Latest / Becker’s Healthcare Podcast / AI, Healthcare Innovation and the Future of Care with Jay Rughani

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AI, Healthcare Innovation and the Future of Care with Jay Rughani · Becker’s Healthcare Podcast

0:00
- This is Scott Becker with a special episode
0:03
- of the Becker's health care and Becker private
0:05
- equity in business podcast.
0:07
- We're thrilled today to be joined by a
0:09
- brilliant leader and investor in health care. We're
0:12
- joined today by Jay Lugani,
0:15
- and Jason investing partner in Tricia Horowitz. And
0:18
- Tricia Horowitz, of course, is is probably amongst,
0:21
- if not the best known
0:23
- venture capital fund in the world and and
0:26
- and a real leader in investing in health
0:28
- care and life sciences,
0:30
- founded by brilliant people. Jay's an investing partner
0:32
- there. He's gonna talk to us about
0:35
- health care, about founders, the areas he's interested
0:37
- in, and a lot more.
0:39
- Jay, can you take a moment and tell
0:41
- us a little bit about your background
0:43
- and how you ended up I think you've
0:45
- been there for seven, eight years now. How
0:47
- you ended up in in the world of
0:48
- venture capital and investing in health care?
0:51
- Sure. Well, Scott, thanks for having me.
0:54
- I've been privileged
0:56
- to be part of the team here at
0:58
- a sixteen c for the last eight years,
1:00
- investing
1:01
- in
1:02
- new technology companies
1:04
- across the life sciences through health care delivery
1:08
- value chain.
1:09
- And I've been in health care my whole
1:10
- career. I've worked with large health care providers,
1:14
- payers, pharma companies,
1:16
- pharmacies,
1:18
- through in a in a consulting capacity.
1:21
- And I've been on the startup side most
1:23
- recently at Flatiron Health in the cancer care
1:26
- space.
1:27
- And what I love doing more than anything
1:30
- else is working with
1:33
- entrepreneurs
1:34
- who are ambitious
1:36
- and see problems
1:38
- in our
1:39
- wonderful but
1:41
- often disjointed health care system
1:43
- and wanna make a difference
1:45
- with their company. And so that's what I
1:47
- do every day.
1:48
- And and and talk about from an from
1:50
- a
1:51
- perspective of looking at founders, looking at areas,
1:55
- is it
1:56
- opportunistic
1:58
- based on
1:59
- great founders, entrepreneurs that come to you or
2:01
- that you're looking at, or is it more
2:04
- thematic where you decide,
2:06
- you know, hey. We really are interested in
2:08
- this area, So when we wanna find the
2:10
- right people to back in that area, how
2:13
- much is opportunistic
2:14
- versus thematic in finding the right founders and
2:17
- entrepreneurs to work with?
2:19
- It it's both. The lens
2:21
- with which I operate is I think about
2:24
- myself as a professional student,
2:27
- and I'm constantly
2:29
- studying what's happening
2:31
- in the market,
2:32
- what are the big problems
2:34
- that,
2:35
- large enterprises or consumers
2:37
- are facing with regards to health care. I'm
2:40
- speaking with entrepreneurs,
2:42
- with,
2:43
- executives across companies,
2:45
- academics, etcetera,
2:47
- trying to figure out what's happening.
2:49
- And that can inform
2:51
- a market view on,
2:53
- where the opportunities are.
2:55
- And then as part of that process and
2:57
- that practice,
2:58
- I am frequently meeting entrepreneurs
3:01
- who,
3:03
- see the similar problems or different problems
3:06
- and have a clever solution to to solve
3:09
- that.
3:09
- And it's a little bit of
3:12
- there is a structured process,
3:14
- but in many ways, it's like when lightning
3:16
- strikes. You kinda just know it when you
3:18
- see it. And,
3:20
- I've been fortunate to feel that several times
3:22
- with the entrepreneurs that I partnered with,
3:25
- and,
3:26
- and it's a beautiful thing.
3:28
- Thank you. And and and we get a
3:30
- chance to see
3:32
- some of the brilliant entrepreneurs that you work
3:34
- with. And I I wanna make sure you're
3:36
- comfortable at any time throughout this discussion.
3:39
- Feel free, if it makes sense, you know,
3:41
- without
3:43
- you know, to to to mention by names
3:45
- entrepreneurs or companies that you're working with and
3:47
- traditionally work with, no pressure to do so,
3:49
- but always feel free to as well.
3:52
- There's currently
3:53
- so much excitement around artificial intelligence
3:57
- in health care.
3:58
- I know you've backed several companies, and and
4:01
- it seems like everybody today has some part
4:02
- of an AI theme in health care.
4:05
- Where do you think AI
4:07
- is is likely to have the biggest use
4:10
- cases in health care, the biggest impact
4:12
- impact. Where do you source sort of see
4:15
- that? Where is it we're seeing cascading use
4:16
- cases. Obviously, ambient listening is taken off. Predictive
4:21
- analytics
4:22
- is growing greatly.
4:24
- Where do you see some of the use
4:25
- cases that will really take off and have
4:27
- a big impact on the health care ecosystem?
4:30
- Yeah. I think the biggest opportunity
4:33
- in health care is what I call infinite
4:35
- health care. It's this idea that we can
4:39
- use AI
4:40
- to turn health care and the delivery of
4:43
- health care from a scarce,
4:45
- episodic
4:46
- service
4:47
- into a more
4:49
- abundant,
4:50
- continuous,
4:51
- and always available,
4:54
- service.
4:55
- Today,
4:57
- the system that we have
5:00
- is amazing in many ways,
5:03
- but is rate limited by clinician time. That
5:06
- is a structural constraint
5:08
- in a country that already spends
5:11
- 5.3
5:13
- a year on health care.
5:15
- And
5:16
- I saw an estimate recently
5:19
- forecasting
5:21
- us being short a few 100,000 clinicians at
5:23
- least over the next decade. So
5:26
- there's seemingly endless demand for services
5:31
- that can
5:32
- help us stay healthy or get us back
5:35
- to being healthy,
5:37
- and yet we're dramatically supply constrained.
5:40
- And so the opportunity
5:42
- for AI
5:44
- and what some of these medical intelligence
5:46
- applications
5:47
- are doing is to dramatically increase the supply
5:51
- of
5:52
- of care that we can that we have
5:54
- available to offer.
5:56
- And
5:57
- I think you mentioned that there are there's
5:59
- a lot of talk around
6:02
- AI tools that increase
6:05
- the,
6:06
- that reduce the administrative burden
6:08
- and can make a
6:10
- health care,
6:12
- practitioner incrementally more efficient. And all of that
6:15
- is important as well.
6:16
- But what I'm most excited about over the
6:19
- the next three to five years
6:21
- is to make entirely new categories of service
6:25
- economically practical.
6:27
- So providing always on guidance to every patient
6:31
- twenty four seven for the rest of their
6:33
- life.
6:34
- But it seems like you're seeing more and
6:36
- more that evolution where more and more the
6:38
- cure that we used to get
6:41
- is now being done in different ways
6:43
- outside of traditional health systems,
6:46
- outside of traditional physicians' offices
6:49
- aided by artificial intelligence for for sure.
6:53
- Where do you see sort of this this
6:55
- concept of
6:56
- consumers
6:57
- getting more and more of their care
6:59
- outside of traditional insurance, outside of traditional sort
7:02
- of the traditional systems. I mean, I see
7:04
- right now GLPs, for example,
7:06
- not so much the therapeutic value of GLP
7:09
- ones. I won't comment on that one way
7:11
- or the other, but the fact that thirty
7:13
- million people are now getting those outside of
7:15
- the traditional health system
7:17
- is an eye opening who moved our cheese
7:19
- type of movement in health care that so
7:21
- much of that would have been done a
7:22
- couple years ago through your traditional doctor's office
7:24
- through the health system. Now thirty one million
7:26
- people or more are on them, and most
7:28
- of them are getting them outside of the
7:29
- traditional health system. Where do you see consumers?
7:32
- And and it's led to cheaper, quicker, more
7:35
- efficient GLP one use.
7:37
- Where do you see consumers
7:39
- increasingly going outside of traditional health care or
7:42
- traditional insurance? Where do you see some of
7:44
- that consumer
7:45
- sort of abundant health care concept infinite health
7:47
- care concept that you're talking about? Where is
7:49
- that evolving?
7:50
- Yeah.
7:51
- Look. I think when I think that I
7:53
- boiled down this problem to a fundamental supply
7:57
- demand mismatch.
7:58
- And
7:59
- when the when the mismatch is so severe,
8:03
- then
8:04
- the exhaust of consumer demand shoots off in
8:06
- other places. So the fact that consumers
8:09
- are
8:10
- are spending more out of pocket to get
8:13
- their medications
8:15
- is,
8:16
- a result of,
8:19
- some flaws in our system around access.
8:22
- The fact that
8:24
- individuals
8:25
- are increasingly,
8:27
- at least this year relative to the last
8:28
- few years, increasingly
8:30
- defecting from insurance
8:32
- and going through going without insurance, the uninsured
8:35
- rate actually went up, is a result
8:38
- of people being frustrated
8:39
- by
8:41
- the
8:42
- the gaps in their health insurance. I mean,
8:44
- premiums are going
8:46
- up,
8:47
- and folks are feeling like they're getting less.
8:50
- I mean, the average employer family premium, I
8:52
- think I saw this recently, was nearly $27,000
8:55
- this year,
8:56
- or excuse me, in 2025.
8:59
- And
9:00
- and yet people are still feeling like they're
9:02
- not getting
9:03
- help in managing their health proactively
9:07
- the way that they they would want. And,
9:09
- you know, I think the the latest statistic
9:11
- is over 500,000,000,000
9:13
- of the 5,000,000,000,000 that we spend on health
9:15
- care is paid out of pocket.
9:17
- And so
9:19
- what what I'm most interested in, to answer
9:21
- your question,
9:22
- is, well, where can AI
9:25
- bridge the gap
9:26
- to get people
9:28
- the care that they want
9:30
- and as much as they want of it,
9:33
- whenever they need it at a at
9:35
- a at a price point that doesn't break
9:37
- the bank.
9:39
- And I love that. And, anecdotally,
9:41
- just even you know, one of the beauties
9:43
- of health care is every single one of
9:44
- us is consumers, and I love your perspective
9:47
- too
9:48
- that you see a lot of stuff out
9:49
- there just by being out there and talking
9:51
- to so many people.
9:52
- But but even for our family, you know,
9:54
- before we go to the urgent care over
9:57
- Christmas, we check on Chi ChiPT what we
9:59
- think is wrong with us. And we go
10:00
- to the urgent care, and and the Chi
10:02
- ChiPT is ninety eight percent, if not a
10:04
- 100% correct, you know, we still need the
10:06
- nurse practitioner PA to help us through it.
10:09
- But that cost of that whole episode
10:11
- went down dramatically
10:12
- because of the combination of chi at g
10:14
- p t and urgent care and the MP
10:16
- versus doing it a different way. And it's
10:18
- sort of another example sort of the abundance
10:20
- or access to health care that comes from
10:22
- this mix of the Internet plus people or
10:24
- AI plus people.
10:27
- Jay, when you look at
10:29
- you see companies
10:31
- that end up being
10:33
- incredibly successful,
10:35
- taking it from, you know,
10:37
- zero to a 100, you know, or as
10:39
- Peter Thiel would say, zero to one. But
10:41
- but talk about when you see companies that
10:43
- Andreessen Horowitz and obviously Marc Andreessen, one of
10:46
- the brightest guys in the world,
10:49
- and and Ben Horowitz, talk a little bit
10:51
- about
10:52
- what what what do you see as the
10:53
- differences sometimes in some of these health care
10:56
- companies
10:57
- that really end up having a big impact
11:00
- and and really becoming successful and having that
11:03
- impact.
11:04
- What is the
11:05
- it's not a secret sauce, but what are
11:07
- some of the things you see in your
11:08
- entrepreneurs, your founders, the companies
11:10
- that really end up having a serious impact
11:13
- that goes right, that they're doing right?
11:16
- Yeah.
11:17
- This is this is the age old question,
11:20
- in terms
11:22
- of what makes innovation happen. Is it more
11:24
- art, or is it more science?
11:26
- And
11:28
- my experience has been,
11:30
- perhaps
11:30
- unsatisfyingly
11:32
- that it's a bit of both. And so
11:35
- what we
11:36
- do as a firm each year is see
11:40
- we're in a privileged position where we see
11:43
- thousands and thousands of companies
11:45
- every year, and we only invest in a
11:47
- handful.
11:49
- And what
11:50
- we typically,
11:52
- find is that those
11:55
- companies,
11:57
- and founders have
11:59
- a
12:00
- very particular set of skills and experiences that
12:03
- make it possible for them to do something
12:06
- unnatural. So let me first explain what I
12:08
- mean by natural.
12:09
- The idea that you're gonna get a few
12:12
- people together, raise a little bit of money,
12:14
- and compete with
12:16
- well entrenched incumbents
12:18
- that have billions of dollars of capital and
12:21
- resources and customers
12:23
- deployed across many states
12:25
- or regions
12:27
- and beat them at their own game is
12:28
- a little bit of an insane proposition when
12:30
- you think about it. And yet, time and
12:32
- time again, you see new innovation not happen
12:36
- within the four walls of the large incumbent
12:39
- enterprise, but it happens on the fringe.
12:41
- And so,
12:43
- so what what is the way in which,
12:46
- that happens?
12:48
- It's typically you know, one of my partners,
12:50
- Alex Rampel, always says, you know, the the
12:52
- best founders can materialize labor, capital, and customers.
12:56
- And so what we're typically looking for is
12:59
- entrepreneurs
13:00
- that have a brilliant,
13:02
- unique insight on the market
13:04
- and then can literally materialize
13:07
- the team,
13:08
- the resources,
13:10
- and the customers to to take a shot
13:13
- on them.
13:14
- And,
13:15
- you know, you Scott, you've met a number
13:17
- of entrepreneurs in our portfolio, whether it's Muthu
13:20
- of Council or Shiv of Abridge
13:23
- or,
13:24
- Chavi of Prosper AI. These are entrepreneurs
13:27
- that
13:28
- are
13:29
- operating in
13:32
- relatively competitive spaces with a lot of other
13:35
- potential options and
13:37
- and and,
13:39
- and attempts being made. And yet, when you
13:43
- spend time with them, you can see that
13:44
- they have a unique insight on the market,
13:46
- and they've,
13:48
- they've rallied
13:50
- a very large number of people and capital
13:54
- motivated,
13:55
- to to work on this idea.
13:58
- And it's a little bit of you know
13:59
- it when you see it,
14:01
- but but those are those are basically the
14:03
- three things that we really look for
14:06
- for an entrepreneur.
14:07
- Sure. No. And you look at people like
14:10
- Shiv, doctor Rao,
14:11
- who is both a kind kind person and
14:14
- a force of nature and combines those different
14:17
- skill sets of being kind,
14:19
- deeply engaged, and a force of nature, and,
14:21
- obviously,
14:23
- incredibly bright at a different level and has
14:25
- the ability to connect with people. It is
14:27
- it is really you know, people use that
14:29
- term unicorn
14:30
- so broadly today,
14:32
- but you see this package of skill sets
14:34
- in some of these people that that's unique
14:36
- in both the ability to build teams and
14:39
- and convey partnerships and align
14:42
- and communicate what they're doing, you know, combined
14:44
- with the the you know, an an incredible
14:47
- will and and determination.
14:49
- I I I think that's fascinating.
14:51
- Jay, when you look at the next year,
14:53
- the next couple years,
14:55
- you see so many interesting things.
14:57
- What are you most focused on and excited
14:59
- about? When when you look at stuff, what
15:00
- gets you up in the morning? What makes
15:02
- you so excited? What what are you most
15:03
- focused and excited about the next six months
15:05
- to a year or two? So, Scott, you
15:07
- alluded to this earlier, which is you mentioned
15:09
- your family,
15:10
- will often,
15:11
- if you have a medical concern, you might
15:13
- ask Chachibuty or Claude,
15:16
- a simple question and
15:18
- and get an amazing answer. And the performance
15:21
- of these large language models on medical tasks
15:24
- is nothing short of amazing.
15:26
- The distinction that I would draw is that
15:29
- there's going to be a set of of,
15:32
- comp or the distinction I would draw is
15:34
- there is a difference that will become increasingly
15:37
- clear over the next couple years
15:39
- between medical information
15:42
- and medical care.
15:43
- For medical information, let's say a consumer has
15:46
- a health concern or some sort of query
15:47
- that they wanna make.
15:49
- ChatGPT
15:50
- and Claude
15:52
- are already deliver
15:54
- medical information better, faster, and cheaper every month
15:57
- than,
15:58
- most other alternatives.
16:00
- And if you've got,
16:03
- if that medical,
16:05
- if the answer that the alum gives you
16:08
- gives you resolution,
16:10
- you've solved your problem, you know what you
16:11
- need to know, they're gonna be increasingly good
16:14
- at that.
16:15
- However,
16:16
- if the patient requires follow-up care,
16:19
- needs to go get a lab draw,
16:21
- needs to go get a prescription medication,
16:24
- needs to go see a specialist, needs to
16:26
- go to the hospital,
16:28
- what then happens is patients what you know,
16:30
- enter what I call the maze. It's the
16:32
- maze of The US health care system.
16:35
- And for those, what I would expect us
16:37
- to see is
16:39
- a set of AI doctor applications
16:42
- that offer both the best of medical intelligence
16:44
- and human care in one. The way that
16:47
- I think about it is like the best
16:48
- quote, unquote AI doctor will give you care
16:51
- and get you care. It'll be your care
16:53
- concierge.
16:54
- On one hand, it'll be infinitely knowledgeable, patient,
16:57
- and personalized to you. It'll give you rapid
17:00
- answers
17:02
- grounded in the world's medical literature
17:04
- to any question you might have, but it
17:06
- will also proactively
17:07
- help you live your healthiest and happiest life.
17:10
- It will get you care. It will schedule
17:12
- that important appointment for you. It'll process that
17:15
- prior authorization for you. It will write that
17:18
- appeal letter for you, and it'll get you
17:20
- to the right site of service.
17:22
- And so what what I think we as
17:24
- consumers can look forward to over the next
17:25
- few years
17:26
- is each one of us having
17:29
- an AI doctor care concierge
17:31
- in our pocket
17:33
- that can offer both medical information
17:36
- and actually get us licensed medical care, loop
17:39
- in a human physician
17:41
- at the moments that that that is warranted,
17:44
- and get us to the right in person
17:46
- care
17:46
- that we need
17:48
- without the friction and morass that we all,
17:52
- often experience
17:54
- and sometimes feel is by design
17:56
- when we're navigating the health care system.
18:00
- I think that divide
18:01
- between medical information and medical care
18:04
- is that next big bridge.
18:07
- And I I love that observation from you.
18:09
- And and we had this discussion earlier today
18:11
- on a podcast with a physician leader at
18:13
- Mount Sinai.
18:14
- We talked about
18:16
- how advanced
18:17
- AI is for screening and so forth
18:20
- and how that next bridge is AI for
18:22
- therapeutics and actually taking care of the patient.
18:25
- And so what you're saying resonates so well
18:28
- with some of the other things that we
18:29
- that we hear. And I think that's that
18:31
- next bridge because you talk about necessity.
18:34
- We're so short. Certain types of providers in
18:37
- the country, I see it particularly in the
18:38
- subspecialty
18:39
- area,
18:40
- You know, 27,000
18:42
- oncologists versus 2,000,000 diagnoses a year. We see
18:45
- so much of those shortages, and it would
18:47
- could bridge that gap
18:49
- from screening
18:51
- medical information to medical care with
18:55
- with people, with with oncologists,
18:57
- with doctors,
18:58
- then we'll really have made a huge, huge
19:00
- stride in this abundance mentality or having the,
19:04
- you know, the need that the the amount
19:06
- of supply we need to take care of
19:07
- the demand there is.
19:10
- Yeah. Exact that's exactly right. And, you know,
19:12
- it's the the
19:13
- I think analogies are always fun. And when
19:15
- we take analogies from other industries,
19:18
- they don't always perfectly translate. Health care is
19:21
- unique. It has its own complexity.
19:23
- But I think analogies also help us build
19:25
- some intuition
19:27
- on what to expect and how it might
19:29
- play out. You know, I love the quote
19:30
- that history
19:31
- never repeats itself, but it rhymes. You know,
19:34
- one analogy is the is the music industry,
19:37
- and I like to think that we'll consume
19:39
- medical care like music,
19:41
- in the future.
19:42
- And what I mean by that is,
19:45
- you know, if you study the the music
19:47
- industry,
19:48
- over the last several decades,
19:50
- we basically went from $15
19:53
- for a song to buy that album
19:55
- to $15 for every song in the world.
19:58
- And,
20:00
- we spend a lot today in 2025
20:02
- relative to 2020, we spend way less
20:05
- on physical records, physical CDs, physical albums.
20:08
- But we spend, but we the we spend
20:11
- a lot, and what we the most of
20:13
- what we spend on is on streaming,
20:16
- is on streaming services like Spotify and Apple
20:19
- Music, etcetera.
20:20
- And,
20:21
- I wonder if that I I I like
20:23
- to think about how that analogy
20:25
- translates to
20:27
- how we'll consume
20:28
- digital medical care where I expect a lot
20:31
- of people will
20:33
- consume a lot more care medical care. They'll
20:35
- get a they'll have a lot more questions
20:38
- answered,
20:39
- and they'll they'll receive a lot more proactive
20:41
- engagement from their physician plus AI care team.
20:46
- And that will be
20:47
- overall deflationary.
20:49
- It won't actually bankrupt us because it will
20:51
- help us avoid the bad expensive stuff. You
20:54
- know?
20:55
- Sixty to seventy percent of Americans
20:57
- are suffering in some way from the chronic
20:59
- disease epidemic. I was reading a Wall Street
21:01
- Journal article about this. Many of those conditions,
21:05
- diabetes,
21:06
- obesity, hypertension
21:08
- could be avoidable
21:09
- with,
21:11
- with with,
21:12
- you know, with different lifestyle factors and and
21:14
- other sort of preventative health care. So it's
21:17
- within our grasp to avoid the bad expensive
21:19
- stuff that drives up the cost of our
21:21
- system.
21:22
- And I think the solution to that is
21:24
- not
21:25
- restricting access
21:27
- and rationing,
21:29
- our scarce health care resources and service capacity
21:32
- more, but rather making it enabled with AI
21:36
- more available.
21:37
- And overall, we'll be able we'll get more
21:39
- and we'll spend less.
21:41
- Jay, we'll close with that. I think that
21:43
- is such an exciting and positive vision. And
21:46
- we do see in this challenging situation we're
21:48
- taking care of in this country, 350,000,000
21:50
- people. We've got a great health system, but
21:53
- there's gaps and we're challenged. But we do
21:55
- see some of these positive thoughts and trends
21:57
- starting to play out. We see them in
21:59
- different ways. We we love your take on
22:01
- it. We love what you folks do. Again,
22:04
- Jay Rugani from Andreessen Horowitz,
22:06
- brilliant investing partner.
22:08
- Jay, thank you so much for joining us
22:10
- today on this special episode of the Becker's
22:12
- health care and the Becker private equity and
22:14
- business podcast. Thank you very much. Thanks for
22:16
- having me, Scott.