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Man and Machine: A New Age for Medicine

By MIKE MAGEE

“As machines become more intelligent and can performance more sophisticated functions, a new relationship between human and automation is dawning. This relationship is moving from master-servant to teammates…” NASA Langley Research Center/2019

“DeepSeek’s Breakthrough Sparks National Pride in China,” screamed the Wall Street Journal headline last week. In the age of Trump’s promise that crippling tariffs would “put China in its place,” the shot across the bow of Silicon Valley’s AI hubris sent Nividia and its allies (and even the reemerging Nuclear power industry whose investors were convinced that AI’s ceaseless thirst for electric power would shift the public’s risk/benefit of nuclear energy in their favor) into the red this past week.

For Nividia, it was a tough way to start the week. As Forbes reported last Monday, “Nvidia lost $589 billion in market capitalization Monday, which is by far the single greatest one-day value wipeout of any company in history…” Of course, it rebounded 8.8% the following day, and by week’s end was near record highs.

As the industry struggles to define just how much of a threat China’s Open-Source cut-rate AI effort is, there is no disagreement on the coming impact of AI on nearly every sector of society, not the least of which is health care. As the NASA report from 2019 suggested, human “master” control of machines is increasingly tenuous, and to succeed we must embrace AI technologic applications as fully enfranchised “teammates.”

Medicine has historically embraced, and even championed their machines, as superhuman extensions of themselves, and featuring them as intricate to “doctoring.” Consider the ubiquitous image of doctor with stethoscope hanging from the neck. It arrived on the scene roughly two centuries ago, in France in 1816. Its creation is attributed to Rene’ Laennec, and was little more than a wooden tube he incorporated as a hearing device after experimented with rolled paper tubes. He likely got the idea after observing the effectiveness of “ear trumpets”, the hearing aid of its time. But it was modesty, according to some historians, that pushed the French doctor to action. He was apparently uncomfortable putting his ear on a woman’s heaving bosom to listen to her heart sounds. The device, an assist, offering better auscultation at the required distance.

Of course, we’ve come a long way since then. But if anything, health care professionals are more reliant than ever on machines. Consider AI-assisted Surgery. Technology, tools, machines and equipment have long been a presence in modern day operating suites. Computers, Metaverse imaging, headlamps, laparoscopes, and operative microscopes are commonplace. But today’s AI-assisted surgical technology has moved aggressively into “decision-support.”

Surgeon Christopher Tignanelli from the University of Minnesota says, “AI will analyze surgeries as they’re being done and potentially provide decision support to surgeons as they’re operating.”

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VC returns: Well, it’s stock trading…

By MATTHEW HOLT

There’s been a lot of discussion lately about whether digital health is a legitimate place for venture capital. There have been lots of huge failures, very few notable successes (and certainly no “biggest companies in the world” yet), while some real giants (Walmart/Walgreens/Amazon) have come in and then got out of health care.

I don’t have to tell you again that most of the publicly traded digital health companies are trading at pennies on the dollar to their initial valuations. But I will. Look at that chart below.

Heck even Doximity– which prints money (45% net margins!)–is trading at well under its post IPO high. My quick overview is that there are not very many publicly traded companies at unicorn status. With really only Doximity, HIMS and Oscar being very successful. (We can have a separate argument as to whether Tempus and Waystar are “digital health”). And there are many, many that are well off the price they IPOed at. All that at a time when the regular stock market is hitting record highs.

Which makes it interesting to say the least that Define Ventures just came out with a report saying that in general digital health has done well as a venture investment and that it was likely to do even better, soon.

The report isn’t that long and is well worth a read but their basic argument compares digital health venture investments to those in fintech and consumer tech. Essentially it took digital health a lot longer to get to 10% of total venture investment than fintech or consumer tech, but it got there after 2020. Now more than 10% of all VC backed unicorns out there are health tech companies. Yes there was a retrenchment in 2022-3 but health tech investment fell less than other sectors in 2022-3 and is basically back in 2024.

The Define forecast forecast is interesting (it’s the chart below). Define posits that it took 4-5 years after the fintech and consumer tech sectors became 10% of VC dollars for them to start pumping out exits and IPOs. There are 30-50 each in those sectors now, but health tech was ahead of that with 18 exits already in the first 5 years after getting to 10% of VC dollars, and those exits were on average double the size of the fintech/consumer tech exits. (Although to be fair the health tech exits were when the market was higher after 2020)

In fact their analysis is that capital returned was about 10x investment.  You might say, but hey Matthew didn’t you just show me a chart that most of those 18 companies were public market dogs? And you’d be right.

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THCBGang Revisited: Ian Morrison

Ian Morrison died yesterday. 4 years ago in one of the early THCB Gang’s, we had a rash of late cancellations. So I talked to Ian solo about his journey, and his views about health care. I re-listened to it this morning and thought you might enjoy it

Ian Morrison

I got the very sad news today that Ian Morrison died peacefully at home yesterday. He had been sick and in hospice for some time but a few months back he told me that he was going for Jimmy Carter’s record. Ian was my first boss in American health care when I worked for him at Institute for the Future and he was as kind and lovely as he was funny and knowledgeable. I was very glad that when I started THCBGang during the pandemic that he was a regular member.

Ian spent decades working with everyone across health care in American and internationally, but as he used to say essentially was paid to insult people. That he did it so humorously and usefully was the reason he kept being invited back. Any Ian Morrison keynote at a big health care conference was both a chance to learn something and laugh hysterically.

He also never ignored the chance to help those trying to make health care fairer and more equitable, serving on the boards of Martin Luther King Jr hospital, the California Healthcare Foundation and many others. He remained a jovial Glaswegian socialist at heart.

Ian liked to say that he went from Scotland where death was imminent, to Canada where death was inevitable, to California where death was optional. Sadly that last crack wasn’t quite true.

My heart goes out to his wife Nora and their children and grandchildren. There’ll be a more formal obituary and a celebration of his life in the days and weeks to come–Matthew Holt

Jonathan Bush, Zus Health

It’s always fun to chat with Jonathan Bush. You kids today may not remember that he was the first CEO to take a cloud-based (Health 2.0!) company public back in 2007! Athenahealth didn’t end up challenging Epic because a cosmically evil hedge fund took it (and him) down as it was on its way to try to do that, but Jonathan has moved on and is now building a clinical data integration company called Zus Health. We talked Zus, digital health, whether there will ever be value-based care and more. 20 mins of digital health gold right here–Matthew Holt

DEI Is Now a Four Letter Word

By KIM BELLARD

I’d love to be writing about something fun. Something that makes us think about things in a new way, or something exciting that will take us into the future. There are lots of such things happening, but there’s too many Orwellian actions happening that I can’t be silent about.

Diversity, we’re told, is actually a pretext for racism – against white people. Equity is foolhardy at best and pernicious at worst. Inclusion only matters if you are the “right” kind of person. “Meritocracy” is the new buzzword; we want only the “best and brightest,” with none of the lowering of standards that we’re being told comes with trying to ensure that everyone has a fair chance to prove their merits.

The Trump Administration has declared war on DEI. It has fired scores of workers whose jobs involve DEI, has asked other workers to inform on people they think may be involved in DEI, and is searching out even workers who attended diversity training (mandated or not). All that would be horrifying enough but it isn’t ending there.

Federal websites are being cleansed of any references to anything that might be construed as DEI. Pages are being edited, or taken down entirely. The NIH has ground to a halt until the appropriate authorities can ensure that no grants are being even to anything that might possibly be related to DEI. The CDC has been forced to pull papers from its researchers that are up for publication for similar review.

The Atlantic reports: “the government was, as of yesterday evening, intending to target and replace, at a minimum, several “suggested keywords”—including “pregnant people, transgender, binary, non-binary, gender, assigned at birth, binary [sic], non-binary [sic], cisgender, queer, gender identity, gender minority, anything with pronouns”—in CDC content.”

Thousands of pages of data from the CDC and Census Bureau have “disappeared,” and the same from other agencies. Health data is prominent among the missing. Angela Rasmussen, a virologist at the University of Saskatchewan, told Science: ““I knew it was going to be bad, but I didn’t know it was going to be this bad. It’s like a data apocalypse.”

Elon Musk, who has no official power yet seems to have control over government IT and the data it contains, is shutting down U.S.A.I.D., who provides almost $40b annually in health services, disaster relief, anti-poverty, and other social mission programs. Previously the Administration had shutdown, then reinstated, PEPFAR, a vital international HIV program that has been credited with saving millions of lives.

The President and his team even tried to blame last week’s Washington D.C. plane-helicopter collision on DEI.  That’s just “common sense, ok,” according to President Trump.

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Who Will Oppose American Apartheid?

By MIKE MAGEE

This past month Bishop Mariann E. Budde drew the Episcopal Church into the national spotlight through a single act of courage. She is not the first, nor likely the last from this denomination to do so. There is a history. More on that in a moment.

The Episcopal church is an offshoot of the Anglican Church of England which dates back to 1534 when King Henry VIII broke with the Catholic Pope who opposed his marriage to Anne Boleyn. Two-hundred and fifty four years later, in 1789, Anglican Church leaders who had helped settle colonies in North America, gathered to form a united Episcopal Church, revising their Book of Common Prayer to exclude its blessing to the English monarch.

Though declining in modern times, missionary minded Anglicans spread throughout the British empire and remain connected to the mother Church as members of the Anglican Communion. For example, British Anglican military chaplains were part of the force that occupied Cape Colony in South Africa in 1795. By 1821, they had established a formal religious foothold. Today, they claim 3.5 million members. In 2012, they elected their first female bishop, Ellinah Wamukoya of Swaziland. And yet, arguably the most influential female Anglican from South Africa is an immigrant to America, an emotional ally of Bishop Budde, and a retired Chief Justice of the Massachusetts Supreme Court.

Her name is Margaret Marshall, and her place in American history dates back to June 6, 1966. That was the date this then 20 year old student, who was vice-president of the National Union of South African Students, was asked to stand in for the organization’s president, Ian Robertson (who was under house arrest for speaking out about Apartheid). She met and transported Bobby Kennedy to speak to over 1000 university students packed into the college auditorium at their “Day of Affirmation.”

Much like Mariann Budde last week in Washington, Bobby Kennedy caught his hushed audience by surprise that evening with these opening remarks:

“I come here this evening because of my deep interest and affection for a land settled by the Dutch in the mid-seventeenth century, then taken over by the British, and at last independent; a land in which the native inhabitants were at first subdued, but relations with whom remain a problem to this day; a land which defined itself on a hostile frontier; a land which has tamed rich natural resources through the energetic application of modern technology; a land which was once the importer of slaves, and now must struggle to wipe out the last traces of that former bondage. I refer, of course, to the United States of America.”

Margaret Marshall, some six decades later, recalled that moment in a conversation with Doris Kearns Goodwin. She said, “There was great tension in the room. People were on edge…As soon as the audience realized what he said, there was laughter and a sense of total relief. It was simply fabulous.”

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How Did We End Up with a Broken Health Insurance System? 

By LEONARD D’ AVOLIO

The murder of UnitedHealthcare CEO Brian Thompson has drawn attention to Americans’ frustration with the for profit healthcare insurance industry. Change is possible but less likely if people don’t understand how we got here, the real issues, and how they might be fixed. 

Health insurance wasn’t always run by big for profit corporations 

According to Elizabeth Rosenthal’s book, An American Sickness (a must read), it all started in the 1920s when the Vice President of Baylor University Medical Center discovered that they were carrying a large number of unpaid bills. The goal wasn’t to make money. It was to keep sick people from going bankrupt while helping keep the lights on at not-for-profit hospitals. 

Baylor launched “Blue Cross” as a not-for-profit and it offered one-size-fits-all coverage, one-size-fits-all pricing, and all were welcome. By 1939, Blue Cross grew to 3 million subscribers and health insurance might have stayed this way if it wasn’t for two important innovations that would change healthcare and insurance as we know it.

Before the late 1930s, there wasn’t a heck of a lot we could do for sick people. That all changed with two innovations: 1) the ventilator and 2) the first intravenous anesthetic. The ability to put people to sleep and keep them breathing opened the door to a whole array of new surgical and intensive care interventions. More interventions meant more lives saved. It also meant longer hospital stays, more expensive equipment and care. Insurance would have to evolve to keep up with medical innovation.

We probably could have solved that problem with direct-to-consumer private insurance (like car or life insurance). But World War 2 introduced a creative workaround to a labor shortage that gave employers an outsized role in determining our health. 

Health insurance tied to employment

During World War 2, the National War Labor Board froze salaries and companies faced labor shortages. Employers figured out they could attract employees by offering health insurance. The government encourages this by giving a tax break to employers on health insurance spending.  

The number of Americans with health insurance skyrockets. Between 1940 and 1955, this number increased from 10% to over 60%, with the not-for-profit Blue Cross dominating. It’s hard to believe nowadays, but at the time, an insurance company was one of the most beloved brands in America.

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It’s Money That Changes Everything (Or Doesn’t) For Surgeons

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By MICHAEL MILLENSON

“Money changes everything,” Cyndi Lauper famously sang about love to a pulsating rock ‘n’ roll beat. So, too, when it comes to financial incentives for surgeons, two new studies suggest, although “How much money?” and “What do I have to do?” are the keys to unlocking monetary motivation.

The first study, a JAMA research letter, examined the impact of a new Medicare billing code for abdominal hernia repair that paid surgeons more if the hernia measured at least 3 centimeters in size. Previously, “size was not linked to hernia reimbursement,” noted University of Michigan researchers.

Surprise! The percentage of patients said to have smaller, lower-payment hernias dropped from 60% to 49% in just one year. Were “small hernia” patients being denied care? Nope. Were surgeons perhaps more precise in measuring hernia size? Maybe. Or possibly, wrote the researchers in careful academic language, “the coding change may have induced surgeons to overestimate hernia size.” Ambiguous tasks, they added, “can be conducive to perceptive [cq] bias and potentially even dishonest behavior, perhaps more so with financial incentives at play.”

This being an academic publication, two footnotes informed us that dangling money in front of our eyes can cause people to “see what you want to see” and come up with an “elastic justification” for truth.

If a simple coding change can apparently boost the number of large-hernia patients by 18% in just one year, what about a payment incentive meant to induce more urologists to follow the medical evidence on low-risk prostate cancer and adopt “active surveillance” (formerly known as “watchful waiting”), rather putting patients through a painful and expensive regimen of biopsies and surgery?

A second study, also in Michigan, involved commercial and Medicare-age members of the state’s Blue Cross and Blue Shield plan. However, after three years and more than 15,000 patients, “the payment incentive was not associated with increased surveillance use among patients with low-risk disease,” researchers concluded in a JAMA Network Open article.

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Doctors Must Fight the RFK Nomination

By DANIEL STONE

As a doctor, I consider Secretary Xavier Becerra and his Department of Health and Human Services (HHS) to be allies of practitioners like me. The behemoth federal agency administers Medicare and Medicaid, the Food and Drug Administration, and an army of public health workers. The Surgeon General, symbolic leader of the nation’s healthcare providers, reports to HHS. For decades, the Department has supported medical science in safeguarding the public’s health. Now that sacred trust faces the threat of Donald Trump’s nomination of Robert F. Kennedy Jr. to run HHS.

RFK’s first problem is a stunning lack of qualifications. After a laudable triumph over drug addiction, he used his legal background to work on environmental protection. Kennedy never held a federal government position nor administered any public agency. He now appears poised for on-the-job training at an agency with 80,000 employees and a $1.7 Trillion budget. In contrast, Becerra served for years in Congress and on its Health Sub-Committee. He also served as State Attorney General, managing 4,800 employees. The qualification issue is not political. During Trump’s first term, his last HHS secretary, Alex Azar, had served as HHS general counsel and president of pharmaceutical giant Eli Lilly. RFK has nothing remotely resembling his would-be predecessors’ qualifications.

Unfortunately, RFK’s shortcomings go well beyond mere lack of qualification. His distortions and public denials of established medical science infuriate practitioners like me. He casts baseless doubt on the well-established benefits of vaccines and on the polio vaccine in particular. Despite the seven decades since polio vaccine’s introduction, doctors still see patients who were infected before it was available. My patient Donna, born in 1955, counts herself among this group. She wears leg braces and often struggles with daily activities. For me, she symbolizes those who by accident of birth or happenstance missed the profound benefits of vaccines that RFK now disparages.

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