The Future of Healthcare: The Role of AI and Technology with Dr. Vijay Pande and Daisy Wolf - Transcript

Dr. Mark Hyman: So VJ and Daisy, it's great to have you on The Doctor's Farmacy podcast. Thanks for coming on.

Dr. Vijay Pande: Thank you so much for having us.

Dr. Mark Hyman: We're excited to

Daisy Wolf: be here.

Dr. Mark Hyman: I know. I'm excited about this conversation. I, you know, I people are listening like, why are bunch of investors, on a health podcast? And it it may be confusing as to why, but just kind of a little background. I think, you know, 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 gonna be doing, not now, but you know, 3, 5, 10 years from now. And so you got your little crystal ball. You see everything going on across the sector that you really focus on, which is health care. NAI.

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 and so I 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, and the average person doesn't get to see 100 of deals come through, and 100 of companies come through that are trying to imagine a new future in health care, 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 maybe you could start by sharing a little bit about, you know, who you are and what is a 16z, the investment, firm that you work with.

And and and, you know, what what is your focus in that around health and and our our future health.

Dr. Vijay Pande: How's so, Mark, thanks so much for having us on the podcast. So Yeah. So I'm, my name is Gigi Pandey. I'm the founding journal partner, the Andreessen Horowitz, which gets shortened to a 16z, Bio And Health Fund. So Andreessen Horowitz is a venture capital firm.

And, the nature of venture capital speaks exactly what you're talking about, which is that Unlike investing in public companies like buying stock, you know, this is investing in companies at their very origins. At the next generation, the next crop, what what health care companies will look like 10 years from now. And so you're absolutely right. We get the honor and the privilege to get to see the future and get to see, what's happening and and hopefully help play a role in in in making that future. And so what investing is for us is that we're looking to see what will be the the big trends in the future of health care what companies are leaning into it.

And how can we fix this, unfortunately, very broken system that we all have to deal with today?

Dr. Mark Hyman: Yeah. That's great. How about you, Daisy? What's the reason you're so excited about seeing all this stuff and and what's your vision about the role that investing plays in in the future of health care.

Daisy Wolf: Absolutely. I think every American knows how broken our health care stimulus. I'm not a doctor. Like you, I'm not a scientist like VJ. I very much came to this from the perspective of being a consumer and a patient and a very straighted 1.

And I think what's exciting is that health care is the last major industry in the US. It's the 5th of the economy that is yet to be really, penetrated and changed by technology, only one of the 100 biggest software companies in in the world is a health care company, which is crazy, and as consumers, we all feel we feel how backwards the system is and we're inspired every day by all of the entrepreneurs we may meet who are trying to really change this.

Dr. Mark Hyman: Yeah. 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 1,000,000,000 of dollars into those sectors to sort of see what what was was gonna be the next Facebook or Google or Amazon. And, and, you know, you win some. You lose some, but but I think you guys have a unique insight into, you know, where we're going. And, And so I'd love to sort of, sort of have you talk about, particularly around this this new investment around function health that I'm a cofounder of that I think is is gonna be one of the most disruptive companies in health care, and I know why I think that.

But I'd love to learn why why you think that. And because you know, you could invest in any company, and 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 you put your chips here.

Not all of them, obviously, but a big big budget chips.

Dr. Vijay Pande: Yep. I'm I'm good.

Daisy Wolf: And for me.

Dr. Vijay Pande: Okay. Sure. Sure. Sure. I'll talk about functionality now.

Talk about why I invested. Yeah. Yeah. So function health is a a new startup that, provides a a very specific service that allows you to order for a a pretty low cost, a large number of tests, blood tests, and otherwise, And the key thing is that it is a meat. Well, let me see.

I'm trying to think. I have never had to give a very concise version and and and it's getting

Dr. Mark Hyman: That's okay. For law enforcement.

Dr. Vijay Pande: Yeah. I know it's dragging it's dragging on. I I wanna make it shorter. You know? So so function health is is a company that helps you proactively get in front of understanding your health care, needs.

And by a combination of blood tests and and, compute on the back end, you get a sense of where your health is now and and in particular, a sense of where it could be going to. And what we're excited about in particular is a couple fold. First off, I feel that the health care system is in great need of help from the outside. And that the health care system will be transferred with help from founders that are coming from other areas, especially from tech, and that, functions a great example of this, and that functions mindset is fairly different than the traditional health care system. In particular, typically, a traditional health care system would say, you know, you shouldn't get all these tests it it may lead to new questions and so on.

And I think the mindset in the 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 health care, but this is something that people want. And it's it's very much a movement that's happening right now. And and that's very encouraging to see that this disruption's happening, not just theoretically, but it's happening today.

Dr. Mark Hyman: How about you, Daisy? What gets you excited about about Functional Health?

Daisy Wolf: Yeah. We've we've been tracking the company since inception and getting that 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, test that could save their lives and, you know, function is democratizing access to this, which is super exciting.

And I think to to BJ's point about uptake, you know, we've seen as investors, we we track a lot of companies over time, and we see a lot of companies that have really, really fast growth in health care we call them hockey stick drafts, and they tend to all be either selling, assess or vanity drug on the internet.

Dr. Mark Hyman: You

Daisy Wolf: know, something along the line.

Dr. Mark Hyman: Neither of, which are just different function does better, does it?

Daisy Wolf: Exactly. They're generally selling like Mahagra or TLP 1s or, retinol for skin care. And 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 and function is a big driver of that.

Dr. Mark Hyman: Yeah. I mean, it's interesting how we really just start it up and open the doors and we didn't do much marketing. I mean, I posted it on social media. I've mentioned in my podcast here and there, but it's really very light. And and it was 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 know, you can see the hockey stick thing. And of course, you wanna invest in that, but know, what are the other kinds of things you're seeing that are coming on the horizon in terms of health care, technology, AI, and where are we going? Can you paint a little picture of the future VJ? Then maybe after days, you could chime in as well. I'd love to hear your perspective

.

Dr. Vijay Pande: Yeah. So, Mark, one thing we, just a reminder is that, we are under relatively strict rules from the SEC for so called marketing. And so I'm gonna try to answer in ways that don't get us in trouble with our compliance. And Nobody wants

Dr. Mark Hyman: to go to jail, so I'm good.

Dr. Vijay Pande: Yeah. And I'm, no, I'm not worried about on a deal. I'm worried about them, like, not liking the podcasts and and so on. So, like, and and,

Dr. Mark Hyman: and, like,

Dr. Vijay Pande: maybe would want Verzeta and so on. So I'll try to I'm I'm gonna talk a little more generally. Just just Sure.

Dr. Mark Hyman: And, by the way, we can send this to you in advance, and you can send it to us. Okay.

Dr. Vijay Pande: That's perfect. Yeah. And, like, I I I actually don't care, so, unfortunately, It's unfortunate that the SCC has these these strict rules. So, you know, one of the things that is, I think, a major force right now, and we saw it with COVID to, in many ways is that people are taking charge of their own health care 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, you know, these glucose monitors, 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 health care system, but as real active active drivers of it. And and that's one of the key areas that we've been interested in, and these, I've been working on, that space, together.

And, you know, we're seeing that basically, I think what's growing is a a movement of like minded companies like minded founders that there's an opportunity to really transform health care in this way that there's many aspects to health care, 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 and beyond, I think these are areas that are actually something that people are building in today.

Daisy Wolf: Yeah. I couldn't agree more. I think we talk a lot about in health care. You know, 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 health care. You know, providers and hospital systems see the insurance company who pays them or end customer, and therefore, don't optimize around consumer experience.

And what results from that is that 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 and so I think we are we're really right for consumer disruption in health care, and function is is at the forefront of that. Yeah.

Dr. Mark Hyman: That's exciting. Go ahead, Daisy.

Daisy Wolf: No. I was gonna say, like, you know, function, right, you you think about what health care looks like today. And my we were just talking about this earlier, but my health care records are across a bunch of different doctors' 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 You know, your your data is tracked every 3 or 6 months. 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 that, you know, in one day in one database for them.

Dr. Mark Hyman: Yeah. You know, I I think that's that's an incredible vision. And and one of the things that I am curious about your perspective on is the types of innovations that are happening. Because when I was a Cleveland Clinic, Toby Kosgrove's one of my heroes, you know, brought the kind of discover vendor, whatever we call them, of, Watson. It was IBM's sort of, supercomputer.

And, you know, the the big kind of tagline was Watson goes to medical school and was able to sort of ingest all of, you know, medical textbooks and knowledge and pass exams and do all that great. And and what what really struck me was that it was sort of like rearranging the dickshers 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 wanna call it doesn't matter. It's just gonna be medicine. But but this this paradigm shift is not, from my perspective, not really emerging from a lot of the new startups, new businesses, new innovations that are and and and I see just just incrementalism in in innovation, not a fundamental shift in how we think about health and health care and disease and diagnosis and treatment.

What what are you seeing come across your, your desk that that is is different, or are you just seeing, you know, the same kind of thing that I think I'm seeing as a am I wrong or or this is actually how, you know, how things are are shaping up?

Dr. Vijay Pande: I don't think you're wrong in the sense that, for 2 factors. One is that, look, I've been changing a system as complex as health care, you know, 28% of, US GDP. That's not something that's easy to do. 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 the task is really hard.

And then also, there probably only gonna 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 or a few companies. It's not like hundreds of companies. You can go through Lyft and Uber for for for Yeah. For, transportation or Airbnb for hotels.

These are only gonna be a few companies. There will be many that will try in a couple different ways, but I think what will happen in this space is that a few will really stand out. And and these are the ones that will be transformative. We review, like, 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 is something that only a few people could do, and only a few companies will do.

And those are the ones that we're looking for.

Dr. Mark Hyman: Yeah. And and and what do you think both of you, around your vision for health care and and one of the big disruptive innovations that are really game changers for us coming up. Like, I I 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 health care and understanding the challenges and looking for ways to really shift. So I'd love to kinda hear your your vision for the future.

Dr. Vijay Pande: Yeah. Maybe I'll take one area and and and Daisy can take a a another. So and and we can we can list more. But, like, if I were to pick one that, is is the one that's been on my mind is AI. And, you know, when you think about health care, what are the big issues in health care right now?

I think if I were to name the top 3, I would call them cost. Quality and access. And AI has a hope to address each one of those in terms of outcomes. Yeah. So I put that

Dr. Mark Hyman: into the quality.

Dr. Vijay Pande: I I put that in terms of quality, like, the quality of outcomes. Yeah. Yeah. Yeah. So, you know, in terms of cost, I think one thing that we're already seeing is that AI is a 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. And that democratization of of medicine, I think, would be very exciting. So that would be cost and access And in terms of quality, you know, when, we saw a similar arc in other areas, like in 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 decades. Right? And there's no way, a computer's gonna be a human being. You know, like, there's no way. And and then 20 years later, it's like, well, that's ridiculous.

There's no way human beings gonna be the 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 the future of in terms of cost quality and and, access would be dramatically improved.

Dr. Mark Hyman: Yeah. I think it's a beautiful vision because I I think those those are 3 elements. On the quality bucket, I would put the paradigm shift that's happening to in medicine because you know, we can do the same things better, right, which needs to happen. And I often wanna hear about quality based care, value based care, It 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 disease as prescribing the same drugs. How do how do you think AI can play a role in really disrupting medical paradigm itself, the scientific paradigm, not just the practice of medicine and getting people access and democratizing and decentralizing and bringing down costs and improving all of that, but how does it really change the scientific paradigm?

Dr. Vijay Pande: Yeah. I think we talked about the data analysis part. I think that's part of it, but then I think a part and and you would know better than I, but, like, 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 wanna make health care 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 are obviously less expensive, which is the win win.

Dr. Mark Hyman: Mhmm. David, how do you how do you think about the future of health care?

Daisy Wolf: Yeah.

Dr. Mark Hyman: And what are the big destructive things that are gonna oh, well, Siri, what was that? As I I had

Daisy Wolf: Conflict topic. We're serious.

Dr. Mark Hyman: No. No. That that Daisy sounded serious, sounded like Daisy or something.

Daisy Wolf: I I exact I actually think it's funny series chiming in right now because we think I talk about this a lot, but we think about what health care will look like in 20 30, 40 years, and then we work backwards from that. And we have invested in a lot of companies who are taking on pieces of that puzzle puzzle to build us you know, toward a better tomorrow. But I think, you know, 30 years from now, we probably 90% of health care is delivered via your phone. So we're gonna have amazing wearable devices, both, you know, in terms of watches, rings, etcetera, but also sub sub cutaneous that are monitoring all sorts of molecules and things happening in our blood stream in real time. We're gonna all be doing function we're we're gonna have at home, you know, blood collection by then.

We probably won't meet a podiatomist. 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 gonna have all of our health data in this one place, and you're gonna be able to 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?

Dr. Mark Hyman: I don't know. I'll ask you questions. Right?

Daisy Wolf: Yes. And we're all gonna have access to, like, the world's best AI and human doctors through our smartphone. And then probably 10% of health care 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. So I I I think it's gonna look very different, you know, 10 20, 30 years from now, and I hope it happens faster rather than.

Dr. Mark Hyman: It seems like the cost will then come way down. I mean, it seems like the the the costs in health care are just kinda crazy. And I don't I wonder if you're seeing any technology companies that are creating transparency because, you know, I can send a patient. I mean, I did this not too long ago, who before function, who wanted to get some lab work done. I wanted to sort of check a bunch of things, and I I did kind of an abbreviated panel of what's in function.

And she she her insurance didn't cover it, and she sent me. She said, Mark, like, I don't know what to do. Like, the bill's, like, $10,000. And I'm like, oh, shit. I'm sorry.

Let me call the company. And so I I called the lab, like, hey. You know, like, 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 and get a scan for my knee for $400. Another scan is the hospital is $25100 for the same scan and the same machine. And and the consumer doesn't know any and they're completely confused. Oh, I I went to go get a a knee, knee exam, and I need a knee brace or something. Like, messed up my knee.

And I get a call from the hospital today. They said, oh, just to let you know, your insurance didn't cover that knee brace, and it's a $1000. I'm like, $1000 for knee brace. I gotta got a new knee. You know?

And so the the elasticity and pricing is is and the lack of transparency in pricing, you know, leaves the health care so patted with cost. You know, we we spend twice as much as any other developed nation and get much worse health care outcomes. You know, we're like a bottom of the pile of of of developed nations. So how do you see kind of this evolving and us actually using technology and AI to help create transparency and kinda more democratized health care because it's it's so messed up right now.

Dr. Vijay Pande: Daisy, you wanna talk about turquoise?

Daisy Wolf: Yeah. Sure. It yeah. It's funny, Mark. We we all work in health care, and I think none of us understand how the pricing works.

Or what we're gonna get.

Dr. Mark Hyman: You

Daisy Wolf: know, what kind of bill we'll get in the mail? I was actually trying to figure out if I 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. We're in or is it a company called Turquoise that's, helping consumers and other unkemute and health care 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 health care where you have to, you know, you have to pay out of pocket for the first 5000, $10,020,000 before your health insurance kicks in. But the silver lining of that is I do think it enables some more free market dynamics where people are gonna 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 thought in in relation to function. I think we thought, you know, $500 a year.

Is that something that, you know, most Americans are gonna wanna pay and what what really struck us and when you're going through all of the customer, surveys is how many people were like, this is amazing value. I something's I'm something's wrong with my health. I'm bouncing on the health care system trying to figure out what's going on, and I know these tests would cost me $10,000 elsewhere. And so you guys are obviously doing amazing things for cost and health care. 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 health care is a $4,000,000,000,000 industry. That's like 90% human services and a lot of sense of human services and and doctors. And so I think we're gonna see a lot of cost reduction from that.

Dr. Mark Hyman: Yeah. I mean, it it is it is striking to me how the value we're getting is so low, in terms of the 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 I I, you know, I meet I meet with senators and congressmen and I work in Washington on food policy and health care policy. And, you know, I don't think anything even have a clear yes.

I I said to one on the other night, I said, you know that $1,800,000,000,000 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 branded 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 one problem.

And so and the reason I love function is that it it to me, it's it's it's kinda like this little rascal on the outside of health care. That's trying to give people what they want and bypassing all the red tape, all the confusion, all the lack of transparency. But, like, I said, yeah, I can I can literally get more than 2 function memberships for the price of 1 knee brace? You know, it's like, that's nuts. Yeah.

Dr. Vijay Pande: Well, the other thing that I think anyone who's gotten sick has seen or has loved ones that got sick is that you kinda have to be 1 the one managing that process. Right? You kinda, like, your house is a body, and you have to be the general contractor for all the people coming to help fix it. And and that's really hard to do. But if you realize that's what's gonna 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, you know, 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 health care is top of mind. And then they start looking and they start looking for alternatives.

And I I think That's the opportunity. That's the market opportunity to present those alternatives.

Dr. Mark Hyman: Yeah. It's so true. You know, one of the know, one of the things I'd love to hear from you about is 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 gonna make make basically make make people's health transformed. And and I know you're seeing a lot of stuff. I'd I'd love to learn what that is.

Dr. Vijay Pande: Yeah. Do you wanna talk about, like, life sciences, like drugs and stuff? Do you wanna talk about health care delivery?

Dr. Mark Hyman: Yeah. Health care delivery, drugs, new technologies. You know, what what what coming that we we don't even know about the average person sitting here listening to this in their car or taking a walk or hopefully jogging or something.

Dr. Vijay Pande: Yeah. Or preparing a

Dr. Mark Hyman: good smoothie.

Dr. Vijay Pande: Yeah. I can hit that too. So I can start. And and how about these, yeah, take life sciences? You wanna take health care?

That might be nice. Yeah, so let me talk about, life sciences, which is, like, where all these medicines come from. And and there's a 2 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, 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 craftsman'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. But 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, 10 pairs of shoes. You might have one pair of shoes or something like that. And and so this this engineering shift to biology is 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 and, take out things. We give them put in genes.

That allows us to 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 whether that does a very, very engineering mindset. So that is coming at the same time when AI is emerging. So the engineering mindset's generating a huge amount of data that requires AI to understand it. AI needs a lot of data to do his magic that's coming from this engineering engineering revolution in medicine.

Mhmm. And and so what we expect to see and granted this may take, like, you know, 5, 10 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 2 in clinical trials, the first sense of does this drug work in a person? The first time we asked that question, 85 percent of drugs fail. And it's approaching 90%.

And if you think the to get to that point, this drug costs 100 of 1,000,000 of dollars to get to point. And now it fails if, like, 85% failed, these drugs are gonna the ones that make it through are gonna 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 it's rough. Right? And 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 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 lifesaving 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.

Dr. Mark Hyman: Yeah. Incredible. And and, Daisy, how about you on on your sector in terms of of of health care and not just life sciences, where where are things shifting?

Daisy Wolf: Yeah. I I think the the ways that AI is gonna have an impact. It it's hard to even wrap our heads around right now, but it's super exciting. So if you if you start from the standpoint of just, you know, what is function enable, you have all of your health data from every blood test to everything they have in an EHR, everywhereable, device data in one place on a person. AI is going to be way better at diagnosing or tap in a human 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 GBP can pass a medical exam. And so we're gonna get way more precise with diagnosis because we're gonna actually have data centralized on people. And we're gonna have computers figuring out what's happening in their bodies. And then AI is going to change drug hair is delivered because we're gonna have all the best you know, the best doctors in the world, we're gonna train AI systems on top of them so anyone can have access.

And so AI is gonna be really good at predicting what treatment is going to best, you know, cure your disease. And then I think, you know, one of the things that me is AI is gonna get way better at, eliminating a lot of the really infuriating infuriating my new shots that we have in health care today. It is crazy that, like, you know, for some vast majority of doctor's appointments in America are still scheduled on the phone. We're the only industry It still has call centers of people, scheduling appointments, doing prior authorizations. We still use fax Sheen's as our main mode of technology.

And and you ask to call a doctor and you ask for your reports, and they're like, oh, we're not allowed to email them. And, like, you, you end up in you know, super frustrating scenario. And we're already seeing little things about this today. Like, there are a bunch of companies that are doing ai phone calls, so they have a bot call doctor's offices, call every doctor's office in your area, and they can come back to you and text us and say, Hey, here are 7 appointments we found to the cardiologist, you know, next Tuesday. What what's best for you?

And so we're already seeing little exciting things on that horizon. Then.

Dr. Mark Hyman: That's crazy. I actually had a friend of mine who's 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 at 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, I went to have another heart scan that I did a couple of years ago to just check. And I had to fill this same forms at the same place that they should have had on on file. So It's it's pretty bad. You know, one of the things I think, either what I'd love to

sort of dive into is is the a personalized medicine revolution that's happening. And I 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 1 trials, meaning n of 1, number 1, meaning you. And how do we actually properly designed 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.

You know, for example, Nexine, which many people take, you have to treat 26 people for one person to benefit Crestor, which is a statin, a drug for lowering cholesterol, you have to treat 20 people for one person to benefit. I mean, 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 crappy antibody. Right? But that's essentially what we have in medicine.

And I think what's exciting about that some of the disruptions that are happening is is personalized treatment, personalized medicine, and and and in a very different way than I think we we currently think about it. So I'd love for both of you to sort of touch on how how the application of AI can help us, you know, really rediscover medicine and science and and kinda reshift the paradigm from the old way of thinking that sort of met one size fits all to a more personalized approach. Like, if I have a patient with rheumatoid arthritis, you know, in the traditional health group, 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, 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, because They have a microbiome problem, and they have dyspotic bacteria that are creating endotoxin that create inflammation that creates insulin resistance. So there's so many layers that that are ignored in our current health care thinking and in current medical practice and science. How is AI gonna help us sort of jump forward to the future and gave people really the right health care, as you said, VJ for themselves, the personalized medicine.

Dr. Vijay Pande: Yeah. So if you think about it, like, in sort of old school ways of doing things. What does the my doctor know about me? It, like, knows my age, my height, my weight, my gender, That's probably about it. Right?

And and maybe a blood pressure. Blood pressure. Yeah. It takes some vitals of blood pressure and and so on. And and, like, there's only so much you can do with that.

Those are useful measurements, but, like, we need a lot more information. And so the 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. It can some genome tests can tell you this drug won't be useful for you and so on.

Yeah. But it 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, a good example of that, but people are working on new diagnostics too. And and diagnostics that are, diagnostics that come along with drugs to know whether you should take this drug or not. And part of the 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 and I think we're starting to see personalized medicine finally reach some of the the hope that we were hoping for.

Dr. Mark Hyman: Yeah. How about you, Daisy? How do you how do you see it?

Daisy Wolf: That was perfect. I have nothing to add.

Dr. Mark Hyman: Great. I think, you know, to me as a physician, practicing on the edge of this field in personalized medicine, you know, I realized that that, you know, it's biology is so complex. And and each of us are so unique and so different. And that that the way we we see disease is 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 it's everything all at once. Literally, it's like everything every all at once like that movie. And it's it's so complex that that a physician my how smart or experienced or well trained he is. He'd been feeling a 1000 years, could never really understand it all and never understand the associations of patterns the dynamics that are happening in each individual that can tell them where they are, where they're going.

And and I think this this new framework of network medicine, systems, medicine, and some, you know, application that might might be emerging as functional medicine. But the the the real point here is that that this this network's 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 I think what's happening is this this collapse is almost like a, a wormhole we're going into, where 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 help co found function health and I think I think why you probably invested in this because we we we have to actualize on that vision, not just have it be a hope for people.

And and that's what gets me really excited to wake up every day and work on this and 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 in terms of the emerging, you know, technologies and things, you know, in addition to the things like, you know, access to your lab data and all the the the sort of system we're building at function. What what are the kinds of things you're excited about that are gonna have big impacts? What are the things you're seeing come across your your investment desk?

Dr. Vijay Pande: So you're thinking about techno new technologies?

Dr. Mark Hyman: Yeah. Like, I don't know what you guys are seeing every day, and I every day, I'm sure you're getting, you know, like you said, a 1000 potential opportunities to invest in companies that are trying to innovate. Yeah. Well, you know, what's going on?

Dr. Vijay Pande: One other one too that I think is gonna 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 of of, and 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 it's 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 early. Imaging is gonna be a key part of that as well. And and that I think especially when combined with with, with with everything that you can measure would would naturally fit into that paradigm.

Dr. Mark Hyman: Yeah. Yeah. I think that's

Daisy Wolf: One more. Totally. Vijay, I can talk a little bit about I could talk about a ai therapist but

Dr. Vijay Pande: Yeah. That's good. Yeah. Generally. You know?

Daisy Wolf: Totally.

Dr. Mark Hyman: Yeah.

Daisy Wolf: So one one realm in which we we've invested heavily in in companies is in Behavioral Health. Like, you know, it wasn't, I think, probably you think back 10 or 15 years ago, and we didn't really believe that, mental health care was health care, and that insurance had to cover it. And then the 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 life times.

We're never gonna have the number of therapists and counselors needed to to treat the global health crisis in terms of mental health. And one exciting thing that we're seeing today is like we're we're probably, I don't know

, 3 or 5 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 and 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 of medicine where where that's true today, and probably the the closest on the horizon. But the kinds of exciting things that them kind of across our desk.

Dr. Mark Hyman: I mean, that's a very cool idea. Right? How do you how do you create a, a wise compassionate, good therapist using AI. It seems almost impossible to kind of create a a human esque version of a therapist, but it it seems like it's happening. So it's very exciting.

Daisy Wolf: It's totally happening.

Dr. Vijay Pande: Yes.

Daisy Wolf: And in fact, you're one 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, you know, we're gonna have personalization.

Dr. Vijay Pande: Yeah. 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. AI, the AI was trained on, millions of conversations of nurses with patients and those nurses were 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 can do a reasonable job.

Dr. Mark Hyman: That's amazing. Amazing.

Daisy Wolf: And unlike a human, it doesn't get burned out in It has unlimited empathy.

Dr. Mark Hyman: It doesn't doesn't have a risk of crossing the patient boundaries either.

Dr. Vijay Pande: Yes. Yes.

Dr. Mark Hyman: Yes. I think I think it's, it's amazing to me, but, you know, what comes to mind is is a is a sort of a synergy between things like kind of a AI therapist and something like function. Because often in mental health is a great example, we kinda misappropriate meaning. If someone's depressed, But 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 at mercury poisoning or they have taken to anybody that's altered their microbiome or, you know, what's the reason they're anxious? Like, it it could be, you know, something else. Like, it'll make a tree deficiency And and so there are real treatable things. And I imagine a future where there's an integration where where the the the systems will be smart enough to ask you all the right questions that can help differentiate what's what and and kind of combine the best of sort of the human emotional sort of support and also not be talk doing talk therapy when you're depressed because you're deficient and foley, you know, which is a simple treatable condition. 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 I think nobody could really imagine, you know, the smartphone. I think is, what is it? Kinda fifteen years old now? Or Yeah.

Dr. Vijay Pande: It's getting on there. Yeah.

Dr. Mark Hyman: Yeah. It's a teenager.

Dr. Vijay Pande: Well, and you think about, like, you kind of want your therapist to be an an endocrinologist and to be maybe an internal medicine. You want this thing that's impossible. Right? To some, you know, one person can do all that stuff, but I think that is what's potentially on the table.

Dr. Mark Hyman: So so from an investor point of view, how do you deal with the fact that Now there's still a track tape makers 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 the drug manufacturers that is just so many people in the current system that are just you know, taking all the way to the bank and and and people getting sicker and it's costing more. So they're not gonna go quietly into the night. How how do you see this this sort of revolution affecting them and and them having to handle it and deal with it.

Dr. Vijay Pande: Yeah. So 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 in business and culture. And, you know, 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 and disruption. Is that the ink the incumbents basically have a choice that they can, disrupt themselves or be disrupted.

And that's pretty hard. You know? Like, there are only so many, companies that have been able to disrupt themselves. I think 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, you know, for this, for the iPhone. You know?

Right. And he's dropped himself. For a bigger business. And if he didn't, someone else would, you know. Yeah.

So so, like, it's something where the the great companies find a way to disrupt themselves. You know, HBO went to streaming and so on. And and I think the best healthier companies I I hope they're listening to 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 wanna know what AI will do. We see this in pharma. We see this in 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

Dr. Mark Hyman: Oh, we lost.

Dr. Vijay Pande: Or maybe even buy the new startups. And and that's how this gets done.

Dr. Mark Hyman: You know, when he comes back, text them, see if he comes back.

Daisy Wolf: Yeah.

Dr. Mark Hyman: Oh, we're almost there. We're almost done too. Okay. It was the, big, big brother, health care, big brother in the sky. Just shut him down.

Yeah. This is a great conversation. I'm learning so much. It's great. Fun.

Okay.

Dr. Vijay Pande: I don't know. How much of that you you got?

Dr. Mark Hyman: We we got most of it. Where would you drop off?

Daisy Wolf: I think you're about to go VJ into typically, they need to partner with startups.

Dr. Vijay Pande: Okay. Yeah. Yeah. Basically I'm hearing a lot.

Dr. Mark Hyman: You're you're echoing through your echo. Yeah.

Dr. Vijay Pande: Okay. Okay. We're back. Yeah. So so, you know, so they have this choice basically that they can try to innovate themselves, but there are other options they can partner with, with the new new technology partner with startups, or potentially buy startups.

And, we're seeing this in other industries you know, Detroit is probably not gonna create self driving cars on their own. They're partnering with startups. They're working with with, these new technologies. This has happened over and over again. I suspect that's what we're gonna 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 choices to to to to change or or or to possibly go obsolete.

Dr. Mark Hyman: Yeah. I just if if we're really successful, with this revolution and function is very successful. In my view, it it's going to put be a lot of business, though. I mean, the hospitals and the doctor's office will be far emptier something will have to shift. I mean, it's gonna be interesting.

And, you know, I don't know who's gonna from a regulatory point of view, you're gonna hold the the 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 wanna say this the wrong way, but they're they're not always acting in in total integrity. And I think they're not always acting in the best interest of health or health care or the the patient or consumer. And I I think, I think this revolution is gonna just shake things up, and I'm I'm excited to be working with you on this with function health. I'm excited, for, you know, envisioning the future together to learning together and, making mistakes, but learning from them and and growing and 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 the day, that's why we get up every morning just to make the world a little bit better. My one of my favorite quotes is from comedy said, you know, where you're gonna put your 1 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 it's pretty exciting. So I I really applaud you both for, you know, 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 negative goal than a scene of a of

sand, but a lot of gold in there and and and really mining that and giving them the resources and tools to to create a better future.

So I thank you both for being on the podcast. I thank you both for your work and, look forward to continuing this amazing journey together.

Dr. Vijay Pande: Thanks so much, Mark.

Dr. Mark Hyman: Thanks, Daisy. Alright. See you guys soon.

Daisy Wolf: Thank you.

Dr. Mark Hyman: Alright. Thank you all for listening to The Doctor's Farmacy. We'll see you next time.