ones for sure.
I think that's, we know the challenges for families on injections as well as like, yeah, just access and cost side.
This is a huge win to be able to hopefully see a really accessible alternative.
I think the, the other side of the story though, to your point, is you're seeing how capital intensive healthcare is, even for the big giants.
Um, the fact that they're having to cut, uh, it worries you so the, everyone is tightening belts, even these guys.
So, uh, you know, you've got your, your, your golden child, if you will, with the, you know, what's going on at Novo.
You know, internationally, it's putting pressure on everyone.
Yeah, definitely.
I mean, all of healthcare, uh, like stocks have been down.
Everything.
Everything is sort of, uh, we're in transition lease.
So, okay.
Moving into Web3, Peter Thiel is leading a pack of investors piloting into Ether.
This is in the Wall Street Journal.
They're talking about Ethereum and how Peter Thiel and a whole bunch of other investors really think that Ethereum is gonna be the real growth engine.
So part of this is just to sort of educate the audience around, you know, we have Bitcoin, which is probably the, the oldest store value, but Ethereum is probably the best, uh, well known, like for more actually.
Processing and doing activities and, and running applications on top of cryptocurrency.
Uh, Mitch, what do you think of this?
Oh God.
This is an area I'm so far ahead of my skis.
Yeah.
I don't have a strong opinion, for sure.
Okay.
I'm learning with the rest of your listener for sure.
Uh, okay.
Then the next story, we have two, the next two stories there about global, uh, stablecoin payments and so circle, uh, which we've been talking about here on the show.
They have a stablecoin USDC, which is a, you know, it's a crypto coin that is always fixed at $1, so you can, you can pay for healthcare things and you don't have to worry about pricing in some other currency, it's in dollars, but settlement is much cheaper, faster, and.
More secure.
And so Circle has now partnered with MasterCard and finra.
MasterCard, of course everyone knows here in the us but FINRA is actually, I think might be even bigger globally as far as a payment processing kind of network.
And so they'll be connected to Circle and I think we're gonna start seeing like on your credit card, you might be buying things in USDC as opposed to USD, uh, because the, it might cost you a 3% transaction fee to buy something in Africa if you use your MasterCard and want to do it in dollars, but no charge if you wanna do it in USDC.
And so I think that's where we're we're headed, that it'll be a lot of transac, just a much cheaper transaction processing.
And then the next story is in the Merkel, which is a focused kind of Web3 publication.
Google Cloud has created sort of a new competitor to the stable coins just for processing, um, transactions.
And they're literally gonna do a cross border so that they can reduce the cost of like the swift network or wiring money back and forth.
And so we're tracking this because there's a lot of payment processing, revenue cycle management, uh, tracking of transactions in healthcare.
We spend way too high a percentage on that in healthcare.
And I think we can, uh, kind of jump to some of these Web3 solutions, whether they're, you know, some cryptocurrency or not, as long as they're more reliable and faster and less expensive, I think it would really be helpful for, for healthcare.
The other thing I'm curious of too, in this space, and I don't know the answer and clearly not enough of an expert, but like the debate we've had for years around how can we get to like single health records that we can bring with us?
What's fascinating is also you hear about the concept of tokenization, similar mind mindset and mentality for health records as well.
I'd be curious to follow this along too, to see if that reemerges as a key theme in this population as well.
Yeah, I, I think it definitely will.
I mean, the, uh, blockchain is the place where you would have a sovereign health record, like I own my, my DNA is my, you know, it's my ip.
It's my literally what makes me, and then I have a, a bunch of health transactions, procedures and I was born, I had a, b, c, things happen.
I'm 55 years old, so I had a lot of stuff happen that should be in my personal health record.
And it's, you know, it should be encrypted on a blockchain, and then I can share it with doctors or whoever as needed.
I think that's coming in the next five years, but it's not quite here yet.
We have, we need a way to pay for it, right.
Is what the, okay.
Moving into ai, the first story, Coinbase, CEO, explains why he fired engineers who didn't try AI immediately.
So Brian Armstrong is the CEO of Coinbase.
He gave his tech team a week to kind of onboard AI tools, and then, at least in the story, it claims that on Saturday he had a meeting.
But anyone who, who didn't try it out, um, and a few people were on vacation or sick or had something going on, but a few people just said they didn't, didn't like it or didn't want to.
And he fired those few people on the spot, which I don't know, definitely sent a message.
What are your thoughts about it, Mitch?
No, I think the message of like AI is not optional is, is a strong message.
I don't love the way the guy went through about it, not the culture I would create or would, but I do think like finding the right incentives, maybe there's carrots and sticks to go after it.
Mm-hmm.
To be able to help.
Uh, which it does sound like even after they, they concluded they were focusing more on investing then on education and how to optimize the use of ai.
But for us, for sure, we're embracing it every day.
I think you have to be, if you're in healthcare right now, or any business, to be honest and not embracing AI is, is just stupid.
Yeah.
So then, uh, in the Wall Street Journal, Nvidia predicts cooler growth.
So they had their earnings, the data center revenue, which is, you know, the biggest growth engine did not fail to meet expectations.
So the stock's been down about 2% ish today.
They reported yesterday, but we were talking before the show.
I mean, you could see if you're watching on video, the, the revenue is this quarterly revenue.
It's been growing, you know, I don't know, maybe 200 million a quarter in growth every, you know, quarter over quarter.
So pretty, almost a straight line up.
Then a couple years ago, they were at a 10 billion, 8 billion a quarter kind of run rate, and now they're in the forties, 47 billion last quarter.
So growth is slowing.
Jensen Wong, of course, spoke and he said he expects the largest AI companies will spend three to 4 trillion in the next five years on AI infrastructure.
And that Nvidia should be able to get 70% of that amount, uh, which is just a. Incredible market share on an incredible amount of spend.
Four.
Mean three to 4 trillion is a lot of money.
I dunno, what do you think of this story?
I mean, I think some of this is, is partially what the, the maturing of the market, if you will, and some of the normalization of the AI hype after such explosive growth.
But I also, the other caveat is this is all pre China, right?
Like they just are get granted.
You know, the ability to start selling and expanding pretty aggressively there.
So I'm curious to see like how that compounds this further.
But it was funny, the, when the other article watching, uh, you know, Jensen this week was the, him out in China as they got the approval out there signing jackets with like gold colored Oh yeah, yeah.
He's rock.
He's a rock star.
Yeah, that's right.
Okay.
The next story is in Bloomberg, apple Explorers using Google Gemini AI to power a revamped Siri.
You know, of course Siri needs help and I think Google Gemini would be a good choice.
What'd you think of this story?
Yeah, it, it doesn't surprise me.
So as we know under the covers, Google had already powering their search function.
It's the standard browser, default browser, if you will, for all search on Apple.
So it didn't surprise me at all their, who they're looking at.
What's interesting and more worrisome is like there's an active DOJ case going on around.
Yeah.
Is this even possible actually by the, by the end of August that's supposed to decide whether.
Apple, Google, um, you know, kind of search embedded in iPhones is allowed.
I think Apple makes, I don't know, 20, 25 billion a year on relationship.
Yeah.
It was 20, I think 22 or something like that.
It's been growing.
Yeah, for sure.
Yeah.
Yeah.
So that, that might, that might end in the next little while, but yeah.
So they have a tight relationship with Google already, like that makes sense.
Yeah.
Yeah.
Who, but who else would they go with?
That's the curiosity.
It's like, it, yeah, it, would it be chat GPT or, well, I mean, right now they, right now they have a relationship with Chat GPT, but it's not embedded in Siri.
It just is in the Apple intelligence thing.
Well, what does it say though, also to the, the employees at Apple as well, of like the commitment around AI overall, these core functions are, you know, being outsourced, if you will.
Yeah.
That's right.
I mean, well, they're so far behind, I don't think, I mean, it's not normal for Apple to outsource software, but, but they, they're way behind on this, so, I don't know.
I think they might have to for a while.
Okay.
Then, uh, just a, a public service announcement.
I have Gmail, Google, this is in phone.
Arena tells all 2.5 billion Gmail users to change your password.
That, so Google got hacked, I think.
I think many of their passwords were stolen.
Um, I changed both my passwords this morning.
I recommend you change it.
So not much more to say unless you have a comment, Mitch, but, uh, you know, this is an AI because AI is empowering more and more of these, uh, threats.
Totally.
Yeah.
I don't click links was the big takeaway and I surprised you when they said 64% of people don't change their passwords regularly.
That's scary.
Yeah, yeah, for sure.
Well, yeah, I mean, I have a password manager.
I had that it was much harder.
I don't know how people would do it.
Okay.
Next story In the Wall Street Journal, perplexity is launching a new revenue share model for publishers.
So actually is, is a, you know, an AI company.
They have a.
Sort of tried to recreate the browser search experience for ai.
Um, and now they have this new revenue share model where 80% will be shared with publishers.
We need a business model in AI so that we have some incentive for people to keep making content.
I don't know, what did you think of this, Mitch?
I, when you look at the math of the 80% that, I don't know if this is the model, agree with you, I think we've gotta figure out alternative, uh, from the current ad based structure.
But what I'd love, because I don't know with 80%, can you still afford the type of investment you in the AI to pursue the quality and the resources and how you're displaying it?
So I, I, it piqued my interest to see an 80% revenue share of whether that's sustainable, but at the same time agree with you fully.
Like I think we've gotta find alternative models.
So it's great to see 'em testing out the waters.
Yeah.
Yeah.
I agree.
I, I don't think it's the final model, but good to see them trying it.
Okay.
And then Anthropic settled their big AI copyright suit called Mitch.
We, uh, a couple weeks ago, there was a, uh, the judge ruled in favor of Anthropic that if the, to the extent they had acquired, this is, I guess, authors, authors sued anthropic for stealing their books, put it into the ai.
The judge agreed with anthropic that, um, if they acquired the books legally, they could then put them in as training and use that information as part of their product.
And that was a fair use.
So they kind of won that case, but then he pushed to a jury trial, the question of did they acquire the books, uh, properly or not?
And I think the answer is, is some yes, some no.
And they settled because the, uh.
The estimate was if they lost, it was gonna be 900 up to 900 billion in damages.
And it was, I think literally like an out of business legal risk that they couldn't, they just couldn't accept.
So the numbers are just incredibly large.
Absolutely.
Yeah.
It's crazy.
Okay.
Then in the New York Times, he sold his likeness.
Now his avatar is shilling supplements on TikTok.
So this is an actor, and his name's Scott Jackman.
He was paid, he's an actor, so he was paid seven $50 to do a spot for TikTok.
They flew him to San Francisco.
They recorded his, him doing this voiceover kind of video thing and then for a year TikTok had the right to use his image likeness, uh, everything and they have turned it into an avatar and it's selling all kinds of stuff.
We'll put a link in the show notes.
You can watch all the different ads.
What'd you think about this?
It's pretty scary to, to see like how many times he had been replicated.
He's speaking different languages.
It's a little bit crazy.
It was crazy how effective the visuals really are and how advanced AI has gotten.
Yeah.
But at the same time, it's like probably should have taken more than 750 bucks.
Uh, and beware of what you're signing up for, the risk of being used for things you may not endorse or want to endorse is pretty scary for sure.
Right.
Yeah.
Okay.
Then we're gonna end on unfortunately, kind of a hard story, but I think it's an important story.
In healthcare and ai.
So in the New York Times a story, a teen was suicidal period.
Chachi PT was the friend he confided in and unfortunately he ended up committing suicide and his father had no idea that he was chatting with Chachi pt, but just going through his phone, trying to find the answers and found all of the text messages, uh, and chats back and forth for about the last year.
This is a 16-year-old boy.
What I wanted to talk with you and Mitch about is there were multiple times when he asked the chat bot for advice about how to commit suicide methods techniques, um, how he might draft a note, how he would, might, um, put together the rope for a noose.
You know, this is not, these were not subtle hints that the technology would need to parse through.
Now, to be fair, they talked about lots of other stuff for hours and hours and hours.
So, uh, certainly.
It was in and amongst a lot of other content, but, but it's scary.
I think the family has a right to say, like, this is a minor and technology should have some guardrails.
When, when you're asking for advice on how to commit suicide, there's not more a more clear signal than that, I don't think.
Absolutely.
No, I I, it's scary at the least, you know, the kid was in there to do homework to start and through building trust through the chat.
It, it got into a place to self disclose.
That's the point when.
A normal human would take a different set of action, but because it's a machine, it didn't have the same governor a lot of us do to realize something's off.
We should have good look for help.
And so it's scary.
I mean, it reinforces as we think about the use of ai, especially in like clinical care, mental health care, anything, having some aspect of human in the middle or figure out the right guardrails for safety and the risk is just fundamental.
It's just so depressing to see.
Yeah, there's no, no question.
And so this was in, uh, 4 0 4 media.
It needs to be covered more.
I wanted to bring it up.
And so 44 attorneys generals around the country.
Uh, so 44 states signed a kind of an open letter to nine, uh, AI and social media companies, all the big companies, philanthropic, apple, chai, ai, open AI character, perpetually, Google, basically anyone they could find that that is in this space.
Really kind of saying to them, we are going to, you know, we as as attorneys generals are gonna hold you responsible for doing wrong to children.
And they specifically kind of carved out minors.
And so the quote that I wanted to get your thoughts on is, it is unacceptable to engage a child in conversations that are romantic or sensual.
Your innovations are changing the world and ushering in an era of technol, technological acceleration that promises prosperity un dreamt on by our forebearers.
We need you to succeed, but we also need you to succeed without sacrificing the wellbeing of our kids in the process.
Exposing children to sexualized content is indefensible and conduct would be unlawful.
Even criminal if done by humans is not excusable 'cause it's done by a machine.
This was from blue states.
Red states, you know, just 44 of our states.
And I think it's really important, and I put it related to the New York Times, although that of course was a. Suicide.
I think that our political infrastructure, our government infrastructure has to step up and protect at least the minors amongst us.
Maybe adults are different.
I mean, I think you could argue, you could argue that, I don't know if I would or not, but for children, certainly they, we need protections.
Totally.
I mean, you think of where we started today and just what happened in my backyard, you know, there massive need as a society to figure out how do we help people when they're asking for help.
Um, I think technology innovation has to play a role and I think we can lead.
Through technology to set better guardrails, better safety systems.
But I think I was proud to see these ags step up the way they are.
Yeah.
I hope the action and reaction is as forceful and as direct, but absolutely.
As a parent of two kids do, I think we owe our kids more.
Uh, we can't keep having kids taking, having suicide.
We can't keep having mass shootings to kids jumping under pews at churches in our own backyard.
Right.
We've gotta do something better.
And I hope, uh, technology leads the way to help us solve some of them.
Yeah, I agree.
And then just to close it, OpenAI did respond that they're changing, they're updating their systems to try to not have the same thing happen again.
I think that's fine, but, but a little late.
Certainly a little late for the.
For the child that committed suicide, but I guess better late than never.
Maybe so, I don't know.
I mean, we work in childhood development.
This whole idea of like wait and see is what's compounded the system V what it is.
I think you put the type of money we put into these resources.
You've gotta learn how to proactively think about what are the risks and challenge the technology you're building.
I think you look back and you look at meta and some of the stories from Mark and team of what they've said, it's like, well maybe we wouldn't have thought of the like button in the same way.
Like think through proactively some of the implications on your design proactively in a way.
And look, put parents first, put kids first, put humans first as you're designing.
I think there's so much we can learn from that.
Yeah, I agree.
And so it's great the work you're doing at Ladder.
I think we have some work to do in, uh, managing our AI tools, but uh, but hopefully the states are beginning to wake up and maybe take, take some control back and, and just put in.
Reasonable guard guardrails.
I mean, the ags are not saying, we don't want you to win.
They literally say they want us companies to succeed, but, but we need to protect our kids at the same time.
Those should not have to be diametrically opposed.
Right.
Yeah.
You, you can do both.
Right.
Exactly.
Well, okay Mitch, thanks for doing this.
Really appreciate it.
It was a great, great show.
Marcus has to watch out for his job.
It was an absolute pleasure, Vic.
Thanks so much.
Okay.