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Dr. Mehmet Oz on Fixing American Healthcare + Fraud | Live from Davos
01:05:43
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- [00:00]
A
All right, everybody, welcome back. It's all in at Davos. My bestie, David Sacks is here. We're having a great time. We're here.
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B
Can you guys catch this in the background?
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A
Oh, my God.
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B
Amazing.
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A
It's stunning.
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B
This is the Davos experience.
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C
It looks real.
- [00:13]
B
I know. Well, it kind of looks like a green screen from here because it's just so picturesque.
- [00:17]
A
It's literally like a green screen.
- [00:18]
B
It is. It's the real deal.
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A
And we'll look over the ledge here and what you'll see is all of the virtue signaling, esg, DEI executives, and you'll just. It's emanating from this entire area and they've put so solar over every single building here. None of it's plugged in. It's just for aesthetics. But we're really excited, David and I, to do a bunch of interviews here. Wow. Today we've got a great one for you, and we're going to talk about health and we're going to talk about the healthcare system with none other than Dr. Mehmedaz. You're the administrator now for CMS. You've gone from being America's doctor, dare I say, to being a civil servant like my friend David Sacks. Why did you choose, really height of your powers career to go into public service like this?
- [01:05]
C
So I'm in the change business, you guys are as well. And if you're in the change business and the project you're pursuing is not making a significant change, then you want to move on to something else that could make the impact you desire. And especially in healthcare, we don't have the luxury of fooling around for years of our lives pursuing interests that don't result in meaningfully changing the quality of life, but also the opportunity that the American people have. And so I loved being a TV host, did it for 13 years. I love practicing surgery, which I've done my whole life till recently. This is the best job I've ever had, and it's the best job I've had because of the people that I get to work with, but also because you truly do get to make the change that I desire. I think a lot of folks, the reason they watch the Olin podcast is they. They wanna change stuff too. And I encourage everybody to take some big swings and you'll break things once in a while, but if you wanna be able to change meaningfully, the infrastructure, whatever's bothering you, you gotta go out at full speed. And this administration offers us a unique opportunity to do that.
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A
It is interesting, David, you Were used to going at a pretty fast pace as well. And then I think our expectation was, hey, you get into public service, it's gonna be about consensus building, and it's gonna take a lot of time. Say what you will about Trump, some people might not agree with every policy, but he ships. He's like a founder who ships and ships product fast. That's also been your experience.
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B
He's hard to keep up with. I mean, he moves incredibly fast, and it makes him really fun to work for because he wants to get things done. Every day he wants to get things done.
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A
There's a sense of urgency.
- [02:42]
B
Yeah. And, you know, you'll be in a meeting with the president in the Oval Office, and you'll tell him about a problem. His first instinct is to pick up the phone and call and fix it right then and there. And he does that meeting after meeting, hour after hour, day after day, week after week. And when you compound that desire to get things done and he acts on it right there, it has a huge impact.
- [03:03]
A
And he seems to get great pleasure in bringing together, especially in this administration, which I think is distinctly different than the first, first administration. He was new to politics, and he brought in a lot of career politicians that I think maybe people told him were the right people. This time, he has explicitly gone and looked for people with expertise who are proven winners in the field, yourself included.
- [03:27]
C
He wants us to carry the water. This is, I think, across different parts of the administration. He wants individuals that don't have to rely on the president to tell the story all the time, because so much of the narrative that is reflected in the media is just completely off. I'm not even saying that they're doing it on purpose. They literally don't understand some of the secondary and tertiary impact of the decisions you're making. And it's our job to therefore tell not just the media, but the American people what we're trying to do. And that's especially important if you're unorthodox in how you govern. And this is a fundamentally important reality, at least at cms. David, I don't know how it is in developing AI, where there probably wasn't a rule book before anyway, but healthcare. You know, there have been doctors since the dawn of. But since humans left Africa 50,000 years ago, there were doctors in the encampment. And so there is a way of doing things and in government, that exists as well, but it's not always the right way to do things. So, for example, we have the ability to make laws. Every part of the administration pretty much, can we get Congress to do stuff? It doesn't always turn out the way you want it to turn out, and it takes a lot of time. And the negotiated final result sometimes falls short. You have rulemaking, second big area, which is, you know, administrative entities like ours can write the rules that everyone has to follow. We're going to pay you this much. We're not going to let these people do that anymore. It does take some time, and it's prone to lawfare. By that I mean the people you're regulating, if they don't like what you're saying, they can sue you and they can stop you. And in this administration, if the other party doesn't like what you're doing, even if it's the best thing. We had a rule that would reduce fraud, but the blue cities didn't like it because it was coming from someone. They didn't like the president, so they enjoined it, and that's now caught up in court. Now we'll win, but it could take years. So that's the second big way. Right. So you make laws, you pass rules. The third way, which historically government has not used, I don't think, as effectively as possible. And this president, because he's a great negotiator, is able to push us in ways that historically not been done, is to just use the power to convene. The US Government can bring people together who would not normally talk. They can give safe harbor industry to come together and discuss problems that historically they would shy away from.
- [05:32]
A
What's the great example of that? I'm wondering if it's the drug companies who. They have something to lose because Trump's been president. Trump has been very clear, hey, I want these prices lowered. Why are we the sucker at the poker table? We're paying 10 times what Canada's paying. Is that the best example in your experience so far?
- [05:50]
C
It's a great example. Most favored nation. Drug pricing specifically addresses the problem you outlined, which is we just pay a bunch more for the exact same product made the same factory, often in America, than our counterparts do here in Europe. So the President says we need to change that. So he says, go talk to the drug companies. Create some opportunities for risk for them, you know, make some rules, create some projects that if we were to act on them, would really hurt them.
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A
A little pressure.
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C
A little pressure. You know, build the crowbars.
- [06:19]
A
Yeah.
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C
And the baseball bats. Okay. Cut some trees down, hone the wood, but don't use them.
- [06:25]
A
Right.
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C
And he very specifically said do not hurt the innovative nature of pharmaceuticals. They are important to our nation. They save lives. We want to have the most innovative industries in the world because that's where the opportunities are to differentiate ourselves. It's also part of our national destiny. Be the best. So don't hurt the industry, but take some of the fat out of it. Pull it back, and give it to the American people. Plus, it's the fair way of doing things. And metaphorically, when you think about NATO and the president saying to NATO countries, we're all in it together to protect ourselves against external threats, you guys got to put up more money. We'll put up more, but proportionally more. It's got to be fair. And they all did that pretty much, with one or two exceptions. He did the same thing with pharmaceuticals. He said, there's an external threat, which is Russia or, you know, foreign governments. There's internal threats like cancer. So we want everyone to chip in. We pay in the United States, 0.8% of our GDP towards pharmaceutical products.
- [07:18]
A
0.8%. 0.8% of our 91% of our GDP goes to drugs. That's not the health care system, which I think is 17%.
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C
Right.
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A
1% of it. A full 6% of our health care goes just directly to the drug companies. So we want.
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B
What's with your math?
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C
It's quite. Quite impressive.
- [07:33]
A
Yeah. Thank you.
- [07:34]
C
So I only bring this up because the percentages make a difference here. 0.8% comes from us playing blackjack. Calculator. I know.
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B
I know you.
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A
No, no. It comes from us playing blackjack and poker together.
- [07:46]
B
I've lost a lot of two outers over here.
- [07:48]
A
Well, I've lost a lot of money to this guy, and I don't play him in chess anymore. Bend, but don't break. You want them to bend a little bit. Be reasonable. But you don't want to break the industry.
- [07:58]
B
As a doctor, that's the upshot of this, because you hear this term affordability a lot. So the average American's gonna pay less for their drug prices.
- [08:06]
C
We're gonna pay less. The Europeans, we are telling all the countries we're in the middle of these discussions. We've just gotten the British to say yes, and other countries are talking to us about the fact that they pay 0.3%. So less than half of what we pay percent wise is being spent by them. And they get away with it because their people don't realize that if you get cancer, more advanced cancers in Europe, your survival rate's way below the US and if you don't, if you don't get access to the drugs, which they don't, for several years on average that we get in the U.S. yes, you can get it for cheaper, but your people are paying a price. And this is going to see the most important message I'm going to deliver today. The most important message is don't think about health care like an expense. Think of it as an investment. Because if I can get the average American to work one year longer because I got them a medication at a better price, they didn't turn away at the drugstore or because we were able to do something else. Correct, whatever missing movement, we'll talk about all this. But if you can get the average American to work one year longer, that is worth $3 trillion to the US economy. It's massive. So we need to get people feeling their best feeling that they have agency over their future, with confidence that they're going to make a difference in the world. So they want to keep trying to do it at the workplace. And that extra one year, which gets them closer to Medicare, by the way, also helps deal with other financial crises that we're facing as a nation. So this is the way to think about it, the right way. Get the actual cost of care down. Don't just pay more money into the system. Get the actual cost of care down. So the money we're spending gets us more value.
- [09:33]
A
We're spending twice as much as these other countries who have universal health care. Now, you did point out that they get things later. So we have a better system, but we pay through the nose for it. That would be an accurate way of describing the current state of affairs.
- [09:45]
C
Precisely stated, yes.
- [09:46]
A
Okay, so how do we get every American health care? Because I believe a lot of the tension we have comes from a fear from people maybe who are not as well off as the people on the POD right now. And they live with that fear. We don't live with that fear. We know if we need to get health care, we're going to figure it out. We'll be able to pay for it out of pocket or insurance will pay for it. But there are people who go bankrupt because of this. You believe in universal health care, I would assume. As a doctor, I want everyone to.
- [10:15]
C
Have access to health care. But how we pay for it is the defining issue here. How do you keep the system incentivized to take care of you? If I tell everybody in America that you have health care and then I tell the doctors, give them health care, but I don't deal with the financial costs, then you all of a sudden start to restrict the access to care so you can get the health care like you do in socialized medicine countries. You just have to wait six months or a year or longer or you don't get the care at all. And when you start having that discussion with Americans, they say, wait, wait, wait, hold on. Yes, of course I want to, to get the health care for an affordable price. But the question, the fundamental question is how long till I actually get the care.
- [10:52]
A
But being denied is something they live with. So they complain about their universal health care, we complain about not having universal health care. What are the two or three?
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B
Well, the thing I would look at is the flow of patients who seek treatment internationally. So I hear lots of stories about Canadians coming to the US to get treatment because they don't want to wait.
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A
Two years to get the latest.
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B
Not just the latest, to get some procedure. Yeah, because they could be dead in two years. So they come here. I don't hear any Americans talking about going to Canada to get treatment.
- [11:23]
A
We actually do have a number of examples of that in surgeries and treatments that you have to pay for out of pocket. Cosmetic, dental, people are going, and this has become tourism. And there are people who do change locations. Yes.
- [11:36]
C
For electron procedures. You mentioned cosmetic surgery. That's definitely a trend. And also there's some procedures that we don't do in America.
- [11:43]
A
Stem cells.
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C
But your stem cells, they're still going through the regulatory process. But the bigger issue really is one David's raising, which is most Americans complain that the health care system is broken. Almost none would leave the country to get top tier health care for a life threatening problem. And so we have this sort of bizarre opportunity. I do think it's an opportunity. How do we make the top tier healthcare available to folks who need it, but do it at a price that is sustainable? And that's where I think your specialty area comes into play. Before this administration, I think because we didn't have the right technologies to promise convincingly that we could do this, there was a hesitancy to make big shifts. We're taking big swings because we think AI is ready. We think the tech transformation that could happen in healthcare is worth subsidizing. And by that I mean making it possible for top tier entrepreneurs who are building apps that can help you deal with the medical crisis that you're dealing with their diabetes. We can put money into the system to make that worth you doing so you can get investors to support you, you can Get a fair valuation, use.
- [12:43]
A
Technology to lower the price. Obviously that's a huge win. Let me ask you the difficult question as a doctor. There have been studies that came out recently that not only do LLMs currently give better advice than the average general practitioner, they have better bedside manner and the customers or the patients enjoyed the LLM more than they enjoyed a gp.
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B
Did you see that? I haven't seen that.
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A
This is a study that came out of either Harvard or mit. I'll put it in the show notes, but this is a pretty groundbreaking. What are your thoughts if you were going to a new society, is this idea that you have to go to the gp, they ask you a bunch of questions, then they go on their medical text, figure out what their advice is. Is that the best modality or would it be better for the common cold, for an ankle sprain to do what most Americans without insurance are doing or people who are self directed? They go on a large language model. It says, here's how you deal with these issues and they do it themselves and they can take care of a couple things. Wouldn't it be better to just have them do this stuff and then decide if they should go see their gp?
- [13:48]
C
I think there's a hybrid of that that de risks it a little bit early on. There are definitely problems with hallucination and the like that that Americans we're very intolerant to. We actually understand if a human being who has an MD degree makes a mistake. We think AI is perfect and are completely intolerant of even a minor transgression. What you said earlier is true and these studies have been done several times now. The large language models do better on board exams. So general knowledge. They're better than a doctor, they're more patient than a doctor. If you talk to an AI informed avatar, they'll answer the same 10 questions on diabetes all day long and not get bored. Talk to a general practitioner after they've talked to 10 patients with diabetes who've asked the same 10 questions, you get a little terse in your responses. That's just human nature. I don't want to answer the same question every time, but that's what patients need you to do. So I think we have the opportunity and we looked at some of these models. In fact, John Doar brought a bunch of very thoughtful entrepreneurs into the building to talk about the possibility of of us taking the average general practitioner and making them five times, maybe even ten times more efficient. Now here's the big deal. There are not enough gps in America. We probably need two to three times more just to keep up with Europe. Just per capita, we're way below. Because my son just finished medical school. There aren't many kids in medical school at Columbia where he went, who are going to become gps. They all want to be ophthalmologists and, you know, orthopedic surgeons because they pay.
- [15:10]
A
A lot more and they got big loans for their. Yeah.
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C
And they're in debt.
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A
They're in debt. And this is.
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C
Even Columbia's free. If you don't have money, you don't have to pay tuition at Columbia. They did that so that kids would go into general practice and hasn't had the desired impact yet. But the broader question is how do we allow AI to play a role as this transition period happens so people feel confident and one way of doing it is to allow it to do most of the work and then especially with the gentic AI, take the paperwork out of it, the busy work out of it, and feed the doctor the key information. What's the most important thing I do as a doctor? I look at you in the eyes and I read you and I try to connect with you. 50% of our cortex of our high cognitive function, 50% of it is to read your face. We're hardwired to be social animals to understand the subtle little. David's bored. You're not. I gotta change the pace. I gotta get back to him. He's doing card calculations in his head.
- [16:02]
A
Yeah, he was. In fairness to David, he was out till 1am they dragged him to four meetings. I was in bed at night. I have good sleep, health. I got my whoop. I got my sleep score. I am a pillow princess like you, Dr. Oz. I hear that you're extreme about your sleep.
- [16:17]
C
Well, I'm a good sleeper. My wife is a world class sleeper. She brings her own pillows.
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A
Your wife is delightful. By the way, I did an hour interview with Lisa before you even got on stage here. I was like, wow, she's impressive.
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B
To build on this point, I mean, I think it's interesting. I think we're going to get smarter doctors and smarter patients and they're each going to use their own version of AI. So you know what patients are going to use as a consumer product? ChatGPT, Grok, you know, and so forth. What's interesting, I think, is when they can dump in their blood panels.
- [16:46]
A
Yes.
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B
Because AI is so good at reading PDFs, you know, just unstructured data. So you dump all your stuff in it, you ask for a diagnosis, you get smarter. You can research your own condition. You're not wasting frankly the doctor's time by asking basic questions.
- [16:59]
A
You're a better consumer, you're a better customer.
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B
Right. So you go in more educated. And then the doctors, they can use ChatGPT or what have you, but actually they're using specialized, much more specialized tools. Yes, that the ones I've seen. They will give you a citation directly to a medical journal that you can bring to your doctor. That's important to doctors. So, you know, it's not hallucinating, it just getting the answer from a, you know, from a.
- [17:23]
A
And it's like, oh, that was on Joe Rogan's podcast.
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B
You know what the source is.
- [17:27]
A
Which is fine if you, if you get information from Joe and then source to a nation. Let me ask you about this trend. This is self directed healthcare. There's Function Health, doing blood labs. Superpower Whoop just started offering them Aura, Apple Watch, eight Sleep. I'm an investor in that one. Full disclosure, it's doing great. These things are now putting all that data together and starting to tell you your life, your health span, your, you know, your actual age versus your health age. I don't sure what that metric is, but people are now measuring things and getting some knowledge of this and then going to a gp. The problem I'm having is, and I'm not price sensitive, I could get any concierge doctor I want. There's very few doctors who want to work like this at the moment. That's. Something's got to change it. But what do you think of this new group of people who are doing self directed health care, doing two blood labs a year, putting it into a database. PRINOVA with the 3D scans, Nico Daniel X, new company doing a $300 full body scan. All, all of this. Is this going to be the paradigm.
- [18:28]
C
Shift 80, 20 rule? If 20% of Americans do what you're saying, and they will, yeah. It'll make all of medicine function better. I'm actually concerned about the other end of the spectrum. Tell me the people who don't go to their doctors. Medicaid patients. Medicaid patients are twice as likely. Medicaid is the folks who are vulnerable who are, you know, have made less money. They're getting government health insurance, Medicare.
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A
That is our universal health care.
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C
That's, that's what we need, help. The chance of a Medicaid patient who doesn't pay for their health care because they don't have the means to do it, the chance of them canceling Their doctor's appointment is twice that of a Medicare patient. And so it's hard to take care of them. Now they have two jobs. They'll get fired if they leave the job early. They don't have the flexibility of moving their calendar around. They don't have transportation. There's lots of reasons they don't show. But if I can't get healthcare to them, that's a major crisis for us. And so the real opportunity for AI is democratizing healthcare. See, you guys are already smart. You just listed off top of your head a dozen companies, all doing great work. Most people have no idea these companies exist or what they do exist. And so if I can put into AI my labs and I don't know much about healthcare, I can get information sent to me in a way that I can process it. And at the time, I'm ready to hear it. Now, I'll give you one more data point that might be useful. All Medicare patients, all seniors over 65, all of them are given a free wellness exam every year. What percentage of people take their free medical exam?
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A
5%.
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C
No, it's not that bad. It's less than 50%.
- [19:52]
A
Less than 50%.
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C
Okay. But most people don't do it. It's there. And part of the reason we think that's happening is you don't prioritize it. And here's the more important data point. People who actually see their doctor think they're sicker, but they're actually much healthier than people who don't see their doctor because ignorance is bliss. People who don't go to their doc or seek any kind of health advice think that they're doing great. And actually, objectively, they're doing much worse. So we have an opportunity to democratize this by saying, okay, I'm going to meet you where you are. You don't care about going to see a doctor, even though it's free, it's yours. In this new health tech ecosystem we're building out with Amy Gleason, who also ran doge, you know, helping to roll this all out, we're making it easier for every tech company to participate. 600 companies have signed a pledge agreeing to interoperability of data transparency and to build these tools for the American people to be able to use them. Now, once I deputize you to be better equipped to take care of yourself, you change the system. Because when you ask a doctor a question the first time, you're the only patient, they don't pay attention. The second patient asks the same question. We change. As a physician, I'm telling you, it helps us to have patients pushing us to pay attention to, for example, ambient collection of information in the doctor's office. So I get a medical report on what you told me. Why? Because 50% of what a doctor tells the patient is forgotten before the patient leaves the office. So when your kid asks you, hey, what happened with the doctor? You don't remember. You're nervous, you're anxious. The doctor spoke quickly. Use big words, break all that down. All of a sudden, information gets flowing easily. Now you've got a lot more stakeholders, and who's the ultimate stakeholder? The patient. So the medical records who historically have been hijacked by medical record companies and hidden and hidden.
- [21:27]
A
Like, how do you ever get them?
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C
Yeah. And all those companies now are saying, all right, we get the joke. And this is again, back to the President. He's not fooling around in this stuff. When he tells you he wants you to share data, you know he's going to come after your ass if you don't deal with this problem. And so they've all come and say, all right, you know, we're in on the joke. Now, the pharma companies, when we're negotiating most favored nation, you know what they said when we challenged them and said, you're charging several times more for the same products? They said, all right, well, we knew one day you'd come knocking. We knew.
- [21:53]
B
So.
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C
And we actually think the President would do something to us. So we're going to negotiate. And you don't want to throw away that power. You know, don't beg for forgiveness, push for action. You know, go make things happen. And if they don't work out, fine. You'll get more bites at the apple.
- [22:08]
B
Just on that point about the pledge, because I got to attend that event at the White House.
- [22:12]
C
You organized it. Well, don't be modest.
- [22:14]
B
It's going to be a little bit too much credit. But it was. Honestly, it was you and Amy Gleason and Secretary Kennedy, and you guys just happened to invite me for some reason. But it was. It was really interesting because. So this is my kind of layman's understanding of it, which is the law gives us the right to our own medical records, but in practice, we don't get them.
- [22:35]
A
HIPAA regulations.
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B
Well, it's because the. The companies that store the health records do it in proprietary formats, and we don't really know how to get that data, and what would we do with it even if we did? So the key is to get Those health records shared to all the other medical companies in the space that we might want to use. Hence the power of the pledge. Get these 600 companies. Agree. But I think that AI is kind of the magic glue here, because AI is so good at reading data from different formats and translating it perfect. So you don't need, like a perfect API anymore. You just get the unstructured data, dump it in, and now it just works.
- [23:13]
A
Which is what we're starting to see. I'm taking my eight sleep data, my whoop data, my blood panels, and I'm putting it into all four of the major ones asking it. I take pictures of every one of my supplements or drinks. What impact will this have? Which impact will this have on sleeping? I think that's like this gigantic win.
- [23:32]
B
Yeah. You being able to realize the promise that the law gives you to actually own your own medical data, but to get it in a usable format that now you can use again, a chat interface to understand it.
- [23:43]
A
It's technological obscurification. Let's call it what it is. They're trying to use these proprietary formats always to get a technological advantage and to have a moat around their business.
- [23:51]
B
AI just decodes that and makes it usable, and now you can interact with it. Can I bring up one other example? So, Dr. Oz, you mentioned democratization. You and I have had a conversation about certain states are actually trying to ban the use of AI to be used in therapy. And I think the point you made to me is, you know what? There's a lot of places all over the country, like rural areas, where there aren't psychiatrists or there isn't psychiatric care. So at least AI provides a baseline level of service. Version one may not have been perfect. There may have been some hallucinations, but it is getting better and better every year. If you ban it, then a lot of people are just gonna have nothing. Right.
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C
I mean, beautifully stated. Let's just go over. Let's unwrap that a little bit. But I mean, just at a high level, say AI is coming to a neighborhood near you. You're not stopping it.
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A
Yeah.
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C
So it's gonna be there, and patients are gonna use it. And so you have to engage it, running from it, you know? You know, we cannot stick our head in the stand on this one. There's other things you can sort of delay. But I've encouraged every governor go full bore at this, but do it in the right way. Allow professionals to function at the height of their licensure. Why don't we use pharmacists better. There's probably 70,000 pharmacists.
- [24:59]
A
Right.
- [25:00]
C
And think about it this way. Almost all Americans, 95%, live within five miles of a pharmacy. They don't live near five, you know, near a hospital usually. So we don't have access to care. In many ways, if we just took AI and allowed pharmacists and doctors, GPs to function at a higher level, it itself would be worth the opportunity. So I'm not even saying advocate at all to an AI agent that doesn't really understand you. We can't control. Maybe some other country gets involved in it at its very practical level. We do not have enough practitioners. There just aren't enough people to take care of rural America. 60 million Americans living in rural America don't have access to mental health services. Our vets commit suicide at a crazily high rate, more than we lose in war, because they don't have access to mental health services. Many of them do live in rural America. And so if we're going to fix those kinds of problems, which are time consuming, you're not going to get Park Avenue psychiatrists to go practice medicine at $800 an hour, at $800 an hour in the north slope of Alaska, the winter, it's just not going to happen. And so this $50 billion investment that we as a country just made, just, just the money, was part of the rural health, the working families tax cut legislation that the president pushed through and Congress got behind $50 billion. The largest investment ever made in rural health care through our agency was given up by the end of the calendar year. All the governors have the money and we charge them to make a difference in their communities. You know, your communities, they almost all came back with some AI element. They all know to really be able to get health care in rural America, you've got to right size the system, right. Sizing the system means, you know, hospitals are going to work out differently, doctors will work differently with each other. But AI is the core element of.
- [26:36]
A
So much of this. And these micro hospitals, just like people are putting ADU units in the back of their homes to get an extra apartment for grandma and grandpa or as an Airbnb. My understanding is there's a bunch of startups working on the equivalent. Building a micro hospital, a room with the central services, perhaps a nurse practitioner who there's more available, and then you telemedicine in. Just bringing the medicine to those areas without having to build a giant hospital is also a win.
- [27:03]
C
Yeah, the micro clinics, I think, is a huge opportunity to provide top tier care. But this goes beyond that. We have AI supported robots that are going to be doing ultrasounds in parts of Alabama where there are no obs. We have drones delivering prescription medications to the north slope of Alaska where there are no roads. You have vending machines that can dispense smart dispensing of medications. By the way, this is happening in other countries. So we want this to take place in America. And why not take advantage of an opportunity with a huge massive inflow of money, which the World Health transformation fund does $50 billion to start to do some innovative work in rural parts of the country, which is the foundational element of who we are as a nation. Those values ripple up to the rest of us. I also think that states now are talking to each other differently. Now that you've got money that's out there that can be used to change the world, they start talking about AI and technology generally very differently now. It's not a sparse research. We live in a world of abundance and AI makes it that much more abundant if we use it correctly. And it's not going to happen today. But we believe by the time the administration has completed this work, we will have dramatically changed the face of how Americans work with information in the health care system. Some of it's just blocking and tackling, as you said, medical record, record companies, not data block. Some of it's forcing health information systems to share data more comfortably and elegantly at a fair price. And part of it's us putting money into the system, seeding it the right way. But the most important thing is to make it safe to go outside. Yeah, we want to make it comfortable, to take financial risk to invest in these areas. That's why 600 companies have invested. Every major AI company, every major foundational technology company, but all a bunch of insurgents that I that have promised. They're all rushing in.
- [28:48]
A
The three places entrepreneurs have been reticent to take on to build new products and services. Education, housing, healthcare. These also happen to be the ones most regulated, most controlled by the government. So to the extent you can give them access and make it go faster, it's going to work. The only investments we've ever made in those spaces are ones that go direct to consumer because we know going through the government, there's just not enough Runway for those companies to get to the other side. Let me ask you about it.
- [29:18]
C
We're open for business and I got to make this plug while I'm here. We want to work with industry. We believe the private sector Will come up with better ideas, come work with us. And we're also looking for people. And we had nine engineers. Nine engineers. When we came in, all of CMS, our COBOL based infrastructure built in the 70s, where we don't have engineers that.
- [29:36]
A
You'Re talking about in the department, you had nine engineers out of. What's the denominator of employees?
- [29:41]
C
6,500 employees and 40,000 contractors. So there's. You basically have an HR person in government working with a government affairs person at the company. There's no engineers there.
- [29:51]
A
16 basis points, David.
- [29:53]
C
We took $3 billion of cost out. There was a company that we fired that had billed us $200 million. Not a single usable line of code. And here's the good part. When we fired them, you know what they said? Nothing.
- [30:04]
A
Yeah, we knew it.
- [30:05]
C
We knew it.
- [30:06]
A
Yeah. We were underperforming. No accountability.
- [30:08]
C
Underperforming.
- [30:09]
A
God, we could go on about fraud for forever. But I want to ask you about this wonder drug. Four years ago, I was listening to my friend Tim Ferriss and Kevin Rose, who are biohackers, and they're always on the edge of this stuff. And he wanted to lose some visceral fat. Kevin was in great shape and he heard about this diabetes drug, Ozempic, and that he was going to give it a shot. He dialed the pen all the way up, puked, dialed it back down, lost his visceral fat. I heard that. I was like 40. I was £213 at the time. Went to my doctor, he said, I have no idea what you're talking about. You're not diabetic, but you are fat. And he said, you're a fat bastard. I think I said that. And I had just gained like 2 or 3 pounds a year for 20 years. And I used to be a marathon runner. I used to be 165, 170 pounds. I'm now 172.
- [30:52]
C
You look like Gazelle right now, by the way.
- [30:54]
A
Well, I had a little muscle, too. Thank you, Dr. Ross. You look great, too. But this is a miracle drug. This, in my mind, we now have, theoretically, tens of millions of Americans have experienced it. It's gonna be in pill format. The four horsemen of the apocalypse. Heart disease, kidney failure, liver disease, dementia, dementia. These are all four or four impacted by obesity. And these GLP1s seem to be impacting them. I was like, you know what? If Trump just, President Trump just gave a national. Anybody can get this drug if they want it. I think he'd win the election. He won Anyway, what do you think about a mandate to make it available, to make the fat drug available for all Americans? Would that be.
- [31:40]
C
So I'm glad you came to work today. So about two months ago in the Oval Office, the President basically did that. He said that we're going to take the prices of these drugs, which are now prohibitively high for many Americans, $1,200 cash pay.
- [31:53]
A
It's crazy.
- [31:54]
C
It's going to be a starting price of around $200 easy. And with the pills, it's 150. And the pills will come out. The first FDA approved pills will start this month. And so we believe at that price casing care. That's right. Basically you get coffee a day at that price. We will within two years return money to the American taxpayer. It's going to save us so much money from reducing hypertension, diabetes and the downstream illnesses. The, the four horsemen of the apocalypse, as you mentioned, that we will save money, that we spend over half the money, I believe within healthcare on these chronic illnesses driven by obesity. And so if it's directly or indirectly because you hurt your knees, cause you're overweight, or you get autoimmune problems, or even cancer is linked to obesity because you have a metabolically active state, all of these are gonna drop precipitously. We have pretty good data on this from internal modeling. So we agreed to those prices with the the two major companies, Novo Nordisk and Eli Lilly. We will launch next week. I don't know when this podcast airs, but launch next week. Trump Rx with those products so you can cash pay at a price that is completely affordable. And here's the good news, every Medicare patient gets it for $50 co pay. Every Medicaid patient gets it for nothing.
- [33:07]
A
Amazing.
- [33:08]
C
So the people who need it the most, the folks that are most vulnerable, this is what when people say the President doesn't want to protect Medicaid, he doesn't love and cherish Medicare, it drives me bonkers. Because he's doing more for underserved Americans than any other president ever has. Giving Americans where the obesity epidemic lives. Underserved Americans, vulnerable Americans who are on Medicaid. Access to these drugs for no out of pocket costs truly democratizes the weight loss issues. Because right now, what's the number one zip code for weight loss drugs? Number one zip code, Upper east side of Manhattan.
- [33:38]
A
I was about to say it's gotta.
- [33:39]
C
Be Manhattan or LA LA's number two.
- [33:41]
A
Okay, right.
- [33:42]
B
Because people can afford it or because they're vain.
- [33:45]
C
They're vain. They want to lose two pounds for their daughter's wedding and they can afford it. $1,200 a rounding. Yeah, right. But $1,200 for someone that's not making money, you're just not going to take the drug. And they're the ones that die early. The life expectancy in rural America, I'll go back to them, in vulnerable population is nine years shorter than yours in the same country.
- [34:05]
A
It's something that came out of left field. What does that tell us about what's going to happen in medicine going forward? Because GLPs, how long of a journey has that been? And then getting to market and then, you know, this off label use, starting with people with diabetes, what does that, what does that, how does that inform you of how we can make even more impact in the future? How do we make another GLP like discovery and implement it the way President Trump has?
- [34:32]
C
Well, this, you know, the drug actually came, it's a poisonous chemical venom, actually, that was deciphered and found to have an impact on some of these core cells in the appetite system of the body, which is so fundamental to who we are that it's very hard to hack the appetite. But GLP1s, they're just the tip of the iceberg. There are more and more sophisticated ways for us to be able to address not just appetite, but addiction. Addictive behavior drops to GLP1s. So the newer drugs are going to be even more effective at that.
- [35:03]
A
Retatrutide is the one you're looking, for example, retatrutride.
- [35:05]
C
But the other thing I would say is the form factor matters. Sending someone an injection, that's that goes bad in the warm weather, that a lot of wastage, you don't know the exact dose. The pills make it like the most other drugs. And now the truck, the price point is much lower as well. So it's easier for us to deliver that at scale to the American people. So it does leapfrog us beyond today's problems. And this is a big theme of our administration. Don't bother fixing today's broken pipes if the world you're building doesn't have pipes. And that's what we're doing with drugs like semaglutide and tirzepatide, which is the Lilly product. We're also getting these companies to onshore their production facility, hire American workers, stay innovative. This is why, again, the President doesn't want us hurting innovation. The same day we did the first most favored nation drug event, we had an executive order on childhood cancer. 20 beautiful children, smiling bright eyes. All of whom. All of whom should have been ghosts. They survived because technologies were afforded to them don't exist in other parts of the world to keep them alive. That's our goal. But I need to. I'd be poorly served. I hear the bell tolling if I didn't get into the other thing.
- [36:10]
A
For whom? We don't know.
- [36:11]
C
Yes, for the bell tolls for sure, Jacob.
- [36:15]
A
But I think that's, I think that's totally for the pharma companies who don't bend the knee.
- [36:19]
C
No, actually, but the issue right now that is consuming us is the fraud.
- [36:25]
B
Fraud?
- [36:25]
C
Yeah, Waste and abuse.
- [36:26]
A
And what have you found, Dr. Oz? Tell us, what is the most concerning to you?
- [36:30]
C
Well, as a preamble, without a better visibility into where the money spent, which we need technology to be able to do, or audits. Well, audits are interesting. You can audit the spreadsheet. You can't tell if the input to the spreadsheet was legitimate unless you actually go and do site visits. And states don't want to do that. So let me just give it to you.
- [36:51]
A
Blocking it. These states, of course.
- [36:53]
C
First of all, let me just. I'll tell you why. That's a good question. Why would you let fraud happen? It is by federal law, by federal law mandated that if you give a patient a welfare program, snap, Medicaid, you must also give them the ability to sign up to vote. So you're basically recruiting voters at the same time you're giving them free government services, which then you might actually end up recruiting a different kind of voter. Like you don't have a law that if you go to an NRA convention, right, for, you know, gun advocates, that you sign up voters. Right. You can go to that event, not get signed up to vote. Obviously they will be probably skewing to the right. So there is an issue there. We also have an active role of unions, especially in California where we have a major problem because the unions have seemed, this is all what I'm hearing from talking to people on the ground, seem to have gotten involved in, for example, signing up home health care workers and personal care services. There are more Americans, I believe, providing some of these home based services that maybe might exist in retail in America. We've shifted the entire employment economy towards some of these services. And here's the risk. If you really want to understand why we have fraud in America, when I give you things that your family used to give you, we are going to have fraud. So your family used to drive you to the doctor's office. Your family would take you home. After you got home back from the hospital, make sure you got well nourished and taken care of. Your family would carry the groceries up the stairs. Your family would negotiate your contract with the landlord. Guess what? Healthy Human Services does all that for you. Now all you gotta do is ask. And in some states it's so easy to do that you end up with significant fraud.
- [38:28]
A
So they have intercepted the transaction, therefore, that's where grift can occur.
- [38:34]
B
And fraud, well, also the government's paying for it, Right? And so when the consumer is paying for it out of their own pocket, they have their own inside incentive to get value for the action. But when the government's paying for it, who really has the incentive to make sure that value has been provided in exchange for that money?
- [38:48]
C
Yeah, and this is what happened in Minnesota, where you had a subculture. It was, you know, just mathematically, most of the indictments are with Somalians. So the Somalian community realized, hey my godness, no one's watching. Now there's an adage, you know, that only the morons get caught in healthcare fraud because it's so easy to do. And if you get, you steal $5 million in Medicare, Medicaid, you go to jail for 18 months. I mean, for many people, that's a pretty good deal. Yeah, you know, sit in the pen for 18 months. But unfortunately, I'll just give you a lay of the land. There are twice as many durable medical equipment providers. They sell wheelchairs and knee braces. There's actually 20 times more in South Florida than McDonald's. I mean, how many do you need? Turns out they're all Cuban, pretty much. They all seem to fly back to Cuba and escape law enforcement. They bill millions of dollars, they get away with it.
- [39:38]
A
What's the solution? There's gotta be a really practical, easy solution.
- [39:41]
C
There are, and I'm gonna share that. But let me just give you two others. Cause you remember these. We have seven times more hospice in California. Hospices for people at the end of their life. Seven times more hospice than was there five, six, seven years ago. Seven times more. We don't have that many people dying in California. And more importantly, the survival rates on hospice. Again, designed for cancer patients dying within six months. The survival rate for most of these hospice centers is 100%.
- [40:05]
A
Wait a second. They shouldn't have gone to hospice.
- [40:07]
C
Exactly.
- [40:08]
B
Is the government paying for it?
- [40:09]
C
Yes, completely paying for it. But no one's dying because you're not.
- [40:12]
B
Supposed to Pay for that? When did the government start paying for that?
- [40:14]
C
Oh, 40 years ago. It was designed.
- [40:16]
B
And then what happened in the last seven or ten that the fraud just went successful.
- [40:21]
A
Two things.
- [40:21]
C
Foreign governments got involved in la. The hospice is driven by the Russian Armenian gangs. They're foreign nationals. They fly back to Russia. We had a big $15 billion bust on these guys earlier in the year. Again, they all escape. The other thing is, no one's watching because there's a opportunity, if you get into these businesses to make a lot of money. And it becomes. I'll give you. I'll just tell you a true story about a whistleblower. Again, I can't prove this, but it's what he said. He said that he. He was building a beautiful mansion. He owns all these hospices. He's a doctor, but he's a fraudster. And so he built this Puget house. They. The plumber comes in and says, hey, you know, I hear you in the hospice space. The guy says, yeah, I made my money in hospice. Then the plumber says, you know, I got a side hustle. I own a hospice too. Right? Then the carpenter hears them and he says, me too. Yeah, I'm in the hospice business. We're all in the hospice business.
- [41:08]
A
Absolutely.
- [41:08]
C
So then the guy says, okay. Well, he realized he's got to get ahead of these guys. So he goes to a major hospital in la, and a doctor at the hospital, very prominent hospital that everyone's heard of, says, hey, listen, if you gave me $1,000, I'll send hospice patients to you. Which is how it's done in la, by the way. You get paid, you send patients over. So the guy says, okay, but what about the actual inpatients, like the people hospitalized? And I get them. And the doctor says, I can't do that because it turns out the members there are some members of the board that own hospice, and they like the patients to go to their centers. You see that the corruption starts in organized crime, but if you tolerate it, it poisons the whole system. And that's the bigger reason. We've got a problem. So what are we doing? We have a fraud war room. I'm going to put a moratorium on some of these services. We're not going to let new people sign up. We're going to actively and aggressively stop paying Medicaid. If we can prove that states are not obliging their fiduciary responsibility to the American people. Because states administer Medicaid, I pay the bills at cms. So we're going to stop paying on behalf of the taxpayer if we don't think you're taking care of the money.
- [42:14]
A
And people should know there are whistleblower laws where you get a percentage of whatever's reported, and they should look into that. And the fact that we have so many people in the administration now communicating that, hey, we want to have you report fraud to us has changed everything. The number of people reporting fraud must have gone up since dramatically.
- [42:36]
C
People in the government. This is probably, you know, the part that's most rewarding to me. Many government workers are Democrats, probably most. What they tell me again and again is they just came to government to do their job.
- [42:48]
A
They wanted to do the right thing.
- [42:49]
C
And they were told not to do their job. They were told not to focus on the fraud, to focus on getting more people signed up. But if you don't take care of the fraud, this is an important message. You will kill the system eventually. You will destroy Medicaid, and I'm not gonna let that happen on our watch. Medicaid, as Hubert Humphrey said, is there to protect those at the dawn of life, which are our children. 53% of kids are born into poverty. We take care of them. Those at the twilight of life, those are the seniors. Right. We owe it to them. Every great society takes care of their most vulnerable, where great people will do that. And Hubert Humphrey said, you got to take care of those living in the shadows. We are not going to let them get hurt. When you let organized criminal elements steal at scale from the federal government, you are killing those programs. We now have so many kids signed up falsely for autism that the kids with autism aren't getting access to care.
- [43:36]
A
Yeah. This is the incredibly frustrating thing, having talked to some young parents who are millennials, Gen Z, they're going to work. They got two jobs. They would love to have childcare, but the childcare dollars are being stolen, therefore, they can't access them. And the same thing's happening across the system. I think this could be just such a defining moment, moment for America, because on the other side, we have socialists, lunatic communists running some of these cities who want to seize people's assets, want to raise taxes before fixing fraud. This is like pouring water into a leaky bucket.
- [44:13]
B
Well, you're talking about California and New York. Yeah. And I couldn't help but notice that Gavin Newsom arrived here at Davos yesterday.
- [44:20]
A
He's here.
- [44:20]
B
Yeah. He was encouraging European leaders to defy President Trump, which is a weird thing for a governor to come here to basically advocate for foreign leaders. To defy the American.
- [44:33]
A
What next? Like, partner with communist countries for your future? I mean.
- [44:37]
B
But I think, honestly, it's all a distraction because the real thing happening in California right now is everybody knows there's massive fraud there. You see that image on the Internet where it's an iceberg and the tip is Minnesota. Minnesota. But the California is.
- [44:51]
A
I mean, it's the fourth largest economy in the world.
- [44:52]
B
So we know there's massive fraud. Fraud. I think Newsom knows there's massive fraud, too. That's why he's vetoed audits.
- [44:58]
A
I mean, can we just pause for a second?
- [45:00]
B
How do you veto an audit?
- [45:01]
A
Veto audits.
- [45:03]
B
Right.
- [45:04]
A
Who would veto an audit?
- [45:05]
B
Someone doesn't want to get caught.
- [45:06]
A
A criminal. A criminal would veto. I'm not saying he's a criminal, but no.
- [45:11]
B
This is to government spending, what the ban on voter ID is to elections. Why wouldn't you only do that? You're banning the thing that helps you catch the fraud.
- [45:21]
A
Yeah.
- [45:22]
B
So why would you ever do that unless you want the fraud to happen?
- [45:25]
A
Exactly. It's. Yeah, it's graziad, as we say here in.
- [45:31]
B
But California, the budget's $350 billion, by far the biggest. It has doubled in the last decade.
- [45:38]
A
And it's like three times per capita.
- [45:40]
B
Two and a half times the inflation rate. Okay. And they're still running a huge deficit, and that's why they're now driving all the job creators out of the state with this proposed asset seizure. If they just clamped down on the fraud, they wouldn't have this hole in their budget.
- [45:55]
C
Just LA county alone, just in hospice and home health care. We believe it's about $3.5 billion just in those two programs in one city. There's probably 10% of all home health care expense in America is in la. So there's so much to do to improve the system that would restore confidence. And when you have governors who are unwilling to do their job, it does make people think that. Listen, when smart people don't do things, it's not an accident. They're not doing these things because they have ulterior motives that either aren't transparent to you or they think you're not smart enough to figure out. We need to ask those questions. This president is not going to tolerate it, but the American people shouldn't either.
- [46:32]
A
We had an interesting moment. Our friend Elon Musk had asked us after he purchased Twitter Now X to come in, and we were looking at the bills, trying to figure out how this company was hemorrhaging Cash at a level that just didn't even seem possible. And one of the things was they had just signed up for tons of software and, you know, basically subscriptions. And CFO comes in, auditor comes in, we're all trying to figure it out. And Elon says, twitter. Twitter?
- [46:58]
B
Yeah.
- [46:58]
A
And Elon says, how are they paying all these? They're like, oh, yeah, they're on credit cards. He said, okay, cancel all the cards. So we sit there and we're like, yeah, cancel the cards immediately. I get three back channels from software companies who are like, hey, I know you're helping Elon. I saw a story in the New York Times, our bill stopped getting paid. Can we come in? And I'm like, yeah, we're not using your software anymore. Nobody's ever used it. It's never been installed. The software had been. You want to talk about fraud at a scale that was deranged.
- [47:29]
B
This is a private company now.
- [47:30]
A
This is a private company.
- [47:32]
B
But your point is. Look, stop playing. When no one is minding the store, bad things are going to happen. And when no one has minded the store for decades and the government's paying for it. You don't even have that private sector profit motive to basically be efficient. Then think about how the fraud just metastasizes. It's gotta be 20, 30%, hundreds of billions.
- [47:54]
A
It's gotta be a double digit, I'm gonna guess 20, 30% of all these types of fraud.
- [48:00]
B
All it took was, was a YouTuber with a video camera to actually show up at the Minnesota daycare centers that were receiving millions.
- [48:07]
C
The leering center.
- [48:08]
B
Yeah, the leering center. They're all empty, dozens of them. Each one's receiving millions of dollars. And that's one program in one state.
- [48:15]
C
And these aren't lowlifes doing this. Low life's involved, obviously, but these are politically connected groups.
- [48:21]
A
Sophisticated.
- [48:22]
C
Yeah. And that's what I'm emphasizing. These are government, foreign, government backed efforts at times, but certainly the people doing them are often foreign nationals. And we are being taken advantage of because we're like a big hippopotamus. You know, all you need to penetrate Medicare and Medicaid is a beneficiary number. They can buy those and you're off to the races. So the solutions are. I'm not claiming they're simple, but they're eminently doable. But you have to expect it of your leaders.
- [48:46]
A
There's going to be some low hanging fruit here, I can tell you. You cutting off payments and saying very simply, hey, we've cut off payments. All you have to do is. Is sign this attestation that you delivered the service, and I would like you to attach your driver's license and passport to it. And by the way, you've been randomly selected to come into the office. We want to hear all about what you're doing and jump on a zoom call.
- [49:07]
B
Right. So you're saying cancel the credit cards.
- [49:09]
C
Yeah.
- [49:10]
A
And then.
- [49:10]
B
And just let them then reopen the account or tell you.
- [49:14]
A
Yeah, yeah, come in. Yeah, we just want to re. Verify what's going on.
- [49:17]
B
Literally zero baseline budgeting, not saying the program's over. And that's the thing that I think Elon found when he was doing doge, is these payments were just on auto pay. Recurring auto pay every year.
- [49:27]
A
Recurring auto pay equals.
- [49:28]
B
With no code explaining what the money was going to.
- [49:32]
A
Auto pay equals fraud. That's all you have to know. And if you look at, like, some of the great. I mean, if you want to talk about, like, some of the good stuff, Lina Khan did, and I was opposed to about 80% of it. One of the things she did that was really well was she said, if you sign up for a service, you have to be able to cancel it the same way you signed up. So newspapers, these bastions of virtue, you'd sign up for Wall Street Journal. You probably have had this experience. You try to cancel it. They're like, give us a call, and then you're on the phone for an hour, just want to cancel it. And I asked the woman, I said, hey, can I ask you just a simple question? Why can't I just cancel online? They're like, oh, well, because of fraud. I'm like, but you took my money through the website, so that's where the fraud would actually occur. She's like, yeah, that kind of makes sense. But I'm just an operator, Mr. Calican. They said, okay, fine, but this is the same concept, which is if you want the money, hey, why don't you come into the office? And we'd love to hear how the program's going. We got your check right here. Come pick it up in person. Want to hear about it? And can you just take a picture of the service you provided? Just taking a picture of the service you provided and then send it in? Yeah. How is this hard?
- [50:36]
B
And like you said, how do you argue for. California already has some of the highest tax rates in the nation, and now you're arguing for more taxes, novel taxes, taxes that no one's ever seen. Unconstitutional tax constitutional probably, and will require A massive new enforcement mechanism. Before you do that, you haven't even wrung the obvious fraud out of the system.
- [50:56]
A
Yeah.
- [50:57]
C
Our biggest allies are state auditors. I met with the state auditor in Minnesota. She confided that, you know, she's been trying to get this on the radar. Just people didn't want to listen. And I talked to folks within the agency, Health and Human Services. You were shuttled around. One woman was actually escorted out of the building for raising the reality that there was fraud. And this happened over several years. And eventually either you leave if you're ethical, or you're quiet because you don't want to get fired. And you make it such a harsh environment for anybody to just tell the truth. This reminds me of a friend of mine who is a billionaire now. Tomas Petafi. Probably know him. Interactive Brokers. Really great guy. And he said he was growing up in Hungary, and he said when he was young, he knew that everyone was lying to him. But that wasn't the big problem. The big problem is he knew that they knew that he knew that they were lying to him.
- [51:47]
A
Right.
- [51:48]
C
So pretty soon we are all in on the fact that there's a big lie.
- [51:51]
A
The whole thing is corrupt.
- [51:52]
C
And so working in these agencies, the good people are weeded out. The people who are left either don't care, aren't good people or complicit. And some of them are complicit.
- [52:00]
A
But.
- [52:00]
C
But I think fundamentally there was a misalignment of values. And this actually was probably the most important thing we had to do in that legislation last year, the working families tax cut legislation. We had to align the president with the governors. There were so many ways of getting the federal government to give you money that wasn't really yours. Legalized money laundering schemes, all kinds of things that clever consultants had figured out over the years that we estimated we would have lost $5.4 trillion just for Medicaid, which is again, why I often joke we were becoming one massive health care system with a small country attached. Well, and if it doesn't work long term, if we don't take bold action, which again, a major message on a lot of things the President's doing. If you don't take bold action on some of these issues, you're leaving the next generation with a train wreck. They can't fix it anymore because the train's gone way off the rails.
- [52:47]
A
Yeah. And just think of the absolute hypocrisy you have someone like Mondami, who says he wants to increase services but provide more for the citizens. And they're not doing the audits, they're not fighting fraud. Gavin Newsom is talking about wanting to provide more for the bottom half of society, but not doing the audits.
- [53:03]
B
And frankly, this whole budget hole that is causing this now asset seizure tax, it all started in 2022 when Newsom promised Medi Cal for all, including illegal aliens. And so what happened is in big beautiful bill, President said, listen, we're not going to reimburse for illegal aliens.
- [53:21]
A
Like so think about incentives there, right?
- [53:23]
B
So then the seiu, uhw, the health worker union union, they're upset because they don't want that funding cut because it indirectly impacts them. So that's how this whole thing happened. Think about the layers of fraud there that you've got. You know, the government, the government of California is paying for illegal aliens probably shouldn't be doing that.
- [53:42]
A
I mean, if you ask the American people, which is who you both work for, how many Americans believe that illegal aliens should get universal health care? I think you're going to get like 98% are going to say absolutely not. And 2% with purple hair in Berkeley who want it. I don't know what their motivation is.
- [54:01]
B
Just to finish the point. If you are going to have the politics of a Gavin Newsom and you're going to tout medical for all in the state, even illegal aliens, doesn't that create a responsibility on you to audit the system and make sure it's not being abused? When you then turn a blind eye to the fraud and you refuse to even acknowledge it, you just pretend like it doesn't exist and you veto the audits?
- [54:24]
C
That's doubly wrong, but it doesn't hurt California. This is the part of the story that's so infuriating. You don't audit the books in California because the federal government's paying anyway. So why would I audit the books to find out that my people aren't getting free money from the federal government? Let's talk about illegal immigrants.
- [54:39]
B
We.
- [54:40]
C
So Gavin Newsom was giving us a hard time for threatening the health insurance of illegal immigrants. Just to be very transparent, if you're on Medicare, you don't get free dental, you don't get free vision. You do if you're an illegal immigrant in California.
- [54:51]
A
This is the inferiority.
- [54:52]
C
So anyway, so you've got taxpayers in New Mexico, right, which is a blue state, but a poor state, paying extra tax dollars to the federal government that are recycled back into LA to deal with the fraud that I'm talking about. So illegal immigrants. He's mad. He's mad. He's mad. He's mad. Mad. We're horrible people. We're Republicans. You have no conscience. You have no heart. As soon as we made it clear we were no longer going to pay for illegal immigrants in California, what did he do? He took them off Medcal. Now he didn't take them off. He come up on the federal side. So in theory, only emergency services are going to get paid for for illegal immigrants in California, which is a national.
- [55:25]
A
Law and is reasonable.
- [55:26]
C
Reasonable. Now we want babies delivered. Car accident victims, of course get health care, but not elective hernia surgery, cataracts. You know, you have to be an American citizen who paid into the system to get these. So anyway, so we deal with this. Gavin says we're only going to pay for illegal immigrants through our own state based system. We've audited him now. This data's coming out this week. We have now found over $1.5 billion of money spent wrongly. We've audited it. They're not even arguing $1.5 billion from that. California charged the federal government for illegal immigrants that they're not allowed to pay charges for. They have to pay for it themselves. He's not happy. But they're paying us because they know we're right. So you're going to see something happen very interesting in California. As soon as the money is being paid by California government officials, they're going to start getting more serious about this. And that's why it's so important for us to say we're not into this anymore. I'm not going to let taxpayers in Alabama and Mississippi, New Mexico, you know, our poorest states pay.
- [56:27]
A
They get less.
- [56:27]
C
4Th largest economy in the world and.
- [56:29]
A
They get less and they get less. And you know, the immigrant. We're a country of immigrants. You could absolutely believe in legal immigration and want the border closed. That's what we saw in the last election. That was the deciding issue. I think at the end of the day. I mean, they also picked a terrible candidate on the other side and didn't have a primary. Put that aside.
- [56:46]
B
If you had an amazing candidate too, incredibly tremendous.
- [56:49]
A
Okay?
- [56:50]
C
The best ever than the greatest at minimizing.
- [56:52]
A
I'm just saying. I mean, you kind of went up against a. Anyway, put it aside. You know, the thing that I think is super important is incentives matter. You've said this many times without explicitly saying it in our conversation. The incentive for people to come to America illegally is to make a better life for themselves. And to have a job, employment. And these social services, if the social services aren't available, you know some number are going to stay back. And if the jobs aren't available, then why would you risk it? Why would you pay one of these coyotes 5, $25,000 across the board? You wouldn't. You would get in the line to do it properly. And that's a very simple solution here. You just change the incentive, make it impossible for an illegal alien to come here. For those two things.
- [57:39]
C
You know what financial value there is of having free health care in America?
- [57:43]
A
So many. Well, the.
- [57:44]
C
I'm not going to make you guess.
- [57:46]
A
Well, I was going to say for the employers, I can say it's very acute to insert yourself into the relationship with your employees. Because employees will not leave one company. They'll pick the company they work for based on the health care. And they will not leave a company to pursue a better opportunity in order to keep their health care, which is dysfunctional because you want talent to move. That's a uniquely Silicon Valley entrepreneurial way to look at it.
- [58:07]
C
From the employer market, we think the money should follow the patient. But broadly speaking, because I don't regulate commercial insurance for illegal immigrants. For your family, it's worth about $30,000. So there is no good reason for you to go back home again if we give you world class health care coverage. So this is a major issue for us dealing with the immigration problem because you cannot send 10 million people back legally who are here illegally. The President has said this. I think he said it publicly, but I think he would. It would take us 200 years of legal machinations to send back people who came here illegally. So there is no legal path to expelling people who came here illegally. You have to remove the incentives to stay here. Free housing, free food, free healthcare, of course you're gonna stay.
- [58:53]
A
Show me an incentive, I'll show you the outcome. If you look at the war on drugs, how unsuccessful it's been. People go to San Francisco for a reason, for their fentanyl because they can buy it and there's no policing. And it is exactly a function of more policing means the price of those drugs go up, which means consumption goes down. Not only is there that dynamic missing in San Francisco because there's no enforcement and you can get fentanyl for five or ten dollars a hit. They also give you housing and $800 or something to that effect per month. So the homeless industrial complex has now created an incentive and everybody in that, you know, really tragic junky community knows that. And they leave Texas, they leave other states to go there, and then they bear the brunt of it, and they are actually increasing the suffering. What's your take on these new super drugs versus the rescheduling of drugs? Obama wanted to do it in his second term. He didn't have the political willpower or will to do it. And Trump now is saying, hey, maybe for cannabis, we should rethink that and do what Canada's done in other modern nations. How do you look at those specific drugs? Fentanyl, nine or 12 overdoses a day in San Francisco at the peak, and then methamphetamine, which is just another scare.
- [60:14]
C
We have good substance use disorder medications. We can't get people into the programs. This is why homelessness is an industrial complex. And the states that have done it, well, I mean, I know Mayor Suarez in Miami dropped the number by 90%, and he did it just by making sure that you got arrested every time you peed publicly. And they don't put you in jail, they put you in rehab, but it takes four or five, six efforts. You can't give people free showers, great accommodations, lots of food, and then expect them to stop using drugs because you're enabling that behavior and not expecting bad outcomes, which is what happened. But I was in the. In Kensington, Philadelphia, which is the drug capital of the East.
- [60:51]
A
Oh, this is where they have that other super drug. I forgot the name of it. It's very pernicious. Tranq.
- [60:55]
B
Yeah.
- [60:56]
C
Tranq is a terrible drug. It creates massive ulcers on your body. So I was there, and, you know, I just walked the streets, just talked to people, like, why are you here? Where'd you come from? Why don't you go home, et cetera? And I ran into a guy who had just saved someone's life, giving them naloxone as an inhaler. And he's an endless driver. And I said, well, you know what happened? He says, well, they OD'd. I gave it to them. And I said, well, what did they tell you? How did they thank you when they awaken from near death, from that dark abyss of darkness? And he said, they're almost always livid at me. Yeah, you ruined their hive and you ruined their escape.
- [61:31]
A
Oh, they're actually hoping to end this suffering.
- [61:34]
C
The pain was so bad. That's why it seems nice. And that's a. That's why I was telling my friends in Minnesota. Minnesota, nice is great when you really, really mean it. But nice does not mean allowing a public health system to be raped. It's not allowing people to abuse themselves, expecting a different outcome than what historically has happened. You need to. If you really love people, you might not like them, but if you really love them, you'll do something that actually goes beyond like, that makes you ultimately gain respect them.
- [62:03]
A
For you and you, there's a very simple. And if you were to take a Christian view of it, and you were to talk to any of the parents, these poor parents who are suffering with a child addicted to drugs and their adult child is on the street, and you said to them, we can arrest them and put them in jail, we can treat them incredibly severely and try to, you know, just lock them up until they, they say, thank you, please do that. But there are a bunch of lunatics who think you're harassing a homeless person who had a bad beat and you're infringing on their freedom. But the parents and the family would say, please lock them up. That's our last ditch effort. So it's not compassion, it is not Christian at all.
- [62:43]
C
That's a faculty lounge discussion with your tweed jacket on and your elbow protectors, when you're pontificating about people that you read about. And I point that out because I'm on the faculty, I've been in.
- [62:54]
A
You got one of those tweets, you talk to those tweed.
- [62:56]
C
Yeah, I got rid of my tweed jackets.
- [62:58]
A
The elbow patches, they look terrible anyway.
- [62:59]
C
But, you know, you sit there and you act again. This is the crazy thing about intelligence is people, the more intelligent you are, the better you are to lying to yourself and others around you, because you can construe almost any data into something that has a meaning that's not really there. And we have tolerated that for too long. I actually think that's an important part of President Trump's appeal. He cuts through all that bs. Don't tell me stuff that just defies common sense, because common sense is not.
- [63:26]
A
So common, you don't have to accept it. I think that's the other thing that I think Trump has, I think, taught some folks. We do not have to accept that state of affairs. You don't have to accept and the framing of it. Let's just call it what it is. You know, I've used the term here on our podcast and say junkies, because I grew up in New York in the 70s and 80s and that's what we call people who are addicted to smack, junkies. It's not derogatory. It's an indication of just how bad that disease is. Calling it homelessness means you're trying to solve the wrong thing. Putting a junkie in a home. They have plenty of homes to go to. It's nothing to do with that.
- [63:59]
B
All right, well, look, we gotta let.
- [64:00]
A
Doc, how long are we talking? Two hours?
- [64:02]
C
I don't know, but I can talk.
- [64:03]
A
Dr. Oz forever.
- [64:04]
C
Surgeon with no fingertips.
- [64:06]
B
All right, let me.
- [64:06]
A
Dr. Oz.
- [64:07]
B
Yeah, let me. Can I please. All right, so, yeah, let me just wrap this up. So Dr. Oz first reached out to me during the transition because he's so intensely interested in AI and he.
- [64:17]
A
So when you were transitioning.
- [64:18]
B
Yes, during my transition.
- [64:20]
A
You supported him.
- [64:22]
C
I love David.
- [64:23]
A
Yes, we all did.
- [64:24]
B
He was for names of AI experts in Silicon Valley to build his advisory panel and just impressed me right away with the energy that you bring, the knowledge, the passion. You really do care about improving health outcomes for all Americans. And I think we are very lucky to have you in this administration from the president on down. And I think the country is very lucky to have. You could be doing many, many different things, but you really care about this job, and I think it's really incredible what you're doing.
- [64:52]
A
Thank you for your service.
- [64:53]
B
I wanted to have you speak to us on the pods. Kind of long overdue.
- [64:57]
C
Well, you're very kind to have me on. I've enjoyed it. Big fan, obviously, of your work, in part because you brought a sense of clarity to many of the issues you discussed. And I want to thank you, David, for being a. First of all, using your ability to get people together, the power to convene is remarkably effective. But you've also demystified a lot of this and allowed the administration to embrace AI and technology in general. So God bless you.
- [65:18]
B
Great, thank you. Thanks for being here.
- [65:19]
A
We'll see you next time on all in at Davos.
- [65:22]
C
I'm going all in. I'm going all in.