The a16z Show - Baumol's Cost Disease, in Healthcare... and Where We Go Next

Episode Date: January 6, 2021

If software’s eating the world -- and more specifically, bringing costs down and increasing productivity through entire industries -- why have some industries, like healthcare, been so resistant? And what could the future look like once technology really gets in? With a16z co-founder -- and author of the now nearly decade-old thesis of “software eating the world” -- Marc Andreessen, in conversation with a16z bio general partner Vijay Pande. This episode originally ran on our show Bio Eats World, but we’re sharing it here in the new year as it’s very relevant for ANYone interested in, well, the future of software eating the world;)  https://a16z.com/2020/12/14/cost-disease-healthcare-baumol/ Stay Updated:Find a16z on YouTube: YouTubeFind a16z on XFind a16z on LinkedInListen to the a16z Show on SpotifyListen to the a16z Show on Apple PodcastsFollow our host: https://twitter.com/eriktorenberg Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Hi, everyone. What follows is a hallway-style discussion featuring A6NZ co-founder and author of the now nearly decade-old thesis of software eating the world, Mark Andresen, in conversation with A6&Z Bio-General Partner Vijay, all about the topic of Baumol's cost disease in healthcare. If software is eating the world and more specifically bringing costs down and increasing productivity through entire industries, why have some industries like healthcare been so resistant? and what could the future look like once technology really gets in? This episode originally ran on our show BioEats World, but we're sharing it here in the new year, as it's very relevant for anyone interested in, well, the future of software eating the world. Hi, I'm Lauren. And I'm Hannah, and this is our show BioEats World,

where we talk about all the ways our ability to engineer biology and re-engineer healthcare are transforming our future. So, Hannah, this episode is called The Cost Disease in Healthcare. What disease are we talking about? It's actually a reference to what's called Baumal's cost disease, or the Baumal effect, which is a phenomenon first described by an economist named William Baumal in the 1960s. In short, the Baumal effect is when there's a rise in wages in jobs and industries that then haven't had the same rise in productivity. Okay, but what does that really mean?

And what does it have to do with healthcare? That's exactly what this episode is about. A16Z founder and internet pioneer Mark Andresen and general, partner Vijay Pande discussed the economic forces that make some things like healthcare, education, and housing get more and more expensive, but things like socks, shoes, and electronics all get cheaper and cheaper. In this wide-ranging conversation about how society and different industries work and what that means for consumers, Mark and Vijay talk about taxability to transform expensive services into affordable goods. Think of the cost of a live string quartet versus a streamed

recorded track, or the cost of a custom-made shoe versus a factory-made one. But until now, using tech to similarly transform services into goods in health care has seemed like an impossible dream. How would you do this for, say, the service of doctors providing care? Mark and Vijay talk about the massive gains in new recent technologies that have begun to make this seem within reach, from laser eye surgery in storefronts and malls to using AI in processing medical claims. Is there a future, in which what doctors are doing today feels analogous to farmers' hand plowing fields 300 years ago

and what would the role of that doctor of the future look like? Take it away, Mark and Vijay. So maybe the place to kick this off would be to talk about what is bowel's cost disease and why it's so important. I think maybe the Twitter version of it is how come things like healthcare and education and construction exponentially increase in cost,

whereas socks from Walmart or many other goods, especially anything electronic, decreases exponentially. How could that be? I mean, we're living in this world where things magically get cheaper, but that college education or healthcare just is becoming this massive challenge for us as a nation. Yes, the way that you measure the impact of technological change in society is through what economists refer to as productivity growth. It's the process of figuring out how to make more output with less input.

Right. And so normally we kind of expect the world to work this way, which is every year over the last 300 years, with a couple of exceptions, most industries got a little bit better at making things and costing a little bit less, and that led to this huge rise in living standards. Agriculture is kind of a classic case, where food is really cheap as a consequence of a lot of technological leverage applied to the challenge of growing food,

and we just generate a lot more calories of food for a lot less money now than we did 100 years ago or 300 years ago. The problem or the challenge is that different sectors of the economy have different rates of productivity growth, basically depending on their idiosyncrasies, and then depending on the extent to which technology is empowered or allowed to actually have its effect on things. And so you see these industries like consumer electronics and media and food and clothing in which you've got the spectacular productivity growth and then correspondingly these spectacular price declines over time.

And then you have these other economic sectors, education, healthcare and housing as three in which the price curves are going in the wrong direction. The cost of a college degree gets more expensive every year. The cost of heart surgery gets more expensive every year, which is going backwards, basically neutral and maybe even negative productivity growth, like they might be getting worse over time. Then you've basically got this problem where you've got certain industries that are racing ahead in productivity growth. And so those workers are kind of becoming super technologically empowered to produce a lot more with less input.

And so those workers are actually getting paid a lot more because they've just got so much technological leverage to the work that they do. Think about, for example, the producer of a TV show or something like the level of kind of power that you have with a modern computer to, like, produce a TV show is leaps and bounds beyond which you would have had if you were literally cutting, you know, splicing film together by hand with the scissors and tape, which is how things used to work. And so you've got these industries in which productivity is growing very fast, prices are declining, and wages are exploding.

And then you have these other industries like education and housing and health care in which that's not happening. But the problem is workers can actually migrate from sector to sector. If I'm not excited enough about having a job as, like, I don't know, a film editor or something, like I can go to nursing school and I can become a nurse. And now I've migrated out of the media industry and I've migrated into the nursing sector. And then the problem is wages get set across these industries. And so you basically have industries with neutral and negative productivity growth that are now setting wages as if they had positive productivity growth, which they don't.

And then the result of that is just this explosion of price in those kind of negative productivity sectors. It's just horrible for consumers of like healthcare education and housing because like the same stuff gets basically more expensive every year without getting any better and maybe getting worse. Oh, and then the other big problem is there's no reason why this would ever stop. The way I crystallize this whole thing is because of rapid productivity growth in consumer electronics, a hundred inch big screen Tee. that goes in your wall in your house and you can watch every movie ever made for 10 bucks a month, the price of that TV is going to drop to like 100 bucks. That is like quite literally what's happening. Correspondingly, the price of a high-end private four-year university degree has leapt up dramatically

over the last 20 years. It's now on the order of, you know, $75,000 a year, so it's like $300,000 for a degree. It's not going to be that long before a four-year college degree costs a million dollars. And so you're going to have $100 television set that covers your whole wall, and you're going to spend a million dollars getting a college degree. And that's just crazy. It's just like such a horribly bad outcome. And yet there's something in the structure of how these market works that presents us from kind of speaking openly about the trends that result in this. Yeah, I think, Mark, one key point that you laid out there was that this is very much the cost of labor and that this sort of specialized labor. And in many of these industries that we're talking about healthcare education, this is an apprenticeship where you have to spend many years to be able to develop skills that are handed down from one person to another, very kind of pre-eathing. industrial revolution kind of behavior. Whereas when we talk about goods, goods are made in factories

that are completely automated and that technology can be applied there to make them 10% better a year. And that leads to exponential performance over time. One of the key ideas I was curious to hash out with you is what we're seeing in AI. What we're starting to see is that AI is turning what used to be something that had to be done by a service into something that can be thought of as a good. that instead of a person training in an apprenticeship-like way to do something, the machine learns these things, you can make copies trivially. You can get now the advantage of Moore's law. And this almost alchemical, magical transformation seems to be one part of a potential

solution to addressing Baumol's cause disease. I'm curious how you see at least that part of it. Yeah, so this actually goes to an example that Baumol used when he wrote the book kind of on this topic. And so he used the hypothetical example of like a string quartet, right? There's two ways to experience a string quartet right in your house. One way is the old way, which you can actually hire four musicians to come and set up in your house and play Beethoven quartets. And it's going to sound great.

And by the way, people still do this. You do this for like weddings, right? This is still a thing. The other way to experience a string quartet in your house is an electronic playback or recording. And what's the cost of a string quartet recording to play back in your house today? You know, it's basically zero. If you just chart the price of getting four musicians to come play at your house from like 200 years ago to 100 years ago to 50 years ago to now, that price has exploded.

The in-person version has gotten, like, wildly more expensive, right? Because of almost cost disease, because those musicians actually, like, work for a living and they have other career options. And then exactly your point in AI, what's the simplest form of AI? It's a computer literally listening to what's happening and playing it back. And it turns out that costs nothing. An enormous amount of progress in the modern economy is that, right? You also benefit from that, by the way, every time you buy a loaf of bread. Our ancestors, we're not buying loaf of bread, carefully pre-slice off the shelf.

our ancestors to the extent that they were able to get access to the core ingredients in the first place where, you know, making bread by hand. Yeah, it was baker as a service. Yeah, exactly. This is actually the big lever that increases living standards. Exactly to your point also, it has been hamstrung by the fact that historically computers have only been able to do so much. Machines have only been able to do so much. And now we have these sort of much more flexible technologies kind of gathered under this kind of term of AI that at least in theory give us the opportunity to now revisit a lot of our assumptions about what should be a product and what should be a service. Yeah.

One of the fun things that we're seeing is AI is nibbling in. with the easy, mundane things that are annoying for people to do, that they have to be trained to do. But then that training that goes to people can now be done to the AI. And the AI can be trained once and then scale. And actually learn from everyone else's mistakes. And so what we're seeing as initial go-to-market are in areas of billing or simple types of diagnoses or triage,

areas where this isn't trying to make some superhuman genius, which may in time come. But I think the first go-to-market is just typing the things that are just boring and reproducible that are just expensive because of the human power involved, not even necessarily because you need a super genius. And that's something that we're seeing right now. There's a famous story of Alan Turing where he was working on inventing the computer in the early 40s. And he was hanging out of Bell Labs in New Jersey with his friend Claude Shannon, who's the inventor of information theory. The two of them were having this heated lunch discussion at the AT&T headquarters building in New Jersey

with all the top researchers and AT&T executives kind of sitting around nearby. by about basically this concept of AI. Like, what would it mean for computers to actually be intelligent, actually like have brains? And they were debating back and forth. And finally, Turing got frustrated. And he stood up and yelled at Claude Shannon. And he said, you know, look, I'm not talking about like turning a computer into a super

genius. I'm just talking about building a mediocre mind like the president of AT&T. And this gets into the emotions and the politics of how we think about automation because the technological progress and productivity growth changes jobs. But in the fullness of time, what we will realize is that a lot of what doctors are today, for example, a lot of that work is going to be analogous to literally when farmers used to hand plow fields 300 years ago. Like if you took a modern farmer who's running a fully computerized cooperation with all these modern combines and tractors and GPS and all these amazing hybrid

engineers seeds and all these miracle fertilizers and everything, and if you told them that they had to go back to hand plowing fields, we would have much worse food at far, far higher prices and a lot of people would go hungry. I am quite convinced that doctors in, you know, whatever, 50, 100, 200, 200 years they're going to look back at what doctors do today and they're just saying, I'm like, God, I can't believe those poor people ever had to do all that. And in fact, they're also going to say, like, there was so much more important work to do. Yep. You know, it's interesting to think about what the arguments against this could be. And one would be is that, well, you know, could the industrialized process be really comparable to what a human being can do? People can do so many things.

I was just thinking about, like, how shoes were made. You would have a cobbler who could make shoes that was perfectly suited for your feet. And they'd be doing everything would be one-off and bespoke. And it probably would be better shoes, maybe. But instead, you just define a series of shoe sizes, you know, I'm either like a nine and a nine and a half or a ten or whatever. I get just get the closest one and it's good enough and the fact that it's ten times cheaper or whatever and now with modern materials so much better that pretty soon you forget about the other experience and you just get used to the new way of doing things. And that's kind of my suspicion is that in the beginning there will be tradeoffs that you have to make

and that people will have to get used to. But that in time I think you wouldn't think of doing in any other way. And at least this follows industrialization in other contexts. Yeah, and in fact, back quote and quote in the glory days when like all shoes were made by hand, they were so like crazily expensive that you would have one pair of shoes, right? This idea that you'd have like a shoe closet, like would have start people is just absurd because you have a pair of shoes.

And then by the way, they're so expensive because of all the many labor involved, right, relative to your ability to make money, you know, as sort of a normal worker that like if your shoes like start to wear through the soul, you're out of luck, you're probably going to be wearing those things for five years. Kids wearing like newspapers stuffed in their shoes, right, to be able to basically compensate for the holes in the shoes because shoes are just like a lot more expensive to replace. Just imagine that shoes cost one-sixth of all GDP, right?

Which is where we're at with health care, right? And so imagine if it was like one-sixth of all economic output had to be used to pay for shoes. And then it turns out nobody wanted to pay for anybody else's shoes. And how terrible that world would be and how that would really screw up. You know, we'd have all these crazily intense, like, political debates. Like we would have had like, you know, these political debates between like Trump and Biden on like the national shoe policy.

Oh, yeah, yeah. Obama shoe, Trump shoe. Yeah, exactly. And then, you know, government-made shoes, right? getting these things out of the realm where you have to have these debates because things are like gigantic, expensive and nobody wants to pay for them is itself just a massive stuff function increase in human welfare that you don't notice it until you don't have it? Well, that's why I think it's maybe not as much of a surprise why it's showing up in health care

because healthcare will eventually become 100% of GDP. So it's something that's not sustainable, this exponential growth and cost. So I think entrepreneurs are seeing that potential. They're creating this in both front office for doing scheduling, for doing diagnosis, for doing back office, for billing, all this sort of routine, horrible things that people hate. But I'm curious, let's just posit that the technology will continue to advance and that AI will get a foothold and will do something

and then eventually more and eventually more. I'm curious, Mark, if you think, is that enough where AI is doing some large fraction of the work to really shift this cost curve? Or is there more than just a technology that's required as part of the solution? We actually do have a clear example of this happening in the area of medical treatment. And that example is laser eye surgery, right? Basically, laser eye surgery, which basically literally will fix your eyes so you don't need glasses anymore. It's the kind of medical procedure that if you described it from somebody from 1950, they think you'd lost your mind.

It's literally beaming lasers onto the surface of somebody's eye to change the shape of the eye. In your mall. Yeah, in a mall, right? Quite possibly right there in the front window, right? And so it's an amazingly technologically advanced procedure. It's actually gotten even more technologically advanced over the last 20 or 25. years. There was a point when you had to like try to hold really still because like laser needs to hit the right part of the eye and now they've got all this advanced like 3D cartographic

mapping where the laser follows your eye movement in real time. And so it's become this incredibly technically sophisticated kind of thing. And while that's been happening, the price has been dropping. And in fact, the reason why Lasic outlets are in the mall is because they can afford to be, right? It's actually become quite inexpensive to set up a Lasic operation and it's actually quite inexpensive to get Lasic. This is the kind of thing where it's like this procedure as a technological feat like not more advanced than heart surgery. It's not more advanced than certain forms of even I would speculate brain surgery. This is advanced stuff.

And yet this thing is on a quality improvement and cost reduction curve, completely unlike any other surgical procedure. And then you kind of say, well, why is that? And of course, the reason is because it's paid out of pocket. Right? So it doesn't run through the insurance system. It's not something that other people pay for. It's not something that has any politics around it.

It's an outpatient procedure. And it's voluntary. And if you don't get it, by the way, then you get glasses. And if you do get it, then you don't need any glasses. And so as a consumer, you can actually make it. make the trade off of like is it worth to spend whatever 1500 bucks for this surgery as opposed to spending you know 200 bucks for glasses every few years what if we could basically re-engineer our whole approach to how we think about all this stuff and you know we can't like literally do that

because like consumers might be in a position to decide whether they need eye surgery and how that should work maybe they're not quite in the same position to understand what it means to have quadruable bypass and then there's also like it's an outpatient procedure inpatient procedures are a lot more expensive have you know lots of care requirements but nevertheless it's like okay there's like a shining beacon for what's possible. So there's that. There's also this big definitional question in my mind, which is like, what is health care?

And we tend to think that health care is like a discrete thing, and the politics are kind of all calibrated around that. And so the big political arguments are always about, do you have health care or do you not have health care, as if you're saying like, I don't know, do you have a shirt or do you not have a shirt, right? But that's not really what it is. The definition of what it means to have health care keeps expanding, right?

It is sort of the number of things that people consider to be conditions that they want treated and the number of things that are actually treatable keep expanding. And then there's this whole other debate of inputs versus outputs, which is how are we measuring healthcare? Are we measuring it by how much it costs and all of the things that go into it and all the procedures? Or are we measuring it in terms of outcomes and literally things like health and longevity, right, and sort of physical vitality. And you really start to have different views on basically what it is we're all paying for, what value we're getting for it.

and then by extension, what shape and form health care will have in the future, where it could end up being very radically different. I'll just give a thumbnail sketch for how health care could be radically different in the future. It may be that all the medical procedures, surgical procedures get basically automated and become very cheap, but it may be that we end up spending more health care than ever because health care basically turns into advanced therapy. And so instead of the physical, it may turn out to be the physical issues are the easy and cheap ones to deal with, and it may turn out the psychological and sociological issues are the complex and painful ones to deal with. And so maybe the job in the future of, you know, doctor and therapist merges, and we end up with this very different type of profession that's really oriented around helping people optimize their entire life.

And then it's like, oh, yeah, every now and then you need to go get a little laser surgery, but that's like not the major part of the spending. And then as a consequence, like maybe doctors, you know, 20 or 50 or 100 years from now are paid a lot more because they're actually a lot more valued in our lives despite the fact that so much of the work that they do today has been automated. Yeah, that they become the focal point for all that automation and keeping the human element. I mean, your point about inputs and outputs, I think, is super important because if you compare to other areas where by the most cost disease exists, like education, that also seems to be very much measured more by inputs than outputs. People ask, oh, did this school get as much money per student as that school? Not how well did the students do. So the crack in the matrix that makes you really wonder about education as a service, as a product, or whatever, is something called

the sheepskin effect. And so basically, you assume that, you know, you go to school for, you know, eight semesters, you know, four years, you come out the other end, you get a job, unless the job pays you, whatever, you know, $80,000. So then apply the following thought experiment, which is what happens to that income once you're out of college? What happens to your rate of income if you only complete seven out of the eight semesters? Logically, you would think, well, if the value of the education is all the stuff that they're teaching me, then I'm going to get seven-eighths of the wage, and I'm going to be making

$70,000 instead of $80,000, right, or whatever that correction is. Of course, that's not what happens. What actually happens is if you only complete seven semesters out of eight, you're going get paid $40,000, right? Because you're going to be a college dropout instead of a college graduate. And you get paid basically what you would have if you didn't go to college. If you didn't go to college, exactly right. And so that's the sheepskin effect. There's two possible explanations for the sheepskin effect. One is all the actual skills are taught to you in that last semester. That's one possibility, but like we know that's not true. And so the other

explanation is college actually, it does not have that much to do with the skills that are being taught. It's something else. It's basically a stamp of approval that says you can execute a task all the way to completion. The education may be somewhat beside the point. It may just simply be the fact you demonstrated you can get through a program. The health care crack in the matrix to me is the fact that it used to be the medical conditions that matter were things that just happened to us that we had no control over. You'd be in a factory in your arm to get cut off or you would just die and you had no control over it. So many of the medical conditions that we're dealing with today as individuals and societally are as a consequence are downstream of behavior.

Yes. Obesity is the big one, right? It's like obesity is cross-linked to all these issues, including heart disease and strokes and cancer and like everything. Massive comorbidities all over the place. All over the place. And so the most effective form of health care is don't eat bad foods and then exercise every day, right? And then if you're going to drink, like only drink a little bit. And by the way, don't smoke, quote unquote, the health care system as we understand it, it's that people, by the time you show up, having had a heart attack or whatever,

you have 30 years of basically bad behavioral characteristics leading up to that. What does it say about us that we treat the health care system is basically the last-ditch attempt to keep us from dying after we've basically spent our life behaving very poorly? And that goes back to this idea of the doctor becoming the therapist. The answer to the actual health outcomes is upstream of what's happening in the health care system. And it goes to the bigger issue for what you asked about, which was what is health care? Because there is this kind of a mind-blowing article that came out that talked about the reasons for death. Right.

And what healthcare deals with is a relatively small sliver of the pie compared to genetics and social determinants. And social determinants being the biggest pie piece, 40%. If your spouse smokes, you're probably going to smoke. or are you going a lot of secondhand smoke. If your spouse is overweight, you'll probably be overweight. If your friends drink heavily, you're going to drink heavily. That the social determinants around you have a bigger impact on health care. And actually we're starting to see now when that finally healthcare companies are going full stack.

You're seeing payer providers thinking about an air conditioner as therapy or as a therapeutic because that actually has a greater chance of decreasing mortality or decreasing the chance of going to hospital. If you're living in Florida, for example, than other things. And so I think that's really kind of a key point that we need to sort of think about. And it goes to the market. And part of the challenge here is that healthcare itself is this kind of artificial market that's created by the government where certain things are health care, certain things aren't health care.

We're seeing Medicare Advantage and other things that allow you to go full stack affecting this. But part of maybe now that after we get the technology in, it seems like there is no choice but to really revisit what is health care. And it's like, okay, then how do we think about paying for this? What are we paying for? right what are we getting for what we're paying for and then of course like who's paying for it yeah and you know i would just like propose when you have a system that's one sixth of the GDP in which like a gigantic amount of the adverse outcomes are being caused by people's basically

behavior or social context and most people's health care is being paid for at least in part or potentially entirely by other people and where consumers basically surrender to the system and don't feel like they have any choice whatsoever and don't exercise any choice and then you have a system as a consequence that's like so heavily regulated and subsidized by the government You could actually say it's a minor miracle that it works as well as it does. We've basically just designed the worst possible economic configuration for an industry. Well, and it's funny because some of these things are hidden, almost like the germ hypothesis where people didn't realize there were germs.

That was really the hidden danger that we weren't doing. And really sanitation is the way to fix things. It could be that eating healthy and avoiding type 2 diabetes is the new sanitation. The AMA feels that they have a new initiative that nobody in America should die from type 2 diabetes. And if you think about it logically, that makes total sense. Just like no one in America hopefully died from issues from sanitation the way we would maybe 200 years ago. I think maybe now it's suggested even now when we have the technology, the question is how can we go from where we are now to this direction that we're talking about? Yeah, so the positive view, there was an exoner economist, Herbert Stein, who had this famous thing when you talked about these issues.

He said, if something can't go on forever, it will stop. And so maybe contrary to what I said earlier, that there are no limits on how far this can go, healthcare being a sixth of GDP, becoming a third, becoming a half. At some point it becomes the most important issue in the world and people just not be willing to put up with it. Maybe just the pain, like the economic and political pain just gets like simply too intense. And then you start to realize you have to kind of unwind yourself from some of these assumptions. But I think honestly, the other thing is just more things like LASIC, more things where we can actually demonstrate what happens when technology kind of hits in the positive way. what technology does, right? Dramatic boost to productivity growth, which means dramatic improvements

and quality combined with dramatic decreases in cost. The optimistic view there would just be like, as consumers, we are getting trained to basically be able to like comparison shop and evaluate and get like ratings or reviews on everything in our life. Literally everything, almost anything you choose to do, whatever restaurant, you know, you go on Yelp or even these days, you know, online dating. You're used to a level of kind of consumer choice and selection and quality control and decision making. If you go like buying a new car or something, it's just like the wealth. of data that's available to you, it's extraordinarily unlikely that you're going to buy a new car these days and be disappointed just because you're going to know everything ahead of time

and you're going to figure out how to get the best possible deal for exactly the car that you want. I think the other part of the supply-driven, which is just like we need to actually drive more technologically superior approaches into the market and like make them available and make them obvious. Like the pair provider model you mentioned, just align with the people who actually want to improve outcomes and just kind of demonstrate the new way. Yeah. It would be a little bit as if we had only ever had state-controlled media or something. And then all of a sudden, somebody kind of had the crazy idea to like maybe actually start making movies in the private sector.

And then it just turned out that those movies were a thousand times better. At some point, we just may need to make the new movies. Yeah. And also, what you're describing is both full stack health care on the enterprise side, which your employer will have, but also direct to consumer health care. And that we're probably going to start to generalize that. We may start to view Peloton and Peloton-ish things as direct-to-consumer health care. I think part of the challenge is that, and this is true for diet and other aspects of health care, are so tailored to the individual that it's been so hard.

And nutrition, we could do a whole podcast restaurant nutrition and the sort of mess that is. But I think now with all that you can measure, even to the point where you could have like a continuous glucose monitor on you and measuring that every minute and having that tell you should eat, how you should exercise. As we move into that, sort of something in between Lazyc and Palaton will start to emerge, where maybe it's not surgery in your eye at your house, but things that are much more clinical and that are getting to these social determinants, getting to our exercise, getting to diabetes, and all of its morbidities, getting to diet. You could deal with several of the top

killers. That at least would be such a fundamental transition and would be the type of thing that could bend the curve that we're talking about. A lot of what you just described can actually be done today. It is actually fairly amazing what you can have. Like as a consumer today, just to go through the list, these fitness trackers have gotten really good, whether it's the Apple Watch or the Fitbit or whatever. They're not doing, you know, pulse or doing blood pressure. They're doing kind of comprehensive health state tracking, they're doing sleep tracking. So you've got all the sensor platform kind of in that thing. You've got the sensor platform on the phone. You can't do laser eye surgery in the house, but people should be able to do eye exams, right, because you basically now have medical grade

visual sensors in the camera. And then you've got a continuous glucose monitor kind of thing. And then on your phone, you can have the fitness app that basically tells you what to do to stay fit. You can have the food app that basically helps you figure out what to eat. You can track every aspect of your behavior. You could track alcohol consumption or whatever other recreational, whatever. And you can aggregate all this data up. And there's like tons and tons of apps on the phone now that will basically do all this for you. Now, you know, the people doing this today are like the hyper-conscientious types that are super into optimizing every part of their existence. It's only some small sliver of the population that will voluntarily do this. You can just imagine

a mandate, right, where for people to get, quote-unquote, healthcare coverage or health care insurance at some point, you know, they have to kind of sign up for a better kind of personal behavioral regime, and they might use these technologies to support that. Or, by the way, you can imagine the voluntary version of it. One of the sort of consequences of health care being so expensive right now is this incredible rise in the individual deductible. It might be the deductible for you just like laying around eating Cheetos and smoking pot is, you know, $1,500 or $4,000 or whatever. But the deductible for you with a healthy lifestyle is $200. And then you've got like, you know, the so-called good driver discount that they do for car insurance.

And so then you have this sort of behavioral kind of push to be able to directly save money. And that's an enticing idea because that aligns the interest of the consumer right with the interest of the system and kind of maybe could throw things back into some kind of calibration. Yeah, you think about all the parts you just talked about. you can get this to be more consumer-driven in a market-like way. Take your previous example of the string quartet that's in your pocket with Spotify. Now you have your doctor quartet or orchestra in your pocket with you all the time, giving you a cure that you need.

We have the motivations. We have the technology. And actually, we have the startups building it. The optimist to me sounds like this is going to happen and this is happening, but we just have to sort of get all the pieces together to make it happen. So I have forced myself to watch some cable television for the first time in a long time over this election. So I've actually seen some TV commercials for the first time of the year. By far the best part of the election coverage was the meditation app, Calm.com.

And actually their commercials actually are quite nice because it's just literally like 30 seconds of rainforest sounds. There was also this company called Pray.com, which is an app to help you pray. Like if you're religious, it's got Bible study and guided prayer sessions and stuff like that. But at first I was like, okay, that's a weird juxtaposition. Then I was like, oh, no, I get it. Calm is basically selling secular prayer, right? Or pray.com is selling religious meditation. Exactly.

Which actually bears on health, right? Because a huge driver of modern health conditions is basically stress and inflammation. And like there are physical components to that, but there's also a medical, psychological, psychological component to that. And so if people are able to actually deal with stress in their lives, that could actually, like, you know, affect some of these things.

It affects things like the rate of heart attacks. It could also affect things like stress eating, which then, you know, absolutely lead to obesity. It may be that the upstream apps that are like the key health care apps that we actually need on all of our phones are take your pit calm.com or pray.com. You could hire a pastor or preacher or a priest to come to your house and pray with you or whatever, advanced meditation, Zen Buddhist meditation, but it's going to be a lot cheaper if it's an app in your

pocket. Yeah, there just probably aren't enough to go around. The serious part of this is what technology should do is it should empower us, right? It should basically give us capabilities and it should give us reinforcement and expansion of our capabilities and help and assistance in ways that make our lives directly better. And I think there is very big reason for optimism that there's sort of this complete set of ways that we can actually improve our lives that the technology can really help us with. Yeah, absolutely. Amen. Thanks so much for joining us on BioEats World. If you'd like to hear more about all the ways biology is technology, please go subscribe to the A16Z Biolnsletter at a16Z.com slash newsletter. And of course, subscribe to BioEats World anywhere you listen to podcasts.