1Mby1M Virtual Accelerator AI Investor Forum: With Investor Gus Tai (Part 3)

Sramana Mitra: Now, I’m going to take this logic a little bit in uncharted territory. I think the most important impact of AI is in healthcare. We’re going to have a planet of 10 billion people to service from a healthcare perspective. So let’s just do back of the envelope Math. Let’s just assume that we need a 100 million trained doctors to be able to cater to that large population. We’ll probably need some 10 million hospitals and clinics to be able to manage that whole function.

So, is it possible that we can do that with AI?

Is it possible that at some point in our evolution, hospitals and clinics become venture funded because they’re run by an AI operating system? I’m asking this question, Gus, as I’m sure you can tell, is that I want to keep capitalism at the center of the innovation ecosystem because there is no evidence that any other model other than capitalism works in the innovation ecosystem.

Gus Tai: Yes, I was going to highlight that I was receiving your perspective in those two buckets. One is the role of AI in creating better solutions and scalability and then the financeability about it, or the ability to have a mechanism for collecting resources to apply. I do have healthcare investments as an angel investor – one is AI related and the other one will be using AI. My expertise and lens is really around the US market standpoint, not global.

The tension with the way the US healthcare ecosystem is set up is that it’s unclear who the customer really is. It’s clear in social media – you as a consumer, you’re part of the product. You’re not the customer. Your interests really are an annoyance on certain dimensions to the business model. So with that lens, you’d say, “Is the patient really the customer of the US healthcare system? Sort of, but maybe not.”

When you talk about capitalistic forces in the US, I think that the industry structure might be more similar. It’s not the same as the advertising business model, which does have its benefits in other ways, but there’s a different alignment of stakeholders versus what an individual may have in mind what would be most helpful for the individual. I view reform in healthcare as something coming from governmental pressures. Capitalism is great, but it does have its limitations.

Secondly, there could be some invention about changes in the value proposition because of AI scalability that unlocks and unleashes a lot of business models that would lead to change it. I’ll give you an example that wasn’t AI driven. One of my seed investments was in a company called MIDI health. MIDI health is a leading company to provide services to peri menopause and menopausal women. That capability became enabled because of Covid and the legality of providing telemedicine services and reimbursement for that. So regulation did unlock a very vibrant growing business.

I think that AI may surface those types of opportunities that are new types of service models. Now, the AI company I have in healthcare is more of a product service for the existing healthcare system. It’s more like a B2B type of technology to make them more effective. Those will arise, but those won’t immediately disrupt the industry to increase the scalability of effective care provision that you had in mind.

Sramana Mitra: Well, I think the US system is actually, in some ways, a better place to start, just because there is both a private insurance on offer as well as a public healthcare system. In the single payer public only systems, it’s a little bit more complicated at some level, but I think if we look at the Platform as a Service model and apply that to healthcare, there could be this kind of AI healthcare operating system, that all hospitals can use, and then on top of that, it may become really profitable for hospitals and clinics to be built more effectively and efficiently.

I asked the question in the context of venture capital, but even if it’s not venture capital, even if it’s a good investment to build a hospital by leveraging information technology and AI in every possible way, that would be small businesses built on top of the platform, potentially, and give us scalability in providing healthcare to the populations. In India, for instance, there is really no insurance industry. The health insurance industry is in a very nascent situation. The insurance industry has to be built, and then the whole healthcare ecosystem has to be built. So it’s an enormous opportunity on both sides, but it’s not built yet.

Then you have the European systems where it’s very much public healthcare, and those systems tend to evolve a lot more slowly. Unless there’s a private, maybe even venture funded opportunity that can come in and disrupt, it’s gonna be slower change. In a way, the US having a private system and the emerging markets having no system at all may be better places for innovation to kick in gear than the ones that are kind of slow and steady public systems.

Gus Tai: Yes, and as as you were saying that Sramana, it struck me that the tension is around incentive alignment across the ecosystem. Healthcare, the way I understand it in the US has a lot of large organizations that have a lot of power that are in this Balkanized system of relationship of cross interests that make it difficult for movement. The way US can benefit is that we, as patients may feel less serviced as much as we would like and to the degree we could aggregate customer patient demand. As you mentioned the private practices and so forth that would fuel the investment in technologies and services for that patient group. It might start out higher in terms of social economics and trickle down.

But it is happening. There are healthcare related services that provide full MRI scans of the human body. There are other ones that do the quarterly measurement of body chemistry to provide feedback. As those companies get half, then you could imagine those businesses could incrementally add more and more services to have complete healthcare capability. That could be another vector to help change alignment -to be more aligned with with individuals.

This segment is part 3 in the series : 1Mby1M Virtual Accelerator AI Investor Forum: With Investor Gus Tai
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