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Rick Gannotta: [00:00:00] Hey, welcome to the Healthcare Nation Podcast, your host, Rick Janata.

Today we're joined by Emily Evans, the sharpest policy strategist from Hedge Eyes Health Squad. Joining us in a conversation that's gonna go over a lot of things, starting with Trump's. First a hundred plus days. In this second term, we're already seeing some seismic shifts there in healthcare, and Emily and I are gonna unpack everything from drug pricing to tariffs and even global supply chains.

Emily, a little background. She's the go-to analyst at Hedge Eye, translating Washington's to Crees into real world market moves. Everything from biotech, the payers, hospitals, you name it. And we're gonna be here to discuss, unpack everything that's happening in the health sector, what's next, and what it means for providers, patients, investors, and for the people who are part of the Healthcare Nation Podcast.

So stay tuned. Gonna be a great show.

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Rick Gannotta: [00:01:00] welcome back to the Healthcare Nation. We are so glad to have you. And as I said, look, when you're on the show three times you, you get resident status. So you are definitely our resident. Well, let's call it this way, policy markets you know, expert on the squads. So great to have you back.

Emily Evans: Well, thanks for having me. I'm happy to be a resident at the Healthcare Nation, so

it's, it's

Rick Gannotta: a fitting title. It's a fitting title, and we got a lot to talk to. So talk about and, and talk to. Absolutely. So let's just jump in and I wanna start strong. We're just over a hundred days into the new administration, Trump's second term lot to talk about with respect to that policy moves fast and hard. We've seen everything from Biden drug pricing tools rolled back, Medicare drug negotiation, paused [00:02:00] favored nation issues coming up, issues with you know, Medicaid across the board. What does this trio of changes really signal? What does the cumulative impact that we're looking at and what should we or shouldn't be watching for? Give us your thoughts, Emily.

Emily Evans: Well, I think the first thing to think about here in healthcare under this administration is this shift in paradigm. Um, and, and it's a, it's a, it's definitely a shift towards more free market solutions, but. That was there in Trump won. So that shouldn't be a too big a surprise, but it's also this shift from this really long period, I'd say 20, 30 years of the federal policy being you are either sick or you're going to be sick.

We need to protect you financially. That's the argument for the Affordable [00:03:00] Care Act, expansion of coverage, et cetera. The, this administration is pivoting to, no, you're healthy. We wanna support you in keeping you that way. And federal policy will be all about. Good health rather than insurance coverage designed to protect you from the, you know, financial, financial distress because you got sick.

Now, it doesn't mean that there's, there's gonna be any changes to the Affordable Care Act. I think it, it's got, its, its own problems that are becoming more evident, but, but it, it means that we're gonna shift the way, the focus away from sickness and coverage to. Um, and that's a pretty big shift when you really start thinking about it at the individual policy level.

So, so that, that, that, I'll throw that out there as kind of the, the, the main, if you're looking for a theme, that's it,

Rick Gannotta: [00:04:00] Yeah, and let me respond to that because I think this, the notion of aging. See over one's own health. I usually apply that to, let's just call it a younger generation, right? Gen X, gen Z, millennials, you know, access to everything from, you know, ai, Google Doc, you know, on their search. All of that coming into a physician visit already knowing, you know, potential differential diagnosis because of their research.

I get that. I think picking up on where you're, where you're, I think coming from which I align with completely is yesterday, I think RFK, during a testimony said he's wanna promote wearables on

All Americans, which I, that I was really struck by that having worked with companies that were, that were pretty prominent in that field, you know, the intrusive level that that could, you know bring to

light.

Emily Evans: I. My response to it was, well, that is a goofy idea. But then I started examining, and I've been examining the, [00:05:00] the FDA's policy, which is gonna be an emphasis on real world data at real world evidence. And suddenly it starts to make sense that you want people, as many people with glucose monitors on them as possible if they're diabetic, you know, instead of just hitting the doctor's office and getting that kind of point in time.

Number so, so to, so that was the, that that's informing everything. And I, I think that's just one example of it with the, with the, the, the FDA kind of picking up that data stream that's generated by wearables and saying, Hey, let's point, let's use that for improving, you know, preclinical work, improving, you know, the FDA approval, approval cycle.

Just making that. 10 year duration of drug approvals, you know, come down to something you know, a little bit more acceptable, or one that reflects the modern era. You know, it's been 10 to 15 years. For [00:06:00] several decades you would think we would get better at it, which goes to your drug pricing questions.

Rick Gannotta: Right. And I think the leveraging of technology, which I'm all for it, it really comes into play. Let me shift on that theme to the players. What's the market telling us? Are we seeing, you know, when you think about insurers, particularly with data even, you know, I think low hanging fruit, like streamlining things like pre-auth hospitals, recalibrating. You know, their, their own capital spend because of some of the CMS reforms we're seeing and what is this doing to even startups, med tech, biotech, et

cetera. And that's, that's,

a.

big loaded question.

Emily Evans: Great question. So one of the things that I've been exploring for the last few months is this idea that we have reached there, there's about 330 million people in America. Um, there's about 330 million people who have insurance coverage in our model. Now, [00:07:00] some of those people are duplicated people on Medicaid and Medicare, for example, people who work and also on Medicare.

But nonetheless, you're really bumping up against the, the total population, which means if you're an insurance company, you're not gonna grow because you enroll more people. You're gonna grow because you can, you, you or you're gonna deliver, um, EBITDA and margin to your investors if you keep your benefit spend.

As low as possible. So you're not, you're not getting in those new healthy, say Medicare advantage enrollees, um, that offset how much you're pay, you know, paying for the, the older ones you, that's not, that's not really happening. And so, um, so that's the, that's the struggle. And, and, and like UnitedHealth Group is a great example.

They, they develop all these AI solutions, these automated solutions for, for utilization management. Well then the big hospitals got in the game. And [00:08:00] they've got their own way of going, okay, if I program it this, I can just navigate over to. Approval. Okay. Um, so, so that's Sure. The battle of the machines that's, that's going on here.

And and, and there the, the only answer is, is probably something like lower utilization and flat lining of price as far as insurance companies go. Um, I, that, that's, at least that's, that's my analysis of it.

Rick Gannotta: Yeah, and for me at least, thinking about the technology side. To the extent you optimize that, where we can at this given point, you'd start with what I would call low hanging fruit, right? On the hospital side it might be, you know, daily operations and management of, of information flow. Not yet clinical.

On the insurer side, will it be pre-authorization, more of the velocity of care? But at some point, you know, the margin starts to, as you [00:09:00] said, kind of get a little flat and there's not a lot of upside unless you're gonna steal market share or expand and get into MA products or even manage Medicaid,

which again, the, the, the cost pressures are going to be on there as the margins kind of stay flat.

What do you think this is doing though to the startup world? Both. I wanna hold pharma out, but if you think about med tech and then the biotech side, what are you seeing from, from that side of the health sector

Emily Evans: So bi, so you ha you have in biotech and to a lesser degree, I think med tech, a lot of stranded capital people who are headed down this road, assuming this paradigm. You know, the, if you're, if you're a biotech company, if. I'll get, you know, I'll get far, far enough down the road for approval to catch the eye of a biopharma company.

They'll buy me good. Done right? I a success there. [00:10:00] And that's just not happening. I. Anymore. Um, because a lot of, a lot of the problems in the big biopharma and some other problems, and that to a lesser degree on the med tech side or or the technology side, you've had a similar problem where a lot of solutions have come in and.

Been kind of rente, you know, not necessarily solution driven. And a lot of that had to do with the Biden administration's policy with respect to artificial intelligence. You know, they did not want to see it implemented, and they went to great lengths at the FDA. And it's CMS to keep, you know, people from moving forward.

So if you have a really great idea to improve productivity, for example, you are definitely stymied, um, from a startup perspective that's starting to break out. You know, we're starting to see, you know, that, that, that relaxing and I, and I think the, the opportunities for. For med tech, for anything that supports [00:11:00] time savers in clinical trials.

You know, anything that, um, cre saves time in the preclinical. Those are the, the business ideas that are, are going to to, you know, I think Blossom here. And some of them, honestly, were kind of put on hold as we went through this period of four years where AI is bad, technology is bad. Now we're getting back to no, no, no, let's let the market, you know, speak here.

And there's a few like decentralized clinical trial companies out on the West coast that, that I think have a lot of interesting promise as a in, now that we can see more clearly what the policy's gonna be.

Rick Gannotta: Yeah, and I think it gets back to what I was talking about earlier with, with respect to the speed, the clinical speed, the

velocity of care. Certainly with clinical trials, I, I've seen a lot with ambient scribes in the room and the

difference that could make. In fact, I was talking to a physician friend of mine who has a very busy GI practice, and he said, look, I can actually get home [00:12:00] on time and I don't have to work.

I could, I could spend that very, very precious time with my kids now, which they'd be asleep.

And I think that's the kind of revolutionary piece. But at the same time, I wanted to ask you, do you see the, in the from a capital investment. Sentiment. Is it solid? Is it shaky? Um, I'm thinking about this and what's the difference between, say and perhaps you've already answered this, a United Health where their shares are off and Humana shares are off. What does that mean versus the other parts of the sector? Is it, is it a good time for investors to be looking at the startup world or. Are things just going to, you know, let's wait and see how, how it rolls out with the rest of the administration.

Emily Evans: I would say emphatically yes to that question. You should be paying attention to to the startup world. Because I feel like there's, I don't feel like this. I've rec, I, I've seen this bottling [00:13:00] up. Solutions, um, you know, this, this holding progress back and now it's, it's surging forward. It's getting a new permission structure to move forward.

So, I, I, I think I can answer emphatically yes on that, and I also, I. Because the insurers, the managed care organizations are under a decent amount of pressure here. They're, they're trying to either keep utilization down or trying to keep price down. Alright? So if you're operating a hospital or a hospital system and you've got price, pressure and or utilization pressure, your, you, what you need to do is increase productivity.

Find productivity solutions like your friend with the ambient scribe, right? That think he's getting home hours earlier. That's a huge productivity enhancer for him. And not to mention the job satisfaction, um, you know,

enhancer for it.

Rick Gannotta: He's not looking to leave.

Emily Evans: Yeah, exactly. And that, that's something that healthcare has been really, really bad about [00:14:00] because it's had so much human capital to exploit.

Um, you just look at the, you know, employment charts, especially after the a CA and then after, during the public health emergency, there are these inflection points in the employment charts where people have come and, and, and, and joined that workforce, putting no pressure on innovation. And, and that was okay.

If you are, your base as a politician is organized labor that's okay with you, right? You, you want that to happen. And, and I think that's what we've seen. No. No poor reflection or organized labor. They're representing their interests. But, um, but that, that's what you, you wanna see. So, so I, I see, I see a lot of, and I know this is happening at the for-profit hospitals, um, and, but it's happening kind of within their walls kind of thing.

Um, but but that's a that's, that's I think kind of the, that's, I think the really exciting part about it.

Rick Gannotta: Yeah, and a. Look, and in fact, I'm glad you mentioned the for-profits because I'm looking at the [00:15:00] for-profit hospitals with respect to innovation to see what they're doing with models of care now, we're still you know, kind of held back and restricted because of interoperability across states,

issues, as you said, with organized labor, with ratios, et cetera. But if you take into account. The big shortages that are coming up with respect

to bedside providers, nurses, certainly many physician specialties and other professionals within healthcare. Something has to change with the model of care. I think technology is gonna be applied in very new and unique ways, but. The speed of that happening is going to perhaps be blunted because of political issues,

because of things like organized labor and literally the regulatory that goes into things like state regs.

Emily Evans: I think, I think state regs are probably the, the biggest concern. And that's one of the reasons the one big beautiful bill has a preemptive clause [00:16:00] on the use of AI regulating AI at at the state level. Because they're, the Congress is concerned about it as well, is like if we start regulating this at, at the state level and AI is kind of an.

Commerce thing, right? It moves across lines, state lines, global lines, you know, you know, fairly easily. So, so I think that's probably the one that I would highlight the most is the state the state regulation. Um, but I do think that there's a, it, you know, it's, we are at an inflection point because of those workforce issues and, you know, doctors are.

Aging and a new kind of doctor is coming on the scene who has, you know, not, has been treated differently, you know, and has experience has lived a different life. Right. You know, with, with video on demand and, and, and, and all kinds of things that your average, you know, 68-year-old general practitioners not, did not have the benefit of coming into practice.

So,

Rick Gannotta: Yeah, and that and, and the patient piece too. What [00:17:00] they want from a

Emily Evans: Right, right.

Rick Gannotta: you know, retail transactional experience that could

Emily Evans: Right.

Rick Gannotta: online.

Emily Evans: Right. Exactly. Um, one thing I wanted to go back to UnitedHealth Group for a minute, because I think their problems are a little unique in the insurance industry and that, um, that is one of the, I think the games that they were playing is, is that they were aggressively coding people coming into Medicare Advantage and getting those risk scores raised.

Now they're having to essentially deliver care that matches those risk scores. And that's of course hitting their, their benefit ratio. The point being a lot of those guys may have over earned over this period of time, maybe since 2019 or so, and, and that's gonna have to get right, right size. That's not necessarily true.

The provider community. And if you start. I hate to be, you know, direct about this when it comes to insurance, but when you, you weigh out, like the actual, you walk up to [00:18:00] somebody on the street, who do you love more? Your doctor, your insurance company. You know, what are they gonna say? Their doctor. So the doctor delivers.

You know, real value to the patient. The insurance company is there because, because they have to be there. And, and I don't know how sustainable that model is over an extended period of time with a new generation taking, taking the, the, the wheel in, in the healthcare

Rick Gannotta: Lemme, lemme pick up on that because I think you know, United Group, right? She, with Optum, it's a little bit of a different animal because it's almost a closed loop system. So.

They're right, right, you're

right. They're, they're, I think, the biggest employer of physicians in the United States which is pretty telling when you

think about everything that goes into the coding and the insurance side of the equation.

And when you look at optimization, it just seems to fall into place that they'd have line of sight [00:19:00] from the top down on all their business units and how it would. Again, give the best ROA for the ROI for their shareholders.

Emily Evans: Yeah, I, I think there that, that's also been a, it, it turning into a bit of a problem because in order to man, when the medical loss ratio at United Health, and you should see the curve, the curve associated with medical loss ratio at United Health. It's like not of this natural world. As my colleague Tom Tobin says, it's this very, very.

Level number, and, and then all of a sudden it breaks out in 2024 because of all this pressure they're getting legally. But what they were, what they appeared to have been doing is, you know, bonusing, the docs on the Optum Health side. So that they could, you know, not send that money back to the government because it's because of the, the MLR rules.

Um, that only lasts when you have a natural, a naturally low MLR. You could, you could bonus bonuses guys, but is that gonna continue [00:20:00] in a higher utilization environment? I don't, I don't know. Um, so, so these, these are, these are questions everybody has and unfortunately United doesn't answer them very well.

Um, they have some of the

Rick Gannotta: I do think, but I.

do think it's playing out in their share price. Right. And some of the, and obviously the, the

More than wobbly, you know, wobbly performance that they've had over the. Last three months.

Emily Evans: Yeah. And they do themselves no favors with their, um, their disclosure, um, their regulated disclosure. It, it's really hard to know what's going on in that company and independently verify it. You just have to talk to management, which they has kind of proven itself not to have a good handle on things here recently, and that, that's kind of.

Causing the street to, you know, we hate uncertainty. Right. Um, and so that's causing the street to be even more skeptical than they otherwise would be if the company had taken a more, um, embraced disclosure. I think more more, you know, honestly, or, [00:21:00] or more directly.

Rick Gannotta: Let me, let me shift again

and get to the, another pressure point, which is the tariffs, obviously the Trump administration. Stance with respect to China, Mexico, even Canada tightening this is where I wanna go back to pharma, generic drugs.

What are we seeing with respect to that world and the strain?

And is there any anything that, that is not apparent that we need to be aware of? And also are the implications in that arena for MedTech and biotech with respect to the supply chain.

Emily Evans: Um. Let me answer that question by saying first, the healthcare industry experienced a greater supply shock problem in 2020, more than any other industry and more than any other industry that mattered a lot. If you didn't, weren't able to [00:22:00] get your Nike shoes, okay, you can wait, right? But when you can't get the protective personal protective equipment or you can't get the active pharmaceutical ingredients, completely different deal.

Right? Um, so one of the af coming out of 20 20 20 21 CMS took fairly proactive steps to say you guys have to have your supply chain. Um, you know, diversified. And I think, and, and so if you, if you talk to any responsible CEO Hill or hospital administrator, you say, yeah, we, we, we, we did a lot of that diversification already.

And one of the comp things I hear from a lot of companies is, you know, we now have, we now have four. Points of origin for our supplies. So if something happens there, that tariff negotiation doesn't go well, for example, then we can just switch over here. You know, where that so, so that, so know, so know [00:23:00] that there's been a lot of work done there that hasn't been the case in other parts of the, the American economy.

Rick Gannotta: But still, but Emily, one piece, I mean, short of onshoring that we're still,

you know, looking at overseas and in most cases, certainly with PPE, it's Asia, I.

So it might be the diversification could be, well, not so much China, but maybe Vietnam as an alternative

Emily Evans: yeah, right. The, yeah, the, so there this, the problem still it, it exists. It's just not as acute as it it was then, which brings me to the next problem, the one I don't think people fully appreciate and that is this administration is viewing the supply chain as a national security issue. And particularly as it relates to the pharmaceutical industry the Department of Defense has put out, I think.

Maybe for five years they've issued reports on the US dependency for active pharmaceutical ingredients [00:24:00] that originate in in China, um or to some degree India. But one of the things that comes clear in the, in the reports early on is that nobody's quite sure, you know, it goes from China. To India to finish in Ireland and then back to the us.

You know, what, what is, what is, it's, it's hard to track, but, but they're spending a good bit of time on that, and I think ultimately. Pharmaceutical tariffs for for APIs and for, you know, other parts of the supply chain are going to have to be onshore dramatically. This is where the industry is. And, and this is where the consumers are.

And and in fact the European, um, one of the European trade groups for the pharmaceutical industry has said to the EU. You know, get, get your act together, you know, with respect to tariffs, um, because we're just gonna make it in your, the [00:25:00] us. Um, because that's where our customers are. So, so there, there's definitely gonna be some, and you're seeing this in the announcements, I think from the, the big pharmaceutical companies about opening plants, expanding plants and and so forth.

They did a lot of offshoring, you know, between 2008 until about 2021. And I think that's gonna have to have to be reversed, which will have implications for price, obviously.

Rick Gannotta: Yeah, and I, I totally agree with you. In fact I'm in North Carolina as, as we do this show, and there are at least two pharmaceutical plants that have opened up in the last 24 months or, or have. Plans to to, to start construction and manufacturing here, which I think is right in line with what you're saying

and across all the sectors.

This is probably meaning beyond the health sector. This is probably the one area where I absolutely believe we could bring it back home, meaning to the US [00:26:00] and for obvious reasons, one of them being strategic and the, the whole DOD side of it.

Emily Evans: Well, you know you know, you've heard the president say, oh, you know about the eu, they stole our pharmaceutical industry. He's, that's what he's coded his saying. And if you go back to the World Trade Agreement with China back in the nineties, I. The whole idea was America was gonna be the brains we were gonna produce, the things nobody else could produce.

And, and then the rest of the world, you know, will make shoes and, and, and, and textiles and stuff like that. They'll, they'll be the bra, right? And, and it, it. It, it's, you could see in the employment chart for the pharmaceutical industry, it's starting in around 2010. So you know, about a decade after the World Trade organization agreement there, there that clearly was some movement offshore.

And and that's the president wants it back and he is gonna get it back. And, and the EU is [00:27:00] not doing anything right now to, to make him do anything different.

Rick Gannotta: Right. No, I hear you. And, and we we're seeing that I think, play out just in the whole AI space. Probably most notably that would be top of mind for, for most Americans, what's happening with respect to Chinese you know, advances in that field and technology across the board. I wanna get into the strategic implications in the global side, but before I go there, one more question just on the tariff piece. Um. What, what is this doing to, again, the early stage biotech, the diagnostics, again, back to the VC-backed, um, health startups that rely on a lot of the imported things like reagents, diagnostic

components, all those technologies, even chips. Is this, is there freeze frame in, in funding? What do you see with respect to, um, that side of, of the market and, and the health sector piece?

[00:28:00] Specifically.

Emily Evans: So the first, the first policy appears to be to try and get rid of any. Offshore costs, animal testing, for example. Um the, the administration has made it a priority to eliminate animal testing, a lot of which comes from Asia. And, and, and replaced that. And, and the, the pod Dr. Marty McCarey and Dr.

Vene Prasad did a. Podcast on, on their, their policy priorities. And, and there's like, let's, let's try and eliminate the things that we, that aren't actually adding value in early biotech. And they pointed to animal testing as, as one of those things, unleashing AI as as another but when it, there are a list of things that I think will always be fine to import and as long as you have a diverse supply chain.

But there are gonna be, there are a lot of things that are still gonna be considered issues and like the prohibition on any [00:29:00] kind of relationship with a particular adversarial country, um, that involves shipping America or even any clinical clinical tissue samples or any kind of genetic material.

To, to China. So there, there's a, there's a wall going up there, um, when it comes to certain types of supplies that that the US is, is not gonna tolerate. And I think that is, is going to be the case for, for a while. Um, and especially the, the whole competition thing with, you know, people say, a lot of people are like, well, you know, China's gonna, you know, take over our biotech industry.

I am not. Convinced, I was told by client today, I need to rethink it. Um, I'm not quite convinced that that is the threat people say it is. I think the bigger issues are the lack of innovation in a process that is badly in need of innovation. I think that's a first problem. [00:30:00] And, and I think the, the, those other problems will get get solved as well.

But that's my. Somewhat unpopular view of of of Chi, our relationship with our competitiveness with China,

Rick Gannotta: Oh, great, great point. And I think, you know, it's, it's, it's even beyond. On perhaps the political systems that goes back into philosophies that might be, you know, informing your perspective because I, I share the same kind of outlook and they're always been very bullish on, on obviously America and the, the, the US ability to innovate.

I.

think we're way ahead. I think where we get into trouble is when we make bad decisions that many times are driven by, I wanna go for the to the lowest cost producer, and then you end up putting all your eggs in that basket and you can't unwind that very easily. I.

Emily Evans: Yeah, that, that's, that is definitely, um, a problem when, and one of the. I think think there people are more cautious about it than they were. I think that [00:31:00] there's, there's a, it, it, it's going to, cost is gonna be a factor, which means innovation is gonna have to be the substitute rather than rather than offshoring, you're gonna have to innovate around this problem instead of, you know, going to China and, and buying what you've always bought is, is what I'm, the message I'm getting.

Rick Gannotta: Let's stay on the strategic theme. So much happening around the world, obviously the Middle East, but beyond that, when we think about just Ukraine, global tensions, even what's happening here domestically, I. I also think about our exposure across the board, not just the health sector, how this kind of percolates out for the average American. So we kind of touched on health security. I. This ties directly to the whole America first piece, I think about resilience. What do you think this means in real practice? Is it stockpiles? Is it changing what we're doing with respect to policy? Is it a risk side of, [00:32:00] of, of the equation that you're gonna see it play out?

This is an abstract question, um, but I'd love to hear

Emily Evans: No, but it's a really good one. And here's here you, um, this is what I'm about to say is probably not what you are expecting, but the Middle East conflict is right now what you have. And, and, and a friend of mine is like, why is nobody shooting at us? Why are these planes flying into Iran and doing this?

And, and the answer of course is, is that. The countries that normally you would expect to blow the whistle. Hey, Iran, you've got some bombers, incoming Saudi Arabia, Qatar you know, the UAE Jordan, these countries are have, are now modernizing. And they are moving away from a a theocratic regime.

Um, I'm not saying religion's not important to these [00:33:00] countries, it obviously is, but they are, they're modernizing significantly, wanna be part of the modern world. And relative to healthcare and biotech and innova innovation the average, I think the median age in Saudi Arabia is 39 years old. So you're in this, these are young populations and young populations of course have children.

Young populations grow old and need healthcare, and they need research. And, and currently a lot of the healthcare, for example, in, in the, the, the, the Gulf the GCC these countries are, um, the healthcare is very fine if you're part of the royal family. But has not necessarily, which is a large group of people, of course, but that is not necessarily penetrated into, you know, the, the population whole, like it, like it has here, you know, to a much greater

Rick Gannotta: And they have embraced a lot of the US systems actually going over there or setting up [00:34:00] hospitals,

sharing the science, and. And, and you know, I also think when you think about Saudi Arabia, not that it's been a declaration, but I think their desire to be you know, a centerpiece in AI technology

Emily Evans: Right.

Rick Gannotta: in the field, they, they haven't made any dispersions about that being a goal.

Emily Evans: No. And you know, they have the, the, their, their vision 2030, which will be replaced by division 2040, you know, tells you that they wanna modernize. And, and so really Iran is an isolated country. When you look at the, the whole Gulf Coast, it's been a very, for, if you're somebody who always likes to pick fights which includes some people in the us.

It's a very helpful thing to have because Ron is a threat. It, it's a, it's a theocracy. We've been more or less at war with them for 46 years. You know, having them turn into a peaceful nation is not in everybody's best interest, but they're isolated. They're surrounded, you know, and, and so we, what I'm [00:35:00] going to go out on a limb here and tell you is that I expect that most of the Gulf countries will have signed the Abraham Accords before the middle of next year, and you will see.

More or less peace in the region for the first time in 80 years, you know, 90 years. And that's a that's a great thing for for, for innovation, peace and prosperity go together as far as the rest of the tensions in the world, most of them, the eu. Um, is the demographics are terrible. Um, you know, aging population not making it particularly easy for it to not be an aging population.

China, their demographics are horrible, you know, because of their, and this is gets me back to the threat of China. I mean, this is a country that decided that they should, one child per family. Not thinking about the cultural pressures that would have on the demographic mix between [00:36:00] men and women, you know, who's like, who came up with that idea?

And, and, and so so that's the, so having that, um. Ha. You know, knowing those, those demographic problems and those things shouldn't, I don't think they should worry people tremendously is, is my my take on it. And there's a huge opportunity in the Middle East, you know, to share what we, we know as far as medicine and biotech.

I know we complain about the price, right? Rick it, but who, where do you wanna be? If you get really sick, you know, the US.

Rick Gannotta: It's right. It may, it, it may not be the best healthcare when you look at things on paper, but I wouldn't want to be anywhere else. That's the, that's. That's, you know, and, and you know, everyone's they, they have their own opinion. But I think, look, this is, this is a reality if anyone's ever spent time overseas.

But let me, let me reframe it a second. [00:37:00] When you do think about the global world, what's happening and our exposure here at, at the domestic level, when you, when you do think about what we should be doing, if I was an innovator, head of a biotech med tech company. I can't afford to bring things necessarily on shore here. Who are gonna be the players that are there. Is it gonna be the Middle East and the, the Emirates and UAE Europe? I, and I share your sentiment with respect to, they seem fairly stalled. Even Ireland, which had great hopes for at one time, I think

Emily Evans: Oh

Rick Gannotta: is, more than wobbly now. They, they seem to be sliding backwards.

And what about South America and Asia? You know, without China, so

Emily Evans: Oh.

Rick Gannotta: India.

Emily Evans: Yeah. So if, if you are that there are, I, I'll say, I'll say this, this not to, I'm not, this, this is gonna sound a little partisan, but, um, the, the structure of [00:38:00] American foreign policy for. Really since 2 9 11. Okay. Has not really been about diplomacy. It's been about military engagement and we've had starting with nine 11 and continuing very little, just good old fashioned diplomacy.

Your send diploma, your diplomat there, he comes here, they talk, you know, they figure out, you know, what they, the, the whole. Re inter, the whole international relations things has been dominated by a system that was out to engage militarily. So if that changes, and so the early signs appear to be that it is, um, that creates a lot of opportunities because then you have countries going.

Well, they don't seem to wanna bomb us anymore, you know, so, so maybe we should engage in, in more, you know, fruitful and prosperous [00:39:00] discussion. So I think that's the, and, and that I don't, I don't know if that's gonna be true. China, the demographics there are just so terrible. But when you look at, you know, you have Vietnam, you know, is it, but Vietnam of course has China breathing down their neck.

But, but, but you know, there are other. The other options there. I'm kind of sad like you about the EU and including Ireland in that but the Middle East and as South America, you know, these, these are, if, if, if diplomacy becomes and peace as the default mode of the United States, foreign engagement becomes the, the thing.

Well, you know, you, you can have a lot of, you can have a lot of great things happen out of that.

Rick Gannotta: Absolutely. Emily, let me, let me wrap it up with, um, the final road and and the final word. should we be on the, on the spectrum right now? Optimistic trepidatious [00:40:00]

Emily Evans: Oh, I, I, I.

oh, I.

Rick Gannotta: for what's happening?

Emily Evans: I'll say a hundred percent optimistic. And, and one of the reasons for that is just miss pen up demand in part. Okay. You had, you had a federal policy with respect to innovation that was not just uncooperative, it was hostile. It was hostile to innovation. And a, you know, a great example of that is this, we had this, um, artificial intelligence executive order come out of the White House, I guess it was in 2023.

And it was designed to, I mean, it was, it's like, okay, here are the things we need to worry about. And, you know, and this kind of like top down design of something we don't even know. It's application. Right? Um, and, and, but they were, what they were trying to do and Mark Andreessen of a 16 Z says, the, says that he does this interview.

I think, I don't know if it was, I don't know who he did the [00:41:00] interview with, but he does this interview and, um, and he, he says, yeah, we go to this meeting at the White House. And the White House is like, oh, well these guys are gonna handle it. Apple, Google, Microsoft. And, and of course a 16 Z has huge investments in a ai Well, that was it.

That was like, okay, let's get together and figure this out you guys, and, and we'll have regulatory capture, but you guys will make money and we'll control this whole thing. And, and so whoever was interviewing mark Andreesen says, okay, so what'd you do? He said, I left the room and I went, endorsed Donald Trump.

You know? Um, so you had this. Policy that I think was overall designed to, um, keep innovation from advancing because, and especially in healthcare, because don't forget, you know, part of the reason that the Affordable Care Act did not quote reform the system, it became an insurance bill. Part of the reason is that President Obama was very concerned about what it would mean to [00:42:00] employment.

It was 2010, we'd just come out of the great recession and, and he was like, I don't, we don't, we don't wanna lose any jobs. Well, of course we didn't lose any jobs. We gained a bunch of jobs and we pushed, you know, other industries kind of off the field. So, so that, that's how they were thinking about it.

And, and so you had this pent up. Demand. You have this pent up, okay, I've got all these problems I haven't been able to solve. Now you're gonna push that through and people are gonna be able to solve those problems. And I think secretary of Kennedy's declaration that they're gonna do a big PPSA ad campaign on wearables.

Makes that point. It's like, okay, let's, let's get out there, let's innovate you all, like innovate around yourselves, you know, inter made around your own health policy. And I've got probably four or five examples like that. But I think the, I think it's a very optimistic solution, optimistic outlook. And if I'm right about, you know, [00:43:00] diplomacy and, and peace and prosperity, I think that's probably true for the whole world, not just us.

Rick Gannotta: I couldn't think of a better note to end the show on than one that's optimistic and has peace and prosperity in it. Emily, it's been great as usual. We're gonna have you back. You're got, you're, you're in residence now, so there's so much more I could go over, but thanks again and we look forward to following you with the Hedge I team and looking for your insights there as well.

Emily Evans: All right, Greg. Thanks so much for having me.

Rick Gannotta: It was great. Take care.