WEBVTT - Tariffs Driving Some Production Back To China: Volvo CEO 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg p m L Podcast. I'm pim Fox. 0:00:08.760 --> 0:00:11.520 Along with my co host Lisa Bramowitz. Each day we 0:00:11.640 --> 0:00:15.120 bring you the most important, noteworthy, and useful interviews for 0:00:15.200 --> 0:00:17.840 you and your money, whether you're at the grocery store 0:00:17.960 --> 0:00:20.720 or the trading floor. Find the Bloomberg p m L 0:00:20.840 --> 0:00:27.560 Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. We 0:00:27.680 --> 0:00:31.640 are broadcasting live from Bloomberg's The Year Ahead Conference at 0:00:31.680 --> 0:00:35.320 Bloomberg headquarters in New York City. On the other side 0:00:35.400 --> 0:00:39.680 of the country is currently the l A Auto Show. Uh. 0:00:39.680 --> 0:00:42.400 And there is Volvo and they did not bring a 0:00:42.440 --> 0:00:46.440 car this year to the auto show to display. Hokan Samuelson, 0:00:46.479 --> 0:00:49.080 who is the chief executive officer of Volvo, joins us 0:00:49.200 --> 0:00:52.479 now from there. Thank you so much for joining us. 0:00:52.520 --> 0:00:55.720 So why didn't you want to display a car and 0:00:55.760 --> 0:01:00.680 what does it mean to have a concept car? Uh? Okay, 0:01:00.760 --> 0:01:04.480 nice being with you. We really see that maybe the 0:01:04.640 --> 0:01:07.319 times when you show the car foot of the clothes 0:01:07.720 --> 0:01:11.400 in front of an audience, it feels a bit outdated, 0:01:12.040 --> 0:01:14.760 especially as the core of the future will have a 0:01:14.800 --> 0:01:18.479 lot more than just the hardware. So we decided, then 0:01:18.600 --> 0:01:23.200 let's focus on on those new customer experiences instead of 0:01:23.240 --> 0:01:26.640 the hardware and then maybe not deluse the message. Let's 0:01:26.840 --> 0:01:30.600 take the car out. So we have here one station 0:01:30.680 --> 0:01:34.600 we talked about in care importainment system of the future 0:01:34.720 --> 0:01:38.000 where we have a partnership with the Google bringing in 0:01:38.040 --> 0:01:41.600 the Android in the car. Another interesting example of a 0:01:41.680 --> 0:01:46.840 connectivity services with Amazon. We have people from Amazon. You're 0:01:47.280 --> 0:01:53.560 showing how you can get your Internet supply directly into 0:01:53.840 --> 0:01:56.840 your car because normally you're not that home when they 0:01:56.880 --> 0:02:01.080 come to deliver the stuff. So that's the practical solution 0:02:01.160 --> 0:02:04.520 also for our for our customers. So these are two 0:02:04.680 --> 0:02:10.760 examples of what the care of the future could could be. 0:02:10.760 --> 0:02:15.079 Besides and of course a nice car. Can you tell 0:02:15.160 --> 0:02:18.120 us a little bit about the three sixty C This 0:02:18.200 --> 0:02:21.080 is the concept car that Lisa was referring to, and 0:02:21.520 --> 0:02:25.760 the venture that you have with Luminar, and how the 0:02:25.800 --> 0:02:30.560 technology that Luminar is pursuing with you is really going 0:02:30.600 --> 0:02:34.280 to change the in car experience. And I have a 0:02:34.280 --> 0:02:36.079 feeling that you'll even be able to have a glass 0:02:36.080 --> 0:02:40.560 of champagne while you're in the car and it won't 0:02:41.160 --> 0:02:45.119 it won't be a danger. Okay, it's a really good 0:02:45.120 --> 0:02:48.920 point because of course, to be able to enjoy any 0:02:49.040 --> 0:02:54.120 type of in car portayment or you need to have 0:02:54.240 --> 0:02:57.840 a car which of course could be driven safely automated. 0:02:58.240 --> 0:03:01.000 And that's where luminar comes in to the picture. I mean, 0:03:01.040 --> 0:03:04.079 that's a very interesting start top that we have also 0:03:04.120 --> 0:03:07.960 on stand here, which is a long range high definition 0:03:08.120 --> 0:03:13.640 light art. So it's really as with the human the 0:03:13.720 --> 0:03:17.919 ability to see. It's crucial for a stage drive, and 0:03:18.120 --> 0:03:21.679 I mean the computer also needs a better revision. It 0:03:21.840 --> 0:03:26.000 has cameras, radars, but also light darts. And then the 0:03:26.120 --> 0:03:29.760 lider is especially important, and the gluminar is taking a 0:03:29.840 --> 0:03:35.280 step forward here of having a long range, high definition lider. Okay, 0:03:35.440 --> 0:03:37.280 I have to think, you know, you're talking about the 0:03:37.320 --> 0:03:39.680 experience and there seems to be a d emphasis of 0:03:39.760 --> 0:03:43.400 actually purchasing the vehicle, and perhaps this is what's behind 0:03:43.920 --> 0:03:46.480 General Motors in the recent announcement they came out with 0:03:46.640 --> 0:03:50.360 to cut a huge proportion of their staff in response 0:03:50.680 --> 0:03:55.680 to changes in automation and electronification as well as just 0:03:55.760 --> 0:03:59.920 the reality which is the car cycle is slowing. What's 0:04:00.000 --> 0:04:06.960 about on it that? Uh, we don't really see a 0:04:06.960 --> 0:04:10.280 a indication of the weaker market so far. I mean 0:04:10.320 --> 0:04:13.920 we have been very fortunate with our new car lines 0:04:14.080 --> 0:04:17.039 and we have the right cars being now popular on 0:04:17.120 --> 0:04:19.640 the on the on the market SUVs. We have three 0:04:19.720 --> 0:04:22.919 quarter of our stays is already today a SUVs, but 0:04:23.960 --> 0:04:26.400 the last quarter is also very important. And we have 0:04:26.480 --> 0:04:29.600 a very attractive new car being built in South Carolina. 0:04:29.640 --> 0:04:32.960 I knew said on so I think there will it 0:04:33.040 --> 0:04:36.320 will not be one under present SUVs. There will be 0:04:36.400 --> 0:04:40.680 awesome market for for other cars. So we are fortunate 0:04:40.720 --> 0:04:43.360 to have a strong product lineup and we can then 0:04:43.640 --> 0:04:47.200 of course continue growing our market share and that will 0:04:47.240 --> 0:04:50.719 help us. And and we are lucky than to be small. 0:04:51.040 --> 0:04:53.920 Not always good to be big. Sometimes it's also an 0:04:53.920 --> 0:04:57.839 advantage being small because the teacher to grow. Then, Okay, 0:04:57.839 --> 0:04:59.600 I'm wondering if you could just talk a little bit 0:04:59.640 --> 0:05:02.960 about producing cars in the US versus the rest of 0:05:03.000 --> 0:05:06.400 the world and sort of the competitive balance there. I mean, 0:05:06.720 --> 0:05:10.000 do you find it to be prohibitively expensive to expand 0:05:10.000 --> 0:05:15.080 production in the United States versus say, China. Yeah, I 0:05:15.120 --> 0:05:20.920 mean with no carrorists between China and and the U 0:05:21.200 --> 0:05:24.560 s that ha's of course complicated using a sort of 0:05:24.960 --> 0:05:28.920 exchange system between these two markets. We we were planning 0:05:29.000 --> 0:05:31.479 really to build a big sead on in China and 0:05:31.560 --> 0:05:35.080 important in to continue importing it into US, which we 0:05:35.120 --> 0:05:37.680 have been doing for some years. And then the one 0:05:37.720 --> 0:05:41.200 built in South Carolina was intended to go the other way. 0:05:41.400 --> 0:05:43.919 But of course with very high carrifts, we have to 0:05:43.960 --> 0:05:46.599 be able, we have to react to that. So right 0:05:46.640 --> 0:05:49.880 now we're planning to build the car we're building in 0:05:49.920 --> 0:05:54.160 South Carolina also in China because will be too expensive 0:05:54.200 --> 0:06:00.320 paying the twenty five percent importunities. But still I say, 0:06:00.400 --> 0:06:04.599 we have mitigated these new tariffs so far, so bye bye, 0:06:05.440 --> 0:06:07.960 and we were led to have the factory in the US. 0:06:08.040 --> 0:06:10.560 But I mean if it would continue then of course 0:06:10.600 --> 0:06:13.360 would be really a big drawback for I think all 0:06:13.600 --> 0:06:18.040 all car makers, if for also US and and US 0:06:18.120 --> 0:06:21.480 would introduce high tarriffs and that would be at the 0:06:21.640 --> 0:06:24.520 end more expensive cards for the consumer. I think they 0:06:24.560 --> 0:06:27.200 are the ones who will be paying the bill. Let 0:06:27.279 --> 0:06:31.520 them thanks very much for being with us. How can Samuelson, 0:06:31.680 --> 0:06:35.680 chief executive officer of Volvo and joining us from the 0:06:35.839 --> 0:06:37.719 l A automobile show And I don't think it's going 0:06:37.760 --> 0:06:39.760 to be an automobile show anymore, at least I think 0:06:39.800 --> 0:06:42.320 it's just going to be a technology show the way 0:06:42.360 --> 0:06:44.960 it's going. Yeah, Well, honestly, it's interesting to me. The 0:06:45.000 --> 0:06:48.760 focus on the practical experience. How to download your music, 0:06:49.120 --> 0:06:52.880 your audiobooks, you know, how do you create an use 0:06:52.960 --> 0:06:57.080 those systems? Right, exactly, and that if becomes tutorial exactly 0:06:57.160 --> 0:06:59.960 that in tech Indeed, all right, you're listening to blue 0:07:00.080 --> 0:07:03.880 Berg Markets. We are broadcasting from the Bloomberg Year Ahead 0:07:03.960 --> 0:07:11.160 Summit at Bloomberg World headquarters. We are so lucky to 0:07:11.200 --> 0:07:14.160 be joined by Franz Bueller, his president and chief executive 0:07:14.160 --> 0:07:17.080 officer of Aho Delis, which is based in the nether Lends, 0:07:17.080 --> 0:07:19.920 but he joins us here at our headquarters. Um this 0:07:20.080 --> 0:07:23.640 brand is the owner of staff in Shop, peep, Had 0:07:23.840 --> 0:07:28.040 Food Line, Giant and Hannaford. So right now, do you 0:07:28.200 --> 0:07:31.440 view trade as potentially the biggest threat to your business 0:07:31.520 --> 0:07:35.400 or technological changes that you need to keep up with. Yeah, 0:07:35.440 --> 0:07:38.480 that's for sure. The market is still very competitive and 0:07:38.520 --> 0:07:40.560 it will also remain the same in the next year. 0:07:41.080 --> 0:07:43.120 And you see that technology is going to have a 0:07:43.200 --> 0:07:47.440 big impact on industry for sure, to making customer journey 0:07:47.480 --> 0:07:50.160 even more attractive, to make it easier for customers to 0:07:50.360 --> 0:07:53.760 prepare the shop to predict their list, but also to 0:07:53.880 --> 0:07:56.920 give them more information on all kinds of things like 0:07:57.000 --> 0:08:00.400 food and navigation nounhealthier choices for food. So I think 0:08:00.440 --> 0:08:02.960 technology will be is going to play a big role. 0:08:03.240 --> 0:08:05.400 Another thing what's going to be an important thing on 0:08:05.440 --> 0:08:07.880 technology is the whole food provenance and we just had 0:08:07.880 --> 0:08:11.360 the romaine lettuce uh scare in the US a big thing, 0:08:11.520 --> 0:08:14.280 and I think more and more people talk about technology 0:08:14.400 --> 0:08:16.679 like blockchain to make sure that if the full supply 0:08:16.880 --> 0:08:19.640 chain visible. And the third thing on technology is that 0:08:20.040 --> 0:08:22.680 if you look at at labor in general, um, there's 0:08:22.680 --> 0:08:24.680 a lot of things in the supply chain of retailers 0:08:24.800 --> 0:08:27.600 or where we can gain efficiencies with the more automation, 0:08:27.640 --> 0:08:30.960 more robotiz robotization of warehouses and these kind of things. 0:08:30.960 --> 0:08:34.040 So technology will be in a very important factors for 0:08:34.040 --> 0:08:37.839 the coming years. Are you also looking to shrink the 0:08:37.960 --> 0:08:43.240 actual size of the grocery store make it smaller? I 0:08:43.280 --> 0:08:47.680 think what we can see is that that online will 0:08:47.760 --> 0:08:51.120 have an impact on the bigger stores, but we use 0:08:51.200 --> 0:08:54.600 that space to have even more and stronger fresh parameter 0:08:54.720 --> 0:08:56.760 in those stores, to do more in organic, to do 0:08:56.880 --> 0:09:00.000 more in fresh food, and to have better offers UM. 0:09:00.040 --> 0:09:02.680 And at the same time, we also operate the smaller 0:09:02.720 --> 0:09:05.160 convenience stores, and we have a lot of them in Europe, 0:09:05.400 --> 0:09:07.640 of course, and I think there's also potential in the 0:09:07.720 --> 0:09:12.000 US to operate smaller stores, smaller supermarkets. So you were 0:09:12.000 --> 0:09:14.840 speaking to a publication earlier this month and you said 0:09:14.880 --> 0:09:18.319 that your company is in a good position for US 0:09:18.440 --> 0:09:21.960 mergers and acquisitions. What kinds of companies are you thinking 0:09:22.000 --> 0:09:26.000 about and how how quickly WI let's play out? Yeah, 0:09:26.280 --> 0:09:28.680 we UM we launched two weeks ago. This is leading 0:09:28.720 --> 0:09:32.760 together strategy UM where growth is very important, but also 0:09:32.880 --> 0:09:35.079 non organic growth, which is an opportunity. And if you 0:09:35.240 --> 0:09:37.440 just stick to the US on the East Coast, I 0:09:37.440 --> 0:09:39.360 think that we will see in further consolidation on the 0:09:39.400 --> 0:09:42.760 East Coast where a lot of companies cannot make up 0:09:42.840 --> 0:09:44.640 let's say, what the investments they have to make in 0:09:44.679 --> 0:09:46.920 technology and online and these kind of things, so that 0:09:46.920 --> 0:09:49.840 we have further consolidation. And with the branch you just 0:09:49.920 --> 0:09:52.760 mentioned where we are very proud about, we think that 0:09:52.800 --> 0:09:55.160 we can deepen our footprint along the whole East Coast 0:09:55.200 --> 0:09:59.040 by filling acquisitions or if we have other targets coming up, 0:09:59.080 --> 0:10:01.480 then we would be interested and the names. No, no, 0:10:01.679 --> 0:10:04.280 there's no no names at the moment. And you know 0:10:04.400 --> 0:10:08.000 everything about for looking statements. Speak a little bit if 0:10:08.040 --> 0:10:13.199 you can about in store dining and also the takeaway 0:10:13.240 --> 0:10:16.800 prepared food business. I think that's a great question. You 0:10:16.840 --> 0:10:19.640 see that more and more customers are looking for meal 0:10:19.679 --> 0:10:22.800 solutions and or to save time, or to get inspiration 0:10:23.120 --> 0:10:26.880 or to have in a very healthy proposition. But take 0:10:26.920 --> 0:10:30.320 it out and uh, and in store dining is part 0:10:30.320 --> 0:10:32.040 of this. We have now a lot of stores where 0:10:32.040 --> 0:10:35.240 we have kitchens inside where people can consume their meals. 0:10:35.920 --> 0:10:38.760 We have more and more investments in meal solutions, if 0:10:38.760 --> 0:10:42.000 it's very nice salads, if it's unique meals with a 0:10:42.080 --> 0:10:45.520 very healthy proposition. So I think that whole uh, what 0:10:45.640 --> 0:10:49.720 you call out of home meal solutions, that whole field 0:10:49.800 --> 0:10:52.280 is going to blur also with the supermarkets and and 0:10:52.440 --> 0:10:54.160 and the restaurants. I think that will be in a 0:10:54.160 --> 0:10:56.280 common space we call it that we would have to 0:10:56.320 --> 0:11:01.880 gain our share of stomach irrespectively where that beautiful meal 0:11:01.960 --> 0:11:03.880 is coming from. What does that say to him about 0:11:03.880 --> 0:11:06.800 our delayed gratification ability that we need to see food 0:11:06.800 --> 0:11:11.360 and consume it immediately. I'm curious, just you're talking about scale, 0:11:11.960 --> 0:11:15.319 and I have to wonder how important Amazon and Walmart 0:11:15.400 --> 0:11:19.040 are to the sort of pressure and race to advance 0:11:19.080 --> 0:11:23.000 sufficiently technologically. I mean, are you finding it increasingly difficult 0:11:23.200 --> 0:11:27.720 to compete given their scale? Um also a good question. 0:11:27.760 --> 0:11:30.319 But if we look at scale for us, it's a 0:11:30.800 --> 0:11:33.640 relative market share important in the markets where we operate. 0:11:34.040 --> 0:11:36.120 We have number one and two positions in all the 0:11:36.160 --> 0:11:39.280 markets along the East coast from Bangor in Maine to 0:11:39.280 --> 0:11:42.360 to u to the southern part of of the Carolinas. 0:11:42.400 --> 0:11:46.120 And it's about local scale, so local market share, and 0:11:46.160 --> 0:11:48.559 we connect them with a great local branch you just mentioned. 0:11:49.080 --> 0:11:52.760 And we believe that a strong local market share combined 0:11:52.800 --> 0:11:56.079 with brand strength is that that in an omnique channelso 0:11:56.240 --> 0:11:59.960 stores an online proposition together that is the strong company 0:12:00.160 --> 0:12:04.400 proposition for customers. And with our fortified billion dollars of 0:12:05.200 --> 0:12:09.000 of of sales, we have very strong positions and therefore 0:12:09.040 --> 0:12:12.880 the necessary scale. Your online sales growth was a big 0:12:12.920 --> 0:12:15.600 bright spot in the third quarter earnings results. In some 0:12:15.720 --> 0:12:20.439 cases up nearly will be spending more money to build 0:12:20.480 --> 0:12:24.800 that out. Yeah, we see that. We believe that consumers 0:12:25.320 --> 0:12:28.360 love a proposition where you have a bricks and mortars 0:12:28.440 --> 0:12:32.000 or store proposition linked and augmented with an online proposition 0:12:32.760 --> 0:12:37.240 um and we grow quite fast. We also will accelerate 0:12:37.240 --> 0:12:40.520 our growth in the US with people digital apps, and 0:12:40.800 --> 0:12:43.080 for next year we see there also growth. A lot 0:12:43.160 --> 0:12:46.560 of people talk about growth in online and magnificent figures everywhere. 0:12:46.920 --> 0:12:48.839 We should realize that we are only in the food 0:12:48.880 --> 0:12:52.800 business and fresh food and frozen food and chilled food. 0:12:53.080 --> 0:12:57.000 There's a very different game than than selling refrigerators, electronics, 0:12:57.040 --> 0:12:59.800 books and c d s and uh. And that's why 0:13:00.120 --> 0:13:02.640 dead growth is not easy to make. And with a 0:13:02.679 --> 0:13:05.160 one billion dollars at the moment, we are still leader 0:13:05.160 --> 0:13:08.200 on the East Coast in food online twenty seconds or less. 0:13:08.240 --> 0:13:10.280 I'm just wondering, do you think that Amazon has been 0:13:10.280 --> 0:13:14.120 successful so far integrating Whole Foods. I don't know. They 0:13:14.160 --> 0:13:16.640 don't give me their boardroom reports on this, but I 0:13:16.679 --> 0:13:20.400 think they don't. Have you asked? I would love to 0:13:20.400 --> 0:13:22.880 ask them, but I think the answer prompt But they 0:13:22.920 --> 0:13:25.320 have You know, you know that our whole has check 0:13:25.360 --> 0:13:28.679 out what they call checkout free stores. Yes, well we 0:13:28.720 --> 0:13:30.480 have it. We have a lot of technology there, so 0:13:30.559 --> 0:13:33.240 I'm not afraid of the technology we we we are 0:13:33.280 --> 0:13:35.920 doing already amazing things in the US and in Europe, 0:13:36.559 --> 0:13:40.240 but also on Amazon. Will see that fresh food looking 0:13:40.280 --> 0:13:44.400 at Amazon Fresh. That is a difficult turf to be 0:13:44.480 --> 0:13:48.040 very successful, and we have roughlyan hunter and thirty years 0:13:48.040 --> 0:13:50.360 experience with food. Thanks very much for being with us. 0:13:50.400 --> 0:13:53.079 Much appreciate it gets us already and hungry for lunch France. 0:13:53.120 --> 0:13:56.120 Muller is the president and the chief executive of our 0:13:56.160 --> 0:13:59.080 whole Del Hayes. I gotta say the late gratification that 0:13:59.160 --> 0:14:02.840 is totally me an inability to do it. You're listening 0:14:02.880 --> 0:14:10.400 to Bloomberg Radio. Healthcare is an area right for disruption. 0:14:10.559 --> 0:14:13.319 Amazon is trying to do just that. Reported today in 0:14:13.360 --> 0:14:15.600 the Wall Street Journal, they are starting to sell software 0:14:15.880 --> 0:14:20.040 that minds patient medical records for information that doctors and 0:14:20.120 --> 0:14:23.120 hospitals can use to improve treatment. Joining us now is 0:14:23.200 --> 0:14:26.800 Lloyd Biner, Dean of the Stanford University School of Medicine. 0:14:26.800 --> 0:14:29.840 We are so pleased to have you. Uh Dr, I'm 0:14:29.840 --> 0:14:34.240 just curious from your perspective, is what Amazon doing exactly 0:14:34.680 --> 0:14:38.640 what you're talking about in terms of modernizing healthcare and 0:14:38.840 --> 0:14:42.960 using big data and the lessons therein to help patients. Yes, 0:14:43.120 --> 0:14:47.000 I think, uh it's It's certainly one example of how 0:14:47.760 --> 0:14:50.840 gleaning information from the massive amounts of data that exists 0:14:50.880 --> 0:14:55.120 within electronic medical records, how that opers offers the opportunity 0:14:55.320 --> 0:14:58.080 to really improve the delivery of healthcare. You know, in 0:14:58.200 --> 0:15:02.440 order to really have individual lies, personalized healthcare, we have 0:15:02.520 --> 0:15:05.680 to look at the results and the outcomes from thousands 0:15:05.680 --> 0:15:09.760 and thousands of patients, uh in order to know what 0:15:10.600 --> 0:15:13.600 the evidence would suggest is the best treatment and prevention 0:15:13.960 --> 0:15:16.760 for disease in an individual patient. And I think what 0:15:16.960 --> 0:15:19.640 I also read this morning in the Wall Street Journal 0:15:19.960 --> 0:15:23.560 that Amazon is moving forward with is a step in 0:15:23.600 --> 0:15:26.720 that direction, and I'm sure that other major tech firms 0:15:26.720 --> 0:15:30.440 and cloud storage platforms are going to be interested in 0:15:30.480 --> 0:15:34.880 the same sorts of topics. The limitation for getting information 0:15:34.920 --> 0:15:39.080 from healthcare data today is not the AI or the algorithms, 0:15:39.160 --> 0:15:42.480 or the ability to do deep learning and neural network 0:15:42.560 --> 0:15:45.680 type approaches. Those are not the limiting factors. The limiting 0:15:45.720 --> 0:15:48.480 factors being able to bring the get data together in 0:15:48.520 --> 0:15:51.320 a way that those techniques of deep learning can be 0:15:51.360 --> 0:15:54.840 applied in a meaningful way. Dr Minor, I'm sure you've 0:15:54.840 --> 0:15:57.560 seen all of the charts and comparisons in terms of 0:15:57.600 --> 0:16:01.479 how much per capita the United States spends on healthcare. 0:16:02.240 --> 0:16:07.840 What is your thought about why do we spend more 0:16:07.880 --> 0:16:12.600 than any other developed country and we don't necessarily live 0:16:12.880 --> 0:16:17.160 longer or any better than the citizens of Switzerland, Germany, 0:16:17.280 --> 0:16:19.880 the Netherlands and so on. Why do we spend such 0:16:19.920 --> 0:16:26.000 an outsized amount in two minutes or less? Right? Clearly, Uh, 0:16:26.120 --> 0:16:29.680 there there are lots of factors. Certainly the payment system 0:16:29.760 --> 0:16:34.680 IS is one prominent factor. Um. You know, moving more 0:16:34.760 --> 0:16:38.640 towards value based reimbursement IS is something that I think 0:16:39.000 --> 0:16:41.120 we have begun to the United States, but clearly we 0:16:41.160 --> 0:16:45.080 need to continue along that pathway. In a strictly fee 0:16:45.160 --> 0:16:48.440 for service world, it becomes difficult to align the incentives, 0:16:48.480 --> 0:16:51.760 which should be based upon outcomes, that is, achieving the 0:16:51.840 --> 0:16:55.840 best health care outcomes with the payments. I mean, that's 0:16:55.880 --> 0:16:59.720 the way any any sort of economy works, uh, when 0:16:59.720 --> 0:17:01.880 it work as well. So that's been a challenge in 0:17:01.920 --> 0:17:05.640 the United States. Also, we focused far too much on 0:17:06.560 --> 0:17:09.199 the latter stages of illness. We need to focus a 0:17:09.240 --> 0:17:12.280 lot more on prediction and prevention, and that's really been 0:17:12.280 --> 0:17:16.560 our goal. Uh. In Stanford Medicine, we define our strategic 0:17:16.600 --> 0:17:20.680 initiative as being precision health. We distinguish that from precision medicine. 0:17:20.920 --> 0:17:23.720 And then we also want to focus great science, great 0:17:23.720 --> 0:17:27.479 technology on prediction and prevention in addition to of course 0:17:27.760 --> 0:17:31.160 achieving the cures for those complex diseases. But we ought 0:17:31.160 --> 0:17:34.440 to be much more focused across the board on being 0:17:34.440 --> 0:17:37.720 better at prediction and prevention. That will reduce the demands 0:17:37.760 --> 0:17:40.600 on the system, because so much of the healthcare expenditures 0:17:40.600 --> 0:17:43.240 in the United States has spent in the most complex 0:17:43.280 --> 0:17:46.000 diseases and in the latter stages of life. So I 0:17:46.040 --> 0:17:49.000 want you to look into the future. The topic of 0:17:49.040 --> 0:17:52.440 your panel that's upcoming is the future of healthcare, and 0:17:52.800 --> 0:17:56.320 you envision a world where we have holographic m r 0:17:56.560 --> 0:17:59.440 s and scans and such so that radiologists can more 0:17:59.480 --> 0:18:03.919 accurately understand what's going on. Tell us about how close 0:18:04.000 --> 0:18:06.240 we are to the future. You would like to see 0:18:06.440 --> 0:18:09.359 at some of the features of that future. I think 0:18:09.840 --> 0:18:12.679 the advances and we started the discussion today talking about 0:18:13.240 --> 0:18:17.960 getting information from huge sources of data, so broadly speaking, 0:18:18.080 --> 0:18:22.320 under the heading of digital health, both the data mining 0:18:22.359 --> 0:18:25.920 aspects as well as the consumer focused devices and technologies, 0:18:26.400 --> 0:18:31.480 those offer remarkable opportunity to democratize healthcare delivery. You know, 0:18:31.600 --> 0:18:35.120 last year are a group of computer scientists at Stanford 0:18:35.119 --> 0:18:40.320 working with our dermatologists. Using a large database of images 0:18:40.359 --> 0:18:43.760 of skin lesions taken with smartphones, we're able to develop 0:18:43.760 --> 0:18:46.480 a deep learning based algorithm that can make a diagnosis 0:18:46.480 --> 0:18:49.960 of a skin lesion as accurately from this algorithm as 0:18:49.960 --> 0:18:53.480 a trained dermatologist. Now, that has a remarkable Now that 0:18:53.760 --> 0:18:56.840 not every community has a dermatologist, and by the way, 0:18:56.960 --> 0:18:59.320 in the communities that have dermatologists, you can't always get 0:18:59.359 --> 0:19:03.280 an appointment. But but and that's one example of many, 0:19:03.320 --> 0:19:06.920 many others of how we can use the same type 0:19:06.920 --> 0:19:10.560 of disruptors that have been so impactful and financial services 0:19:10.600 --> 0:19:13.040 in ordering goods and services and apply those to healthcare. 0:19:13.160 --> 0:19:17.560 All Right, So, how is privacy an obstacle here? Because 0:19:17.680 --> 0:19:20.520 I would imagine people are concerned that some of the 0:19:20.520 --> 0:19:23.440 big tech companies are gleaning all the information from everything 0:19:23.480 --> 0:19:26.160 they do on their phones. Anyway, if they start taking 0:19:26.200 --> 0:19:29.720 images and sort of connecting their health with their devices 0:19:29.760 --> 0:19:33.639 that follow them around, how does that play out? Sure, 0:19:33.960 --> 0:19:36.919 privacy is absolutely a concern. I think the key The 0:19:37.000 --> 0:19:41.679 first step is transparency, so people have to know how 0:19:41.720 --> 0:19:44.520 their data is going to be used. In the Wall 0:19:44.520 --> 0:19:47.119 Street Journal report that you and I both read this morning, 0:19:47.119 --> 0:19:51.800 it mentioned that Amazon furnishes a key that can only 0:19:51.920 --> 0:19:56.120 be opened or used by the institution that that has 0:19:56.160 --> 0:19:58.760 obtained the data. I know words Amazon will never access. 0:19:58.880 --> 0:20:03.160 According to the report, the individuals uh that whose data 0:20:03.320 --> 0:20:06.679 formed the basis of the deep learning process. You know, 0:20:06.760 --> 0:20:08.600 that's a first step, but there are lots of other 0:20:08.640 --> 0:20:11.520 steps that have to be taken as well. I would 0:20:11.560 --> 0:20:14.800 hope that as we have this dialogue based upon transparency, 0:20:14.840 --> 0:20:19.480 based upon really all of us in society understanding the 0:20:19.520 --> 0:20:23.520 opportunity that these approaches offered to improve healthcare, I would 0:20:23.560 --> 0:20:25.400 hope that each of us as an individual will become 0:20:25.440 --> 0:20:28.520 more comfortable with how our data will be used, because 0:20:28.560 --> 0:20:30.679 that's the only way we're really going to improve the 0:20:30.720 --> 0:20:34.280 delivery of healthcare. Now, we just learned that CVS has 0:20:34.320 --> 0:20:39.199 completed its acquisition of Ethna. What's your position, based on 0:20:39.280 --> 0:20:45.560 your experience as a medical professional, this combination between pharmacy 0:20:45.640 --> 0:20:52.200 benefit management corporations, regular pharmacies, and health insurers. I think 0:20:52.200 --> 0:20:55.800 the CVS at A merger is representative of a broader 0:20:55.880 --> 0:20:59.720 trend of consolidation in the healthcare market. In the country today. 0:21:00.080 --> 0:21:02.560 You know, there can be economies of scale and efficiencies 0:21:02.640 --> 0:21:07.560 from consolidation. There can also be concerns about UM about 0:21:07.720 --> 0:21:12.119 how the competitive drive and the UH sort of individual 0:21:12.160 --> 0:21:14.760 delivery systems and the innovation that comes from that, how 0:21:14.800 --> 0:21:18.919 that might be affected by massive consolidation with CVS and 0:21:18.960 --> 0:21:22.719 Etna and with other similar types of arrangements. What I 0:21:22.760 --> 0:21:27.920 see is a desire to build truly vertically integrated delivery systems, 0:21:28.040 --> 0:21:32.560 so where you and I, as as healthcare consumers, have 0:21:32.800 --> 0:21:36.240 everything covered under one umbrella, and that includes being able 0:21:36.280 --> 0:21:40.240 to get our prescriptions, uh under a comprehensive integrated plan. 0:21:40.720 --> 0:21:43.960 All right, thanks very much for being with us. Dr 0:21:44.240 --> 0:21:48.440 Lloyd Minor is the dean of Stanford University's School of Medicine, 0:21:48.800 --> 0:21:52.640 and he is here at the Bloomberg The Year Ahead 0:21:52.760 --> 0:21:57.840 conference talking about the future of healthcare and healthcare delivery. 0:21:58.320 --> 0:22:00.640 Fascinating discussion. I love the do you have being able 0:22:00.680 --> 0:22:03.000 to take a picture of something that concerns you and 0:22:03.119 --> 0:22:06.960 having Dr Googleberg give me an answer. Yeah, while you're 0:22:07.000 --> 0:22:15.320 in your autonomous driving vehicle drinking some champagne. This is Bloomberg. Today. 0:22:15.600 --> 0:22:19.600 CBS Health has closed it's seventy billion dollar deal to 0:22:19.680 --> 0:22:23.080 purchase the health insurer ETNA. Here to tell us more 0:22:23.119 --> 0:22:26.320 about the world of healthcare. Michael Ray, Founder, chief executive 0:22:26.440 --> 0:22:30.240 are Ex Savings Solutions. Michael, thank you very much for 0:22:30.320 --> 0:22:34.040 being with us. We've been waiting for this deal to 0:22:34.119 --> 0:22:37.480 close for many months. Do you think this is going 0:22:37.520 --> 0:22:42.119 to really transform the way healthcare is delivered to Americans? No? 0:22:42.240 --> 0:22:45.800 I do not, UM, I think that really what you 0:22:45.840 --> 0:22:48.280 see here is a combination of two companies in the 0:22:48.320 --> 0:22:52.400 healthcare space, one that handled, you know, strictly pharmacy benefits 0:22:52.400 --> 0:22:55.439 and one that handled underwrote risk on the health insurer side. 0:22:56.000 --> 0:23:00.560 I don't expect the consumer experience to change. I don't 0:23:00.560 --> 0:23:03.960 expect costs to change because of it. Um. I really 0:23:03.960 --> 0:23:05.679 just think it's it's kind of a combination and a 0:23:05.720 --> 0:23:09.439 new brand. Michael. One thing that possibly could change the 0:23:09.520 --> 0:23:12.280 landscape is the fact that big corporations are sort of 0:23:12.280 --> 0:23:15.360 taking things into their own hands. We've talked about, for example, 0:23:15.800 --> 0:23:18.399 h Berkshire Hathaway teaming up with JP Morgan and others 0:23:18.440 --> 0:23:21.720 to create their own health network. UM. But you're seeing 0:23:21.760 --> 0:23:25.200 it also with your own company, right, Yes, we are so. 0:23:25.240 --> 0:23:27.680 We recently signed a deal with the health Print Health 0:23:27.680 --> 0:23:30.919 Transformation Alliance the h t A, which is a combination 0:23:30.920 --> 0:23:34.679 of about fifty companies American Express, Coke UM, some of 0:23:34.680 --> 0:23:37.880 the some of the really large large players represents about 0:23:37.880 --> 0:23:40.680 six million lives and they have really formed this coalition 0:23:40.720 --> 0:23:43.200 to try to, to your point, take take things into 0:23:43.240 --> 0:23:45.639 their own hands and actually start to exert some of 0:23:45.680 --> 0:23:48.600 their own influence on what decisions are made and and 0:23:48.640 --> 0:23:53.360 how how consumers navigate the space. So, is the consequence 0:23:53.440 --> 0:23:58.040