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Marcus & Vic discuss key economic trends - inflation, disinflation, & Wall Street bank earnings, alongside the impact of rising credit card debt & healthcare layoffs. Venture capital, particularly Series B funding, & highlight innovations in AI for healthcare, including virtual digestive care, AI-powered psychiatry, & home testing solutions. The growing role of AI in healthcare call centers & major healthcare AI partnerships addresses the future of AI & automation ...
Marcus & Vic discuss key economic trends - inflation, disinflation, & Wall Street bank earnings, alongside the impact of rising credit card debt & healthcare layoffs. Venture capital, particularly Series B funding, & highlight innovations in AI for healthcare, including virtual digestive care, AI-powered psychiatry, & home testing solutions. The growing role of AI in healthcare call centers & major healthcare AI partnerships addresses the future of AI & automation in the healthcare industry.
1:48 - Wall Street Posts a Strong Quarter
4:39 - Tracking layoffs, closures in healthcare nationwide
5:42 - Carta: Series A to B Chasm
11:00 - Oshi Health Secures $60M To Scale Virtual Digestive Care
12:52 - Legion Health Pivots to Digital AI-Enabled Psychiatry, Raises Over $6M
14:43 - Ash Wellness raises $10M to expand at-home testing
15:19 - Suki banks $70M to build out AI assistants for doctors, expands health system partnerships
16:36 - Parakeet Health expands AI call center, announces $3M seed round
17:53 - Digital health funding: Glooko gets $100M, appoints new CEO
18:47 - RadiantGraph raises $11M for patient engagement
20:50 - True change 'requires investment': Healthcare leaders react to new $250M Gates fund for women's health
21:59 - FTC increases premerger notification requirements despite pushback from providers
27:52 - Health Costs and Flat Raises Are Set to Squeeze Paychecks
30:51 - UnitedHealth Shares Dive After Health Giant Says 2025 Results Likely to Fall Short
32:10 - Medicaid drags Elevance Health as it misses on profit in Q3
33:05 - Medicare Plans Are Making Big Changes for 2025. Here’s How to Navigate Them.
35:31 - KFF: 2024 Employer Health Benefits Survey
39:18 - Nonprofit health systems launch Longitude Health to improve performance, care delivery at scale
41:41 - Walgreens Boots Earnings
44:12 - More Children Are Depressed and Anxious. Is Social Media Really Behind It?
49:01 - Abridge, Wolters Kluwer Health ink partnership to integrate UpToDate with AI medical scribe
50:55 - Introducing healthcare agent service in Microsoft Copilot Studio
52:42 - New York Times to Bezos-Backed AI Startup: Stop Using Our Stuff
55:04 - Amazon, Databricks Strike Five-Year Deal Around AI Chips
57:06 - Google Backs New Nuclear Plants to Power AI
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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Thank you.
All right.
Uh, before we get started, I just want to acknowledge the, uh, the passing of someone who was.
Worked with us in the past on the health further brand.
Um, Alyssa Lockett's, um, she was an intern with us back when we were doing the health further festival.
And, um, she was, she was killed this week in, um, in Nashville while she was just trying to exercise on the green way out in the Antioch neighborhood.
Um, I just, I heard the story, but I didn't see the name associated with it.
And then I saw a Facebook post today and I saw the name and I was like, I know.
That name.
I know, I know that name and, um, went, went and searched it and saw her face and I was like, shit, I'll listen.
So, um, Yeah, it's terrible.
I didn't know the story because I don't watch the local news.
It's too depressing.
But, um, Someone that we worked with just really close to home.
Yeah, it makes you realize how vulnerable we all are.
Yes.
Yeah, it's terribly sad She was she's brilliant, you know after her work with us.
She went on to get her PhD and You know, just just a brilliant young lady young and had her entire life ahead of her and Was a pleasure to work with and, uh, very sad by this news.
So, uh, our, our thoughts are with her family and friends and, um, yeah, we're just very sorry, uh, as nothing else to say after that, um, let's, uh, let's do what we do, let's dig in.
All right, let's start with the economy, Vic.
We're in a earning season for all the big wall street banks and sort of two big takeaways that they're doing really well on the trading.
Um, and not a lot of activity, but but they're made up for it pretty much in trading and in net interest margin.
Um, and then the credit book is getting is framed a little bit delinquencies, 30 day plus 90 day plus are all up.
So, um, um.
Not surprising, but I think worth noting that, again, the K shaped economy, like if you, if you work on Wall Street and are a trader, you're doing well.
But if you have a credit card balance and are trying to pay off things, you're not doing so well.
Yeah, and I think, um, we are seeing that sentiment, that lingering impact of the economy.
Is, uh, it's, it's taking center stage in terms of the election that is less than three weeks away now, which is crazy.
Um, which is that sense of, uh, of a lack of relief, right?
I mean, even in the face of inflation getting down into the, you know, sub 2.
5 range, it's not necessarily changing, uh, the, the, the comfort level of the average American household.
And, uh, and while.
Americans have been sort of weathering the storm over the course of the last 18 months.
Uh, credit balances did go up, savings did go down.
And so we're still sort of in that mire.
Um,
yeah.
And disinflation down to two and a half, or even say you get down to two, right.
It's still increased.
All the prices are increasing compared to last year.
So you don't It doesn't go backwards.
People think like, Oh, inflation's down.
I'll be able to afford more things.
No, it's just not getting as expensive as quickly.
Right,
right.
And you know, your access to credit is more limited.
Yeah.
And maybe you, you didn't make a raise this year or you make even less money.
Right.
For some reason, there were a lot of layoffs that happened.
So I think we're at this point where even though it You could say that the Fed avoided a recession and got to a quote unquote soft landing.
It doesn't mean that we, as a population, didn't experience a tremendous amount of pain and, and, uh, that's, that still has to work its way through the system.
Yeah.
Yeah, I mean, I'm hopeful that we'll see.
We have a couple more shows before we get to the election, but I'm hopeful that all the mudslinging and pointing fingers and stuff after election will go away and we can turn to, okay, how do we create jobs, create, you know, allow people to earn money and buy stuff.
Yeah.
Yeah.
I mean, uh, we.
We're going to have a jobs number coming out here pretty soon and, you know, seeing whether or not the unemployment has at least started to turn around or at least stay flat, or if it's continuing to sort of move in the wrong direction.
Um, and on that note, modern healthcare, I don't know if they regularly do this, but I happen to catch it this time around this, this story of where they're, they're tracking layoffs and closures in, in healthcare nationwide.
And, um, I just found it kind of interesting, uh, the, the tracker here, this is all from October.
I, I see here.
Yeah.
The, the late, late life
spans.
Yes.
Yeah.
So,
so it's September through October and it's all like big names.
So, uh, blue, blue shield of California laying off 61 employees, CBS health cutting 2, 900 corporate jobs since our health laying off 200 employees, um, bright line laying off clinicians.
So just kind of a steady drumbeat of, of real names making layoffs.
And it may not be like that huge, but that's still a trend of you're not hiring, you're doing layoffs.
Right.
And so
layoff is the last thing you do.
Like you move people around.
If you're growing in some other department, you might move them there.
And so, yes, if people, if companies are laying off, they're certainly not hiring.
That's right.
That's right.
Uh, so let's shift to the VC world.
Um, Carta is, is becoming quickly sort of the, the day in, day out de facto data provider of what's going on in the venture industry.
And they're doing a good job with it.
They're doing a great job.
It's, it's, it's actually a, a, a great lesson in, um, uh, crisis management.
Right?
Um, obviously the, the company had a couple of big fiascoes over the course of the year.
You know, some of them were about internal employee culture.
Some of them were about the whole secondary market thing.
Right.
But the fact that they are providing real value to the entire ecosystem in terms of the data that they are kind of, you know, Solely able to provide, uh, it's kind of washing away all the negative stink that they've been dealing with.
I think
it's sort of two things.
One, they, they took responsibility for the mistakes and have done their best to either exit, they're not doing the secondaries right now because they, they clearly weren't, didn't have it organized very well.
And then they keep sort of trying to figure out how can they use their data to add value to the, to the industry.
And this, um, for people that aren't watching, it's much better on video, but, but this chart is a really creative new way to look at data.
So talk, you showed that you found it.
It's really interesting.
Yeah.
So it's, it's basically laying out.
Uh, on the bottom, it's, it's quarters, um, and it's got 12 quarters.
So effectively three years.
Uh, and then on the, on the Y axis, it's, it's covering quarters and years, but that's from the date of an A round.
And so you've got like all these different squares that kind of show you at the intersection of those two things, quarter from, from when, you know, they, they were, uh, up and running to when they did the A round at the intersection of those two things, like when were they able to successfully raise the B?
Um, and.
It's, it's worse than it's been in, in recent times.
Right.
So they, they kind of highlight the fact that right now only 9 percent of companies that are two years from their series A round, um, are getting to a, to a series B.
Right.
And that is a very, very low graduation rate.
Like you think about all the companies that raise a series A, you're generally thinking inside of two to three years, you're going to get to the B.
Um, and if 9%.
And two years of getting to the B, uh, then they're showing, if you, if you look up to 2021, 26 percent in three years, I mean, that's a lot of companies that are either doing seed extensions or probably going out of business,
right?
So the reason I like this chart and just to sort of build it out, if people are not looking at it in 2018.
There are four years, there's a little more than four years.
So you, you have the full 12 quarters of historical record.
It is what it is.
And you can see that two years after the series A round, um, it ranges between 27 and 26%, but really sort of in the high twenties.
So one out of four deals, maybe slightly better, we'll raise money.
That feels kind of right.
Yeah.
And then how about 2020?
And then 2020 is a kind of a, you know, a hot market, a bubbly, you know, you know, lots of capital chasing risk, right?
And so you can see pretty clearly, uh, that graduation rate spikes up to a peak of 41 after two years.
Almost half, 1 in 2 is raising money.
And that probably is not, I don't know that that's totally sustainable.
Healthy, I think would be 25 to 35%.
Right.
And the bottom line, it's four
times as hard now
as it was in 2020.
Yeah.
So now it's, it's down at 9%.
So it's four times as hard as it was two years ago.
Yeah.
To raise your B.
Another way to say that is that.
If 500 companies raised money in a quarter two years ago, now it's going to be 100, 125 companies raised money.
Yeah.
So for my portfolio, I'm really stressing that it's, it's just a much higher threshold.
It's going to be very difficult.
You have to be almost like, Top 10 percent by this, by this facts, top 9 percent in the market to rate, to raise your next round.
Yeah.
I mean, and, and with those odds, you have to sort of say B as a pipe dream, right?
Because you know, networks are accounting for a large percentage of those 9%.
Like it's not actually that 9 percent doesn't reflect merit.
No.
Right.
A huge, Portion, at least 50% of that 9% is just 'cause the networks.
Yes.
Just 'cause of who knows who and who has access to who and who can convince who to do what.
Because, because we're still in the private markets.
Yeah.
And I think there is some, uh, correlation to merit in the networks, but, but it's not like you can't just run really hard and get, raise your be.
Yeah.
So I think the, the answer is you need to be, you need to have a plan for how you can grow on your own.
On your own.
On your own.
Yeah.
On your own.
Yeah.
Yeah, so that's, that's helpful data for, uh, You know, where we are in the market.
And then there were a lot of announcements of rounds that happened.
Uh, so a series C round, and this is again, you know, a company that's going to be more baked and at the scaling point, they've already got their B done.
So now they're into the C, but let's look at the name.
So we're talking about Oshie health.
Um, they're doing a virtual digestive care, 60 million series C.
What are the names?
Bessemer, flair, first Cressy, CVS health, Takeda.
I mean, there's a lot.
You know, it's like, that's what I mean when I say networks.
Bessemer, Flair, Fritzgresi, especially those three.
Yeah.
They, all three of them work with Oak all the time.
And so there is an easy network handoff there.
And Oak looks at lots of things, but, but they like to invest with those, those earlier funds.
Those, those funds come along all the time.
Right.
Anything you want to say about OSHI before we move to the next one?
No, it's sort of in this trend of, disease specific or maybe a certain patient type specific.
Um, it's a way to carve off a part of healthcare services where you can make a difference, I think.
Yeah.
Stay, stay away from the health systems.
Yeah.
Basically.
Right.
Uh, which, which I got to say, I feel like that is becoming a part of the healthcare VC investment thesis.
Yes.
It's part of my thesis.
Right.
Just like.
You have to be aware that epic is this huge, like risk area.
That you, you may not ever get through.
It is possible to get through it, but you have to have big healthcare systems that are big Epic clients telling Epic, they want it.
Yeah.
You got Epic on one side, you got Oracle on the other side.
Yeah.
Right.
Right.
And Microsoft swimming around in there and Google swimming around in there.
Right.
You know what I mean?
Right.
And so with those four players, it just gets really hard.
I
mean, I've, I've been focused on the post acute space.
because there's lots of different niches to play in.
Yeah,
much smaller players, much less concentration.
Yeah.
Agree.
Agree.
Lesion Health pivots to digital AI enabled psychiatry raises over 6 million.
Yeah.
So this is one of several this week that are now using AI not only in the back office to organize things, although they are doing that, but also in, you know, sucking in all the patient health records and then using it to determine your preferences and when you like to come to appointments based on when you've been to appointments before, but also what happened in all your lab results and they, they shape their care plan that way.
Yep.
Yep.
And they're using LLMs as opposed to Wobot.
Yes, generative
AI.
It's not, it's not, uh, sort of a guardrailed based, uh, step by
step.
It's not deterministic.
Not deterministic.
Yeah.
Wobot is deterministic.
Yes.
Um, and that, I'm confused by that, uh, because I know people keep saying there's all these guardrails you can sort of put in place, but no one's been able to demonstrate a hallucination proof LLM, and I, and I don't think we have clarity on what the, how the liability is managed when it's not a person delivering the clinical care.
Right, when I, I just, I just, I just don't think There is, I mean, I was
talking to this with a lawyer this morning.
He's not investing in generative AI.
in the clinic because of that issue.
Then someone's going to die and it's not, there is no case law of who's responsible.
And deterministic is the right way to do it.
The large language models by definition cannot be deterministic.
It's right.
It's a probability based thing.
That's right.
Yeah.
So, um, and they're not going to give you the same answer twice.
Yes.
Well,
that's part of the problem.
You can't do the same answer twice.
Yeah.
Ash wellness raises 10 million to expand at home testing.
Uh, let's see.
They're using the funds to break into Medicare Advantage.
The round was led by Merck, Global Health Innovation Fund.
So this is So instead
of going to a LabCorp or, or, you know, they'll send you all the stuff to your home and then you send it back in.