We have this interesting shift in culture to
the entrepreneur is the rock star of the 1980s,
seventies, whatever, but similar to being a rock
star. They don't see sleeping on tour buses for
however many days out of the year playing in
crappy dive bars and getting $4 in tips. They
see Aerosmith, whatever, on stage. Taylor Swift,
on stage. And they see the outcome, not the struggle.
Maybe this is the worst forum to say this on,
but I low -key kind of hate AI. And don't get
me wrong, I still retain my misgivings and suspicions
about large health systems owning private jets
and having bank accounts in the Caymans with
hundreds of millions of dollars. Thanks so much
for joining us today, Preston. Thanks for having
me. I'm excited to be here. For our audience
who might not have heard of you, could you give
us an intro? Yeah, absolutely. Which I'm sure
is most of, if not all of your audience, very
unhearable. So I'll start not too terribly long
ago, but maybe in the college years, as it were,
as we sort of end up starting in our education.
So I went to... University of Colorado in Boulder.
Interestingly, or maybe not, just because I didn't
get into very many colleges and came down to
two options. One was to be in Vermont and be
cold 78 % of the time, or be in Colorado and
only occasionally be cold, contrary to popular
belief. you know, it is a great school. They
have a lot of great opportunities there, which
I rationalized, but realistically, it was a weather
decision completely. And so I went to the University
of Colorado in Boulder, studied psychology and
philosophy of all things, and, you know, had
a really nice time, thought it was fun, but wound
up kind of quickly thinking, I don't know that
I love... Traditional education. Um, and while
this is kind of interesting, it was a very structured
box still. And so I graduated in three years,
um, spent one semester during that three years
abroad, which is a lot of like cool life experience.
And then just decided to embark into the world,
but, um, maybe partial Boulder rock climber,
a philosophy student. I didn't really have much,
um, in the way of. traditional business or otherwise
aspirations after college. I went and started
building furniture. I found myself building interiors
of private airplanes for a short period of time,
which was pretty fascinating. Worked in rock
climbing gyms, just wanted to go out and just
sort of live life and travel around and do those
kinds of things. But interestingly, and this
part probably interesting, and I don't know where
it came from. Probably have to dissect my childhood
a little bit, but While I was building furniture,
all I could think about was, I loved building
it. It was super fun. I still build furniture
as a hobby. But most of what I spent my time
thinking about was the business of furniture
building and how do you go from your garage shop
doing commission work here and there to something
much bigger than that. And then when I was building
interiors of private airplanes, that work I actually
really did not like it all, but it was fine.
Um, and all I could think about was how do you
take this business to the next level? Is there
expansion beyond private planes? Can you get
into yachts? How do you grow faster? Where in
the shop do you move to the airport? It's all
this. That's all I thought about, which again,
I didn't really have much in the way of aspiration
along those lines, but it's all that occurred
to me while I was in those settings. So, and
I, at the climbing gym. I didn't think about
that as much. I just enjoyed climbing and coaching
and route setting. It was just fun. So after
some period of time, I decided I like building
furniture, but I really want to pull in this
business thread. I had sort of started some things
here and there, little kind of pursuits, but
never anything substantial. And so I thought
to myself, well, maybe I'll go get a... Corporate
jobs will go work somewhere real for a while
and I'll learn Just more about business hands
-on because I was tired of school is tired of
this and that I just wanted to go do something
So I applied to some things but at this time
it was 2011 2010 maybe job prospects were low
for a rock -climbing furniture builder with a
psychology degree undergrad not even any kind
of garage so I sort of hatched a plan, a bit
of a scheme. And I thought to myself, all right,
I'm going to do this. I'm going to go enroll
in an MBA program. And when I... Or yeah, when
I get in, if I get in wherever it is, then I
will maybe take a course or sort of audit a course
or just be enrolled. Cause when I, then I can
put on my resume, MBA candidate and I can put
in my email things. I was like, cooked up this
plan. I was like, all right, I'm going to, I'm
going to show people and they'll take me seriously.
Cause I'm going to get an MBA, which I had no
intention of doing like at all. I just needed
to get in a foot in the door. One thing led to
another, and I applied here locally in Atlanta
to Georgia State University, was offered a scholarship
and research assistantship, and it was going
to be paid for. So I thought to myself, all right,
you know what? Let's just go do it. Let's just
go knock this out. And I loved it. It was...
fascinating. I loved learning all of these elements
of business. And really for me, even though if
people follow me or have talked to me here and
there, I often say, you don't need an MBA, just
skip it. Which I think is true in a lot of cases.
But for me, I was starting so behind the eight
ball and so much sort of from scratch and zero.
And I do like learning a lot despite not really
loving college. And I just really found it to
be a fascinating Pursued and and really helpful
for me. So eventually to weave long tails and
I a couple years later have about to graduate
and found myself working at a After applying,
you know everywhere and in between at a medical
device company and at the time and before since
I haven't mentioned it I knew just nothing at
all about health care If you had asked me what
you know ACA stood for I'd have been like, I
don't know Well, I have no clue. You know, all
I knew is that I could be on my parents insurance
dollars 26. That's about the length of it. Um,
so, but I found myself at a medical device company
and quickly sort of fell in love with the healthcare
industry for a myriad of different reasons. And
in love maybe is a weird word for it, but something
about healthcare is drawn to for sure. And at
the time it was a very myopic view. It was very
narrow. We sold surgical devices, largely disposable
to large health systems. So that's really kind
of seeing healthcare from a super specific pinhole
really. But still it was a product management
job, more upstream in a very large corporation,
did about $16 billion annually, publicly traded.
And I sort of acted as a... general manager for
product lines, which was really great because
the thing I find the most fascinating about product
management in a large company is the ownership
over something with no functional authority whatsoever.
So you have to make things happen, though you
can't demand that anything happens because the
people don't report to you. R &D doesn't report
to you. Finance doesn't report to you. Sales
doesn't report to you. Nobody does. And yet you
still have to move the needle and you're responsible
for the business results of a product or a product
line. And I love that because it's very entrepreneurial.
And the whole reason I kind of went back to school
and decided to go try to work is because I always
was thinking, how do I grow a business? How do
I start a business? How can I make this work?
So that was my mindset. And, and by the way,
when I, when I started in my brain, I was like,
all right, I'm going to go work for five years
and then I'm going to start a company. And which
ended up happening. Um, but you know, I got in
and I just decided it was, I didn't know what
it was going to be. I didn't intend on healthcare
and it happened to be healthcare. So I was there
in that first job for a couple of years and then
moved to another bed device company, another
global company in a less global role, more US
focused, but it was more downstream. It was fine.
It was interesting. Got a little more of the
chops under my belt, much more marketing, much
less product. And, you know, a few years later,
found myself at the sort of the five year mark
and was like, all right, it's time to start a
company. Um, and it was, well, I know now about
medical devices and I know about, um, you know,
furniture making and woodworking. And then I
was like, all right, which way do I go? Cause
I was, I still, I loved healthcare, but it, it
wasn't always going to be like the thing forever.
So after much introspection and you know, pressure
testing different things and testing some ideas.
It was the, it was a medical device that I ended
up starting a company around and we launched
it. We worked on it for a little while and it
was a piece of capital equipment with some disposable
to it used in surgery, mostly open cases, help
prevent unplanned hypothermia. And we launched
it in February, 2020. So set up for tremendous
success. I would, I would sit. come like July
of 2020 or so, I would sit in front of my computer
and look at this. You remember those maps of
all the states that would like, you know, Financial
Times, New York, they all had it and it was,
you know, red, yellow, green, super red. I would
literally just stare at that and check it every
day to look at the states that were declining
rates and which hospitals were at or lower than
capacity and cold call hospitals during the pandemic,
just in case the ones in West Virginia ended
up being a decent place to start because they
weren't doing any data reporting. And it ended
up that our first customer was in West Virginia.
So to make a sort of longer story short in that
era of life, we eventually uh, sold the business
in like a tag -along acquisition at the end of,
uh, 2021. And, but during that time, which sort
of has helped lead me to where I am today is,
you know, it was the pandemic. So what do you
do during the pandemic? You know, you start just
kind of. pursuing other things or doing other
things or, you know, you maybe start a podcast,
which I did and didn't go great, or you start
writing a lot more, which I did. And I started
writing a lot more on LinkedIn. I had been doing
it for a while, um, in my product manager days
because I wanted to learn more about healthcare.
And I thought the way I could do that was to,
because again, pinhole myopia medical device,
I could take to LinkedIn, write a post about
an article that I read or something and inevitably.
Whether it was one person, two people, 70 people,
I would get responses and people would say, Oh,
that's right. Or, Oh, that's wrong. Or you haven't
thought about this or my perspective is that.
And so I used it as a good feedback loop and
mechanism. And I'd set up calls with people.
I'd DM them. It was just a way for me to learn
more and get deeper. And so that really started
in 2017. 2020 -ish, 2021, I thought to myself,
all right, I have extra time on my hands. I now
have some formed opinions about healthcare because
I've learned a lot over this whole trajectory.
And then I started writing on LinkedIn and I
started writing the healthcare breakdown. And
where that sort of ties into all this and where
it's led to today is I kind of had a throwaway
line at some point and said, the business of
healthcare is destroying the practice of medicine.
You know, physicians need to take back the business
of healthcare. um, and, and, or clinicians. And
so that was really like the germinating of what
is now forward slash health, because I had all
this experience. It was business side, but I
saw these misgivings of the healthcare system.
Talked to so many clinicians and physicians,
not for any sort of gain. I wasn't selling anybody.
I just wanted to learn and understand the perspectives
of everything. And the only thing I could like
think to myself is This huge heavy lift, corporatization
of healthcare is really at the crux of the issue.
And yes, there are macro system issues at play.
You know, capitalism in the United States, you
know, private for -profit or publicly traded
insurance companies dominating how, you know,
private but for public good entities that are
also capital constrained and need public funding
to grow and expand and then fight with these
big, like those machinations make it really challenging.
But this sort of idea and like, how can I then
work towards and position myself to help sort
of shift that paradigm and take back quote unquote
business of healthcare? And really the answer
was. put myself in a position to help those who
I believe need to be in the driver's seat. And
that's independent clinicians, physicians, physicians
and leadership levels, starting new companies,
launching health tech, med tech, et cetera. But
just getting it back to the heart. Cause you
know, we can say idealistically, the business
stuff shouldn't matter at all. Okay, sure. Great.
Um, but in the United States, like it does, we
operate in a capitalism system version of it.
And. Those are just realities. And if we want
to make it better, we either can just talk about
how it should be, or we can work within our constraints
and make something happen. So very long story,
not short. I met a business partner through exploring
some different digital health options. Where
can we do? What's the next thing I wanted to
work on? And we wanted to work together. The
first thing we tried didn't really work out.
It's care delivery and wound care. And then we
decided, well, we sort of built a digital, you
know, a virtual clinic. Maybe we could help doctors
start their own clinics. And so forward slash
health was sort of born out of that idea. And
we've since helped a number of doctors start
new clinics. We've worked with a couple of existing
clinics to help in their financial side, revenue
cycle, you know, different kinds of things. And
we really are a consultancy that focuses on finance
strategy and systems design, otherwise known
kind of as operations, but it's a little different
flavor, to help build amazing healthcare organizations.
And that's what we do. And that's my very, very
long introduction. Thank you, Preston. That was
amazing. And I have a million questions. Let's
go back to something you said earlier on, which
is traditional education isn't for you. Tell
me a little bit more about that, and how do you
think about educating your kids? And something
I'm kind of thinking about right now is really,
me and my wife, we talk about the movement of
unschooling, if you're familiar with that movement.
And how can we teach our kids to not, you know,
my five -year -old, she's learning math and she
counts on her fingers and the teacher wants her
to draw these lines to tally up the numbers.
Inherently, I'm like, well, why, right? If you
can count on your fingers, that works. I think,
how do you kind of think about structure and
systems in education and how they help us and
sometimes maybe how they trap us inside imaginary
boxes? Yeah, it's a great question. And I think
about it a lot too. So I have a five -year -old
and a seven -year -old and watching them in respectively
kindergarten and second grade in public school.
Georgia is all, I mean they're in a great public
school, don't get me wrong, but it consumes a
lot of my thinking. And I guess if I think about
projecting out, there was, I'm gonna sound like
a weird anecdote, but there was this show called
Are You Smarter Than a Fifth Grader? Do you remember
that show at all? Yeah, yeah. It was like, so
everyone was like, oh, that show's, yeah, it
was like funny and stuff, but for whatever reason
to me - I'm not smarter than a fifth grader.
That's what I'm saying. Right. That's what everybody
said. They're like, I'm not part of the fifth
grader. And the only thing I could see when I
watched that show was how useless the information
you learn in fifth grade is in adulthood. It
was the only thing that ever like stood out to
me. I watched it one time and I was like, this
just means that you don't need to know any of
this information because that's sort of what
I think school becomes kind of quickly. Sure.
You got to learn how to write letters and just
practice it. And you have to learn how like you
know, seven plus 18 equals whatever it equals,
because I'm bad at basic math, because I have
a calculator, you know. How to multiply, like
there are basic things that I think are important,
but when you get into fifth grade, you know,
and I just started to see this and not every
school, but a lot of schools it's like, well,
we teach to the textbook, we teach to pass the
tests, we have to get the right scores, et cetera,
et cetera. I don't know that it's really about
learning versus it's about memorization and performance,
which I think becomes not a great thing for kids
in the short and long term. So as I think about
it, I think about projecting out and they're
to their teenage and adult years and even in
college, like I kind of want them to do three
things and three things only. It'd be enough
if they know how to think. And that incorporates
a lot of things, critical thinking, asking questions,
all that great stuff. If they can communicate
well, yeah, so you have to know how to write
the basics, but clear communication is really
thinking and then just understanding how to convey
it. And then if they can be kind and empathetic,
do you need much else? Do I need to know the
facts of the War of 1812 or what the Louisiana
Purchase was? I mean, maybe, but I mean... with
the rise of all technology, even without AI,
like Wikipedia has all the information, a book
has all the information. I need to know how to
go find it, think critically about it, what it
means, the inferences I can make. I never got,
I occasionally got some of that in school, but
really it was just, you know, I remember taking
a psychiatry, psychology test in college, cramming
note cards, day of, sat down. took the test,
got like a 97. Someone asked me a question about
it. I mean, literally three hours later and I
had no idea. I was like, I don't remember because
it was just such a, you know, cram. You get a
nugget and then it's just irrelevant because
it's not thinking. It's just the memorization.
So that's how I think about education and why
I didn't like it. And it's especially because
I think even if it was just memorization, they
lack being able to tie it to purpose. So why
am I learning this? How is this going to help?
You know and the only person that could ever
tell you is like history teachers because they
don't want history to repeat itself and I'm like,
okay Maybe but yeah the lack of So what I think
in modern education traditional education is
a problem Yeah, it's really interesting that
you know life is not a test And in terms of this,
there's not a score sheet for life that's objective
and traditional. And we train our children to
look at their school and their success through
passing tests and achieving a certain grade on
tests. But that's not how even work works or
even the corporate world or the non -corporate
world. Like, you know, after you're done with
school, it's like a different world out there.
So it's funny how we train people in a certain
way and then they have to live the rest of their
life in a different way. Do you think entrepreneurship
is innate? Or do you think this can be learned?
There's something I think about is physicians
ask me, you know, I want to get out of medicine.
I want to launch a sidekick or I'd like to launch
a company. And sometimes I ask them some questions
about their appetite for risk and uncertainty.
And it's clear that they don't have an appetite
for risk and uncertainty. And I think that's
what entrepreneurship is. Is you're excited about
uncertainty and risk. and making bigger bets.
Given that medicine self -selects initially for
people who are not excited about those things,
what advice do you have for physicians who are
not inherently entrepreneurial? Do you think
it can be learned or do you think it's something
that's innate? I wanted out of medicine the moment
I graduated, right? There wasn't this curve where
I'm like, okay, I want something else. It's like
I already knew I wanted something else kind of
all along. Yeah, I think it's a great question.
And I think it can be both, honestly. We've all
met the person who you're just like, that dude's
an entrepreneur. That's a, or a guy, like they're
purebred, right? They're a business person. They
hustled in high school. They sold candy bars.
They did whatever. They laddered up to like do
something different. They were constantly just
like hustling to do something interesting the
way they thought was different. Like, so I a
hundred percent think that it can be sort of
innate, but I think that it can be learned too.
I mean, I think I'm sort of a, you know, a more
of a learned entrepreneur than an innate one.
And I think both can be equally successful. Um,
perhaps on different timelines, perhaps on in
different styles, but I think it can work for
both. And if you ask some pretty well accomplished
entrepreneurs too, about their risk aversion,
I think you might be surprised to find how many
would suggest that they are actually rather risk
adverse and they only go into decisions that.
look on the surface like there might be a significant
or considerable amount of risk, but the asymmetry
in the return is such that it negates to a degree
the amount of risk, plus they have vetted, understand,
and looked at the downside enough to know how
to mitigate some of those factors. So I think
that even, and whether some of them do it intuitively
or some of them do it analytically, et cetera.
I think the best thing you can do going into
it is, and again, this is to the school point
and why I think it can be hard for physicians
because, you know, I spent whatever, how many
years? 12, 16, 18 years in school. You've spent
way more time in school. And then not to mention
training, which is school -esque in a lot of
ways. And you have to do it this way. There's
a performance, there's sort of check boxes, whatever
it's someone else's. In entrepreneurship, those
things don't just don't exist. The only thing
that exists, the only North Star is market adoption
of your thing. And, you know, there's a lot of
ways you make that work. And you have indefinite
at bats. There are no strikeouts. There's no,
you got this wrong one time. Bye. You're done.
It's, yeah. What's your appetite to get up and
do it again? Did you spend all your money? Do
you care if you spend all your money? You know,
whatever the thing is. Um, but I think that can
be really hard to just recognize the use. Like
you said, there is no test. Just go start and
do it and maybe you decide. Nah, not for me.
Great. You know, we, we have this interesting
shift in culture to the, the entrepreneur is
the rock star of, uh, you know, the 1980s, seventies,
whatever. Um, And a lot of people just want to
be it because they think, oh man, you know, but
similar to being a rock star, they don't see
sleeping on tour buses for however many days
out of the year playing in crappy dive bars and
getting $4 in tips and you know, all this travel
and all the headache and lugging their instruments
around. They don't, they see the, they see Aerosmith
or whatever on stage, Taylor Swift, you know,
on stage and they see. the outcome, not the struggle.
And I think we've had a lot of that in entrepreneurship.
So the best thing to do is say, okay, there is
a possibility that I can do this, but also it
might not be for me. And that's fine too. What's
something you've changed your mind on in the
past couple of years as it pertains to healthcare?
That's a really good question. Let me pause and
reflect on that for a moment. In the last couple
of years, Honestly, I think the biggest change
for me has been understanding systems and where
healthcare exists in the function of macro systems.
So I used to be very, and I mean, I still am
critical, maybe just grumpy, um, critical of
a lot of the players in healthcare. And I talk
about it with health systems a lot and I've,
I've thrown my share of darts at large health
systems. And I think a lot of those are, are
deserve it, but I. I start to find myself more
and more pausing and reflecting on what are the
conditions in which they're operating. And I
mean, they're almost operating in a possible
condition to not function like they do. Because
again, as I sort of, I think before you started
recording, sort of rambled quickly about the
sort of macro systems that we operate, that healthcare
operates within, a hospital exists to essentially
provide a public good. but is forced to contend
with large for -profit entities, insurance companies
who exist solely to make money. I don't care
who says what about anything. If you're in a
public market exchange, you have an obligation
to your shareholders first. You can literally
be sued if they think you are not acting in their
best interest, which is to return as much money
to them as possible. And so we've pitted these
two entity types against one another. And we've
said to one, well, also provide a public good.
And then we said to the other, do whatever you
want, make as much money as possible. That's
your purpose. What do you think the response
in the healthcare system is going to be? All
right. We're in an arms race and the arms are
money and finance and size and scale and leverage
and instrument and all these kinds of things
that have nothing to do with treating a patient
well. they have only to do with a financial battle
that we've set them upon. And so that has been
probably the biggest shift. And that's one example,
but that's probably the most salient example.
And don't get me wrong, I still retain my misgivings
and suspicions about large health systems owning
private jets and having big accounts in the Caymans
with hundreds of millions of dollars and things
of that nature. But again, sort of looking at
the macro environment, the systems in which they
operate, gives me a totally different perspective.
It also gives a totally different perspective
on, you know, the clinic down the road with two
docs and how they're running things and how it's
challenging, but also what their opportunities
are. Because if you can design macrosystems,
you can design microsystems similarly that can
give you really great output and outcomes. What's
the history there? Why did we decide that the
organizations delivering the care need to be
non -profit versus everyone else including pharma
and insurance and medical device can be for -profit.
Now we are seeing a shift here with the consumerization
of health care. Companies like Rose and Forhams
and Cerebral and there's a Function Health and
there's so many of them coming up where the care
delivery part of health care is for -profit as
well now. So why did this happen? Do you think
this change is good? for patients or consumers
and yeah, would it be better if the care delivery
was for profit and then pharma med device and
insurance and maybe those I shouldn't be lumping
them together are non -profit. That's an interesting
question probably someone more Historically inclined
could answer it better But I think yeah, I forget
we just bash traditional education. So yeah I
didn't pay any attention. No, they don't they
certainly don't tell you all these things though
in history class but so Funnily enough and and
I will tell a little bit of history because I
do know this one I might get some of the exact
details wrong, but so Sort of modern day health
insurance, as we know it, started with Baylor
University in Texas because they had a hospital
and their revenues were declining. So a gentleman
whose name I forget, but I wrote an article about
it. You can read it at thehealthcarebreakdown
.com. He, which is I think a really great strategy
is a brilliant stroke. on his part, he decided
that he would go to the teachers union of Dallas
and say to them for the low, low price of, it
was like 50 cents a month or whatever it was,
um, you can come to the hospital, stay, we'll
cover your, it'll be $5. You could stay for a
week and everything after that, like we'll cover
it. So, you know, the details are a little, you
know, whatever. And like the length of stay that
it covered, but effectively he created. insurance
model for his narrow network for Baylor. And
if they just paid them, he was the first pay
vider kind of, and there are iterations of insurance
before that. This is more modern. And he really
launched insurance sort of as we know, hospital
insurance, part A, if you will, of insurance.
And I believe it was called Blue Cross. is what
he called it. And then up in, I think it was
California, there was like a loggers association.
And they found that, and it was a few years later,
they found at the time that their loggers, obviously
it's dangerous work. They were getting hurt very
often. And so they didn't want to go work anymore
because they get hurt. And then they'd have to
pay all this, you know, doctors and this and
that, and they couldn't afford it. So they thought
to themselves, what if we paid, the employer
paid. for the medical bills of these individuals
who are working for us. They called it Blue Shield.
And, you know, the physician side, the part B
sort of was born out of that. And of course,
the sort of the rest is really history from that,
but those were the origins. And so we look at
it, the point of rounding back around is like
the birth of this was really one side, maybe
employee protection or... benefits really, how
do I get people to want to work here? Well, I'll
make sure that if a saw slices your fingers off,
I'll pay for the finger reattachment or whatever.
And the other side was like, our revenue is declining.
How do we smooth it out and make sure that we
get money in, even if patients aren't coming
in the door? And then they've really amalgamated
since then. But then on the flip side is you
have the hospitals, you have the health systems.
And I think my nonprofit ends up being a misnomer.
We're really talking about a tax exempt entity
and they are granted their tax exemption because
they theoretically, and they do, but they provide,
you know, disproportionate share. They follow
EMTALA. So they have to take anybody, which is
a federal statute anyway. So they have to do
it, even if they weren't, obviously HCA has,
can't turn anybody away and they're a for -profit
entity, but they, you know, they take Medicaid
pay all this different stuff. So it allows them
basically operate. I mean. And in a way, they
still operate the same. The difference in nonprofit
and for -profit is just they don't have shareholders.
They can derive enterprise value. But they have
bondholders because they issue debt and they
trade still. And you can buy bonds, revenue bonds,
for a hospital. And they get rated by Fitch and
these ratings. I didn't know that. OK. Yeah.
So that's really the interesting part. So nonprofit
just means that they don't have shareholders
that they pay out their profits to. They retain
them and keep them. But then, like, if Ascension
wants to open a new hospital, they cost a billion
dollars, they're going to go issue a revenue
bond. And private market individuals, a lot of
times because they're tax -exempt, because it's
a tax -exempt entity, will go and buy the bond
and they raise corporate debt. And so they don't
have shareholders, but all of their financial
incentives are aligned to the debt that they
have to issue because no one's going to lend
you money if they don't think that you can pay
them back. And your bond will become useless
if the company becomes insolvent. So we've really
created this interesting, you know, financial
incentive and we wonder sort of a little bit
why some of these large nonprofit organizations,
a lot of it's because they have to One, they
have to cover their debt, and two, it's a financial
instrument. They're providing a return despite
it not being a stock exchange type of return
on these bonds. So they're quote unquote non
-profit. They're really tax -exempt. So we think
about them in this light, but they're care delivery.
So it's altruistic, and there are all these regulations
around it. They have to see these patients, and
we have Medicaid, and you can't turn anybody,
all this stuff. But at the same time, They're
in this sort of amalgamated mess of everyone's
chasing the dollars and all this industries around
it. There's so much money going into it. Even
back in the day, there was so much money going
in that the industry just developed around it.
I mean, and it's become this sort of behemoth
and monster. And I don't know that it's, I don't
think that it was by design at all. It's just
a function again of a macro system in which it
operated, you know, profit driven capitalist
system. If a hospital sees, you know, hundreds
of thousands of patients a year and they need
tools to see them better and to do whatever,
I'm going to go build a tool and go sell it to
them. Or I'm going to, you know, make a drug
and then go sell it to the doctor to sell to
the patient. You know, it just, the industry
was created around this incredible need, but
pharma device, et cetera, et cetera, has stayed
largely out of the realm of. the same type of
kind of regulation, or at least maybe even more
sociologically, the focus of being a public good
because they were sort of an industry created
to help the public good entity that already existed
independent. And they just kept growing. And
by the time anybody said, wait a second, it's
too late because now they're multi -billion dollar
companies with lobbyists and lobby arms and all
this stuff. It's kind of over. You know, we can't
pull that hydra back in. You said the purpose
or one of the missions for forward slash health
is to help clinicians take back health care.
How do you think clinicians have lost their reins
on health care if they ever had it? And what's
your plan to help them take it back? So I think
You know that the reins have been lost a little
bit just because I mean really of the function
of what we see now and again, it's It says everything
has grown as the economy has gotten bigger as
everything's been more important scale and size
and money and this and that and we talk about
hospitals a lot, but they're all kinds of different
organizations and corporate entities and You
know, Optum employs like a hundred thousand physicians
these days, and it's just kind of wild, but it
was the shift, the sort of maybe necessary, maybe
unnecessary, maybe it shouldn't have ever gotten
there, but you know, if you're busy treating
patients all day long, and even if you think
about it from way back in the day in the 1950s
and 60s, and it was a very different model. you
know, more and more people had insurance, but
it was still a new thing. And it was still, you
know, whatever, but they're private and you look
around and you see what are the opportunities.
And doctors are doing what they've always done.
You're treating patients and you're seeing them,
but now you're in this sort of weird quandary
because someone else is now footing most of the
bill because, you know, insurance became tied
to employment during World War II with wage freezes
in the United States, because the large employers
said, well, how do we incentivize if we can't
just pay people more? That was the only benefits.
We can pay for their health care. And so by 1950,
it was in the 40s, I think it was. 7%, something
super low. People had health insurance and by
the end of the fifties, it was like 60 something
percent because it was all employer based. And
then we've that train is gone and it's run away
obviously by now. But so then you have these
interesting dynamics that doctors have been doing
what you've always done. Care for people, you
see patients, but now their payer source is different.
Who's paying them? These entities are You know,
it becoming increasingly powerful and they're
now want to pay because they take premium, you
know, the whole calculation of insurance. And
then you have more industries coming in to serve
hospitals because more people have healthcare
now. And can pay, you know, someone, someone
else pays. So the industry is just all quickly,
very quickly maturing and growing because there's
so much dollars coming into it. And meanwhile,
doctors are doing like what we need you to do
is take care of us. And so. But people are paying
them less. People are calling them more. People
are pitching them things. So you need to react
and you need to build a business around what
you just normally did sort of as a physician.
And you could just go on house calls and do this
and you pay this money and whatever. And it's
just grown up around it more leverage from payers.
So the business just got out of control because
there wasn't time. There wasn't any. ability
to counteract some really quickly developing
forces that were acting on the business front.
And then I think, you know, by the, was it 70s,
HMO introduction, you know, and then all of the
different acts in the 80s and then admin just
exploded. And then we see the, you know, cost
curves of healthcare really shoot up like in
a hockey stick because of everything that required.
So I think that's how it got sort of out of control.
I think it's, I don't know. Perhaps Pandora's
box is open and it's impossible to close. I don't,
I like to think that that's not the case. And
whether it's sort of, let's just go build something
outside of the current system, whether the system's
going to melt down and completely break, you
know, I don't know, but I just do know that there
was a, there was, and we see it, we see people
going back to these old ways and it's working
really well for doctors and for patients. And
I spent today two hours, which honestly was a
little long, but. It was great. With a physical
therapist whose cash only pay, and it's less
expensive than if I used insurance. And people
don't think about it like that, but if I paid
insurance, I'd have to pay my premium just to
be able to then pay for the care, which is, you
know, 40 minutes rushed with three other people.
And it really amounts to probably the same amount
of money if I didn't need my deductible, whatever,
whatever. And someone pays that deductible, right?
If I've met it, someone's paying. So it's so
much more expensive. And I think when people
start really seeing that, seeing that clinicians
are driving all of the value in healthcare and
who we need, but we need them now in those positions,
thinking about the business. Cause at the end
of the day too, I mean, it's a service. It's
an exchange of value. Um, there's altruism there
a thousand percent, but it's a job. It's a livelihood.
positions have been getting paid for centuries,
millennia. You know, that's not going to go away,
but just the business model is so broken. So
we just need the clinicians to start, we need
the public to sort of see what's happening, understand
how the money really flows. And then the clinicians
just be prepared, ready in the positions to say,
all right, I can do this. I can manage the finance.
I can do the operations. I can, whether you want
to be a big organization or just you going on
house calls, you know, four days a week, whatever.
It can work. Moving back to AI and I'll ask you
to kind of use your philosophy degree and I'll
see if you've paid attention maybe. I did not.
I got a D in biology and a D in chemistry, but
still made it all the way through med school.
Do you think we're pushing very fast in the AI
world towards general intelligence? And general
intelligence is defined by not the general intelligence
of the average human, and that's maybe the terminology
needs a little bit more correction there, but
AI becoming the smartest human in each individual
field. So playing chess like Magnus Carlsen,
building companies, and there's a very polarizing
figure, but like Elon Musk. Do you think we...
We're making a mistake, because throughout history,
we have always been the smartest species. And
that's good. I think we've survived and we've
maintained power, if you want to use that word,
over the world. And every other, even more dangerous
species like lions and tigers, we are the ones
in charge. Do you think we're making a mistake
by we're letting, you know, maybe opposable thumbs
is the other advantage we have, but the main
one being intelligence. Do you think we're making
a mistake by, you know, ceding that to, and we're
building something that that's going to be more
intelligent than we are? I don't know. My gut
reaction is yes. Like I sort of, maybe this is
the worst forum to say this on, but like, I low
key kind of hate AI a lot because first of all,
I mean, I use ChatGPT and I find it to be...
Do you mean like it's a love -hate kind of...
I don't know. I kind of feel like it's just hate,
honestly, because I see value in it because I
use it because it's faster. I'm really bad. I've
always been really bad at like internet searches.
I just don't know how to ask questions well,
maybe. describe what I'm trying to look for.
So I find it helpful in that regard, but it makes
things up. It's weirdly agreeable. It's just
sort of, you know, and smarter people than me
obviously have built these in multi -billion
dollar companies and this and that. But I sort
of think about like fundamentally too, and we
started this off in like traditional education
and our kids and just different things. And,
you know, if I find myself sitting down to write
something and I think, oh man, this is gonna
be hard. It's gonna be like a few pages and this
and that. And I just might, I don't even really
know where to start. And then I just go, let
me just see what chat GPT can come up with first.
And I mean, I just don't like that. I don't like
that for me. I don't know that I like it for
humanity in a way. Part of me is like, that's
fine. Cause I'll have a competitive advantage.
Cause everyone will stop. We'll forget how to
think. but in a way to see like we've been on
that bandwagon we've been on that train for a
long time i mean scrolling instagram and tiktok
and just checking out and consumption over thought
process and creation and things like that this
is just sort of the next version of it i do think
there's some real danger whether it's terminator
3 take over the world i robot whatever which
people think it is and can be and i saw some
interesting studies recently about AI self -preservation
and lying and threatening and blackmailing and
stuff, which is real chat terrifying. But on
the other side, the humanity danger of us ending
up in a Wally situation where no one talks to
one another, we can't think anymore, there's
no social interaction. It's just me in a computer
in a room because I can chat with AI or ask it
questions. Cause like, I don't, I'm too lazy
to figure it out or even think about it. And
eventually what, how do we even know if, you
know, all the great writers and content creators
and they say, yeah, I use AI, but I'm still thinking
I'm just helping me be more efficient and effective.
And it's like the computer. Yeah. And like it's
the, it's the internet, you know, or it's what
a law professor who is funny and he's old school
guy. He was like, yeah, my law firm, uh, I voted
against having a computer in the firm. We took
a, you know, partner's vote and I just thought
we don't need this and this is weird and whatever.
And so we think of that now as being silly and
maybe AI becomes the same thing. But I think
that one of the biggest dangers is the societal
element of, are we going to forget how to think?
Are we going to forget how to interact? Cause
yeah, again, you can be the smart person who
uses it to help fuel your efficiency. But one.
Efficiency to what end? Like, do we need that?
Or do you want to be so hyper -efficient? Like,
why? At the expense of what? And then, yeah,
it works now until maybe it doesn't because then
it's such a crutch that you really have forgotten
some of those fundamental things you thought
you had sort of control over. So, I don't know.
Jury's out for sure. I, you know, low -key kind
of hate it because sometimes I feel like it makes
me a little bit less sharp because I... I don't
like to rely on it. I want to think and, you
know, write and struggle through things. And
it's making the struggle too easy in a way. And
then what's that going to do for the future generation?
Because again, we talked about it. I don't think
knowing facts is super important. Certainly don't
need to know with chat GPT around or whatever.
Um, but thinking is important. If you put a 10
year old in front of a computer with AI, they're
never going to have to learn how to think. That's
a problem. Let's push deeper here. If we build
a world where everything is convenient and easy
and you are constantly fed dopamine hits, and
I do realize there's this somewhat of a hedonic
treadmill where you need more and more hits or
a higher concentration of dopamine maybe, why
is thinking important? And this may sound like
a silly question, and maybe it is a silly question,
but... Why do we need to know how to think if
everything is easy and AI creates this world
of abundance and everything is given to us? I
think that's a great question, honestly, and
one that maybe I haven't even thought about too
much. It's a fascinating question, actually.
Because, yeah, I guess at the end of the day,
but who knows? I don't know. I was going to say
at the end of the day, someone's got to pull
the strings or something, but maybe not. Maybe
the computer just pulls the strings and we just
float around in our Wally hover chairs or, you
know, fluid and we're just bad dopamine hits
and none of us exist and really, but we're all
happy. And so maybe there's, maybe that's fine.
And maybe there's a no existential crisis. to
new existence because I mean if we're for all
ultimately chasing happiness and there's some
way that that happens and then we just but then
I guess the question is and maybe maybe one day
it'll be weird archaic thinking is that I don't
know we are products of the earth and land and
evolution and we're animals and we're you know
I want to run up a mountain and do hard things
and struggle and like there's There's beauty
in all of those and all of the bad elements of
life too, you know, and connection and this and
that. And again, we could have the philosophical
debate. It's like, great. Well, what if you were,
you know, the brain in the vat thought experiment,
what if you're just a brain in a vat and it's
all just like electric feeding you all the things
and you thought you did all that. Cause it's
like, how did we know that like any of this is
real? It's just sensory interpretations in our
brain. Maybe AI gets us there and maybe it's
fine. But I have no idea. But for whatever reason,
the prospect feels wrong, I guess, is the worst,
best answer I have. That's well said, Preston.
Last question. As you're building forward slash
health and as I'm building matter health, a couple
concepts I'm always trying to balance out is
this concept of optionality and friction. when
building product for consumers, both on the B2B
and the B2C side. How do you think about optionality
and friction? And what I mean by that is friction,
it could be in the onboarding process, in the
product you're building, in the user journey,
and how do you leverage friction to maybe, and
this goes back to maybe it ties into what we
were just talking about, is friction is important.
It pre -selects users that will be successful,
and it gets people to experiences and values
you want to deliver. And optionality is important
as well, right? And how much optionality? So
you can follow maybe the Apple framework, an
extent where everything is designed for you.
Whereas most engineers and developers want to
have a lot of optionality and maybe the Android
framework where you can do a lot with it. It's
clear which is more successful to an extent,
if you have a Steve Jobs or if you are Steve
Jobs. And you can instantly listen to a consumer
and say, this is what they want. based on their
problems. How do you think about optionality
and friction and building forest slash health?
And what are some kind of lessons you've learned
from your previous companies on those two levers?
Yeah, optionality and friction. So I do think
about friction a lot, but maybe slightly differently.
I find it in, especially in a B2B space, I think
about it mostly in a sales process versus necessarily
a product process. Because I find that buying,
not that I made a comment the other day and I
was like, really our job as salespeople is to
like help the customer buy something. And it's
like, duh. But if you really think about it,
it can be really hard to buy something that we
already want. And especially in a B2B environment,
because I mean, yeah, if I'm the CEO of whatever
and I can just say like, sure. But even then,
if I have departments and this and that, and
people are going to feel different ways, if I
make decisions unilaterally about their area,
so it can be hard. to buy something that, you
know, you objectively think is going to be a
great thing. So it's, I think about friction
in those terms. It's like, how do I help that
person achieve what they want, which may be buying
kind of a thing. But I also, it's interesting
you say it, the sort of self -selection of the
friction and Apple too, to an extent, because
Apple has a very specific viewpoint and their
specific viewpoint did the self -selection for
everybody. Pretty much. And that is, I think
the friction that you mean is that, you know,
for this set of people, this will create a lot
of friction. It's, it's basically putting your
stake in the ground and saying, this is what
my company is about. And, you know, it's an identity
play a little bit to say, you know, Southwest
airlines is a classic example. They basically
said, we're not for business travelers. Like
we don't have a business class. There's no expensive
upgrade thing. Like you just come on this plane
and we're going to compete with you driving instead
of flying. And so it was sort of more about what
they weren't than what they are, but that would
create friction for a business traveler. And
so they purposefully introduced it to weed out
the certain segments that they didn't want to
serve and weren't uniquely positioned to serve
and be value added to them. So I think about
in those ways and maybe a little less. for forward
slash health, although that probably baves me,
but I think about a lot for the people that we
work for, because as we do strategy work, like
these are the types of questions and interesting
things that you can kind of start to unpack and
unravel. And then in terms of optionality, we
do think about that a lot. I mean, especially
as a consultancy, like if people will say, well,
your consultant, what does that mean? And then
it's kind of like, well, you know. A good sales
move is to say, well, give me an example of a
pain point you're facing in your business right
now, because then you're immediately just uncovering
problems and maybe they're a good fit or whatever,
whatever. But you can kind of do it like that.
You can kind of be anything to anybody. And so,
and I find that in that realm of, you know, if
I'm talking to you and I'm like, I don't know,
what do you need? Like what's going on? And you're
like, I don't really, like unlimited options
is not helpful. And even too many options because,
you know, once you identify what's the unique
value that you're uniquely positioned to offer
to a market that actually needs it, which really
narrows it down to sort of an ICP kind of framework.
And then they really only need like maybe one
and a half things. And so then you saying like,
well, they could use this and they could use
this and they get like, yeah, but they really
only need one and a half things. So give them
one and a half things. And then I think a lot
of companies, like if you just did something
different, it needs to be like different for
a different problem in a different segment. Not
all of these just come in and, you know, choose
your own adventure. Cause I think that's again,
going back to buying friction, people are going
to be like, I don't know what to do. Like, they
want you to tell them what to do. You're the
problem solver. So optionality is a big thing
we think about for Forest Slash Health. Friction
is a big thing we think about for our customers
and how they're designing, developing, launching
products, launching tech, you know, building
clinics at the same time. Awesome. Where can
people find depressed and physicians are interested
in working with Forest Slash Health? Where should
they recheck? Yeah, always on LinkedIn hang out
there a lot. So please find me on LinkedIn or
forward slash health calm Preston at forward
slash health calm any of those things You can
find me always open to having conversations discussions
seeing how we can make help Thank you. This has
been amazing Thank you so much for having me
appreciate the discussion