The Future of Healthcare: The Role of AI and Technology | Dr. Vijay Pande and Daisy Wolf

Primary Topic

This episode delves into the transformative potential of AI and technology in healthcare, focusing on cost, quality, and access improvements.

Episode Summary

Dr. Mark Hyman hosts Dr. Vijay Pande and Daisy Wolf on "The Doctor's Pharmacy" podcast to discuss the future of healthcare influenced by AI and technological advancements. They explore how venture capital investments drive innovations in healthcare, emphasizing AI's role in enhancing diagnostic accuracy, treatment personalization, and operational efficiencies in the medical field. The conversation covers various aspects, including the integration of AI with existing healthcare practices to improve patient care and the potential disruptions AI may bring to the traditional healthcare models.

Main Takeaways

  1. AI can significantly reduce healthcare costs by automating diagnostic and treatment processes.
  2. Technological advancements are poised to improve healthcare quality by enabling personalized medicine.
  3. Enhanced access to healthcare services can be achieved through AI-driven platforms, offering widespread and equitable medical advice.
  4. The integration of AI in healthcare is seen as an evolution similar to the impact of the internet and smartphones on general society.
  5. The potential for AI to democratize expert medical knowledge, making top-tier healthcare advice accessible to all.

Episode Chapters

1: Introduction to AI in Healthcare

A discussion on how AI and technology can address the primary challenges in healthcare: cost, quality, and access. Dr. Vijay Pande: "AI has a hope to address each one of those."

2: Investment Perspectives in Healthcare Technology

Insights into how investments are shaping the future of healthcare, with a focus on startups and innovations. Daisy Wolf: "Healthcare is the last major industry... yet to be really penetrated and changed by technology."

3: AI's Role in Future Healthcare Paradigms

Exploration of AI’s potential to revolutionize healthcare practices, making high-quality healthcare more accessible and efficient. Dr. Vijay Pande: "AI working with doctors will be the best of both worlds."

Actionable Advice

  1. Embrace AI tools in healthcare for enhanced diagnostic accuracy.
  2. Consider investments in health-tech startups focusing on AI integration.
  3. Stay informed about the latest technological advancements in healthcare.
  4. Support policies that promote technological innovations in healthcare sectors.
  5. Educate healthcare professionals on the benefits and implementation of AI technologies.

About This Episode

AI is set to revolutionize healthcare as we know it - improving diagnostics, treatment personalization, patient care, while simultaneously reducing costs and enhancing outcomes. In this episode of “The Doctor’s Farmacy,” I sit down with Vijay Pande, PhD and Daisy Wolf, JD to explore how investors are shaping the future by funding innovative companies that address our system's fundamental problems. Discover how cutting-edge tech, like wearable devices and AI diagnostics, is making personalized medicine more accessible and effective for everyone.

People

Dr. Vijay Pande, Daisy Wolf, Dr. Mark Hyman

Companies

Andreessen Horowitz

Books

None

Guest Name(s):

Dr. Vijay Pande, Daisy Wolf

Content Warnings:

None

Transcript

A
Coming up on this episode of the Doctor's pharmacy. When you think about healthcare, what are the big issues in healthcare right now? I think if I were to name the top three, I would call them cost, quality, and access. And AI has a hope to address each one of those. Hey, everyone, it's Doctor Mark here.

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Welcome to doctor's pharmacy. I'm Doctor Mark Hyman. That's pharmacy within a place for conversations that matter. If you care about your own health, if you care about the future of your health and healthcare and what's happening on the horizon, you're gonna love this conversation. And it's a little bit different than I usually have on the podcast because I'm not talking to someone in healthcare.

I'm talking to some investors from venture capital who are investing in healthcare. And they're extremely brilliant. Have a vision of what's happening across the horizon. They see thousands of deals a year come across their desk, and they talk about what they're seeing, where healthcare is going, and what we should be prepared for, because it's exciting, it's different, and it's as big a revolution in our lives as the Internet or the iPhone. The first guest there's two guests today from Andreessen Horowitz or as it's known, a 16 Z.

Vijay Pandey, he's a PhD. He's a general partner. He's been with Andreessen Horowitz since 2014. He has founded and leads the A 16 Z bio and health sector, which invests in life sciences and healthcare through four dedicated funds with more than $3 billion under management. So a lot of money to put out there to invest in innovation.

He's leading the investments of the firm across biology, computer science, machine learning, AI in healthcare, digital therapeutics, diagnostics, all kinds of cool stuff. He's also an adjunct professor of structural biology at Stanford. He holds a BA in physics from Princeton and a PhD in physics from MIT. He's also been awarded the Delano Prize in computation at Guinness World Records for folding at home. The American Chemical Society's Thomas Kuhn paradigm shift award.

And we're in that paradigm shift right now. Thomas Kuhn wrote the book structure of scientific revolutions, which I read in college and changed my life and was all about the paradigm shift. He is just a cool, smart dude. Another guest that we're having today is his colleague Daisy Wolf, who's an investing partner, and Andreessen Horowitz, where she focused on healthcare and technology, particularly specializing in healthcare, AI and software, consumer health and the intersection of healthcare and fintech, which is financial tech for those not in the lingo. Before that, she worked at Meta and the global business group has had lots of roles in startups and hedge funds.

And she went to Yale, got her law degree there, and also her undergraduate degree and her MBA from Stanford School of Business. So it's with great pleasure and delight that I welcome Daisy and Vijay to the doctor's pharmacy podcast. So let's dive in. So, Vijay and Daisy, it's great to have you on the Doctor Swarmsey podcast. Thanks for coming on.

B
Thank you so much for having us. We're excited to be here. I know. I'm excited about this conversation. You know, people are listening, like, why are a bunch of investors on a health podcast?

A
And it may be confusing as to why, but just kind of a little background. I think investors are looking at the future, not at the past, and they're trying to understand what's coming and what's important and what we're going to be doing, not now, but, you know, 3510 years from now. And so you got your little crystal ball. You see everything going on across the sector that you're really focused on, which is healthcare and AI, and you're looking into a world that doesn't quite exist yet. And you're trying to help push it along by investing in companies that help us bridge that gap.

And so I think it's kind of exciting because in a way, we get a little bit of a crystal ball about what you're seeing. You know, the average person doesn't get to see hundreds of deals come through and hundreds of companies come through that are trying to imagine a new future in healthcare, but you do, you're getting that. And it's like, I'm so interested in like, what you're seeing and where we're going. So maybe, Vijay, you could start by sharing a little bit about, you know, who you are and what is a 16 z, the investment firm that you work with. And, you know, what is your focus in that around health and our future?

Health. So, Mark, thanks so much for having us on the podcast. So, yeah, so my name is Pandey, the founding journal partner, the Andreessen Horowitz, which gets shortened to a 16 z bio and health fund. So Andreessen Horowitz is a venture capital firm. And the nature of venture capital speaks exactly what you were talking about, which is that unlike investing in public companies like buying stock, this is investing in companies at their very origins, at the next generation, the next crop, what healthcare companies will look like ten years from now.

B
And so youre absolutely right. We get the honor and the privilege to get to see the future and get to see what's happening and hopefully help play a role in making that future. And so what investing is for us is that we're looking to see what will be the big trends in the future of healthcare, what companies are leaning into it, and how can we fix this unfortunately very broken system that we all have to deal with today? Yeah, that's great. How about you, Daisy?

A
What's the reason you're so excited about seeing all this stuff? And what's your vision about the role that investing plays in the future of healthcare? I think every american knows how broken our healthcare system is. I'm not a doctor like you. I'm not a scientist like Vijay.

C
I very much came to this from the perspective of being a consumer and a patient and a very frustrated one. And I think what's so exciting is that healthcare is the last major industry in the US. It's a fifth of the economy that is yet to be really penetrated and changed by technology. Only one of the hundred biggest software companies in, in the world is a healthcare company, which is crazy. And as consumers, we all feel that.

We feel how backward the system is and we're inspired every day by all of the entrepreneurs we may meet who are trying to really change this. I think, you know, you get to pick and choose from the best of the crop out there and the innovators, the thinkers, the creators, the visionaries, and you pour literally billions of dollars into those sectors to sort of see what was going to be the next Facebook or Google or Amazon. You win some, you lose some. But I think you guys have a unique insight into where we're going. And so I'd love to sort of have you talk about, particularly around this new investment around function health that I'm a co founder of, that I think is going to be one of the most disruptive companies in healthcare.

A
And I know why I think that, but I'd really love to learn why, why you think that. And because, you know, you could invest in any company and you made a big bet with function health. And I appreciate that. We appreciate that. But it, you know, I'm really curious to hear your thought process about what you've been seeing over the last years and why you put your chips here.

Not all of them, obviously, but a big, big budget chips. So function health is a new startup that provides a very specific service that allows you to order for a pretty low cost, a large number of tests, blood tests and otherwise. And the key thing is that it is a mean, I'm trying to think I've never had to give a very concise version. And it's getting. That's okay, it's a podcast for long format.

It's fine. I want to make it shorter, you know. So function health is a company that helps you proactively get in front of understanding your healthcare needs. And by a combination of blood tests and compute on the back end, you get a sense of where your health is now, and in particular, a sense of where it could be going to. And what we're excited about in particular is a couple fold.

B
First off, I feel that the healthcare system is in great need of help from the outside, and that the healthcare system will be transformed with help from founders that are coming from other areas, especially from tech. And that function is a great example of this. In that function's mindset is fairly different than the traditional healthcare system in particular. Typically, a traditional healthcare system would say, you know, you shouldn't get all these tests. It may lead to new questions and so on.

And I think the mindset that function has, that by having these tests over a period of time, we can understand your personal baseline, and one can actually wrap your head around your health is a pretty specific, pretty significant paradigm shift. And then on top of that, I think the one of the things that's particularly appealing about function is the community they've built and the uptake that we're seeing that not only is it sort of theoretically interesting for people to be on top of their healthcare, but this is something that people want. And it's very much a movement that's happening right now. And that's very encouraging to see that this disruption's happening, not just theoretically, but it's happening today. Yeah.

A
How about you, Daisy? What gets you excited about function health? We've been tracking the company since inception. I think I met Jonathan, the CEO, maybe a year and a half ago now. And we, we believe wholeheartedly that consumers should have access to tests that enable them to understand what's happening in their bodies in clear terms.

C
Tests that could save their lives. And, you know, function is democratizing access to this, which is super exciting. And I think, to Vijay's point about uptake, you know, we've seen, as investors, we track a lot of companies over time, and we see a lot of companies that have really, really fast growth in healthcare. We call them hockey stick drafts, and they tend to all be either selling a sex or vanity drug on the Internet.

A
Which we're doing, neither of which function does neither of those things exactly. They're generally selling, like, Viagra or GLP ones or retinol for skincare. I think what really shocked us when we were kind of digging into function was just the organic growth of consumers desperately want this. And we never see this kind of pull from consumers for preventative health care. And so it really does feel like something is changing in the water right now.

C
And function is a big driver of that. Yeah. I mean, it's interesting how we really just started up and opened the doors and we didn't do much marketing. I mean, I posted on social media, I've mentioned on my podcast here and there. But it's really very light.

A
And it's kind of shocking how many people are just desperate for something different and new and how tired people are of the old system. What I'm wondering about for you, though, is you see the hockey stick thing, and of course you want to invest in that. But what are the other kinds of things you're seeing that are coming on the horizon in terms of healthcare technology, AI, and where are we going? Can you paint a little picture of the future of EJ? Then maybe after Daisy, you could chime in as well.

I'd love to hear your perspective. One of the things that is, I think, a major force right now, and we saw it with COVID in many ways, is that people are taking charge of their own healthcare, and that they're actually very hungry to do so. And the means that they're looking for today isn't working. And this is coming at the same time where there's actually now all these tools that do miraculous things. You see what you can do with GLP ones, you can see what you can do with cgms, these glucose monitors.

B
Metabolic health is such an exciting area. There's numerous areas in health that are being driven by patients, and patients as consumers, not as products of the healthcare system, but as real actor, active drivers of it. That's one of the key areas that we've been interested in. And Daisy and I have been working on that space together. And we're seeing that, basically, I think what's growing is a movement of like minded companies, like minded founders, that there's an opportunity to really transform healthcare in this way.

But there's many aspects to healthcare. So this is one part of it. But this part actually, I think, is really ripe for disruption. And by enabling people to understand their health, whether we're talking about diet, fitness, primary care and beyond, I think these are areas that are actually something that people are building in today. Yeah, I couldn't agree more.

C
I think we talk a lot about, in healthcare, problems of cost and access. But what we don't talk about is how broken the consumer experience is. And it's broken because consumers are not seen as the end customer in healthcare. You know, providers and hospital systems see the insurance company who pays them as their end customer and therefore don't optimize around consumer experience. And what results from that is like, even if you are a highly motivated patient who wants to take control of your health, you.

It's really hard to make appointments and get tests and understand those tests and understand what you can be doing. And then we have problems of behavior change. And everyone's like, oh, that's a cultural issue. But I think what we ignore is that the best companies fundamentally change consumer behavior, and we see that all the time in other industries, you know, whether. And so I think we are really right for consumer disruption in healthcare and function is at the forefront of that.

A
Yeah, it's exciting you think about what. Healthcare looks like today. And my, we were just talking about this earlier, but my healthcare records are across a bunch of different doctor's offices and different states. And it's really hard to understand what's happening in my body and how it's changing. And with function, you get, your data is tracked every three or six months.

C
You have all these comprehensive tests. You can see how your biomarkers are moving. It plugs, you know, it's going to plug into ehrs and have all the data that happens in a doctor's visit, all the data from your wearable devices, and it's going to be, you know, everything that's happening in every person's body, you know, in one day, in one database for them. You know, I think that's. That's an incredible vision.

A
And one of the things that I'm curious about your perspective on is the types of innovations that are happening, because when I was at Cleveland clinic, Toby Cosgroves, one of my heroes, brought the kind of discover, vent, or whatever we call it, of Watson, who was IBM's sort of supercomputer. And the big tagline was, Watson goes to medical school and was able to ingest all of medical textbooks and knowledge and pass exams and do all that great. And what really struck me was that it was sort of like rearranging the Dexters and the Titanic. It was using incredible technology to do the same thing better, not to do something fundamentally different that what I would call scientific wellness or functional medicine or systems medicine or whatever you want to call it, doesn't matter. It's just going to be medicine.

But this paradigm shift is not, from my perspective, not really emerging from a lot of the new startups, new businesses, new innovations that are happening. And I see just incrementalism in not a fundamental shift in how we think about health and healthcare and disease and diagnosis and treatment. What are you seeing come across your desk that is different, or are you just seeing the same kind of thing that I think I'm seeing? Am I wrong or this is actually how things are shaping up? I don't think you're wrong in the sense that for two factors, one is that, look, I mean, changing a system as complex as healthcare, you know, 20% of us GDP, that's not something that's easy to do.

B
And in fact, too, you can change, you can improve one part, but it's a complex system. That doesn't mean the whole thing improves. So the task is really hard. And then also there are probably only going to be a few companies that really make this kind of revolutionary change. You think about the companies that like have revolutionized other industries, like, you know, Spotify, revolutionized music.

That's something that, it was basically one company that did that, or a few companies. It's not like hundreds of companies. You can go through Lyft and Uber for transportation, or Airbnb for hotels. These are only a few companies. There will be many that will try in a couple of different ways, but I think what will happen in this space is that a few will really stand out, and these are the ones that will be transformative.

We review thousands of companies when before we invest, and in a year. And so there's many brilliant, hardworking entrepreneurs in this area. But making this type of change is something that only a few people can do, and only a few companies will do. And those are the ones that we're looking for.

A
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And what do you think, both of you, around, your vision for healthcare, and what are the big disruptive innovations that are really game changers for us? Coming up, I'd love to hear your perspective, because you, like I said, you have these sort of crystal ball looking in the future and seeing what's bubbling up and also understanding the complexity of healthcare and understanding the challenges and looking for ways to really shift. So I'd love to kind of hear your vision for the future. Maybe I'll take one area and Daisy can take another. So, and we can list more.

B
But, like, if I were to pick one that is, the one that's been on my mind is AI. And when you think about healthcare, what are the big issues in healthcare right now? I think if I were to name the top three, I would call them cost, quality, and access. And AI has a hope to address each one of those. What about outcomes?

A
That's the one I care about as a doctor. I put that in terms of quality, the quality of outcomes, in terms of cost, I think one thing that we're already seeing is that AI is a pilot for doc, co pilot for doctors today, and may take on more and more tasks. That's something that can actually. What's exciting about is that when it can be trained from the very best doctors, it can give access, effectively, of the very best doctors to everyone. And that's something that we just don't have today.

B
And that democratization of medicine, I think, would be very exciting. So that would be cost and access. And then in terms of quality, you know, when we saw a similar arc in other areas, like in, let's say, on Wall Street 20 years ago, people were talking about using computers to do trading, and the reaction was like, that's ridiculous. Being an expert trader takes like decades and decades, right? And there's no way a computer is going to beat a human being.

You know, like, there's no way. And then 20 years later it's like, well, that's ridiculous. There's no way a human being is going to beat a computer. You know, and we've saw this in chess, we saw this in so many different areas. And I think it's the flip that we're in the middle of now is that it feels like hard for some to imagine that, you know, a computer and AI couldn't do what a human being can do.

But sometimes you think about what we're asking doctors to do, we're asking them to be machines to grind through all of this information, all this medical data about me and about the world, and instantaneously come up with the answer. That's a lot to put on somebody's shoulders. But I think the hope was that AI working with doctors will be the best of both worlds. And the future of, in terms of cost, quality and access would be dramatically improved. Yeah, I think it's a beautiful vision because I think those are three elements on the quality bucket.

A
I would put the paradigm shift that's happening too, in medicine because we can do the same things better. Right, which needs to happen. And I often, when I hear about quality based care, value based care, it really, to me, is often about improving things around the margin, like improving medical efficiencies, reducing errors, care coordination, better emrs, better tracking of data, you know, maybe better preventive screening, but it's still diagnosing the same diseases, prescribing the same drugs. How do you think AI can play a role in really disrupting the medical paradigm itself, the scientific paradigm paradigm, not just the practice of medicine and getting people access and democratizing it, decentralizing and bringing down costs and improving all of that. But how does it really change the scientific paradigm?

B
Yeah, I think we talked about the data analysis part. I think that's part of it, but then I think, and you would know better than I, but I think the part of making medicine successful is giving the right care at the right time, at the right place, and AI helping doctors and helping medical systems make sure that happens. And this is a win for providers. You know, doctors want to make healthcare better, but it's also a win for payers in that if we can do that, we can keep people healthier and healthier patients are obviously less expensive, which is the win win. We think about what healthcare will look like in 20, 30, 40 years, and then we work backwards from that.

C
And we have invested in a lot of companies who are taking on pieces of that puzzle, puzzle to build up, you know, toward a better tomorrow. But I think, you know, 30 years from now, we probably 90% of healthcare is delivered via your phone. So we're going to have amazing wearable devices, both, you know, in terms of watches, rings, etcetera, but also subcutaneous, that are monitoring all sorts of molecules and things happening in our bloodstream in real time. We're going to all be doing function. We're going to have at home, you know, blood collection.

By then, we probably will meet a phlebotomist. We'll have a device to do it, and so we'll have a real monitoring of our health. And you were describing this earlier, but we're going to have all of our health data in this one place, and you're going to be able to chat with, you know, your phone and say, I have a stomachache. What's going on? Does anything seem weird in my body right now?

A
It'll ask you questions, right? Yes. And we're all going to have access to, like, the world's best AI and human doctors through our smartphones. And then probably 10% of healthcare will be, you know, going to the hospital for procedures. But more and more every year is going to be something that's, you know, you can do at home with, you know, and then we'll have, you know, drug delivery into the home.

C
So I think it's going to look very different, you know, 10, 20, 30 years from now. And I hope it happens faster rather. Than it seems like the cost will then come way down. I mean, it seems like the costs in healthcare are just kind of crazy. I wonder if you're seeing any technology companies that are creating transparency, because I can send a patient of mine, I did this not too long ago, before function, who wanted to get some lab work done.

A
I wanted to check a bunch of things, and I did kind of an abbreviated panel of what's in function, and her insurance didn't cover it. And she sent me, said, mark, I don't know what to do. The bill is like $10,000. And I'm like, oh, shit, I'm sorry, let me call the company. And so I called the lab, like, hey, you know, this is not our pricing.

Like, you give us a different pricing, and so there's such variability in elasticity in the marketplace. You can go to one hospital and get a scan for my knee for $400. Another scan, it's another hospital, it's $2,500 for the same scan, the same machine, and the consumer doesn't know any of this and they're completely confused. I went to go get a knee knee exam and I need a knee brace for something like messed up my knee. And I get a call from the hospital today.

They said, oh, just let you know your insurance didn't cover that knee brace. And it's a $1,000. I'm like, $1,000 for a knee brace? I gotta got a new knee. And so the elasticity in pricing and the lack of transparency in pricing leaves the healthcare so padded with costs.

We spend twice as much as any other developed nation and get much worse healthcare outcomes. We're like the bottom of the pile of developed nations. So how do you see this evolving and us actually using technology and AI to help create transparency and kind of more democratize healthcare because it's so messed up right now? Yeah, it's funny, Mark. We all work in healthcare and I think none of us understand how the pricing works or what we're going to get, what kind of bill we'll get in the mail.

C
I was actually trying to figure out if I'd hit a deductible today, and it is purposely very confusing. But I think there's a lot of promising changes on the horizon. We're getting some regulatory changes around price transparency at a company called Turquoise that's helping consumers and other entities in healthcare understand what everyone's pricing is. And so I do think we're starting to see, and you have a lot of people moving on to high deductible health plans, which is probably not a great trend in healthcare, where you have to, you know, you have to pay out of pocket for the first 5000, 10,000, $20,000 before your health insurance kicks in. But the silver lining of that is I do think it enables more free market dynamics where people are going to start shopping for their care and comparing prices.

And we are, we're definitely seeing some of that in consumer behavior today. And we actually saw it in relation to function. I think we saw, you know, $500 a year. Is that something that, you know, most Americans are going to want to pay? And what really struck us when we were going through all of the customer surveys is how many people were like, this is amazing value.

I something's wrong with my health. I'm bouncing around the healthcare system trying to figure out what's going on. And I noticed these tests would cost me $10,000 elsewhere. And so you guys are obviously doing amazing things for costs in healthcare. But I think to the question about AI, we also, obviously, it's funny, BJ and I have talked about this a lot, but AI has way worse margins and is way more expensive than traditional software, but it is way cheaper than human services.

And healthcare is a $4 trillion industry that's like 90% percent human services and a lot of extensive human services and doctors. And so I think we're going to see a lot of cost reduction from that. Yeah, I mean, it is striking to me how the value we're getting is so low in terms of the diseases going up, people getting sicker and sicker, you know, rising costs, rising hospital burdens, rising disease burdens, and we're spending more and more than any other nation and getting less and less. And that can't, that can't stick. And, you know, I meet with senators and congressmen and I work in Washington on food policy and healthcare policy, and, you know, I don't think any of them even have a clear view.

A
I said to one the other night, I said, you know, that $1.8 trillion of the entire federal budget is spent, which is about a third of the entire federal budget is spent just on health care. And not just through Medicare, but Medicaid, the Department of Defense, Indian Health Services, Va. I mean, you name it, put it all together, it's a ton of dough. And they're not even managing it. They're not even thinking about it as one problem.

And so. And the reason I love function is that it, to me, it's kind of like this little rascal on the outside of healthcare that's trying to give people what they want and bypassing all the red tape, all the confusion, all the lack of transparency. I can literally get more than two function memberships for the price of one knee brace. It's like, that's nuts. The other thing that I think anyone who's gotten sick has seen or has loved ones that got sick is that you kind of have to be one, the one managing that process.

B
Right. You kind of like, your house is a body and you have to be the general contractor for all the people coming to help fix it. And that's really hard to do. But if you realize that's what's going to happen if you get sick, I think you start having this mindset shift that maybe I can do that while I'm healthy. I don't have to wait till I'm sick to sort of be the general contractor there.

I should be thinking about my health. I should be on top of this. And we see more and more people thinking that way with, you know, for all these different reasons, they come to it, that healthcare is top of mind, and then they start looking, and they start looking for alternatives. And I think that's the opportunity, that's the market opportunity to present those alternatives. You know, one of the things I love to hear from you about is the exciting things that might be helping us that we don't know about yet, that are coming soon, that are life saving treatments, that are innovations that, you know, are going to make, basically make, make people's health transformed.

A
And I know you're seeing a lot of stuff. I'd love to learn what that is. Yeah. So let me talk about life sciences, which is, like, where all these medicines come from, and there's two revolutions are happening at the same time. So the first revolution is that there's huge, there's a huge revolution in how we're doing biology, that biology is becoming an engineering discipline.

B
And, like, for people who don't think about engineering, I think the shift to think about it's like going from having artisanal people, like craftsmen's or artisans, making something, to something that's done in a very systematic way. Computers engineered. You know, all of our factory goods engineered before then, you know, people were like, build shoes by hand or something like that. And the cost was really high. There's huge variability.

Only the rich people could have shoes. You couldn't have, like, ten pairs of shoes. You might have one pair of shoes or something like that. And so this engineering shift to biology is a huge paradigm, and it comes with all these robotics and other types of advances and kind of crazy things that we can do in biology now. We can edit genes and take out things.

We can even put in genes. That allows us to think about biology in a very different way, almost thinking about it in a sort of programmable way where we can read, we can write, and then we can see what that does. A very, very engineering mindset. So that is coming at the same time when AI is emerging. So the engineering mindset is generating a huge amount of data that requires AI to understand it.

AI needs a lot of data to do its magic. That's coming from this engineering revolution in medicine. What we expect to see, and granted this may take 510 years, but we see the beginnings of it today, is that biology is a very, very complex discipline, and that we have all these mistakes that come from our lack of understanding, I think a lot of people may not realize this. For the drugs that come to phase two clinical trials, the first sense of, does this drug work in a person? The first time we ask that question, 85% of drugs fail and it's approaching 90%.

And if you think to get to that point, this drug costs hundreds of millions of dollars to get to this point, and now it fails. If like 85% failed, these drugs are going, the ones that make it through are going to be expensive because you have to pay for all the failures. So our ability to use AI, plus these revolutions in biology, means we now understand human biology so much better. Drugs fail in people, but they worked in animals. We know they worked in mice, we knew they worked in other animals.

You know, I always joke it's a great time to be a rich mouse because you could be cured of all diseases, but like, you know, to be a person, it's rough, right? And so AI being something that allows us to understand human biology in a way that we couldn't, that will make a huge difference in the ability to get drugs past the finish line. But then on top of that, there's all these new types of drugs that take advantage of these engineering advances. And so you'll see new ways of even thinking about drugs. The first advance in this years ago was biologics, and people might heard of Humira or some of these other sort of life saving biologics from some time ago.

There's a whole new class of new modalities, new ways of coming up with therapeutics that are coming down the pipe that I think will have similar massive changes, especially when it's combined with that engineering mindset. Yeah, incredible. And Daisy, how about you on your sector in terms of healthcare, not just life sciences, where are things shifting? I think the ways that AI is going to have an impact, it's hard to even wrap our heads around right now, but it's super exciting. So if you start from the standpoint of just, you know, what does function enable?

C
You have all of your health data from every blood test, everything that happened in the EHR, every wearable device, data in one place on a person. AI is going to be way better at diagnosing what's happening in a human's body than a human. And we already have a number of places where that's true today. I mean, I think probably most have heard that chat GPT can pass medical exam, and so we're going to get way more precise with diagnosis because we're going to actually have data centralized on people, and we're going to have computers figuring out what's happening with their bodies. And then AI is going to change how care is delivered because we're going to have all the best, you know, the best doctors in the world.

We're going to train AI systems on top of them so anyone can have access. And so AI is going to be really good at predicting what treatment is going to best cure your disease. And then I think one of the things that excites me is AI is going to get way better at eliminating a lot of the really infuriating minutiae that we have in healthcare today. It is crazy that some vast majority of doctors appointments in America are still scheduled on the phone. We're the only industry that still has call centers of people scheduling appointments, doing prior authorizations.

We still use fax machines as our main mode of technology. And you call a doctor and you ask for your reports, and they're like, oh, we're not allowed to email them, and you end up in some super frustrating scenario. And we're already seeing little things about this today. There are a bunch of companies that are doing AI phone calls. So they have a bot call doctors offices, call every doctor's office in your area, and they can come back to you and text message and say, hey, here are seven appointments we found to the cardiologist, you know, next Tuesday, what's best for you.

And so we're already seeing little exciting things on that horizon. That's crazy. I actually had, a friend of mine was like, you know, Mark, can you get function to make sure there's just one time I have to fill out the same form. Like, you go to different departments, the same hospital, you fill out the same forms over and over, everywhere you go, it's the most annoying thing. Or you go to the same place that you went.

A
I went to have another heart scan that I did a couple years ago to just check, and I had to felt the same forms at the same place that they should have had on file. So it's pretty bad. One of the things I think I'd love to sort of dive into is the personalized medicine revolution that's happening. And I don't think most people understand how bad science is at telling you what you should do. For you, the NIH now is saying the highest level of evidence is something called n of one trials, meaning n of one number one, meaning you.

And how do we actually properly design research and clinical care to be personalized? You know, when you think about drugs, oh, well, you know, drugs are studied, they go through these large clinical trials, they get approved, and. But when you look at the data, what we really have is imprecision medicine, not or impersonal medicine. And for example, nexium, which many people take, you have to treat 26 people for one person of benefit. Crestor, which is a statin drug for lowering cholesterol, you have to treat 20 people for one person to benefit.

So they're not very good drugs. I mean, if I had to treat 20 bladder infections before one person got better, that'd be a crappy antibiotic. But that's essentially what we have in medicine. And I think what's exciting about some of the disruptions that are happening is personalized treatment, personalized medicine in a very different way than I think we currently think about it. So I'd love for both of you to sort of touch on how the application of AI can help us really rediscover medicine and science and kind of reshift the paradigm from the old way of thinking, that sort of one size fits all to a more personalized approach.

Like, if I have a patient with rheumatoid arthritis, you know, in the traditional health care system, they would all get the same approach. Or if had someone with a heart disease, they'd all get the same approach. Or diabetes is the same drugs, but the treatments may be very different depending on what's happening for that individual. Right. If someone's diabetic, they might maybe be caused by an environmental toxin like BPA or arsenic, which can cause diabetes, or maybe because they're eating too much sugar.

It could, because they have a microbiome problem and they have dyspotic bacteria that are creating endotoxemia, that create inflammation, that creates insulin resistance. So there's so many layers that are ignored in our current healthcare thinking and in current medical practice and science. How is AI going to help us sort of jump forward to the future and get people really the right healthcare? As you said, Vijay, for themselves, the personalized medicine. Yeah.

B
So if you think about it, like in sort of old school ways of doing things, what does my doctor know about me? It knows my age, my height, my weights, my gender. That's probably about it, right? And maybe a little blood pressure. Yeah, it takes some vitals, blood pressure and, and so on, and there's only so much you can do with that.

Those are useful measurements, but we need a lot more information. And so the dawn of personalized medicine was roughly 20 years ago. And I think that coincides with genomics becoming more accessible. And the hope was that genomics would actually be that extra information. And there are some cases where genomics is helpful, like in some genome tests can tell you this drug won't be useful for you and so on, but it has its limits, because the genome is basically the blueprints for your body, but not the way your body is right now.

Much like, you know, people renovate their houses and do changes all the time, and, you know, things happen. The blueprints are useful, but not that useful. So I think what's really happening now is that we can actually measure other things. So there's tons of different diagnostics and functions. Good example of that.

But people are working on new diagnostics, too. And diagnostics that are diagnostics come along with drugs to know whether you should take this drug or not. And part of that, what makes these diagnostics so interesting is that many of them are driven with AI, that they're measuring different parts of your body, they're measuring many different things and coming to understand whether this drug would be useful for you. But then, on top of that, with all of the measurements that people are taking, it's natural for AI to just look at everything that a doctor might see, look at all of your history, compare it to everyone else's history that's similar, and then say, hey, you know, like 99% of the people that are like you, drug a worked and drug b didn't work. I think we should try drug a.

And at best, I think in the old school way, there would be, your doctor might have an intuition about this, but there's no way they could run the numbers. And so that speaks to medicine becoming a data science game. There's obviously work to do, but I think that mindset is there, and I think we're starting to see personalized medicine finally reach some of the hope that we were hoping for. How about you, Daisy? How do you see it?

C
That was perfect. I have nothing to add. I think to me, as a physician practicing on the edge of this field of personalized medicine, I realized that biology is so complex and each of us are so unique and so different that the way we see disease is deeply flawed because it doesn't understand the profound complexity of biology, because biology is biology, it's physics, it's chemistry, it's everything all at once. Literally, it's everything everywhere all at once, like that movie. And it's so complex that a physician, no matter how smart or experienced or well trained he is, even a thousand years could never really understand it all, and never understand the associations, the patterns, the dynamics that are happening in each individual that can tell them where they are, where they're going.

A
I think this new framework of network medicine, systems medicine, the application of it, might be emerging as functional medicine. But the real point here is that this network phenomenon that is human biology, can never really be understood by an individual to create a truly bespoke approach to your health. And that's what people want, and that's what people need and what they deserve. And I think what's happening is this collapse. It's almost like a wormhole we're going into, where technology is shifting, science is shifting, the paradigm shifting demand of consumers are shifting, and computer technology shifting, so that we have this kind of really magic moment.

And I think that's really why I helped co found function health. And I think. I think why you probably invested in is because we, we have to actualize on that vision, not just have it be a hope for people. And that's what gets me really excited to wake up every day and work on this and to get people the help they need to end needless suffering from things that have solutions that they just don't know about, or that even their doctor might not know about. So in terms of the emerging technologies and things, in addition to things like access to your lab data and all the system we're building at function, what are the kinds of things you're excited about that are going to have big impacts?

What are the things you're seeing come across your investment desk? I'll mention one other one, too, that I think is going to be very important, is that we talked about the importance of being able to do measurements. I think there are going to be new advances in imaging that are coming out. MRI is, I think, the beginning, but frankly, a very old technology. And we're seeing advances in imaging where much like doing massive blood tests might seem like it's a lot to do if you're not sick, but if you think about it, that is the way to know, to get that sort of check engine light.

B
Early imaging is going to be a key part of that as well. And that, I think, especially when combined with everything that you can measure, would naturally fit into that paradigm. Yeah, I think that's true. One realm in which we've invested heavily in multiple companies is in being behavioral health. Like, you know, it wasn't, I think probably you think back ten or 15 years ago, and we didn't really believe that mental health care was healthcare and that insurance had to cover it.

C
And then the Affordable Care act changed all that. And we saw tons of entrepreneurs come into the space and build really impactful companies focused on people's mental health. But we still have this problem that supply and demand will never match in our lifetimes. We're never going to have the number of therapists and counselors needed to treat the global health crisis in terms of mental health. And one exciting thing that we're seeing today is we're probably, I don't know, three or five years out from being able to talk on the phone or maybe even zoom with a therapist and not know if they're a human or not, because we can train these models and on, on therapy, and we can all have access to the best kinds of mental health care, too.

And so I think, you know, that's just one specialty of medicine where that's true today and probably the closest on the horizon. But those are the kinds of exciting things that come across our desk. I mean, that's a very cool idea, right? How do you, how do you create a wise, compassionate, good therapist using AI? It seems almost impossible to kind of create a human esque version of a therapist, but it seems like it's happening.

A
So it's very exciting to me. And it's back to your point of personalized medicine. Like, it's not only just everyone can have access to an awesome therapist, everyone can have access to an amazing therapist for them that's like, you know, the style that works for them, whether they're like, soft and comforting or direct, we're going to have personalization. And I think one of the big surprises about AI has been that I think people thought it would be do the nerdy math things, but not the sort of connecting with you emotional things. And actually, when it's trained on, like another example of AI nurses that are being deployed today, the AI was trained on millions of conversations of nurses with patients.

B
And those nurses were great nurses. They were empathetic. And the empathy comes out from the AI as well, that to some degree, AI is just trying to mimic what its input is. So if you give it some elements of empathy, it actually can do a reasonable job. And unlike a human, it doesn't get burned out and snap.

A
Unlimited empathy have a risk of crossing the patient boundaries either. Yes, I think it's amazing to me. But, you know, what comes to mind is sort of a synergy between things, like kind of an AI therapist and something like function, because often in mental health is a great example. We kind of misappropriate meaning if someone's depressed. Well, what is the cause of that?

Is it because they just lost their spouse? Is it because they have a vitamin D deficiency or they eat too much tuna, have mercury poisoning, or they have taken an antibiotic that's altered their microbiome or, you know, what's the reason they're anxious? Like, it could it be, you know, something else like an Omega three deficiency? And so there are real treatable things, and I imagine a future where there's an integration where. Where the systems will be smart enough to ask you all the right questions that can help differentiate what's what and kind of combine the best of sort of the human emotional sort of support and also not be talking, doing talk therapy when you're depressed because you're deficient in folate, you know, which is a simple, treatable condition.

So I think. I think that kind of synergy is kind of very exciting to me, and I think we're. We're heading there faster than we think. I mean, you know, I think nobody could really imagine, you know, the smartphone, I think, is, what is it, kind of 15 years old now or something? It's getting on there.

B
Yeah, yeah, yeah. It's kind of a teenager. Well, anything about like, you kind of want your therapist to be an endocrinologist and to be maybe an internal medicine. You want this thing that's impossible, right, to some. No one person can do all that stuff, but I think that is what's potentially on the table.

A
So from an investor point of view, how do you deal with the fact that there's still eight track tape makers on the market and horse and buggy makers? And they're not going to want things to change, whether it's insurers or providers or hospital systems or, you know, all the drug manufacturers. There's just so many people in the current system that are just, you know, taking all the way to the bank and people are getting sicker and it's costing more, so they're not going to go quietly into the night. How do you see this sort of revolution affecting them and them having to handle it and deal with it? Yeah.

B
So this is not the first time we're seeing a revolution like this. You know, technology and other new forces have changed many different areas in business and culture. And what we've seen over and over again is basically what Clayton Christensen talked about in his book when he's talked about the innovators dilemma and disruption, is that the incumbents basically have a choice that they can disrupt themselves or be disrupted, and that's pretty hard. There are only so many companies that have been able to disrupt themselves. I think my, my favorite example is maybe Steve Jobs came back to Apple, built the iPod, made all this money, and then he got rid of the iPod for this, for the iPhone.

He killed a business for a bigger business, and if he didn't, someone else would.

It's something where the great companies find a way to disrupt themselves. HBO went to streaming and so on. And I think the best health care companies, I hope they're listening to us and thinking about this, and I know they are because we talk with them. They're curious for what this future is bringing. They want to know what AI will do.

We see this in pharma, we see this in care delivery, and they may do this by inventing it themselves, but typically what happens is that they actually partner with the new startups, or maybe even buy the new startups, and that's how this gets done. We're seeing this in other industries. Detroit is probably not going to create self driving cars on their own. They're partnering with startups, they're working with these new technologies. This has happened over and over again.

I suspect that's what we're going to see here. And I think what people realize is that they see this coming, they see the same things we're seeing, and they know the choice is to change or to possibly go obsolete. Yeah. If we're really successful with this revolution and function is very successful in my view. It's going to put people out of business, though.

A
I mean, the hospitals and the doctor's office will be far emptier. Something will have to shift. I mean, it's going to be interesting. And, you know, I don't know who's going to, from a regulatory point of view, going to hold the pharma and the insurance industry to account because, you know, they're, they're, I think, acting in ways that are often, in my view, I don't want to say this the wrong way, but they're not always acting in total integrity. And I think they're not always acting in the best interests of health or healthcare or the patient or consumer.

And I think this revolution is going to just shake things up. And I'm excited to be working with you on this, with function health. I'm excited for envisioning the future together, to learning together and making mistakes, but learning from them and growing and creating a better future. Because at the end of the day, it's really about creating a place where each of us can live a life where we're fulfilled and happy and healthy and do the things we love with the people we love. And at the end of day, that's why we get up every morning just to make the world a little bit better.

One of my favorite quotes is from comedy said, you know, where are you going to put your one grain of spiritual sand on the universal scales of humanity? And I think that's what we're trying to do with all this and it's pretty exciting. So I really applaud you both for doing the hard work of sifting through the thousands of companies that are trying to make a difference and finding those that have a little nugget of gold and a seed of a very different future. Thank you for joining me on the Doctor's pharmacy podcast. I look forward to working with you as we continue to build function.

And all of you listening, I hope you check it out. Go to functionhealth.com. mark, there's a 200,000 person waitlist. You can jump that waitlist by going on that link. And I don't know if you have any last thoughts or words of wisdom to share.

Daisy and Vijay, I'd love to hear. Yeah, no, I think you said it well. I am thrilled about be on this journey with you and I think it will take a while to build what we're talking about building. And that's one thing I want to remind people that the revolution we're talking about is not going to be tomorrow. But like, I think what we're going to see is year after year we're going to have higher expectations.

B
Like you look at the, where the iPhone went over ten years. It was like a little toy thing and now I can't live without it. I think it's going to be like that. It's going to be like, oh, that's really cool. We can do this now and this now.

Then every year there's gonna be new things, and then at the end of the ten years be like, I can't imagine we lived without this. I can't imagine we lived any other way. And I think that is what's gonna happen. And, you know, super thrilled to be a part of building it. Yeah.

A
Thanks, Vijay. Absolutely. We're optimist and you're doing the hard work and we are honored to be partnering with you. So thank you for everything you're doing. All right, thanks everybody.

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