Junaid Kalia, MD:

Good morning everyone again. Thank you for joining Signals and Symptoms podcast today. We have two special guests. My two co host besties are going to act as guests today.

The portion is that we keep talking about patients, we keep talking about AI and healthcare AI and then it's going to change the trajectory of care coordination. But the minute the care coordination changes, the economics changes behind it.

Like how hospitals going to rewire in the age of AI, how clinics are going to rewire.

So basically what I'm trying to say, there's a twin disruption. One is of course the medical part of it, the other one is essentially how the cost reduction impacts, how the revenue growth changes, how the optimization completely changes as well.

Now reminder that healthcare is also a business and therefore business has, comes with a lot of things that how is it going to really change and how do we see the future in, in one year, two years, five years and 10 years as we go along.

So just to prime the discussion up, I'm going to give you two major in my opinion some observations. Number one, my sister is a psychiatrist. She teaches a lot of psychiatry residents and then she now moved away.

But what she had noticed is that, that essentially nearly 90% of her psychiatrist classes are moving towards, for a lack of a better word, concierge medicine, telemedicine more importantly, essentially cash pay.

Observation number two is the rise of the wellness part. We talk about healthcare, healthcare, healthcare, but essentially med, spas, chiropractors, etc.

All of them are now using labs, using imaging, and you know, also now adding personalized treatments including peptides, and then of course essentially moving forward.

So all of that basically is now impacting. So problem number one, AI is disrupting care. Now we have started it, how it is disrupting the complete financial chain, of the solution part. So I'm going to start with Ed. So first you can set the stage better than I do. And then let's start with the mega concept of US hospital systems. Then we'll come to Harvey, which is basically global what's happening.

And then we'll, you know, peel into each layer of this, this smelly onion one at a time because people don't even like to admit that healthcare is a business, which is odd. Anyways, go ahead.

Edward Marx:

Yeah, I think healthcare is about to be disrupted in a massive way. You know, we talked about that in the past with, with virtual care and of course we saw it actually happen with the pandemic. But then we all went back pretty much to the old standard ways because that was the economics.

So if you look at what's happening just this year alone, Wall Street Journal had another article coming out, this week, where it's talking about how there's been four consumer facing products that have come into reality this year alone and they are completely going around healthcare systems. No one really pays attention because it's kind of status quo. It hasn't hit their pocket but yeah, And there was a quote from there. I'm just trying to pull it that “Hey, we have to change our business models or be lost. When a general purpose AI could field health questions at consumer scale with no procurement chain.”

The implicit message to health IT buyers is uncomfortable. The friction we've built, right, hospitals we've built into our vendor onboarding process is becoming a competitive liability because we all know it can take. I was talking to a different person yesterday. 18 months. They finally went through all the governance structures and it took 18 months. And he said by time their technology was approved, it was obsolete.

They had ready to come out with the latest and greatest. And so because we're so slow to adopt new things in healthcare, so a competitive liability, not a quality filter, right?

We've created these governance processes, we've created these, all these filters, all these reviews. It's a liability today.

Think about Clay Christensen's the Innovation Dilemma. It's perfect situation where we're going to be disrupted unless we make changes right away, we're going to be disrupted by these outside forces.

I interacted with three of the top five, according to U.S. news and World Report, three of the top five health systems in the last two weeks and only one understood what we're talking about and was actually doing something.

They recognized that the old way isn't going to work and they had to take some risks, they had to take some bets with different types of companies and start working with them.

Junaid Kalia, MD:

It's very amazing that you told the story about something that is insane, that even the employees themselves, including, yes, I mean I have nurse practitioners who are not asking enough questions to me that like they used to.

I have nurses who would just say, hey, I got this from chat GPT, do you agree? And then they move on. It's kind of scary, as a physician that that the reliance is on a, that is not wedded.

Harvey, give us a contrast of how things are changing globally in this context and how when we have an insurance based system, privatized healthcare, but what happens in a public healthcare systems, how are they coping in this new reality where not just the care is disrupted, but economics are.

Harvey Castro, MD, MBA

Yeah. So what I find fascinating is all of this to me personally, I feel like this ties to culture.

Other countries have always done things differently. Obviously that's the culture comment. And so I find it interesting how the correlation plays into healthcare. Example, I went to Dubai, very strict, I loved it, it was really interesting.

But it's a top down effect. They're like, this is what we want to do. This is how we're going to take care of healthcare. And it's coming from the top and it's being honored all the way through. They're leveraging the data of AI for the entire population. And that just shifts the way health care is delivered.

Obviously, what we're talking about, Ed explains, we have pain points here in the United States. If we didn't have any pain points, we wouldn't have international medical travel, it wouldn't exist. That the reason it exists is because there's such a problem here in the state, there's so much money that is, let's call it wasted or it's not optimized.

And as a result, other countries, some of these things can be 10 times cheaper than the United States. Case in point, I gave a TED talk in, Arizona last year and I was shocked. Every single person I interacted with, every single one, I don't know why it came up, they're like, go to Mexico.

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It was literally right next door. It was like 10 minutes, from where I was speaking. And I go, where do you go to Mexico? It's like I get all my dental care there. I don't know what it was, but everyone I interacted with local, they were like, I have to go to Mexico for my dental work. And I thought, interesting, there's a zillion dentists here, but they're all going, not going there, you know,

Junaid Kalia, MD:

so true.

I mean even the traditional care that we are already experiencing is changing. I mean, we're gonna see how the oil prices are gonna change. Now more importantly, we're seeing that investors see it. So if you follow the money, which is essentially we think investors are smart money, which we don't know. But what I'm saying is that the smart money is going towards the AI, but then the clinical intervention versus economic drivers are different. So Ed, when you are seeing this and when you're talking to hospitals that you are looking at the future, where first of all, hospitals are already cash trapped.

When you reduce essentially hospital admissions. How are hospitals going to cope with it in the next two years, three years, five years?

Edward Marx:

I always said that they may sell off some assets and some of the brick and mortar, maybe you're really community assets.

Junaid Kalia, MD:

So you're gonna recommend as a board member that you have to restructure your whole sort of play..

Edward Marx

Yeah Think about it. If you're. Again, I, I'm sure there's some hospitals that have a different system, but the majority, the PCP is the lifeline. And if that pcp, you know, one of the predictions I've made, and we'll test it and we'll find out if it was right or not, that 65% of people will get 85% of their care via AI.

And that's a significant reduction in primary care and in the traditional model. So who's going to tell those individuals, you know, where they're going to go for their specialty care?

In the past, again, you know, you had the referral system which was largely based on this vertical integration. And now there's going to be someone else potentially directing those patients. So, that revenue stream could be, will be significantly impacted. So. Yeah.

What are they going to do? Well, one is, we've talked about this before, is they need to jump in the game. They need to offer bimodal treatment options. Two, they need to double down on the virtual care that works so well during COVID And again, why did we leave it? Third, they need to offer, you know, these AI agents, you know, they need to replicate what's happened, what these other consumer grade products are now doing.

Junaid Kalia, MD:

So basically what you're saying is that, that hospitals will need to rewire, go from brick and mortar to more consolidated view of things and then incorporate virtual AI all of these as a funneling pathway.

What I'm saying is that, that if you were to get into the game again as an EHR physician and then, build a new sort of around the shop right here, corner like, you know, EHRs with hospital, like, like the amazing thing you did and then got exit.

But if you were to restart this game, how would you do it in this new environment that we're in?

Harvey Castro, MD, MBA:

You know, that's a tough one. I believe strongly. It's about a win win situation. Right? Unfortunately, both sides of that equation are on opposite sides and that the insurance wants to make more money for themselves and the hospital wants to have the money so they can give to the patients.

That's how I see it. So to me it's, how do you make that perfect balance? And so for me personally, I see it as we would need to put more predictive analytics. There's a retooling. I call it the great shift. I love what Ed said about the percentage 60, 5% of people with will get 85% of the care.

Well, with AI, if that's the case, then you would think, why not lower the price of health care? But then there's that dichotomy, right? If I woke up one day and I said, hey, Junaid, I'm only going to pay you 10% of what I used to pay moving forward, you'd be like, what? So there's that disconnect.

Junaid Kalia, MD:

Let's say you're the king of the world and then now you're Going to create a new policy for VBC for us where the economic realities are changed, including AI and everything. How would you reconstruct value based care in the age of AI?

Edward Marx:

Well, you know, insurance companies are a little bit more consolidated. So there's still a lot of health plans out there.

I'm not an advocate of universal payer system, but certainly if you wanted to do value based care at scale, you know it would be nice to have a single, it'd make it easier if there was a single system.

So going back to answering your question, let's assume you're in a situation where you do have a single payer that covers the entire entire geography.

So obviously you would deploy the same AI agents that we've been talking about that I've referenced. So you have all these disruptors. So you would have to become the disruptor. So, so that's how I would answer the question, what would you do in a VBC scenario?

You would become the disruptor. You would offer a multi-channel, omnichannel type of health care, including these agents. And if you did this, and if you, if you really incentivize your patients to move this direction, I mentioned 65% of patients, if you could even move that to, you know, 80% of patients through incentives, through efficiencies, there might be some natural incentives that come if you're just more efficient.

But if you had these AI agents that again, people are using now and are you going to use a lot more, you would then be able to move your, your access issue would be gone. Your PCPs that still needed would be very well employed and the other ones would start doing specialty care.

So answer the question, is AI agents taking a lot of the primary care? That's the first thing right there. You'd become so much more efficient. Access issues would be gone.

Love it. You're absolutely right. The pathways are going to be adjusted as well. Direct, to specialty versus pcp, two specialty versus you know, concierge medicine.

We're going to basically move to what we call tokenization economy, including I think US dollar going to convert to stablecoin at one point in another in the next, two to three years.

So the question really becomes, is that, that. Harvey, how do you envision the tokenization of economy in general? And then more importantly, how do you think that will this tokenization be part and parcel of a VBC architecture and who will own it? How would you centralize virtual VBC measurement through tokenization? Or I'm just hallucinating.

Harvey Castro, MD, MBA:

It goes back to what I kind of say always. It's the culture, right? That's radical. That's different. Will the culture accept it?

Will the older generations of the people in power allow that to happen while they're alive? With that said, there's many ways that there's like hints of that coming, right? You look at insurance company rewarding you for better health, going to your annual visits, moving around more, those metrics.

The insurance company is saying, okay, you know what, we will pay you, by decreasing your premiums. So that in a way is tokenization. If you think about it, who will own that, that pyramid? Interesting. Just because the way I see it is the powers are not going to want to let go of power. I would assume that it'll be the government pushing hard to have some hand in that so that they own it.

And then obviously the bigger insurance companies are going to make sure that they, they have their hand. What do you think, Ed?

Edward Marx:

Yeah, I agree. I think it's that's a great analysis.

Junaid Kalia, MD:

My opinion is, and this is my slide, that the value based care will be parcel and parcel of it. How it will look like I don't know.

But this will be part and parcel especially considering previously that 740 billion is going to be hopefully saved. And this will also create a real mechanism for a new form of reimbursement.

That is AI is always present, monitoring the care. AI is tokenizing it.

Agree with Edward Marks, radiologist, is going to become a real problem. As a matter of fact, their, you know, rad partners and everyone are changing the reimbursement system from number of studies read to number of time spent so that, you know, they decrease the overall cost of reading.

That's true. That's going on now. And then lastly, I truly believe that we're going to see a tokenization of the healthcare economy in general. Basically the idea would be that the back office, the front office, as it gets automated, the whole process is going to come forward more further that you will be able to use quickly where to send, how to send, and AI can help coordinate care with you.

Ed and Harvey, any last thoughts?

Harvey Castro, MD, MBA

No, my, my favorite phrase, because I get this question a lot like, hey man, how do I get better at AI? And I'm like, you know, it's like riding a bike, right? The more you use it, the more you know it.

At first you, you freak out holding that bar really hard, and then later you're like, oh, dude, I could ride this bike without riding my, without holding the bar. So big picture, enjoy AI do it in everything you do. Because I do it for everything.

Edward Marx:

We were talking about AI they were asking all sorts of questions. We were in a hospital setting and they're, they're into it. And so man, it is thing, it's real. And you either, I used to always say, innovate or die. We'll have to come up with something clever like that for AI or maybe it's AI or die.

Junaid Kalia, MD: