Healthcare Needs Builders, Not Bureaucrats: Dr. Mehmet Oz Live from Davos

23:23I take pictures of every one of my supplements or drinks. What impact will this have? of which impact will this have on sleeping. I think that's this gigantic win. Yeah, you being able to realize the promise that the law gives you to actually own your own medical data, but to get it in a usable format that now you can use again a chat interface to understand it. It's technological obscurification. Let's call it what it is. They're trying to use this proprietary formats always to get a technological advantage and to have a moat around their business. And AI just decodes that and makes it usable and now you can interact with it.

23:55Can I bring up one other example? So, Dr. Ross, you mentioned democratization. You and I have had a conversation about certain states are actually trying to ban the use of AI to be used in therapy. And I think the point you made to me is, you know what, there's a lot of places all over the country, like rural areas, where there aren't psychiatrists or there isn't psychiatric care. So at least AI provides a baseline level of service. Version one may not have been perfect. There may have been some hallucinations, but it is getting better and better every year. if you ban it, then a lot of people are just going to have nothing.

24:29Right. I mean, beautifully stated. Let's just go over. That's unwrap that a little bit. But I mean, just at a high level, say AI is coming to a neighborhood near you. You're not stopping it. Yeah. So it's going to be there and patients are going to use it. And so you have to engage it running from it. You know, you know, we we cannot stick our head in the sand on this one. There's other things you can sort of delay. But I've encouraged every governor go full bore at this, but do it in the right way. Allow professionals to function at the height of their licensure. Why don't we use pharmacists better?

24:56There's probably 70 ,000 pharmacists, right? And think about it this way. Almost all Americans, 95%, live within five miles of a pharmacy. They don't live near a hospital usually. So we don't have access to care in many ways. If we just took AI and allowed pharmacists and doctors, GPs, to function at a higher level, it itself would be worth the opportunity. So I'm not even saying abdicate at all to an AI agent that doesn't really understand you, we can't control, maybe some other country gets involved in it. At its very practical level, we do not have enough practitioners. There just aren't enough people to take care of rural America.

25:3360 million Americans living in rural America don't have access to mental health services. Our vets commit suicide at a crazily high rate, more than we lose in war, because they don't have access to mental health services. Many of them do live in rural America. And so if we're gonna fix those kinds of problems, which are time consuming, you're not gonna get Park Avenue psychiatrists could go practice medicine. At$800 an hour. At$800 an hour in the North Slope of Alaska in the winter. It's just not going to happen. And so this$50 billion investment that we as a country just made, just, the money was part of the rural health, the working families tax cut legislation that the president pushed through and Congress got behind.

26:11$50 billion, the largest investment ever made in rural health care through our agency was given up by the end of the calendar year. All the governors have the money and we charge them to make a difference in their communities. You know your communities. They almost all came back with some AI element. They all know to really be able to get healthcare in rural America, you've got to right-size the system. Right-sizing the system means, you know, the hospital is going to work out differently. Doctors will work differently with each other, but AI is the core element of so much of this. And these micro hospitals, just like people are putting ADU units in the back of their homes to get an extra apartment for grandma and grandpa, or as an Airbnb, my understanding is there's a bunch of startups working on the equivalent, building a micro hospital, a room with the central services, perhaps a nurse practitioner, there's more available, and then you telemedicine in.

26:58Just bringing the medicine to those areas without having to build a giant hospital is also a win, yeah? The micro clinics, I think, have a huge opportunity to provide top tier care. But this goes beyond that. We have AI supported robots that are going to be doing ultrasounds in parts of Alabama where there are no OBs. Right. We have drones delivering prescription medications to the North Slope of Alaska, where there are no roads. We have vending machines that can dispense smart dispensing of medications. By the way, this is happening in other countries. So we want this to take place in America.

27:32And why not take advantage of an opportunity with a huge, massive inflow of money, which the Rural Health Transformation Fund does,$50 billion, to start to do some innovative of work in rural parts of the country, which are the foundational element of who we are as a nation. Those values ripple up to the rest of us. I also think that states now are talking to each other differently. Now that you've got money that's out there that can be used to change the world, they start talking about AI and technology generally very differently. Now it's not a sparse research. We live in a world of abundance and AI makes it that much more abundant if we use it correctly.

28:07And it's not going to happen today, but we believe by the time the administration has completed its work, we will have dramatically changed the face of how Americans work with information in the healthcare system. Some of it's just blocking and tackling, as you said, medical record companies, not data block. Some of it's forcing health information systems to share data more comfortably and elegantly at a fair price. And part of it's us putting money into the system, seeding it the right way. But the most important thing is to make it safe to go outside. We want to make it comfortable to take financial risk to invest in these areas.

28:39That's why 600 companies have invested. Every major AI company, every major foundational technology company, but all a bunch of these surgeons that I have promised, they're all rushing in. The three places entrepreneurs have been reticent to take on, to build new products and services, education, housing, healthcare. These also happen to be the ones most regulated, most controlled by the government. So to the extent you can give them access and make it go faster, it's going to work. The only investments we've ever made in those spaces are ones that go direct to consumer. Because we know going through the government, there's just not enough runway for those companies to get to the other side.

29:17Let me ask you about - We're open for business. And I got to make this plug while I'm here. We want to work with industry. We believe the private sector will come up with better ideas, come work with us. And we're also looking for people. And we had nine engineers, nine engineers when we came in. All of CMS, our cobalt-based infrastructure built in the 70s, where we don't have engineers that - You're talking about in the department, you had nine engineers out of What's the denominator of employees? 6 ,500 employees and 40 ,000 contractors. So you basically have an HR person in government working with a government affairs person at the company.

29:49There's no engineers there. 16 basis points, David. We took$3 billion of cost out. There was a company that we fired that had billed us$200 million, not a single usable line of code. And here's the good part. When we fired them, you know what they said? Nothing. Yeah, we knew it. We knew it. Yeah, we were underperforming. No accountability. Underperforming. God, we could go on about fraud forever, but I want to ask you about this wonder drug. Four years ago, I was listening to my friend, Tim Ferriss and Kevin Rose, who are biohackers, and they're always on the edge of this stuff. And he wanted to lose some visceral fat.

30:21Kevin was in great shape, and he heard about this diabetes drug, Ozempic, and that he was going to give it a shot. He dialed the pen all the way up, puked, dialed it back down, lost his visceral fat. I heard that. I was like 40... I was 213 pounds at the time. Went to my doctor. He said, I have no idea what you're talking about, you're not diabetic, but you are fat. And he said, you're a fat bastard. I think I said that. And I had just gained like two or three pounds a year for 20 years. And I used to be a marathon runner. I used to be 165, 170 pounds. I'm now 172. You look like a gazelle right now, by the way.

30:53Well, I add a little muscle too. Thank you, Dr. Ross. You look great too. But this is a miracle drug. This, in my mind, we now have theoretically, tens of millions Americans have experienced it. It's going to be in pill format. The four horsemen of the apocalypse, heart disease. Kidney failure, liver disease, dementia. Dementia. These are all, four of four are impacted by obesity and these GOP ones seem to be impacting them. I was like, you know what? If Trump just, President Trump just gave a national, anybody can get this drug if they want it, I think he'd win the election. He won anyway. What do you think about a mandate to make it available, to make the fat drug available for all Americans?

31:39Would that be... So I'm glad you came to work today. So about two months ago in the Oval Office, the president basically did that. He said that we're going to take the prices of these drugs, which are now prohibitively high for many Americans,$1 ,200 cash pay. Crazy. It's going to be a starting price of around$200. Easy. And with the pills, it's$150. And the pills will come out. The first FDA-approved pills will start this month. And so we believe at that price. $5 a day. Because zinc hairpays, right. It's basically you get coffee a day. At that price, we will, within two years, return money to the American taxpayer.

32:16It's going to save us so much money from reducing hypertension, diabetes, and the downstream illnesses, the four horsemen of the apocalypse, as you mentioned, that we will save money. that we spend over half the money, I believe, within healthcare on these chronic illnesses driven by obesity. And so, either directly or indirectly, because you hurt your knees because you're overweight or you get autoimmune problems or even cancer is linked to obesity because you have a metabolically active state, all of these are gonna drop precipitously. We have pretty good data on this from internal modeling.

32:46So we agreed to those prices with the two major companies, Novo Nordisk and Eli Lilly. We will launch next week, I don't know when this podcast airs, But launch next week, Trump Rx with those products. So you can cash pay at a price that is completely affordable. And here's the good news. Every Medicare patient gets it for$50 copay. Every Medicaid patient gets it for nothing. Amazing. So the people who need it the most, the folks that are most vulnerable. This is what it, when people say the president doesn't want to protect Medicaid, he doesn't love and cherish Medicare. It drives me bonkers because he's doing more for underserved Americans than any other president ever has.

33:20giving Americans where the obesity epidemic lives, underserved Americans, vulnerable Americans who are on Medicaid, access to these drugs for no out-of-pocket costs truly democratizes the weight loss issues. Because right now, what's the number one zip code for weight loss? Drugs. Number one zip code, Upper East Side of Manhattan. I was about to say it's got to be Manhattan or LA. LA is number two. Okay. Right? Because people can afford it or? Because they're vain. They're vain. They want to lose two pounds for their daughter's wedding and they can afford it. $1 ,200 a round Nothing, yeah. Right?

33:50But$1 ,200 for someone that's not making money, you're just not going to take the drug. And they're the ones that die early. The life expectancy in rural America, I'll go back to them, in vulnerable populations, nine years shorter than yours in the same country. It's something that came out of left field. What does that tell us about what's going to happen in medicine going forward? Because GLPs, how long of a journey has that been? and then getting to market, and then this off-label use, starting with people with diabetes, how does that inform you of how we can make even more impact in the future?

34:26How do we make another GLP-like discovery and implement it the way President Trump has? Well, the drug actually came from, it's a poisonous chemical, a venom, actually, that was deciphered and found to have an impact on some of these core cells in the appetite system of the body, which is so fundamental to who we are, that it's very hard to hack the appetite. But GLP-1s, they're just the tip of the iceberg. There are more and more sophisticated ways for us to be able to address not just appetite, but addiction, addictive behavior drops of GLP-1s. So, the newer drugs are going to be even more effective at that.

35:03Reditrutide is the one you've got. For example, Reditrutide. But the other thing I would say is the form factor matters. In sending someone an injection that goes bad in the warm weather, a lot of wastage, you don't know the exact dose, the pills make it like most other drugs. And the price point is much lower as well. So it's easier for us to deliver that at scale to the American people. So it does leapfrog us beyond today's problems. And this is a big theme of our administration. Don't bother fixing today's broken pipes if the world you're building doesn't have pipes. And that's what we're doing with drugs like semaglutide and interzapatide, which is the Lilly product.

35:38We're also getting these companies to unshore their production facility, hire American workers, stay innovative. This is why, again, the president doesn't want us hurting innovation. The same day we did the first Most Favored Nation drug event, we had an executive order on childhood cancer. 20 beautiful children, smiley, bright eyes, all of whom, all of whom should have been ghosts. They survived because technologies were afforded to them. They don't exist in other parts of the world to keep them alive. That's our goal. But I need to, I'd be poorly served. I hear the bell tolling. If I didn't get into the other thing.

36:10For whom we don't know. Yes, for the bell tolls. For sure. I think that's totally for the pharma companies who don't bend the knee. The issue right now that is consuming us is the fraud, the waste and abuse. What have you found, Dr. Oz? Tell us. What is the most concerning to you? Well, as a preamble, without a better visibility in where the money's spent, which we need technology to be able to do. Or audits. Well, audits are interesting. You could audit the spreadsheet. You can't tell if the input to the spreadsheet was legitimate unless you actually go and do site visits. And states don't want to do that.

36:50So let me just give a take. Why do you blocking it, these states? Of course. First of all, let me just, I'll tell you, that's a good question. Why would you let fraud happen? It is by federal law, by federal law mandated that if you give a patient a welfare program, SNAP, Medicaid, you must also give them the ability to sign up to vote. So you're basically recruiting voters at the same time you're giving them free government services, which then you might actually end up recruiting a different kind of voter. Like you don't have a law that if you go to an NRA convention, right, for gun advocates that you sign up voters, right?

37:25You can go to that event, not get signed up to vote. Obviously, they will be probably skewing to the right. So there is an issue there. We also have an active role of unions, especially in California, where we have a major problem because the unions have seemed, this is all what I'm hearing from talking to people on the ground, seem to have gotten involved in, for example, signing up home health care workers and personal care services. There are more Americans, I believe, providing some of these home-based services that maybe might exist in retail in America. We've shifted the entire employment economy towards some of these services.

37:58And here's the risk. If you really want to understand why we have fraud in America. When I give you things that your family used to give you, we're going to have fraud. So your family used to drive you to the doctor's office. Your family would take you home after you got home back from the hospital to make sure you got well nourished and taken care of. Your family would carry the groceries up the stairs. Your family would negotiate your contract with the landlord. Guess what? Healthy Human Services does all that for you now. All you've got to do is ask. And in some states, it's so easy to do that you end up with significant fraud.

38:28So they have intercepted the transaction. Therefore, that's where grift can occur and fraud. Also, the government's paying for it. Right. So when the consumer is paying for it out of their own pocket, they have their own incentive to get value for the transaction. But when the government's paying for it, who really has the incentive to make sure that value has been provided in exchange for that money? Yeah. And this is what happened in Minnesota where you had a subculture. It was probably not, you know, just mathematically, most of the indictments are with Somalians. So the Somalian community realized, hey, my goodness, no one's watching.

38:59Now, there's an adage, you know, that only the morons get caught in health care fraud because it's so easy to do. And if you get you steal five million dollars in Medicare, Medicaid, you go to jail for 18 months. I mean, for many people, that's a pretty good deal. Yeah. You know, sit in the pen for 18 months. But unfortunately, I'll just give you a lay of the land. There are twice as many durable medical equipment providers. They sell wheelchairs and knee braces. There's actually 20 times more in South Florida than McDonald's. I mean, how many do you need? Turns out they're all Cuban, pretty much.

39:31They all seem to fly back to Cuba and escape law enforcement. They bill millions of dollars. They get away with it. What's the solution? There's got to be a really practical, easy solution. There are, and I'm going to share that. But let me just give you two others because you're going to remember these. We have seven times more hospice in California. Hospice is for people at the end of their life. Seven times more hospice than was there five, six, seven years ago. Seven times more. We don't have that many people dying in California. And more importantly, the survival rates on hospice, again, designed for cancer patients dying within six months.

40:01The survival rate for most of these hospice centers is 100%. Wait a second. They shouldn't have gone to hospice. Exactly. Is the government paying for it? Yes. Completely paying for it. But no one's dying because you're not supposed to be in hospice. When do the government start paying for that? Oh, 40 years ago. Oh, OK. It was... And then what happened in the last seven or 10 that the fraud just went... Two things. Foreign governments got involved. In LA, the hospice is driven by the Russian Armenian gangs. They're foreign nationals. They fly back to Russia. We had a big$15 billion bust on these guys earlier in the year.

40:31Again, they all escape. The other thing is no one's watching because there's a opportunity if you get into these businesses to make a lot of money. And it becomes... I'll give you... I'll just tell you a true story about a whistleblower. Again, I can't prove this, but it's what he said. He said that he was building a beautiful mansion. He owns all these hospices. He's a doctor, but he's a fraudster. And so he built this future house. The plumber comes in and says, hey, you know, I hear you're in the hospice space. The guy says, yeah, I made my money in hospice. Then the plumber says, you know, I've got a side house, so I own a hospice too.

41:01Right? Then the carpenter hears him and he says, me too. Yeah. I'm in the hospice business. We're all in the hospice business. Absolutely. So then the guy says, okay, well, he realized he's got to get ahead of these guys. So he goes to a major hospital in L.A. and a doctor at the hospital, very prominent hospital that everyone's heard of, says, hey, listen, if you give me a thousand dollars a month, I'll send hospice patients to you, which is how it's done in L.A., by the way. You get paid. You send patients over. So the guy says, OK, what about the actual inpatients, like the people hospitalized?

41:29Can I get them? And the doctor says, I can't do that because it turns out the members, there are some members of the board that own hospice and they like the patients to go to their centers. You see that the corruption starts in organized crime. But if you tolerate it, it poisons the whole system. And that's the bigger reason we've got a problem. So what are we doing? We have a fraud war room. I'm going to put a moratorium on some of these services. We're not letting people sign up. We're going to actively and aggressively stop paying Medicaid if we can prove that states are not obliging their fiduciary responsibility to the American people.

42:05because states administer Medicaid, I pay the bills at CMS. So we're going to stop paying on behalf of the taxpayer if we don't think you're taking care of the money. And people should know there are whistleblower laws where you get a percentage of whatever's reported and they should look into that. And the fact that we have so many people in the administration now communicating that, hey, we want to have you report fraud to us has changed everything. The number of people reporting fraud must have gone up since dramatically people in the government this is probably you know the part that's most rewarding to me many government workers are democrats probably most what they tell me again and again is they just came to government to do their job they wanted to do the right and they were told not to do their job they were told not to focus on the fraud to focus on getting more people signed up but if you don't take care of the fraud this is an important message you will kill the system eventually you will destroy medicaid and i'm not gonna let that happen on our watch medicaid as hubert humphrey said it's there to protect those at the dawn of life which are our children 53 percent of kids are born into poverty we take care of them those at the twilight of life those are the seniors right we owe it to them every great society takes care of the most vulnerable we're great people will do that and he's hubert humphrey said you got to take care of those living in the shadows we are not gonna let them get hurt when you let organized criminal elements steal at scale from the federal government, you are killing those programs.

43:30We now have so many kids signed up falsely for autism that the kids with autism aren't getting access to care. Yeah, this is the incredibly frustrating thing, having talked to some young parents who are millennials, Gen Z. They're going to work. They got two jobs. They would love to have childcare, but the childcare dollars are being stolen. Therefore, they can't access them. And And the same thing's happening across the system. I think this could be just such a defining moment for America because on the other side, we have socialists, lunatic communists running some of these cities who want to seize people's assets, want to raise taxes before fixing fraud.

44:10This is like pouring water into a leaky bucket. Well, you're talking about California. And New York. Yeah. And I couldn't help but notice that Gavin Newsom arrived here at Davos yesterday. He's here. Yeah, he was encouraging European leaders to defy President Trump, which is a weird thing for a governor to come here to basically advocate for foreign leaders to defy the American president. Yeah, what next? Like, partner with communist countries? I mean... But I think honestly, it's all a distraction because the real thing happening in California right now is everybody knows there's massive fraud there.

44:44You see that image on the internet where it's an iceberg and... The tip is Minnesota. I mean, it's the fourth largest economy in the world. So we know there's massive fraud. I think Newsom knows there's massive fraud too. That's why he's vetoed audits. I mean, can we just pause for a second? How do you veto an audit? Veto audits. Right. Who would veto an audit? Someone who doesn't want to get caught. A criminal. A criminal would veto. I'm not saying he's a criminal, but - No, this is to government spending what the ban on voter ID is to elections. Why wouldn't - You only do that. But you're banning the thing that helps you catch the fraud.

45:21So why would you ever do that unless you want the fraud to happen? Exactly. It's... Yeah. It's distraxed. Now even the - Distraxed as we say here on the phone. But California, the budget's$350 billion, by far the biggest. It has doubled in the last decade. And it's like three times per capita. Two and a half times the inflation rate. And they're still running a huge deficit. it. And that's why they're now driving all the job creators of the state with this proposed asset seizure. If they just clamped down on the fraud, they wouldn't have this hole in their budget. Just L.A. County alone, just in hospice and home health care, we believe it's about three and a half billion dollars.

46:00Just in those two programs in one city, there's probably 10 percent of all home health care expense in America is in L.A. So there's so much to do to improve the system that would restore confidence. And when you have governors who are unwilling to do their job, it does make people think that, listen, when smart people don't do things, it's not an accident. They're not doing these things because they have ulterior motives that either aren't transparent to you or they think you're not smart enough to figure out. We need to ask those questions. This president is not going to tolerate it, but the American people shouldn't either.

46:32We had an interesting moment. And our friend Elon Musk had asked us after he purchased Twitter, now X, to come in and we were looking at the bills, trying to figure out how this company was hemorrhaging cash at a level that just didn't even seem possible. And one of the things was they had just signed up for tons of software and basically subscriptions. And CFO comes in, auditor comes in, we're all trying to figure it out. And Elon just said - Is that Twitter? Yeah. And Elon says, how are they paying all these? They're like, oh yeah, they're on credit cards. He said, okay, cancel all the cards.

47:05And so we sit there and we're like, yeah, cancel the cards. Immediately, I get three back channels from software companies who are like, hey, I know you're helping Elon. I saw a story in the New York Times. Our bill stopped getting paid. Can we come in? And I'm like, yeah, we're not using your software anymore. Nobody's ever used it. It's never been installed. The software had been, you want to talk about fraud at a scale that was deranged. This is a private company. This is a private company. Yeah. But your point is, look, when no one is minding the store, bad things are going to happen. And when no one has minded the store for decades and the government's paying for it, you don't even have that private sector profit motive to basically be efficient.

47:46Then think about how the fraud just metastases. It's got to be billions. Twenty, thirty percent. Hundreds of billions. It's got to be a double digit, I'm going to guess, twenty, thirty percent of all these fraud. All it took was a YouTuber with a video camera to actually show up at the Minnesota daycare centers that were receiving millions of dollars. The Leering Center. Yeah, the Leering Center. They're all empty. Yeah. Dozens of them. Each one's receiving millions of dollars. Yeah. And that's one program in one state. And these aren't lowlifes doing this. They're the little involved, obviously, but these are politically connected groups.

48:21Sophisticated. Yeah. And that's why I'm emphasizing these are government, foreign government-backed efforts at times, but certainly the people doing them are often foreign nationals. And we are being taken advantage of because we're like a big hippopotamus. All you need to penetrate Medicare and Medicaid is a beneficiary number. They can buy those and you're off to the races. So the solutions are, I'm not claiming they're simple, but they're eminently doable, but you have to expect that of your leaders. There's going to be some low hanging fruit here. I can tell you, you cutting off payments and saying very simply, hey, we've cut off payments, all you have to do is sign this attestation that you delivered the service, and I would like you to attach your driver's license and passport to it.

49:00And by the way, you've been randomly selected. To come into the office, we want to hear all about what you're doing and jump on a Zoom call. Right. So you're saying cancel the credit cards. Yeah. And then - And just let them then reopen the account or tell you - Yeah. Yeah. Come in. Yeah. Yeah. We just want to re-verify what's going on. Literally - Zero baseline budgeting. Exactly. I'm not saying the program is over. And that's the thing that I think Elon found when he's doing Doge is these payments were just on... Auto pay. Recurring. Auto pay every year. Auto pay equals... With no code explaining what the money was going to.

49:31Auto pay equals from. That's all you have to know. And if you look at some of the great... I mean if you want to talk about some of the good stuff Lena Khan did and it was opposed to about 80 % of it. One of the things she did that was really well was she said, if you sign up for a service, you have to be able to cancel it the same way you signed up. So, newspapers, these bastions of virtue, you'd sign up for Wall Street Journal, you probably have had this experience, you try to cancel it, they're like, give us a call. And then you're on the phone for an hour, just want to cancel it. And I asked the woman, I said, hey, can I ask you just a simple question?

50:05Why can't I just cancel online? They're like, oh, well, because of fraud. I'm like, but you took my money through the website, so that's where the fraud would actually occur. She's like, yeah, that kind of makes sense, but I'm just an operator, Mr. Calacan. They said, okay, fine. But this is the same concept, which is if you want the money, hey, why don't you come into the office and we'd love to hear how the program's going. We've got your check right here. Come pick it up in person. We want to hear about it. And can you just take a picture of the service you provided? Just taking a picture of the service you provided and then send it in.

50:35How is this hard? Like you said, how do you argue for... California already has some of the highest tax rates in the nation, and now you're arguing for more taxes, novel taxes, taxes that no one's ever seen before. unconstitutional constitutional probably and will require a massive new enforcement mechanism before you do that you haven't even rung the obvious fraud out of the system yeah this is our biggest allies our state auditors i met with the state auditor in minnesota uh she confided that you know she's been trying to get this on the radar uh just people didn't want to listen and i talked to folks within the agency health human services you were shuttled around one woman was actually escorted out of the building for raising the reality that there was fraud.

51:17And this happened over several years. And eventually, either you leave if you're ethical or you're quiet because you don't want to get fired and you make it such a a harsh environment for anybody to just tell the truth. This reminds me a friend of mine who is a billionaire now, Tomas Pettifay. You probably know him. Interactive Brokers. Really great guy. And he said he was growing up in Hungary and he said when he was young, he knew that everyone was lying to him. But that wasn't the big problem. The big problem is he knew that they knew that he knew that they were lying to him. Right. So pretty soon we are all in on the fact that there's a big lie.

51:50The whole thing is corrupt. And so working in these agencies, the good people are weeded out. The people who are left either don't care or aren't good people. Or complicit. And some of them are complicit. But I think fundamentally there was a misalignment of values. And this actually was probably the most important thing we had to do in that legislation last year, the working families tax cut legislation. we had to align the president with the governors. There were so many ways of getting the federal government to give you money that wasn't really yours, legalized money laundering schemes, all kinds of things that clever consultants had figured out over the years that we estimated we would have lost$5.4 trillion just for Medicaid, which is, again, why I often joke we were becoming one massive health care system with a small country attached.

52:31Well, and if it doesn't work long term, if we don't take bold action, which again, a major message on a lot of things the president's doing. If you don't take bold action on some of these issues, you're leaving the next generation with a train wreck they can't fix anymore because the train's gone way off the rails. Yeah, and just think of the absolute hypocrisy. You have someone like Mondami who says he wants to increase services, provide more for the citizens, and they're not doing the audits. They're not fighting fraud. Gavin Newsom is talking about wanting to provide more for the bottom half of society, but not doing the audits.

53:03And frankly, this whole budget hole that is causing this now asset seizure attacks, it all started in 2022 when Newsom promised Medi-Cal for all, including illegal aliens. And so what happened is in big, beautiful bill, president said, listen, we're not going to reimburse for illegal aliens. Think about incentives there. Right. So then the SEIU, UHW, the health worker union, they're upset because they don't want that funding cut because it indirectly impacts them. So that's how this whole thing happened. Think about the layers of fraud there that you've got, you know, the government of California is paying for illegal aliens.

53:41Probably shouldn't be doing that. I mean, if you ask the American people, which is who you both work for, how many Americans believe that illegal aliens should get universal health care? I think you're going to get like 98 % are going to say absolutely not. And 2 % with purple hair in Berkeley who want it. I don't know what their motivation is. I don't want to spoil them, but just to finish the point, if you are going to have the politics of a Gavin Newsom and you're going to tout medical for all in the state, even illegal aliens, doesn't that create a responsibility on you to audit the system and make sure it's not being abused?

54:16When you then turn a blind eye to the fraud and you refuse to even acknowledge it, you just pretend like it doesn't exist, and you veto the audits, that's doubly wrong. But it doesn't hurt California. This is the part of the story that's so infuriating. You don't audit the books in California because the federal government is paying anyway So why would I audit the books to find out that my people aren't getting free money from the federal government? Let's talk about illegal immigrants so Gavin Newsom was giving us a hard time for threatening the health insurance of illegal immigrants just to be very transparent If you're on Medicare, you don't get free dental.

54:47You don't get free vision You do if you're an illegal immigrant in California. This is the inferior But so anyway, so you've got taxpayers in New Mexico, right? which is a blue state but a poor state, paying extra tax dollars to the federal government that are recycled back into L.A. to deal with the fraud that I'm talking about. So illegal immigrants, he's mad, he's mad, he's mad, he's mad. We're horrible people. We're Republicans. You have no conscience. You have no heart. As soon as we made it clear we were no longer going to pay for illegal immigrants in California, what did he do? He took them off MedCal.

55:16Now, he didn't take them off. He came up on the federal side. So in theory, only emergency services are going to get paid for for illegal immigrants in California, which is a national law. And it's reasonable. Reasonable. Now, we want babies delivered, car accident victims. Of course, get health care. But not elective hernia surgery, cataracts. You have to be an American citizen who paid into the system to get these. So anyway, so we deal with this. Gavin says, we're only going to pay for illegal immigrants through our own state-based system. We've audited him now. This data is coming out this week.

55:46We have now found over$1.5 billion of money spent wrongly. We've audited it. They're not even arguing. One and a half billion dollars from that California charged the federal government for illegal immigrants that they're not allowed to pay charges for. They have to pay for it themselves. He's not happy, but they're paying us because they know we're right. So you're going to see something happen very interesting in California. As soon as the money is being paid by California government officials, they're going to start getting more serious about this. And that's why it's so important for us to say we're not into this anymore.

56:19I'm not going to let taxpayers in Alabama and Mississippi, New Mexico, our poorest states pay for the fourth largest economy in the world and they get less. And they get less. And we're a country of immigrants. You could absolutely believe in legal immigration and want the border closed. That's what we saw in the last election. That was the deciding issue, I think, at the end of the day. I mean, they also picked a terrible candidate on the other side and didn't have a primary. Put that aside. You had an amazing candidate too. Incredible. Tremendous. Okay. The best ever. The greatest ever. Minimizing.

56:52I'm just saying, I mean, you kind of went up against a... Anyway, we'll put it aside. You know, the thing that I think is super important is incentives matter. You've said this many times without explicitly saying it in our conversation. The incentive for people to come to America illegally is to make a better life for themselves and to have a job, employment, and these social services. If the social services aren't available, some number are going to stay back. And if the jobs aren't available, then why would you risk it? Why would you pay one of these coyotes$5 ,000,$25 ,000 across the board?

57:27You wouldn't. You would get in the line to do it properly. And that's a very simple solution here. You just change the incentive, make it impossible for an illegal alien to come here for those two things. Do you know what financial value there is of having free healthcare in America? So many. I'm not going to make you guess. Well, I was going to say for the employers, I can say it's very acute to insert yourself into the relationship with your employees because employees will not leave one company. They'll pick the company they work for based on the healthcare, and they will not leave a company to pursue a better opportunity in order to keep their healthcare, which is dysfunctional because you want talent to move.

58:04That's a uniquely Silicon Valley entrepreneurial way to look at it. From the employer market, we think the money should follow the patient, But broadly speaking, because I don't regulate commercial insurance, for illegal immigrants, for your family, it's worth about$30 ,000. So there is no good reason for you to go back home again if we give you world-class health care coverage. Yeah. So this is a major issue for us dealing with the immigration problem because you cannot send 10 million people back legally who are here illegally. The president has said this, you know, I think he said it publicly, but I think he would.

58:36It will take us 200 years of legal machinations to send back people who came here illegally. So there is no legal path to expelling people who came here illegally. You have to remove the incentives to stay here. Free housing, free food, free health care. Of course, you're going to stay. Show me an incentive. I'll show you the outcome. If you look at the war on drugs, how unsuccessful it's been, people go to San Francisco for a reason for their fentanyl. Because they can buy it and there's no policing. And it is exactly a function of more policing means the price of those drugs go up, which means consumption goes down.

59:13Not only is there that dynamic missing in San Francisco because there's no enforcement and you can get fentanyl for five or ten dollars a hit. They also give you housing and eight hundred dollars or something to that effect per month. So the homeless industrial complex has now created incentive. And everybody in that, you know, really tragic, junkie community knows that. and they leave Texas, they leave other states to go there, and then they bear the brunt of it. And they are actually increasing the suffering. What's your take on these new super drugs versus the rescheduling of drugs? Obama wanted to do it in his second term.

59:52He didn't have the political willpower or will to do it. And Trump now is saying, hey, maybe for cannabis, we should rethink that and do what Canada's done and other modern nations. How do you look at those specific drugs, fentanyl, nine or 12 overdoses a day in San Francisco at the peak, and then methamphetamine, which is just another scourge. We have good substance use disorder medications. We can't get people into the programs. This is why homelessness is an industrial complex, and the states that have done it well, I mean, I know Mayor Suarez in Miami dropped the number by 90%, and he did it just by making sure that you got arrested every time you peed publicly, and they don't put you in jail, They put you in rehab, but it takes four or five six efforts.

1:00:36You can't give people free showers, great accommodations, lots of food, and then expect them to stop using drugs because you're enabling that behavior and not expecting bad outcomes, which is what happened. But I was in Kensington, Philadelphia, which is the drug capital of the East. Oh, this is where they have that other super drug. I forgot the name of it. It's very pernicious. Trank? Yeah. Trank is a terrible drug. It creates massive ulcers on your body. And so I was there and, you know, I just walked the streets, just talked to people like, why are you here? Where'd you come from? Why don't you go home, et cetera?

1:01:06And I ran into a guy who had just saved someone's life, giving them the lock zone as an inhaler and ambulance driver. And I said, well, you know, what happened? He says, well, they OD'd. I gave it to them. And I said, well, what did they tell you? How do they thank you when they awaken from near death from that dark abyss of darkness? And he said, they're almost always livid at me. Yeah. Yeah, you ruined their high. And you ruined their escape. Oh, they're actually hoping to end this suffering. The pain was so bad. That's why it seems nice. And that's why I was telling my friends in Minnesota, Minnesota nice is great when you really, really mean it.

1:01:43But nice does not mean allowing a public health surgeon to be raped. It's not allowing people to abuse themselves, expecting a different outcome than what historically has happened. You need to, if you really love people, you might not like them. But if you really love them, you'll do something that actually goes beyond like that makes you ultimately gain respect for them for you and for you. There's a very simple way. And if you were to take a Christian view of it and you were to talk to any of the parents, these poor parents who are suffering with a child addicted to drugs, and their adult child is on the street and you said to them, we can arrest them and put them in jail.

1:02:20We can treat them incredibly severely and try to just lock them up until they say thank you. please do that but there are a bunch of lunatics who think you're harassing a homeless person who had a bad bead and you're infringing on their freedom but the parents and the family would say please lock them up that's our last ditch effort so it's not compassion it is not christian at all that's a faculty lounge discussion with your tweed jacket on yeah and your elbow protectors when you're pontificating about people that you read about right uh and i bring point that out because I'm on the faculty. You know, I've been.

1:02:54You got one of those tweet. You talk to those tweed. Yeah. I got rid of my tweet jackets. The elbow patches. They look terrible. But, you know, you sit there and you act. And this is the crazy thing about intelligence is people. The more intelligent you are, the better you are to lying to yourself and others around you, because you can construe almost any data into something that has a meeting that's not really there. And we have tolerated that for too long. I actually think that's an important part of President Trump's appeal, he cuts through all that BS. Don't tell me stuff that just defies common sense.

1:03:24Because common sense is not so common. You don't have to accept it. I think that's the other thing that I think Trump has, I think, taught some folks. We do not have to accept that state of affairs. You don't have to accept. And the framing of it, let's just call it what it is. You know, I've used the term here on our podcast, say junkies, because I grew up in New York in the 70s and 80s. And that's what we call people who are addicted to smack junkies. It's not derogatory. It's an indication of just how bad that disease is. Calling it homelessness means you're trying to solve the wrong thing.

1:03:54Putting a junkie in a home. They have plenty of homes to go to. It's nothing to do with that. All right. We got to let Doc... How long are we talking? Two hours? I don't know, but I can talk to Dr. Oz forever. I'm a surgeon with no fingertips. All right. Dr. Oz. Can I... Please. All right. So I just want to... Yeah, let me just wrap this up. So Dr. Oz first reached out to me during the transition because he's so intensely interested in AI. This is when you were transitioning? Yes, during my... Transition? You supported him? Yes, very much. I love David. Yes, we all do. He was looking for names of AI experts in Silicon Valley to build his advisory panel and this impressed me right away with the energy that you bring, the knowledge, the passion.

1:04:35You really do care about improving health outcomes for all Americans and I think we are very lucky to have you in this administration from the president on down. And I think the country is very lucky to have you could be doing many, many different things, but you really care about this job. And I think it's really incredible what you're doing. Thank you for your service. I wanted to have you speak to us on the pods kind of long overdue. Well, you're very kind to have me on. I've enjoyed it. Big fan, obviously, of your work, in part because you brought a sense of clarity to many of the issues you discuss.

1:05:04And I want to thank you, David, for being a, first of all, using your ability to get people together. The power to convene is remarkably effective, but you've also demystified a lot of this and allowed the administration to embrace AI and technology in general. So God bless you. Great. Thank you. Thanks for being here. We'll see you next time on All In at Davos. I'm going all in.