WEBVTT - Confronting the Consequences of a New Demographic Reality 0:00:02.520 --> 0:00:10.280 Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business Week, 0:00:10.560 --> 0:00:13.840 insight from the reporters and editors that bring you America's 0:00:13.840 --> 0:00:18.520 most trusted business magazine, plus global business, finance and tech 0:00:18.600 --> 0:00:22.640 news as it happens. Bloomberg Business Week with Carol Masser 0:00:22.960 --> 0:00:25.560 and Tim Stenevek on Bloomberg Radio. 0:00:26.560 --> 0:00:29.560 It is Bloomberg BusinessWeek. That's Carol Master. I'm Tim Stenevek 0:00:29.600 --> 0:00:32.159 preparing for cold here in New York and across the 0:00:32.200 --> 0:00:35.360 country over the next week. Sot us Paul Brennan reminded 0:00:35.440 --> 0:00:37.640 us when I was complaining about this earlier, it's winter. 0:00:37.840 --> 0:00:40.800 It's January, is what he said, Yeah, exactly. Then he 0:00:40.840 --> 0:00:42.400 got us to move on to the next thing. Thumbs 0:00:42.440 --> 0:00:46.960 up from Paul. Hey, here's something interesting. Elon Musk talks 0:00:46.960 --> 0:00:49.120 about this, or used to talk about it. Never know 0:00:49.120 --> 0:00:51.199 what he's talking about now. The birth rate in the 0:00:51.280 --> 0:00:54.880 US and population collapse. Here's some numbers, Carol, US births 0:00:54.880 --> 0:00:57.000 declined in twenty twenty three to their lowest level in 0:00:57.040 --> 0:00:59.400 more than forty years, and continue this two decade trend 0:00:59.440 --> 0:01:02.600 of Americans having fewer children. Birth rates and countries around 0:01:02.600 --> 0:01:06.440 the world have been declining, mainly in wealthier nations, as 0:01:06.480 --> 0:01:10.440 economic instability and uncertainty over events like the pandemic discourage 0:01:10.480 --> 0:01:12.040 people from having children. 0:01:12.120 --> 0:01:14.679 Yeah, while countries including France and China have taken measures 0:01:14.720 --> 0:01:17.680 to try to encourage couples to have children, US birth 0:01:17.760 --> 0:01:20.480 rates have been stifled by forces including a lack of 0:01:20.480 --> 0:01:23.200 paid family leave and skyrocketing health costs. I hear this 0:01:23.240 --> 0:01:27.240 from a whole younger generation. Oh and people don't forget 0:01:27.360 --> 0:01:31.320 are living longer. These are and as a result of 0:01:31.360 --> 0:01:33.720 all of this, she added up, there's some serious economic 0:01:33.760 --> 0:01:36.800 implications to it, like GDP per capita In many countries, 0:01:36.840 --> 0:01:38.800 tim are taking a pretty serious hit. 0:01:38.959 --> 0:01:40.880 It's the focus of a new report out today from 0:01:40.959 --> 0:01:45.200 the mckenzi Global Institute. It focuses on this new demographic reality. 0:01:45.200 --> 0:01:47.920 Olivia White is senior partner at mackenzie and Company. She's 0:01:47.960 --> 0:01:51.400 also director of McKenzie Global Institute. She joins us from 0:01:51.520 --> 0:01:53.560 New York. Olivia, good to see you. I think a 0:01:53.560 --> 0:01:55.480 lot of people are familiar with what's happening in Japan 0:01:55.560 --> 0:01:58.160 and China. I just mentioned some troubling US stats. I 0:01:58.160 --> 0:02:01.000 think people get that too. Where else is this happening? 0:02:02.560 --> 0:02:05.040 It's happened. So in two thirds two thirds of the 0:02:05.040 --> 0:02:09.160 world's population lives in countries where the birth rate are 0:02:09.200 --> 0:02:11.920 called the fertility rate is below what we call replacement, 0:02:12.520 --> 0:02:15.200 and replacement is the birth rate that you'd need in 0:02:15.320 --> 0:02:17.600 order for each person to replace themselves. 0:02:17.639 --> 0:02:21.120 So I got a wife and two kids, so that's 0:02:21.240 --> 0:02:22.679 essentially a replacement rate. 0:02:23.440 --> 0:02:24.160 You're doing your job. 0:02:24.280 --> 0:02:27.000 Well, But am I though I'm only doing the replacement 0:02:27.280 --> 0:02:29.080 right part, I'm not actually doing growth? 0:02:30.600 --> 0:02:34.000 No, well, let's let's start with with with just the 0:02:34.080 --> 0:02:37.200 question of how society works and this sort of economics 0:02:37.200 --> 0:02:38.359 associated with them. 0:02:38.720 --> 0:02:39.960 Tim, let's start with the basics. 0:02:40.960 --> 0:02:45.080 Fair enough, go ahead, I think you're doing your job there. 0:02:46.000 --> 0:02:51.800 The basically, society is built upon populations that expectations. Societal 0:02:51.840 --> 0:02:56.080 expectations are built around populations that stay stable or perhaps grow. 0:02:56.560 --> 0:03:00.320 And part of that is because people are kids, they're 0:03:00.320 --> 0:03:03.160 supported by their parents, their parents are the workers, and 0:03:03.160 --> 0:03:05.760 then ultimately, at some stage you move into retirement and 0:03:05.800 --> 0:03:08.160 you're supported by the people who are working, and the 0:03:08.200 --> 0:03:12.320 basic social compact is supported on mechanics that looks like that. 0:03:12.880 --> 0:03:16.480 But what happens when people on average start not replacing themselves, 0:03:16.480 --> 0:03:19.799 having fewer children than them, you start to have more 0:03:19.840 --> 0:03:22.800 old people than you have workers, and all of a sudden, 0:03:23.360 --> 0:03:26.400 either you're in a situation where old people actually have 0:03:26.480 --> 0:03:28.680 to work, they don't have nearly as much money, etc. 0:03:29.480 --> 0:03:31.520 Or you're in a situation where there is a bigger 0:03:31.560 --> 0:03:34.720 burden placed upon the people who are working, so they 0:03:34.720 --> 0:03:37.480 have to work more productively or more hours, or perhaps 0:03:37.480 --> 0:03:39.240 you have to figure out ways of getting more of them. 0:03:39.400 --> 0:03:40.839 And that's why it really matters. 0:03:41.280 --> 0:03:41.480 You know. 0:03:42.000 --> 0:03:44.240 The one thing that helped me out here. I understand 0:03:44.280 --> 0:03:49.760 that global birth rates are going down. Individuals, women are 0:03:49.760 --> 0:03:53.560 having a lot less children than they did seventy years ago. 0:03:53.720 --> 0:03:56.400 I mean, I'm one of seven, I have one, so 0:03:56.560 --> 0:03:58.960 that's a big change in one generation. 0:04:00.240 --> 0:04:04.600 Having said that, there's more people on earth, and I, you. 0:04:04.560 --> 0:04:08.280 Know, I wonder in emerging economies, like I don't know 0:04:09.280 --> 0:04:14.400 what's your concerns about all of this, and like I 0:04:14.480 --> 0:04:19.080 understand the growth implications, but technology sometimes makes us more productive. 0:04:19.640 --> 0:04:21.960 So I'm trying to understand, like, what do we need 0:04:22.000 --> 0:04:22.880 to be worried about? 0:04:24.360 --> 0:04:25.919 Well, I don't know if we need to be worried 0:04:25.960 --> 0:04:27.839 about anything per se, but I think we need to 0:04:27.880 --> 0:04:31.120 recognize the reality of what's happening, and make sure it 0:04:31.320 --> 0:04:33.480 is the very least that we're adapting in order to 0:04:33.520 --> 0:04:37.240 accommodate it. First on the country level. Then if you 0:04:37.240 --> 0:04:39.839 think about the global level, and the adapting at the 0:04:39.839 --> 0:04:41.640 country level is a little bit what I talk about now. 0:04:41.640 --> 0:04:43.480 If you think about the global level, because I think 0:04:43.520 --> 0:04:46.200 the right to go there, Carol, what we actually see 0:04:46.480 --> 0:04:50.760 is call it three waves of countries, the developed countries, 0:04:51.240 --> 0:04:55.440 including China, where we're already at a place where we're 0:04:55.480 --> 0:04:59.200 starting to get inversions of as we call it, inversions 0:04:59.240 --> 0:05:02.719 of population of more older people than there are younger people. 0:05:03.839 --> 0:05:06.560 You then have this second wave of countries, and that's 0:05:06.600 --> 0:05:10.080 a huge swath of most development countries in the world 0:05:10.200 --> 0:05:13.880 where actually the birth rate has already fallen below this 0:05:14.000 --> 0:05:17.599 replacement rate, but it's happened reasonably recently, so you still 0:05:17.600 --> 0:05:20.640 have a lot of young people going to be workers, 0:05:20.839 --> 0:05:22.840 and they're going to get to where we are in 0:05:22.839 --> 0:05:25.839 the developed world in twenty thirty forty years, depending on 0:05:25.880 --> 0:05:28.600 the country. And then at this stage you have sub 0:05:28.640 --> 0:05:31.800 Saharan Africa plus a couple of additional countries. Afghanistan is 0:05:31.800 --> 0:05:34.640 in that group. Pakistan is in that group where birth 0:05:34.720 --> 0:05:38.200 rates or fertility rates are actually well above replacement. But 0:05:38.240 --> 0:05:41.240 what's notable even there is that they are falling, and 0:05:41.279 --> 0:05:45.159 they're falling relatively quickly and faster than people thought. We 0:05:45.279 --> 0:05:48.160 might be okay, but the situation of falling birth rates 0:05:48.480 --> 0:05:51.240 is something that's rather unprecedented and something that at least 0:05:51.320 --> 0:05:54.360 so far, countries don't have experience in turning around. 0:05:55.880 --> 0:05:59.400 In the US, it's like the easy explanation that my 0:05:59.520 --> 0:06:03.960 generation talks about is lack of federal paid family leave 0:06:04.760 --> 0:06:07.479 and the high cost of childcare. But what struck me 0:06:07.480 --> 0:06:09.719 about this report is that, like you said, it's happening 0:06:09.720 --> 0:06:12.200 in two thirds of countries, many of which we would 0:06:12.240 --> 0:06:15.480 look at as being sort of models for having really 0:06:15.560 --> 0:06:18.760 lax policies when it comes to family leave. Is it 0:06:18.800 --> 0:06:21.599 too simple? Is my explanation for the US too simple? 0:06:23.000 --> 0:06:25.520 Yeah? I think there are a lot of reasons to say. Look, 0:06:25.600 --> 0:06:29.480 things like family leave, thinks, things that help families get 0:06:29.480 --> 0:06:33.200 some form of economic credit. Those are helpful, right, Maybe 0:06:33.200 --> 0:06:35.720 they even mean that birth rate doesn't fall as quickly. 0:06:35.960 --> 0:06:37.719 But as you said, if you look globally and you 0:06:37.760 --> 0:06:40.839 look over time, it seems really quite compelling to believe 0:06:40.880 --> 0:06:43.040 that that's not enough and that's not all that's going on. 0:06:43.320 --> 0:06:45.080 So just you know, give you a sense of the 0:06:45.120 --> 0:06:48.200 sweep of time. In nineteen fifty, which is the first 0:06:48.240 --> 0:06:51.000 year the UN started keeping data on birth rates, ructure 0:06:51.080 --> 0:06:55.480 found fertility rates Luxembourg was already below replacement. It went 0:06:55.560 --> 0:06:57.720 up a little bit in the subsequent years and then 0:06:57.760 --> 0:07:01.200 went back down. But you then had coming after a 0:07:01.279 --> 0:07:04.760 large number of countries in Western Europe and then finally 0:07:04.800 --> 0:07:07.479 the US in the fifties and sixties and seventies where 0:07:07.480 --> 0:07:11.000 birth rates actually fell below this replacement. Right, So looking 0:07:11.040 --> 0:07:13.560 and pointing just at things that are the case right 0:07:13.600 --> 0:07:17.960 now economically purely misses something fundamental in the explanation. 0:07:18.400 --> 0:07:20.400 Why should we be talking about this now? Just got 0:07:20.440 --> 0:07:23.560 about a minute left Olivia, and I think about no, no, no, 0:07:23.600 --> 0:07:25.680 I don't mean it as you know, but I do 0:07:25.760 --> 0:07:29.480 think watching significant trends. I think Elon's perspective is that, 0:07:29.560 --> 0:07:31.560 you know, civilization is going to die out. 0:07:32.920 --> 0:07:33.160 Mars. 0:07:34.800 --> 0:07:38.600 But the importance of why we need to talk about this. 0:07:39.480 --> 0:07:41.560 Yeah, So what one thing we did is we said, look, 0:07:41.640 --> 0:07:44.640 suppose that societies want to continue to keep their GDP 0:07:44.800 --> 0:07:48.080 per capital growth rate of the past fifteen years or so. 0:07:48.120 --> 0:07:51.840 That's basically, what sets our ability to have our living standards, 0:07:51.880 --> 0:07:54.400 to support our older people, to do our best at 0:07:54.480 --> 0:07:57.680 pulling people into a place of impoverm excuse me, of 0:07:58.160 --> 0:08:02.040 no poverty and empowerment. If we want to do that, 0:08:03.360 --> 0:08:06.080 given where birth rates are going in the US, for example, 0:08:06.120 --> 0:08:08.480 productivity growth has to go up by a factor of 0:08:08.520 --> 0:08:13.600 about two all else being equal. Labor force participation needs 0:08:13.600 --> 0:08:17.240 to go up by a factor of about three percentage 0:08:17.280 --> 0:08:21.679 points all else equal, or some combination of ross things. 0:08:22.560 --> 0:08:24.600 So that's why it matters, and it matters right now. 0:08:25.280 --> 0:08:26.600 Yeah, I mean thirty seconds. 0:08:26.600 --> 0:08:29.440 I mean, could technology along with all of us kind 0:08:29.440 --> 0:08:35.199 of living longer and maybe working longer, you know, could that. 0:08:36.640 --> 0:08:38.480 Make up for it again just quickly? 0:08:38.960 --> 0:08:41.240 For sure? Right, So this is sort of a call 0:08:41.320 --> 0:08:46.080 for innovation that helps drive productivity and that helps productive 0:08:46.120 --> 0:08:48.200 is probably not enough in all places, but in the 0:08:48.280 --> 0:08:51.400 US it might be. But making sure that we do 0:08:51.520 --> 0:08:54.120 that in a way that maintains the social fabric that. 0:08:54.040 --> 0:08:57.400 We want interesting, which maybe means you're way mow makes 0:08:57.440 --> 0:08:58.079 a lot of sense. 0:08:59.679 --> 0:09:02.000 Yeah, you don't need that person who would be driving 0:09:02.080 --> 0:09:03.360 you will do something else. 0:09:03.200 --> 0:09:05.839 Right exactly, Olivia White, Thank you so much. Always Fun, 0:09:05.880 --> 0:09:08.280 senior partner over at mackenzie and Company, Director of the 0:09:08.360 --> 0:09:10.400 McKinsey Global Institute. 0:09:10.040 --> 0:09:11.440 Carol, it's already that time of year. 0:09:11.559 --> 0:09:12.960 I know, Davos. 0:09:13.040 --> 0:09:16.160 Davos, she's rubbing your hands together. She's so cold. Yeah, 0:09:16.200 --> 0:09:19.240 you know, thinking about that trip to Switzerland. Yeah, now 0:09:19.280 --> 0:09:20.160 you'll be colder here. 0:09:20.320 --> 0:09:22.400 I'm going to be here. It's going to be really cold. 0:09:22.559 --> 0:09:22.760 Hey. 0:09:23.920 --> 0:09:26.880 At the World Economic Forum. Issues there are also top 0:09:26.880 --> 0:09:28.920 of mind for us generally, and when we talk about healthcare, 0:09:28.960 --> 0:09:32.840 certainly the cost an aging population, pandemics, AI and other 0:09:32.880 --> 0:09:35.760 innovation when it comes to treating and preventing disease, A 0:09:35.800 --> 0:09:39.360 new US president, what it means for regulations and more 0:09:39.400 --> 0:09:42.800 we've got with us. Robert Garrett, CEO of Hackensack Meridian Health. 0:09:43.120 --> 0:09:47.000 The organization called itself the quote largest integrated healthcare network 0:09:47.000 --> 0:09:50.319 in New Jersey. Here are some numbers. Eighteen hospitals, seven 0:09:50.360 --> 0:09:54.120 thousand physicians, more than thirty five thousand employees, and more 0:09:54.120 --> 0:09:56.600 than five hundred facilities that provide care for patients. 0:09:56.760 --> 0:09:57.160 It's a lot. 0:09:57.240 --> 0:09:59.560 Robert Garrett joining us here in our Bloomberg Interactive Broker 0:09:59.559 --> 0:10:00.679 Studio to have you back. 0:10:00.679 --> 0:10:01.280 Happy New Year. 0:10:01.320 --> 0:10:02.640 How are you I am great. 0:10:02.640 --> 0:10:03.880 Happy New Year to both of you. 0:10:04.040 --> 0:10:05.120 Great to be back. 0:10:05.160 --> 0:10:06.400 Thanks for having me tell me. 0:10:06.520 --> 0:10:08.400 You know, it is a massive system. There's a lot 0:10:08.440 --> 0:10:08.760 going on. 0:10:08.800 --> 0:10:11.920 There's a lot coming at us, every executive, publicly held 0:10:11.960 --> 0:10:16.640 private companies, institution, a lot of questions about twenty twenty five, 0:10:16.679 --> 0:10:18.559 and a lot of it has to do with what 0:10:18.600 --> 0:10:20.439 we get out of Washington, right. 0:10:20.559 --> 0:10:22.640 What's top of mind for you when you think about 0:10:22.640 --> 0:10:23.800 the incoming administration? 0:10:24.080 --> 0:10:26.559 So you know it kind of it's kind of from 0:10:26.559 --> 0:10:29.559 a healthcare perspective, I believe it's a little bit mixed. 0:10:29.640 --> 0:10:32.480 So what I look forward to is and you know, 0:10:32.520 --> 0:10:34.760 I know that the confirmation hearings haven't happened yet, but 0:10:34.960 --> 0:10:38.080 if RFK Junior gets in as our secretary for our 0:10:38.080 --> 0:10:43.680 Health and Human Services, certainly his focus on reducing chronic 0:10:43.720 --> 0:10:48.920 disease and on making the food supply more stable, safer, 0:10:49.160 --> 0:10:53.200 Like even yesterday the FDA right took action and said, 0:10:53.280 --> 0:10:56.080 you know, red dye number three needs to be removed 0:10:56.080 --> 0:10:57.240 from our food. 0:10:57.360 --> 0:10:59.079 I threw away some sprinkles when I got home. Yeah, 0:10:59.160 --> 0:11:00.959 yeah I did. It's like, okay, well I guess you're 0:11:01.120 --> 0:11:03.240 meeting me exactly. Yeah, it would have been could have 0:11:03.240 --> 0:11:04.880 been nice that it brought to my attention. You know, 0:11:05.320 --> 0:11:06.040 thirty years. 0:11:05.840 --> 0:11:08.280 Ago they banded for other reasons. 0:11:08.520 --> 0:11:10.920 My wife just like it's one of our top. 0:11:10.760 --> 0:11:14.000 Questions, were like, you banded years ago for X y Z, 0:11:14.240 --> 0:11:15.560 why not just get rid of it all? 0:11:15.679 --> 0:11:17.160 But exactly a bigger question. 0:11:17.280 --> 0:11:19.880 But you know, if there's a focus there drugs, I 0:11:19.920 --> 0:11:22.319 think that's a positive thing because you know, look at 0:11:22.320 --> 0:11:26.200 part of our mission is to transform healthcare, keeping people healthier. 0:11:26.440 --> 0:11:29.160 We want to reduce chronuct disease. What I worry about, 0:11:29.440 --> 0:11:32.480 you know, with the new administration is I want to 0:11:32.520 --> 0:11:35.960 be sure that policies are made based on science, whether 0:11:36.040 --> 0:11:38.839 it's vaccine policies, whether it's are you. 0:11:38.880 --> 0:11:41.959 Nervous it will not be under if RFK is. 0:11:41.880 --> 0:11:45.640 Indeed, I'm concerned, you know that, And my message would be, please, 0:11:45.760 --> 0:11:48.160 you know, follow the science, because look at what vaccines 0:11:48.200 --> 0:11:50.680 have done, how many millions of lives they've saved across 0:11:50.720 --> 0:11:53.880 the world. Look at the research that's been done by 0:11:53.920 --> 0:11:57.360 the National Institute for Health for example, and uh, you know, 0:11:57.440 --> 0:12:01.520 we've we've eradicated some diseases, we redo the cancer mortality rate, 0:12:01.520 --> 0:12:03.640 we're on the verge of a cure for type one 0:12:03.679 --> 0:12:06.640 diabetes that all started with research that was funded through 0:12:06.679 --> 0:12:09.280 the NIH, the National Institute for Health. If we don't 0:12:09.320 --> 0:12:13.040 have that research, then what then Then it falls on 0:12:13.280 --> 0:12:17.440 the private sector to continue that research. And that's always 0:12:17.559 --> 0:12:21.319 that's always very very difficult because organizations, whether it's pharmaceutical 0:12:21.400 --> 0:12:25.239 companies or healthcare systems, you know, there's there's multitude of priorities. 0:12:25.280 --> 0:12:28.360 I think that public private partnership that has existed with 0:12:28.400 --> 0:12:30.719 the NIH is the is the way to go, and 0:12:31.040 --> 0:12:32.840 I think the results have been good. And look at 0:12:33.000 --> 0:12:35.760 you know, is the CDC perfect? Is the NIH perfect? 0:12:36.160 --> 0:12:39.400 Probably not so. But let's not necessarily throw out the 0:12:39.400 --> 0:12:41.679 baby with the bath or water. So that's that's my message. 0:12:41.800 --> 0:12:44.040 So I think there's some some positives that could come 0:12:44.040 --> 0:12:45.880 out of this, but there's, you know, some cautions that 0:12:45.880 --> 0:12:46.920 we need to watch closely. 0:12:47.240 --> 0:12:49.840 Do you think that other people in your positions around 0:12:49.840 --> 0:12:54.040 the country share that same level of trepidation with certain 0:12:54.080 --> 0:12:57.640 parts and that is actually being expressed to the administration. 0:12:58.120 --> 0:13:02.120 Well, I actually participated in the Wall Street Journal CEO 0:13:02.360 --> 0:13:05.960 Council meeting which happened down in Washington about a month ago, 0:13:06.000 --> 0:13:09.480 and we did send a list of from the healthcare perspective. 0:13:09.480 --> 0:13:12.280 We sent a list of our priorities to the incoming 0:13:12.320 --> 0:13:16.680 Trump administration, and one of them was please follow the science, 0:13:16.800 --> 0:13:20.560 please support research. So that was on that was part 0:13:20.600 --> 0:13:23.439 of what we considered a priority for the new administration. 0:13:23.559 --> 0:13:26.959 So I would have to say, based on that conversation 0:13:27.040 --> 0:13:29.600 that happened down in Washington, that you know, many of 0:13:29.600 --> 0:13:32.920 my colleagues do support that, particularly those that are in 0:13:33.000 --> 0:13:38.600 the academic health system arena, because academics is about education, 0:13:38.760 --> 0:13:39.760 it is about research. 0:13:40.040 --> 0:13:42.960 Do you anticipate, though, that you might have to someday 0:13:43.200 --> 0:13:45.640 in the near future have a conversation with Elon Musk, 0:13:45.920 --> 0:13:48.600 who is looking at the efficiencies of government and especially 0:13:48.600 --> 0:13:51.800 when it comes to various health issues or the NIH 0:13:51.840 --> 0:13:52.760 and so on and so forth. 0:13:52.960 --> 0:13:55.079 Yeah, I mean, I think, you know, at some point 0:13:55.440 --> 0:13:58.160 I would welcome that conversation because you know, listen, I 0:13:58.160 --> 0:14:00.199 think there are some great ideas that are coming out 0:14:00.200 --> 0:14:03.640 of the industry to make healthcare, you know, more efficient. 0:14:03.360 --> 0:14:04.520 More affordable. 0:14:04.880 --> 0:14:07.800 But I also think there are some basics there that 0:14:07.840 --> 0:14:10.800 we have to watch and we don't want to again, 0:14:11.200 --> 0:14:13.880 you know, really reinvent the entire system. I think there 0:14:13.880 --> 0:14:17.439 are some good aspects of American medicine good aspects of 0:14:17.480 --> 0:14:20.840 American health care. It's not perfect, and I would welcome 0:14:20.840 --> 0:14:22.280 a conversation with Elon Musk. 0:14:23.200 --> 0:14:25.400 Interesting. Okay, let's I want to talk a little bit 0:14:25.400 --> 0:14:29.520 about priorities when it comes to the new year, when 0:14:29.520 --> 0:14:32.000 it comes to sort of the next generation of healthcare, 0:14:32.040 --> 0:14:34.880 we talk a lot about technology. If there's been sort 0:14:34.920 --> 0:14:37.160 of one theme that's just dominated our lives and the 0:14:37.160 --> 0:14:39.240 lives of public investors over the last couple of years, 0:14:39.280 --> 0:14:42.120 it certainly has been AI. We're told the big promise 0:14:42.840 --> 0:14:46.760 is in healthcare, drug development, pharmaceuticals. How are you thinking 0:14:46.800 --> 0:14:47.200 about it? 0:14:47.920 --> 0:14:50.600 I think that AI has come a long way in 0:14:50.680 --> 0:14:53.880 healthcare over the last couple of years. We as an example, 0:14:53.880 --> 0:14:57.280 at Hackensac Meridian Health, we have over three hundred use 0:14:57.360 --> 0:15:01.200 case pilots going on right now around promise, either use 0:15:01.240 --> 0:15:05.440 case pilots or AI algorithms that are in development. So 0:15:05.680 --> 0:15:08.800 around AI, yes, anything that's actually being used right now. Yeah, 0:15:08.840 --> 0:15:11.240 So let me give you a couple examples. You know, 0:15:11.400 --> 0:15:15.480 in the area of disease identification, which is really, you know, 0:15:15.680 --> 0:15:19.160 I think such an important area. We have a use 0:15:19.240 --> 0:15:23.200 case pilot, an algorithm that's been identified that will help 0:15:24.120 --> 0:15:29.680 physicians identify advanced and chronic kidney disease earlier. So what 0:15:29.720 --> 0:15:33.240 that might mean is if they can identify it earlier 0:15:33.280 --> 0:15:36.560 and start either prevention or start early treatment, it might 0:15:36.920 --> 0:15:40.040 it might mean avoidance of years of dialysis or even 0:15:40.080 --> 0:15:43.280 a kidney transplant. So that's one example. Another good example 0:15:43.440 --> 0:15:47.160 is in the area of precision precision treatment. So we 0:15:47.240 --> 0:15:51.880 have a pilot going on that radiologists are using to 0:15:51.960 --> 0:15:56.320 help identify breast cancer. And sometimes, you know, a scan 0:15:56.640 --> 0:16:00.360 does not identify certain types of breast cancer, but with 0:16:00.560 --> 0:16:03.720 the help of an AI algorithm, they can take the scan, 0:16:03.960 --> 0:16:07.160 take the information that's being given by that algorithm, and 0:16:07.200 --> 0:16:10.160 then say, hey, this patient really is at risk or 0:16:10.160 --> 0:16:12.400 this patient really does have breast cancer, and we need 0:16:12.440 --> 0:16:14.960 to treat that patient. So you know, in that sense, 0:16:15.120 --> 0:16:17.640 I mean, if you know, if you had me here 0:16:17.680 --> 0:16:19.880 two years ago, we wouldn't have been there yet. But 0:16:19.880 --> 0:16:23.200 at least we're starting to see some real efficacy. The 0:16:23.240 --> 0:16:25.440 other piece that I would say, you know, and you 0:16:25.480 --> 0:16:28.520 guys know this pretty well, there's a workforce shortage in 0:16:28.600 --> 0:16:32.640 healthcare physicians, nurses, and we're seeing still a lot of burnout. 0:16:32.760 --> 0:16:36.000 And when we survey our doctors and nurses. The reasons 0:16:36.000 --> 0:16:39.280 for the burnout is they're doing a lot of tasks 0:16:39.360 --> 0:16:42.200 that take them away from the bedside, and AI can 0:16:42.360 --> 0:16:44.880 help with those tasks. They can as an example, they 0:16:44.880 --> 0:16:49.440 can summarize notes and they and that's been very effective. 0:16:49.560 --> 0:16:51.440 Why is it still so tough to see a specialist? 0:16:51.440 --> 0:16:54.760 I'm not using your hospital system as as an example 0:16:54.760 --> 0:16:58.600 by any means, but by the way, careful what you wish. 0:16:58.720 --> 0:17:01.360 We had a colleague who had a doctor i think 0:17:01.400 --> 0:17:03.480 a week or week and a half ago order a test, 0:17:04.080 --> 0:17:06.840 called back and booked the appointment, and when she called 0:17:06.840 --> 0:17:08.679 back to confirm, and she's like, oh, that doctor's already 0:17:08.680 --> 0:17:09.479 gone and left the practice. 0:17:09.480 --> 0:17:11.240 Like there's just so much movement or. 0:17:11.160 --> 0:17:14.080 People leaving, or just there's a lot of stuff, or 0:17:14.160 --> 0:17:16.400 you can't even get in to see it in another case, 0:17:16.440 --> 0:17:18.160 like it's three, four or five months. 0:17:18.480 --> 0:17:21.560 Yeah, I mean there's definitely a shortage of primary care physicians. 0:17:21.600 --> 0:17:24.120 There's a shortage in certain specialty areas. I mean, we're 0:17:24.160 --> 0:17:26.879 seeing why across the country. Well, it's I think it's 0:17:26.920 --> 0:17:31.639 a variety of reasons. I do think that medical schools 0:17:32.400 --> 0:17:36.399 have not really incentivized physicians in the past to go 0:17:36.440 --> 0:17:40.480 into primary care. Sometimes it's for economic reasons. The reimbursement 0:17:40.480 --> 0:17:43.040 for a primary care physician is a lot less than 0:17:43.040 --> 0:17:45.840 a specialist, and the cost of medical education is so 0:17:45.920 --> 0:17:48.720 great that they a lot of students feel like, well, 0:17:48.880 --> 0:17:51.680 when I get out, I need to specialize in something. 0:17:51.840 --> 0:17:54.920 Plus our system, the US healthcare system has been very 0:17:54.920 --> 0:17:58.439 focused on treatment rather than prevention. But we have a 0:17:58.440 --> 0:18:01.359 medical school at Hackensack Mariti and we are doing just 0:18:01.400 --> 0:18:05.320 the opposite. We're incentivizing students to go into primary care, 0:18:05.359 --> 0:18:06.359 to go into psychiatry. 0:18:06.400 --> 0:18:07.840 How do you how do you fret an incentive for 0:18:07.880 --> 0:18:09.080 them if they're going to be paid, you know, a 0:18:09.160 --> 0:18:10.800 third of what specialists are. 0:18:10.600 --> 0:18:14.480 We have a we have a tuition forgiveness program, We 0:18:14.560 --> 0:18:17.119 have scholarships that are available if they if they go 0:18:17.200 --> 0:18:18.200 into those special. 0:18:18.200 --> 0:18:21.439 It's hard because the salary difference is so different between 0:18:21.440 --> 0:18:24.520 these specialists and these PCPs. I mean we're talking like 0:18:25.040 --> 0:18:27.560 could be like five hundred thousand dollars per year difference, right. 0:18:27.400 --> 0:18:29.680 And that's where more that's where we have to shift. 0:18:29.720 --> 0:18:32.600 And you know, in some European countries, like in Switzerland 0:18:32.640 --> 0:18:36.040 and Germany, where they've been more effective in prevention, there 0:18:36.160 --> 0:18:39.720 you see that primary care physicians are being are being 0:18:39.760 --> 0:18:43.399 paid compensated, either by government or by the private sector, 0:18:43.560 --> 0:18:45.520 a lot more than specialists. 0:18:45.560 --> 0:18:48.679 Hey, we heard from United Healthcare earlier today. This was 0:18:48.680 --> 0:18:52.199 the first time they spoke publicly about the killing of 0:18:52.280 --> 0:18:56.080 Brian Thompson back in December. How do you feel in 0:18:56.119 --> 0:18:58.960 a position like that about the reaction to that killing, 0:18:59.040 --> 0:19:01.480 the sort of populace revolt that we saw in the 0:19:01.520 --> 0:19:04.080 wake of that, the idea of this sort of you know, 0:19:04.200 --> 0:19:08.639 folk hero being somebody who took someone down. Listen. 0:19:08.720 --> 0:19:13.960 You know, we as a provider, we've had differences with 0:19:14.080 --> 0:19:17.679 insurance companies, but I would never ever, you know, advocate 0:19:18.240 --> 0:19:21.119 violence to resolve that. We sit down, and you know, 0:19:21.160 --> 0:19:24.040 it's disturbing to me that there is that kind of reaction. 0:19:24.080 --> 0:19:29.880 I understand people's frustration with insurance companies, healthcare insurance companies, 0:19:29.920 --> 0:19:33.000 but honestly, we need to work on those problems together. 0:19:33.040 --> 0:19:36.640 I don't think the answer ever gets solved through violence 0:19:36.720 --> 0:19:40.600 or or even making somebody into a hero because they 0:19:40.960 --> 0:19:43.880 murdered another human being. You know, I think about it. 0:19:43.960 --> 0:19:46.199 You know, I didn't really know Brian Thompson, but you know, 0:19:46.240 --> 0:19:49.240 he had a family and kids and you know, you know, 0:19:49.480 --> 0:19:52.399 my heart goes out to them because that was just terrible. 0:19:52.440 --> 0:19:55.320 I think the better way to resolve this is to 0:19:55.320 --> 0:19:57.639 to try to change policy, try your to work in 0:19:57.720 --> 0:20:00.280 a in a collaborative way, and I think I think 0:20:00.280 --> 0:20:01.760 there are opportunities to do that. 0:20:01.920 --> 0:20:03.159 How do we How do we do that? 0:20:03.200 --> 0:20:07.040 Because listen, Robert, you understand the system so well, and 0:20:07.160 --> 0:20:10.639 I think increasingly I just see it in our around 0:20:10.640 --> 0:20:13.920 the newsroom, you know, talking with friends and family. I mean, 0:20:13.960 --> 0:20:16.520