📣 Digital Health Download: November 2026

0:02Welcome to the Heart of Healthcare podcast. I'm Hallie Teko. I'm Michael Esquivel. And I'm Steve Krause. And every Monday, we bring you the latest in healthcare innovation as we sit down with entrepreneurs and industry experts. So buckle up and join us as we figure out how to improve healthcare for all.

0:31Hello, listeners, and welcome back to the Heart of Healthcare podcast. I'm your co-host, Steve Krauss. Today, again, with my friend, Michael Esquivel. We are doing the digital health download stories from the month of October. It's been a great start to the fall. I can't believe we're heading into the holiday season here very quickly, Steve. It is crazy. You know, we were talking earlier about as we get older, it feels like time moves faster as we're getting older, my friend. Well, we're both, I joined the 50 Club last month. Welcome, welcome. And to rat you out, I know you're older than me, but the listeners will know you're better looking and better in shape because you're doing all those wellness things.

1:11So kudos to you. All right, first story this month. It's a really interesting one. Folks know that we've talked a lot about AI. We're going to continue, I'm sure, because it's everybody's focus these days. We've talked about how AI has been inflationary to date. We've even had guests on to talk about it on the pod. And mostly that's because of the back office application AI, things like RCM, increased coding. And I've been obviously an advocate on this podcast. Michael, you've heard me saying, well, I think that's true, but I think the deflationary impact of AI is coming, which is going to be around the clinical use of AI, right, in terms of allowing doctors to practice at the top of their license, treating patients more with AI rather than humans.

1:53I hope that should be true, but a new study in the New England Journal of Medicine AI version found that AI systems recommended care when compared to seeing the same patient case as human physicians, that they provided recommended care that cost$314 per visit, whereas the humans suggested care that cost$97 per visit. So an increase of almost 3x across, granted, a small number of use cases, 200, but really interesting finding, actually, when there was an A-B test of AI versus humans, the AI actually recommended more care clinically. And the thesis of the authors of this study was that AI is just probably practicing more defensive medicine, that it's being actually more conservative.

2:40And so that was really fascinating. Maybe it won't be deflationary, as I thought. Maybe it'll be inflationary. Michael, thank God you're a lawyer. I always say this on this podcast. I'm curious, you must have read this and had an interesting, you know, defensive medicine obviously involves, you know, liability, potentially sometimes involves lawyers. Like, what was your take on this in terms of, you know, maybe AI is going to be more defensive and feel like it's more on the hook and want to guard against claims of malpractice more than an actual human? Yeah, it's a great question. Now, to be clear for our listeners, Steve, it compared an AI-only analysis versus a doctor only, a human doctor only, right?

3:17Correct, correct. It wasn't a combination. No, correct. Just to be clear. Yes, pure AB, AI versus human. Thank you, Michael. Oh, great. No, that's great. I wanted to do that, to clarify that, just to make sure I had gotten it as well, Steve. So, you know, it's really interesting. At the end of the day, for me, my quick take here is it's always about the standard of care, Steve, right? And as you know, we are awaiting guidance from both regulators and, frankly, the courts on how AI changes that standard. So when you ask who's on the hook today, it's the clinician, right? The AI isn't a defendant.

3:50And nothing in the law today makes its output the benchmark for care. It's not the standard of care today. So malpractice asks whether the doctor acted as a reasonable, competent peer would. And we're waiting on guidance on how AI might change that. So order everything, as the AI use case here suggested, isn't the standard of care. You know, that order everything approach, that defensive medicine approach goes above and beyond that standard. So declining, as the human doctors might have done in this study, is oftentimes defensible. The danger ultimately, Steve, is going to be when you skip the test and that was the one that would have caught the problem.

4:33And so it's going to be really, really interesting to see how this plays out. But today, the clinician is on the hook. on the flip side, that standard of care, as I said, we're not sure how AI is going to change that. Right. Yeah. So finally, I wouldn't have expected. And again, I think it comes down to, it'll be interesting to see what the, and we're actually having Jacob Schiff, who is the person at CMS who's responsible for reimbursement around a lot of these innovative models in AI and has put forth the access model. We'll have him on the pod in an episode coming up. And the question is also how are these AI technologies going to be paid for, as we talked about before, right?

5:13Because in some ways, if it's a fee-for-service chassis, which it might be, it's unclear how these things are going to be paid for, then actually recommending more care is both good, I guess, in terms of potentially liability, being more defensive, but also would be good in terms of actually more reimbursement. Michael, over to you. What's your top story? My top story, or one of them anyways, for this month was, as you probably saw, Steve, Trump announced a new women's health initiative. On October 19th, the president signed an executive order directing NIH to create a women's health division within 90 days and establishing a White House Women's Health Task Force.

5:50As many have seen, Melania Trump, our first lady, has been championing that initiative, which covers everything from heart disease to cancer to menopause, infertility, and endometriosis. Notably so, Steve, the order doesn't mention contraception or reproductive rights. The idea, I think, here is to close some of the longstanding gaps in women's health research. Historically, as you know, women have been underrepresented in clinical trials, and we still know far less than we should about conditions that disproportionately affect women. There's also a clear emphasis in the executive order on using AI to accelerate research and getting new treatments to patients faster.

6:29The good news for me in this is that women's health is getting attention at the highest levels of our government. And the initiative really does, to me, Steve, seem to acknowledge that this is about far more than just reproductive health. So unfortunately, the downside here is the executive order doesn't actually commit any new research funding. And it's happening at the same time, as we've all read, that the administration has been cutting any NIH funding and staff. I guess with the 90-day deadline coming due in early 2027, I guess there'll be something concrete to check back in on at that time.

7:06But Steve, from your perspective, look, you've seen a lot of venture investment going into women's health in recent years, but still not enough. What's your take on all this? Yeah, you know, I mean, it's hard to take any sort of proposal that comes out of the administration sometimes seriously until you actually see what the written document is and the funding associated with it, as you mentioned, Michael, a lot of promises made, questionable how many promises capped, at least when it comes to progressing women's health issues, probably more, obviously more regressive things have happened than progressive, I would say.

7:39But I would note that, you know, if you go below the president himself, at least, and even the secretary of HHS, there's a lot of good people in that administration who are working, you know, even, you know, hard on some really important issues, including Chris Klomp, who we both know well, who I worked with, who is now the number two at HHS and who, by the way, was on the board of Maven as an independent director, Maven Health, which is along with Mitty and Paul Mello, and I'm sure I'm missing many, many more. There are now, as opposed to when I started 20 years ago, like women's health wasn't even mentioned in healthcare, which is crazy, right?

8:16Now you've got a bunch of, those are just three, but a number of companies that are really significant players in our space, right? There are hundreds of millions of revenue or, you know, hundreds of millions to billion dollar valuations plus have the prospect of becoming potentially IPOs at one point, being standalone companies today and into the future are focused on women's health. You know, I did some research and granted it's over two decades, but there's been over a hundred billion dollars of total M &A value created in just women's health exits. I would say women's health, while really important, it's hard to, some companies straddle both men's health and women's health and people's health.

8:51So it's hard to just, I think that$100 billion over 20 years understates by a large margin, the number of companies that are focused on women's health, but they point out things like Hologic and SciTech, Abbott's purchased a layer, Billion to One's IPO, lots of different companies that are part of the franchise that are built around women's health,$27 billion plus transactions in the space. So there's been progress, I'd say. And I like when, you know, the fact that this category, which again, like I said, it's always existed. Like women are the decision makers in healthcare. We all know that for families, but I, I, I didn't, I didn't really hear the term more than a decade ago.

9:28So it's great to see the, the tension, the focus, the funding, obviously now some federal initiatives focused on it. And, you know, honestly, even in venture, like we've got a long way to go. I'd say, uh, it, the, a lot of the, the partnerships still are very, are very male dominated, if not totally male dominated. But I'd say if you look at healthcare, I thought it was really interesting. And I compared the number of women investors on the Forbes minus list, which is like, you know, the canonical list of top 100 VCs that's done every year. Who knows whether we love it or not? I compared the number of women investors on that list.

10:01There were eight, by the way, eight of 100, 8 % this past year, 2026, which is shocking to how to Halle, our co-host, our wonderful co-host. She puts together a list every year of the top 60 digital health VC firms. And there were either women leads or co-leads of those firms of the top 60. there were 20. So I thought, hey, in healthcare, which makes sense, right? Women are, you know, really important constituents in everything, honestly, in our economy, but particularly in healthcare. And so I love the fact that 33 % of the digital health VCs are women-led or co-led versus just 8 % of the top 100 VCs on the four minus list were women.

10:37So it should be, the number should be 50, right? So some good progress since when I started, to be fair, but a long way to go. for sure for sure and you know finally waking up that uh what is it steve about 51 of the world's population right uh is not a niche area to focus on so i leave it at that all right um on to my story well you know it's ai what am i this is what i am i'm a lineman just like every vc that's all we know these days but i i did find this one pretty interesting i'm sure you followed it because you do a lot of things in your job and there's this like whole new evolving world of personal AI assistants, I'm sure Muse, Instinct.

11:13Michael, have you used any of them yet? Or you feel a little bit too legally? I don't know. It's really tricky for us lawyers. So unfortunately, to really take advantage of it, you've got to open up everything. You've got a lot of client attorney privilege. People would love to know about some of the M &A deals and IPO candidates in my pipeline. And yeah, so unfortunately, I've not had the ability to really take advantage of it. Yeah. Well, Instinct and Muse is like you're wearable for me, Michael. So I got to be there. So anyways, this month, there's sort of this first platform war of the personal AI agent here, which is, Michael said, these instinct muse, others, like literally can kind of become your own concierge, if you will, your own assistant, right?

11:54Like literally executing tasks for you without – well, you can give them consent. They can actually literally close the last mile on a whole bunch of things, restaurant reservations, booking to get your passport re-upped, and obviously shopping, right, for you. So actually, interesting story from the non-healthcare world, Amazon blocked Meta's Muse agent from shopping on site this past month because, you know, obviously, you know, Amazon was worried about how do they control that? How do they verify security? And a lot of issues that are really real in this AI-agentic world. And it got me thinking, man, this is coming to health care.

12:30And are our health care institutions prepared? And the reason I know that is sort of you think about Google in the old day, pre-AI, right? About 14, 15 % of searches on Google were healthcare related, right? And now you think about OpenAI and Anthropic, and we know that about 15 % of the searches there, even more, are healthcare related. People are using them, as we've talked about, for their own personal doctor. And so it doesn't take too hard of a leap to think, oh, my gosh, now we're going to use these agents to actually go do one of the most painful things, which is book a doctor's appointment.

13:02And how many times have you spent waiting on the phone or actually, by the way, go fight your insurance bill. Right. And so, you know, these agents are going to go and book a lot more medical appointments. They're going to fight a lot many more bills. Right. They're it's they're just going to they're going to become pervasive in health care. And I have a sense that health care brands either have an opportunity to get ready for this and sort of figure out how they're going to create that trusted relationship. And with the agents, which are actors on behalf of humans. Or by the way, my guess is healthcare often is going to be caught flat footed and not know how to react to this.

13:33And it's going to be really interesting. So I was curious, like what you thought of this, Michael, when you read about this story, you know, how do you, how do you think these systems are going to react? And, and is this going to be a good thing? Like who benefits here? Are the consumers going to benefit? Is there going to be more friction, more cost added to our system when you see these, you know, personal agents inevitably taking on healthcare tasks? Yeah, you know, Steve, it's, you know, I don't know, maybe it's going back to the battle of the bots in the end. But, you know, key nuance here for me as I read this was, look, we clearly need to remove the administrative friction like scheduling, etc.

14:10But we need to keep the clinical judgment credible. So a physician's no isn't friction. An organization that says yes to everything, I don't know, does that, Steve, become a trusted advisor either? As we know, the information blocking rules prohibit record holders from blocking access to EHRs, and patients can direct their data to an app of their choice. Well, Michael, let me push you on it. Do you think that, don't you think there's going to be a healthcare institution that says, no, we're not going to allow agents to schedule? I bet that's going to happen, don't you? Or do you don't think so?

14:40Well, you know, I mean, look, friction has always been a quiet filter in healthcare, right? But the problem is agents don't give up, Steve. I mean, you and I, we've been on calls at 40 minutes. I give up. I just hang it up and I say, forget it. I'll deal with it later. And guess what, Steve? I never get to it. And I just accept the no or I accept that the reimbursement isn't what I thought it was going to be, et cetera. So I do think you're right. But look, under those information blocking rules, technically, I don't know if they can say no. But I think it really also raises a big privacy question for me, Steve.

15:16Like once that data reaches an app, for example, or via that agent, it's outside of the HIPAA landscape and the HIPAA protections may no longer apply. But I'll tell you, to me, it's another big, big question, Steve, is where's the privacy gap here? How are we going to navigate that? So bottom line for me, Steve, I'll leave it at this, is the winners here will make that front door frictionless, but also be able to give a no answer that patients still believe. Yeah, yeah, yeah, for sure. All right, Steve, let me move on. I got a couple of stories that are kind of tied together. You may have seen this, but KFF publishes results.

15:54It's an employer health survey results of employer-sponsored health coverage, including premiums, employee contributions, cost-sharing provisions, offer rates, and employer practices. As you know, Steve, most Americans under 65 get their insurance through their employer. And not surprising, but certainly disappointing is that workers' share of family premiums, what they have to actually pay is up 9 % in one year. That figure has now risen, Steve, to$7 ,471. So call it$7 ,500 a year. This is unfortunately on the backdrop, Steve, of wages rising just 3.7%. Inflation during that relevant period was rising at 2.7 % in that same period.

16:40So, you know, it means in many ways, the employers are pushing more of the cost onto workers. And, you know, it's even more acute for people working at smaller companies. They're hit the hardest. At firms with fewer than 200 workers, the survey showed, people pay almost$10 ,000 a year toward family coverage, Steve. And so, you know, the real question, Steve, is we feel like we keep saying this is unsustainable. I don't know what else to say, Steve. This is unsustainable. Americans are drowning in healthcare costs. What do you think? I thought about your story, and then I saw this LinkedIn post about Duke, the Duke University.

17:16Duke's actually moved towards means testing when it comes to health insurance. And in fact, asking its higher paid employees to pay more for health insurance than its lower paid employees, which is interesting. So I think that is one potential solution, which I think our society may go to. But I think we're going to go to more means testing as a society. I think that might happen in health insurance. And I think that might be an OK solution. You know, honestly, one of the most interesting things, Michael, is that your point about health care being so unsustainable, that's actually starting to get through the the the American mindset around keeping government out, you know, generally.

17:55But one thing I found, which is really interesting, is that – and I heard about this, and then I went to go do some research – is that obviously Democrats' support for Medicare for All has always been relatively high and has increased since the late 2010 era. But actually, Republican support has risen for Medicare for All. Republicans were about 19 % in 2019 favored Medicare for All. Today, about one-third of Republicans favor it. 72 % of independents favor it 84 % of Democrats favor it so you've seen this increase where you know because of this unsustainable nature of the healthcare cost you're actually seeing people open to positions that like a decade ago they've been whoa whoa that feels like big government I think that's because honestly like Medicare is a very like people get the point that like one big buyer might be better at driving down costs I'm not sure we get there as a system but clearly it shows that people who used to be really starkly against something that draconian in their mind, that like pro-government, are now like the Republicans have shifted from 19 % to 33 % in favor of Medicare for All.

19:04Yeah, it's going to be interesting. Well, Steve, let me shift this to my next story, which is kind of tied, which is medical tourism to China. So this story comes from KFF Health News. As you know, while politicians in Washington are increasingly worried about China's biotech industry, American cancer patients are actually traveling there for treatments they can't get at home. The article actually follows a woman in New York with advanced lung cancer that had spread to her brain. She was running out of options, so her son traveled to Shanghai to get a targeted cancer drug called sunvirtznib. And what's interesting, the drug was actually approved in China back in 2023.

19:45And the FDA finally did approve it here in the States in July of 2025, but it's still not commercially available here. So her son and family took her to China to receive this drug, which is readily available there. And she's now been on that treatment for about 19 months, and her cancer has largely been controlled. Her son noted in the article that he's aware of at least 30 other Americans who have similarly traveled to China for that exact same drug. Meanwhile, China is becoming a biotech powerhouse, Steve. There's just no doubt about it. It It accounted for as much as 46 % of new drugs tested worldwide in 2025.

20:23And like you and I saw this year at JPM, more and more American pharma companies are licensing drugs from Chinese biotechs. One reason all this is happening, Steve, clearly is speed. Clinical trials can move faster and they cost less in China. In the US, you know, the drug development process just takes longer with higher regulatory costs. You know, it's interesting, Steve, just on a personal note, I work with this really exciting company called Warp Sciences. And you may have seen, our listeners may have seen Warp announced the$215 million Series A round recently. And what they're trying to do, and maybe this is an effort to bring back, onshore back some of this, is bring AI and robotics and life sciences together here in the US, starting in their case with a preclinical CRO, which makes and tests molecules for companies developing these new medicines.

21:12So it's really exciting to see that maybe, again, coming back to our AI theme, that maybe there'll be an opportunity to restart the American biotech effort here and maybe not continue to see nearly half of that new drug testing occurring in China. So, Steve, when you look at what's happening in biotech, how worried are you about the U.S. falling behind China? And is this becoming a serious competitive threat? What can we do? Well, I mean, it's real. You know, it's funny. I think we underestimate as a country and maybe as an industry, and I'm far for an expert. I mean, it's been, you know, 15 years since I did biotech investing.

21:51Not very good at it, but that's why I pivoted to health, the space I love now. But, you know, back then I remember, you know, people just would think like, oh, well, China, they're just going to steal your IP and your molecules, right? But it turns out like they had a coordinated effort on their government part to just become real legitimate drug developers. And obviously they have a strong academic environment and grow their own researchers from within. As you said, the regulations are not as strict. I was talking to someone who said that basically the Chinese regulatory authorities have like a third, actually a third of the number of regulators as we have at the FDA.

22:33So to your point about speed, You know, it's just less less oversight there. I can get to market faster. And then I think the scary thing is, you know, honestly, nowadays, and you just mentioned one company, you couple AI, you couple robotics and you couple biotechnology. And that's just going to increase the speed and the competitive advantage. And we know that China is a real counterpart in the AI front, which probably will have less regulation than we have, even though right now our administration is pretty lax around regulation with AI. so you just read Anthropics S1 which just came out and see how prominent the opportunity in the life science era is that Dario has always been a huge fan of but as so are others we believe these technologies are going to lead to faster, more potent more efficacious, less toxic drugs and China's got a real competitive threat there on both the progress they made in biotechnology and the AI front and all you have to do is see just last week You know, the Trump administration proposed a rule which would, you know, add biotechnology to outbound investment restrictions that U.S.

23:38entities can have in China. So essentially, it's not a final rule, but it targets American money going to Chinese biotech, not licensing, but actually, you know, making investments, equity investments, joint ventures, other types of stakes. Like you could tell that the administration views this country as a serious threat to, you know, our biotech, what has been our biotech supremacy. So, you know, and by the way, they basically draft that on a Biden era executive order that covered semiconductors, quantum and AI. So like the linkages are just so tight. Right. So we'll see. We'll see. It's definitely it's definitely now on the minds of like you didn't think about Chinese homegrown biotech companies as being real, but they're real.

24:19It's going to be interesting to see how it all plays out in this new world of AI in particular. All right, final story. You know, this is a story that has some entrepreneurs freaking out is a term that was used in one of the pieces I read that was used in Second Opinion. You know, there have been over the last couple of months a real crackdown that the CMS Centers for Medicare and Medicaid Services are having of several codes that relate to both remote patient monitoring as well as CCM. I mean, on the remote patient monitoring there, they've really proposed that, you know, basically the use of these codes to for RPM can only be done by in-house physician practices, not outsourced third party companies.

25:02By the way, there was a whole slew of venture backed companies that focused on the RPM space that are the ones freaking out. Now, this isn't a final rule. There's it's it's again, it's a proposal and there's still a comment period and it will ultimately see what comes of it. But that was a huge policy that was put forth. And then this month, there was a quieter story, but sort of a crackdown on CCM, which is chronic care management codes. And basically, there's been pressure that there'll be increased audit intensity by the OIG on firms that use these codes to especially direct to consumer companies that are focused on using these codes as their main source of revenue.

25:43So, you know, really interesting. On the one hand, you know, the thing that always concerns me is it's really hard in health care to start a company. We've talked about this based on sort of policy, in this case, reimbursement policy, which, by the way, I think is really good to move, you know, patient monitoring remotely to chronically care for patients right outside the four walls of the hospital. Like I think these these codes and these policies had good standing and good meaning. but then all of a sudden you know you've got the trump era they're focused on fraud waste abuse their their calculations are that up to 500 million dollars for rpm has been spent and maybe 500 million dollars on ccm has been spent you know on these codes and there's concern that is some of this fraud waste and abuse of course that there is but honestly it's like 0.1 of the medicare budget i looked it up so not a huge and now of course you know we have them saying well hey maybe these codes can't be used anymore maybe there'll be intense audits and i just worry about the whiplash that entrepreneurs have.

26:40And then of course, now we're going to talk to Jacob upcoming about this access policy, which basically kind of is a counter to these codes. I don't know. I'm just curious, Michael. On the one hand, I get it. I don't want these codes to be misused, but at the same time, I hate whiplash for entrepreneurs, you know, and I fear that this may be a case that even though maybe there's good policy reasons to do it. You heard the story. I'm sure you've worked with some of these companies that use these codes. Like what were your thoughts? Yeah, it's, you know, it's very, very clear the proposal, you know, the code side of the world is getting riskier, you know, and CMS through the stricter rules that they're proposing on RPM, it's going to be a really a wake-up call.

27:19But I think the short answer is I think about this access program, right? The good operators are going to move there voluntarily, you know, because it is the access model is a voluntary one. But, you know, the pressure, the economics will push the rest. The pressure comes from that code side getting riskier, not from necessarily a mandate. But like, can you know, a lot of entrepreneurs are like, can we really make it work? And maybe that they're thinking that maybe you're maybe right. Maybe they're thinking that because they're comparing it to the current codes they could get. Yeah, that's the problem.

27:49Right. And you can't that's not an apples to apples comparison. You got to look at it as to what what the what the codes are going to look like after these changes. And it'll be a really interesting comparison because that's the real access. This the real comparison is access versus those codes following these proposals and changes. Right. I guess I don't and I maybe maybe I'll do some follow up on this, but like, I don't know, I maybe I'm just a glass half full of optimist. Yes, there was a billion dollars spent on our RPM and CCM. That's a rough estimate. Like are the bad apples like maybe 20 percent of that?

28:24Let's just say I don't even think it's that much. It's probably with sub single digit, you know, percentages were like fraud, waste, abuse. But I got to believe that the rest of the large percentage, whether it's 80 or 95 or 99%, actually this stuff should work. Like remote patient monitoring when done by like a reputable organization is a good thing. Like, and then chronic care, Mason, chronic care management for someone who's a comorbid got kidney failure or congestive heart failure. Like that can only be a good thing. So it's, again, it's 0.1 % of the federal budget. I know we want to move to a value-based care model.

28:56I want to talk to Jacob about access. I love the idea, but I've just always thought that value-based care has been like wildly underfunded and asks the entrepreneurs, the venture and, you know, backers and the innovators to take on so much cost and so much risk to get paid like months later. So I don't know. I don't know where I stand. I just, I hate to see the whiplash personally. I really hope it doesn't lead to less innovation in this space. So we'll see. We'll see, Steve. I'm excited to listen to that podcast when you're finally able to get him on our show. All right, well, happy Halloween.

29:32My youngest son was born on Halloween, so it's a big holiday in the Krause house. Happy Halloween to you. Likewise, Steve. I hope you have a great rest of your month and we'll look forward to catching you here soon. All right, my friend. See you later. Thanks, listeners. Bye.

29:52Thanks for listening to The Heart of Healthcare. If you enjoyed this episode and you'd like to support the podcast, please leave a rating and review. And don't forget to subscribe. The Heart of Healthcare is produced by Hallie Tecko and hosted by Michael Esquivel, Steve Krauss, and Hallie Tecko. The show is engineered, edited, and mixed by Kyle Moore. Visit our website, heartofhealthcarepodcast.com, for show notes and details. Thank you.