Podcast

Matt Stoll (00:00)
Welcome to On Background, tis the season for our, blah, blah, tis the season for our year end, ⁓ year in review session. With us today, we have Steve Parente, Health Economist extraordinaire, Tom Gunderson, parked in one of our local malls, Penom is a former healthcare analyst for Piper Jaffrey, now Piper Sandler. My name is Matt Stoll, I’m a Medivice guy, and we are going to.

wrap up the year with a conversation about the wonderful topics that we discussed for the last 12 months.

On Background (00:38)
Well, thank you, Matt. And I want to just to call out for Tom. First of all, it’s not just any mall in Minnesota. It’s America’s first enclosed mall. know, Southdale, Southdale set the pace for the nation just so we’re so we’re ⁓ No, it’s exciting that we did this all this year. We’ve talked about it doing this podcast series. ⁓ It’s kind of fun to kind of, you know,

Matt Stoll (00:48)
that’s right, I forgot.

On Background (01:06)
close it out for the year, even with our extra special, we’ll see if we do it next year in conception, 12 days of Christmas ⁓ recap. But ⁓ what was interesting, I have to was in doing that, ⁓ we’re right on the verge of closing out, because this is a recording on the New Year’s Eve, is just the range of the topics that we covered, and many of them are probably things that’ll

you know, pop up again next year. Starting with Paul Howard ⁓ talking about AI and healthcare, everyone’s favorite topic. We were talking about it kind of ahead of the curve, both the pros and cons. And it was great Paul talking about how that, you know, connected to his work with the FDA. And then ⁓ moving on to Karen Mandaboum who

largely is a lawyer, but has done a lot of work with health data privacy and how health integration will come together. And with all the things that are happening with, you you put in AI on top of healthcare data, those two things better go together. You have a problem. So, so that was fascinating. And then, ⁓ you know, going next, ⁓ we have Tony Lasasso.

coming in later talking about g l p one drugs as tony ⁓ we asked on the talking member about his of all-star journal op ed and don’t have one of them that snarky lines for the year maybe which you know which one

Matt Stoll (02:46)
It was kind of a little bit of a, yeah, he was showing off a little bit. I don’t know how that was.

On Background (02:51)
That’s Tony. He’s not heavy, he’s my confirmation brother. ⁓ Usually we trade emails by our confirmation names. Extra special points on the background, podcast listeners, figure those out.

Matt Stoll (02:52)
Yeah, which is fair. Yeah.

That’s fair.

And

Tony’s theme was, we’re going to give everybody a Zempik and slim down the country, ⁓ which.

On Background (03:14)
Yeah, what’s

interesting is that when we reposted Tony’s ⁓ episode, a good friend of Tony’s and mine, ⁓ Bannon put out, in five years it’ll be in the water. ⁓

Matt Stoll (03:26)
That’s fair.

Well, and we had a ⁓ follow-up, I think it was Joe Antos who ⁓ talked about the development of oral GLP-1 ⁓ formulations to kind of get a, and he talked about it in the spirit of competition and getting more towards.

getting more towards a product that the market actually wanted, which was to prevent us from sticking needles in our bellies and get us into something we could take every morning. ⁓ But to that.

On Background (03:58)
And lo and behold,

it happened at the end of the year. There was an announcement for if that product came out onto the market or will be coming out soon. Doug Holtz-Eakin was there too, former CBO director, talking all things health policy.

Matt Stoll (04:04)
Yep. So, yeah.

On Background (04:18)
Doug’s a guy in the sense of, actually one comment came back, it’s like, ⁓ well, if you have Holtz-Eakin on, this podcast is serious now. But nothing like a former CBO director to keep score. And then we added Tom Gunderson to this whole process. And Tom, I know you’re in a beautiful enclosed climate location, but.

Matt Stoll (04:28)
Really? Who said that?

On Background (04:44)
And we used to be doing this more with the Medical Industry Leadership Institute, ValLab chat series, so we’re thrilled you’re doing this now. But I guess, know, some of your thoughts, about, I know you came in a little bit later in the show, but I mean, you’re coming in from a whole different perspective than, you know, ⁓ me and Matt in terms of things we’ve seen and things we know and things we’ve actually done. So your thoughts, Tom, a little bit.

Thom (05:11)
Sure, ⁓ I’ll react to a couple of things that you said, Steve. One was AI, and AI is kind of the theme for the last two to three years, right? And you can’t go anywhere. Venture plans that come in all have to have AI in them for future investment. But from a standpoint where I’m coming from, it’s kind of like talking about, well, you know, we just found electricity and it’s really going to change how we do.

healthcare in this country. No, it’s going to pervade everything. It’s going to change the way we are and where we’re going. And ⁓ I think that many of the companies that are out there are already working on it, but they need young people, younger people to keep up with the incredible pace that AI is growing at. Because ⁓ if you fall behind,

in any of the industries that we talked about, whether it’s pharma or bio or med tech. If you fall behind in any from an AI standpoint, it’s going to be difficult. ⁓ that’s one thing that I paid attention to in the podcast that you did. And the other is just an outsider’s view of listening to these podcasts from an economic standpoint and a policy standpoint. And what I saw in

2025 from a med tech standpoint is investment slowed down the med tech.

funds did not do as well as the S &P. Usually they lead the S &P ⁓ and they didn’t do as well this year. And you see what I consider from an investment standpoint to be

a level of risk that’s higher than it’s been in the last couple of years and certainly one of the highest levels of uncertainty that I’ve seen in the last several years. Risk the market can handle. You price up, you price down, you can put that into the equation, you study it, you figure out, et cetera. Uncertainty is a difficult one and when you

bring in a new administration and they start jumbling things up in a different way that’s less predictable than say it’s been in the last decade or so, then it throws the investors for a loop and they just say there’s other things for me to invest in rather than ⁓ healthcare in order to get the returns that I want to get from my.

for my investors. it’s circle around listening to the policy discussions that we’ve had. That’s what I’m taking is that there’s a lot of detail. There’s a lot of work that goes into this. But if the leaders at the top aren’t setting a ⁓ goal or direction that investors can follow.

On Background (08:16)
you

Thom (08:35)
the money’s not going to follow either. That’s kind of my take home message so far.

On Background (08:40)
Hmm. I guess that sort of leads a little bit into, you know, what to look forward to in the coming year. I mean, that’s sort of a wish list aspect there. I hear you, Tom, like, you know, clear direction as to the where. And I guess it depends on what leadership are we talking about too? Because I mean, if it’s, you know, if it’s HHS leadership, there’s, you know, it’s what’s been intriguing this year, just looking back at it is normally

You don’t really have this sort of these, if you will, photo shoots with essentially four leaders of HHS sort of standing together in unison. ⁓ You know, it’s not really been the case where, you know, the head of the FDA, the head of the NIH, HHS and CMS all sort of stand together, you know, in different policy initiatives. And I’ll refrain from commenting on them, but I just note that that is different and it’s been a consistent piece. So at least.

If nothing else, they’re trying to show a front, a unified front that hasn’t been necessarily been there before. But I hear what you’re saying in a sense from a market perspective. It’s not clear. I’ve got one question I want throw back at you, Tom. Take the politics out of it for a second, or least the leadership policy part of it out. Is there something else, I mean, in med tech that’s slowing it down? In other words, is the innovation cycle slowing down, or is there…

Thom (10:01)
Thank

On Background (10:04)
There are more concerns, I mean, in terms of what products are getting to market. To your other issue, is more money flowing now more to the pharma side of the house rather than to the tech side?

Thom (10:21)
I think from, I don’t know that it’s going to pharma. just saw what you guys probably saw in the Wall Street Journal, that, you know, PhDs in Boston are going ⁓ wanting for a job because biotech is down so much in Boston and there’s layoffs. I’ll go with the layoff theme to partially answer your question, Steve, and that is, yes, there are a few things. Take the politics out of it. We’ve been through this before. I’m trying to think, maybe 15, 20 years ago.

The FDA, particularly the device side of the FDA, had a moment where everybody who was there had kind of 20 years experience. So imagine that. You have a lot of experienced people that know how to get things done, that have been there, haven’t seen anything that they haven’t been able to handle in the last 20 years. They all retired within two to three years. And there wasn’t a backup plan. I remember talking to the FDA commissioner about

There wasn’t a backup plan to backfill those positions. So there was for four to five years a slower FDA, a less competent FDA. And I don’t know that we’re in the same place today. That was disruptive across the board. I don’t know we’re in the same place today, but my contacts are telling me a lot of the smart people have left the FDA. And if the smart people are leaving,

Who does that leave there again? So it makes it more difficult for the ⁓ people that do have research to get through this process because some of the people there are brand new and haven’t done the job before. ⁓ the other thing that goes with what I was talking about several minutes ago, and that is from a venture standpoint, I know that if I

go into MedTech or Bio or Pharma, it’s a 10 year turnaround. So I have to figure out how I’m going to make money over 10 years. I’m probably not going to take it from back of envelope to successful GLP-1-1 product. I’m probably going to take it from proof of concept through when it can be acquired by somebody else. And if that acquisition is dependent

dependent and therefore my payday is dependent on FDA approvals, that timeline just got pushed out and therefore the value.

On Background (12:59)
Yeah. No. So let’s pivot a little bit to what we’re looking for in the next year. We haven’t barely put together what our potential prospect list is. We’re probably going to ask some people back. I guess Matt, just through to you first, I what topics do you think we need to bring in to talk about that are important or even ones that we need to bring back again? What would you say?

Matt Stoll (13:23)
Well,

to Tom’s point, know, I talking about AI and healthcare and AI specifically in, so I started out my career in the telecom space and I am, so I, the concept of moving bits is not foreign at all. And we’ve kind of got these traditional silos of medtech, pharma, biologics, and biologics is really just a living form of medtech and

They’re approved under a different process, but they are functioning either as drugs or as devices. And then you’ve got the healthcare space, which is the delivery of actual health services to patients using those tools and physician and nursing services.

And things like, well, and even imaging is, know, and stuff like that, that falls under medtech. And then we’ve got AI, which kind of creates a fifth silo of product or service or both. so I…

As a skeptic, as somebody who’s seen the Garner hype cycle play out a couple times, seen the Rogers model play out, Lord knows how many times, I sit there and go, okay, to Tom’s point, well, it’s like finding electricity. I don’t agree. I think it’s going to have a lot of applications. It may follow what the web did in the late 90s, what telecom did in the early 2000s.

where we had irrational exuberance, a crash, and then a building of, I guess what I’d phrase as, critical mass. application to, or how do I edit a lot of this out, but.

finding the right applications, finding the right problems to apply it to where you had good return on investment for it and it actually solved good problems. And so where I’m struggling, and this is just because I think I’m behind in my reading and talking to the right people, is where can we put it where it’s solving the right problems? You can look across.

On Background (15:34)
Mm.

Matt Stoll (15:47)
have many disease states and find applications. can look at med device development. You know, it’s like Avid and Medtronic are building their own AI instances. To do what? Pharma is using it for, for,

drug discovery. That makes a lot of sense. know, when Steve and I and Mike Finch were teaching the medical device, the medical evaluation lab at the University of Minnesota, you know, students would come in with these new concepts of saying, oh, it has AI in it. And eventually my question to them became to do what? It’s another hammer in the toolbox in and of itself. Okay, it’s new and it’s shiny.

But where do you apply it in a way that’s actually meaningful that, again, in healthcare we’ve got two levers, direct dollars spent and lives improved. So how are we using AI to deliver a product or a service that moves those two levers in a meaningful way? And we talk about all the exuberance, we talk about all the shininess and the excitement behind it, but where does it actually convert into a way that makes the healthcare system more efficient and more effective?

And that’s what I really like to, you know, again, ⁓ I realize hanging around you guys, I realize that I’m young, but I’m not young anymore. I don’t know if that was an insult or not. ⁓ But yeah, sorry. But.

Thom (17:11)
Yes, it was. ⁓

Matt Stoll (17:15)
So I’m having my curmudgeon phase and I’m like, no, need to learn about, you know, I need to make sure that I’m engaging this in the right way. And so I kind of want to understand where it’s being applied in effective ways and how we actually move the needle in healthcare. Because we had several, we had several participants this year who talked passionately about it.

but they couldn’t really cite examples of where it’s moving the needle. It’s like, this is gonna be fabulous. And I’m thinking, but where and how and where is it actually providing a meaningful ROI for companies and a meaningful improvement in lives for patients? And that’s what I wanna learn myself.

Thom (17:57)
So

Steve, let me react to that, add a little bit to it and answer your question of, continue to answer the question of what do we look at next year? I agree that I don’t, electricity was kind of important, so I don’t want to poo poo it, AI is important. ⁓

Matt Stoll (18:19)
Yeah, agreed.

On Background (18:21)
Sorry.

Thom (18:24)
Where I see AI and where I would like to see people talk about this and maybe some of the podcasts next year is ⁓ we don’t have enough providers. We don’t have enough doctors in this country. ⁓ The boomers continue to live on and ⁓ the generations behind them are now starting to get into that age group where there’s going to be more disease and you’ve got

more demand and less supply when comes from those healthcare providers. Particularly, and this is where we could, I bet, find somebody in Minnesota, ⁓ in the rural areas where ⁓ hospitals are closing down, it’s difficult for people to physicians. I think AI would be an excellent substitute for that. When I talk to doctors, they all go, AI can’t do what I do.

It’s med school. It’s looking at the patient. It’s doing all that. I don’t agree with that argument, but I’ll let them have that argument. But where we do agree is that a good AI program is better than no doctor at all. If you’re out in the middle of nowhere and you’ve got a problem and the answer is the most advanced up to date.

data-driven algorithm tested AI program. I’m going for that whether I’m in Bismarck or Southdale. It’s just…

Matt Stoll (20:00)
So.

So Tom, one, I agree with you. One thing I talked to Steve about, I think it was last year, maybe earlier this year, was I said, well, at the University of Minnesota, we have all the intelligence and all the collective wisdom that’s been developed there through millions of patient records and data points. And I said, ⁓ I think I called it the Minnesota Patient Initiative, which was you roll all that up, you put it into the right AI,

and you push, and it captures all of the environmental and ⁓ demographic and lifestyle elements that are captured within a state or a locale. And then you use that to push out kind of your best practices to areas that don’t have.

physicians like they have in the Minneapolis Metro and in Rochester at Mayo Clinic and you push it out to the rural areas and Steve’s response was if only I was a younger man. you know and I know that’s not unique right? It’s can you push can you can you push the wisdom of the high volume areas out to the lower volume and lower resource areas and improve the health outcomes?

On Background (21:04)
Hmph.

Matt Stoll (21:18)
by proxy there with where you, again, you’re right, where they don’t have the expertise and the sure quantity of physicians out in those areas.

Thom (21:28)
So personally, I think that takes a pilot test, not somebody sitting around for a year to come up with the perfect plan. Just go do it, go places, see what works, doesn’t work. But I’ll also react to Steve saying, if only I were a younger man, because what I was going to say to your health initiative thought, Matt, was, and who’s going to do that? Who’s going to be the champion? Who pulls this together? Because I’m reminded it’s what us old camaradians do. We remember the good old days.

Matt Stoll (21:35)
Right.

Yeah.

Thom (21:58)
Long before Google, one of the leading search engines in worldwide webdom was Gopher. And we had the lead and there wasn’t a champion to go for it. And the next thing you know, ⁓ there’s a trillion dollar ⁓ company out there that has grown and done good things. I’d like to see.

On Background (22:04)
Hmm.

Yep.

Matt Stoll (22:10)
Yep.

Thom (22:25)
champion and I’d like to see pilot trials start, I don’t know, Tuesday.

On Background (22:30)
I guess the question is, are you okay if the pilot trials occur outside the US? what can, let me, let me, let me frame this up a little bit. One of the things that concerns me about AI is that for the most part, the way it’s being looked at from by regulators is it’s an assistant to the physician. It’s an assistant to the care process. It’s a little bit like the movie war games dates me a little bit 1982, you know,

that opening of that movie is that the sense is that the machine can’t, you can’t, yeah, with Joshua, you can’t trust, you can’t trust ⁓ the human in the chain. need to have the machine operate all the way through, right? And so they take the humans out of the silos, basically. In medicine, I don’t think anyone has advocated to take the physicians out and have the AI come on in.

Matt Stoll (22:58)
with Joshua.

Yeah.

On Background (23:25)
to handle all the other components of it. so my concern, be very direct, is that will the rural doctor, given the information that the AI has produced, trust it, act on it, use it, and then adapt and learn from it? ⁓ Because they still, every physician still sits at the driver’s seat for so much of the care that is out there. And, you know, other, and I’ll go back to my racial comment, other countries ⁓ don’t have

as much of a, for lack of a better term, of status that they coer to physicians. And so they very well could be.

lack of better term, industrial medicine of sort of like if this algorithm, it doesn’t require a physician, it could just be someone who’s physician adjacent to execute and move on if all the different pieces align. And one last piece, their data systems actually probably link potentially better than ours. ⁓ That’s one of my largest concerns about authoritarian regimes with money ⁓ is ⁓ they know that the competition space in

the biologics or basically anything in biopharma discovery is a major, major market. They want to be in it and they know that AI potentially is a way to actually accelerate it. that, mean, trying to think about who are the best people for a podcast to bring in. mean, you almost want to bring in, you know, someone who’s been in the FDA before, but also someone who talks national security and just sort of say like, is this something you track, you know, in terms of just broader considerations.

Thom (25:04)
I’d listen to that podcast.

Matt Stoll (25:07)
Ha!

On Background (25:09)
I gotta

see how those people are. ⁓ The thing that was always fun about when I worked in DC in the White House years ago was across the corridor from the National Economic Council was the National Security Council. There never was a coffee cooler moment and you probably didn’t want one either.

Matt Stoll (25:32)
Well, and Steve, when you talk about, you know, when we talk about future podcast topics for the coming year, ⁓ I think the, well, you kind of touched on it. One of the big ones is economics. ⁓ How do we pay for it? It’s, so whether that’s…

whether that’s developing the devices and the drugs. We talked about the ferocious costs associated with the development of pharmaceuticals and med devices. Tom and I have lived the latter personally.

You know, we’ve talked about the former extensively, you know, the money that’s being thrown at AI currently in the current development efforts. And then just, you know, the, not to bring up a political hotspot, but the ACA subsidies and the current debates about that driving up individual healthcare costs. And how do we pay for all of this?

And where are there opportunities then to drive some of the costs out of the system, either with tools or processes or philosophies, et cetera, that make the system more efficient? ⁓

just given the landscape that we have in the US. There may be other philosophies worldwide of how it’s done and we can talk about those, but we have our system in the US. So within the landscape that we have today, how do we make what we do more effective, more efficient and more accessible for more people in the US? And I’d love to talk to more of those folks.

On Background (27:05)
Yeah.

Well,

we could talk more. I think one area that we need to probably touch on ⁓ that we can bring some people into is like, and this sort of came up in the, with the last debate over the Affordable Care Act extending the tax credits is these health savings accounts and engagement. could tell you that ⁓ actually just recently I was reading something from the CEO of LinkedIn, on LinkedIn from the CEO of Health Equity, which is the largest holder now of health savings accounts.

And he was basically saying like, these are incredible things or triple tax advantage. And yet people just don’t use them and know about them. ⁓ millions of people don’t. And so it’s an interesting scenario where the U S has gone to a lot of lengths to actually give consumers ownership over their, ⁓ not just, you know, choosing their medical care and what doctor they want to have, which more so than say other countries for sure.

but also giving them the financial resources to back that up. And yet it’s not really being done. I mean, that’d an interesting thing to follow up with because ⁓ it’s now gotten into national politics. Two senators have talked about national accounts. The president’s talked about national accounts. No one’s talked about the logistics of how it would actually be done in any detail other than three sentences ⁓ or some legislation. ⁓ But I mean, just to put it into context, I read some of the legislation that was out there.

And it actually starts off with saying the secretary shall. And the one thing I remember from the White House is that you have to ask the question, which secretary? Because when it comes to healthcare, there’s three of them involved, labor, treasury, and HHS. And that’s why you have to bring them all in a room together. And so that would be an interesting conversation, I think, for something in the future.

I think obviously the drug conversations about how drug regulation is going to be a major part again. So some of it’s going to be bringing back some former guests. And another one I’ll mention too is Rina Conti, our last guest ⁓ before Eric Hargan, ⁓ talking about basically what she knows about 340B and what’s going on. But she was coming hot off the heels of a trip to China that

She just wanted to talk about, she was basically like on the tip of her tongue, like, let me tell you about how my first trip to China just blew me away in terms of what I see there in terms of drug discovery. And maybe we can just ask her, what’d you see?

So.

Thom (29:43)
I’d go along with that, by the way. I know that this is policy and has a Washington focus on economics. But just from my side, you said is the innovation engine slowing down? That was a question to me earlier. As we look to 2026 and how we do these, I’d vote for a little bit on the R &D side, either from Washington, NIH kind of thing, or what you said.

⁓ just now is drug innovation in China. are on, in my opinion, we are on the cusp of a huge ramp up in biological pharmaceutical innovation with CRISPR and mRNA and many other things that are in the labs right now and being developed ⁓ and to see how policy works. we get…

Can we get warp speed 2.0 to help with some of these things? Those are the kinds of things that I think would be interesting conversations as well.

On Background (30:51)
Yeah. And then also another follow on to that was perhaps this conversation we had with Tom Phillips and talking about kind of like a NATO style drug innovation fund or coordination just to accelerate that too. So the burden’s not always on the US for R &D. It’s a good place to start too. Well, didn’t, know, in the end, when I thought about this conversation, Matt, I thought we’re going to talk for 10 minutes and be done, but

Thom (31:09)
Exactly.

Matt Stoll (31:22)
Hey, we came up with some good stuff. Yeah.

On Background (31:22)
But not.

Yeah. Well, I guess, Matt, you have the sonorous tone of the gods here, so why don’t you bring us in for a landing as we count down the hours to New Year’s Eve, which has already occurred in China and Australia, and I think we’re just on the cusp of Dubai, but go ahead.

Matt Stoll (31:43)
I guess I wish all of our listeners, I think I’ve looked at the recent downloads for our podcast. It’s not huge, but hopefully we can develop a loyal following. don’t know. I’d wish everybody, I hope your 2025 was prosperous and healthy and happy and wish you all a wonderful 2026. Hopefully we can, I hope that we can bring on intelligent.

productive and fruitful conversation in the new year about healthcare and how we realize it in this country.

On Background (32:20)
I’m going to close and comment Tom. I love the fact that you’re here because this entrepreneurial and policy focus combined I think is really important. You can’t really have one without the other and so you keep us honest on that score. But what’s fun about it too is to talk to the people, know, sort of the niches. These are people from all walks of life but they had some aspect of government so they at least know.

If they weren’t making the sausage, they at least stood really close to the machines and they have some better sense of how things can be. For some reason, Hormel just came in my mind too.

Thom (32:53)
you

On Background (33:01)
But so just a big thank you to you, Matt and Tom and Brianna and Lisa Tamai, aka JJ for making this go. This was something that we dreamed about for a while. It’s kind of fun to keep going and we’ll see how the listening audience goes up. You don’t want it to blow up in a bad way because in this world, in this country, in DC, blowing up can really, you know, blow up. ⁓

Matt Stoll (33:27)
Yeah, exactly. Yeah.

Thom (33:28)
Ha

Matt Stoll (33:30)
I don’t mind the fact that a small but loyal listening audience is not necessarily a bad thing.

On Background (33:31)
Anyway.

All right, all. Well, happy new year, all. Happy new year, everyone. And we’ll see you all on the other side. Take care.

Thom (33:42)
Alright,

bye guys.

Matt Stoll (33:43)
Take care.