Operational Leadership: Accelerating Innovation in Healthcare with Dr. Raj Garg and Les Funtleyder

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This week on World Reimagined, we spoke with two experts about what leadership and technology is needed to transform the healthcare industry in the U.S. Listen wherever you get your podcasts.

The healthcare industry is one of the largest and most consequential sectors in the United States—but it’s also one of the most complicated. This unique complexity makes it challenging for the operational change and innovation the industry desperately needs in order to better serve citizens. 

In contrast, the inherently innovative tech sector is not only a huge component of the U.S. economy, but it also plays a pivotal role in accelerating change across all other industries. In this episode, Host Gautam Mukunda speaks with Les Funtleyder and Dr. Raj Garg about what leaders can learn from combining the fast-paced innovations in tech with the cautious and deliberate rhythms of the healthcare industry.

Les is a portfolio manager at E Squared Capital Management, and the author of Healthcare Investing, and he sits on the boards of Applied Therapeutics and Acalis. Dr. Raj Garg was the former President and CEO of Cancer Treatment Centers of America, he was also one of the most trusted advisors to CEOs of the world’s largest healthcare companies during his time as senior partner in the healthcare practice at McKinsey. He is a doctor and attorney and serves on the boards of Health AI 360 and the National Spine and Pain Centers.

What I would actually predict is that the next couple of decades are going to really be an age of biology, and an age of technology and healthcare that will cause pretty fundamental shifts.
Dr. Raj Garg
The biggest [healthcare] challenge from my perspective is that people don't like change, especially in systems that been in place for a really long time.
Les Funtleyder

Follow @GMukunda on Twitter or email us at WorldReimagined@nasdaq.com

Literature Referenced on World Reimagined Season 2 Episode 10:

Healthcare Investing: Profiting from the New World of Pharma, Biotech, and Health Care Services, by Les Funtleyder

Guest Information for Operational Leadership:

Dr. Garg is a strategic, inspirational, values-based health care leader with a proven P&L track record. He is deeply experienced across multiple segments of health care. He builds exceptional aligned senior teams with commitment to delivering tangible results. His global experience spans North America, Europe and Asia and substantive expertise covers the corporate value chain as well as a broad range of C-suite topics.   

Most recently, Raj led Cancer Treatment Centers of America (CTCA), a $4.5B company, as CEO & President, where he drove a major turnaround of the company significantly reducing costs and driving operational excellence across its hospitals and functions. He built a strong leadership team, a culture of performance accountability, moved the company to go in-network and accept Medicare patients, and defined a new strategy for the company while creating/executing against a robust inorganic growth pipeline. Raj was a member of the Board, its Executive Committee, and its Finance & Risk, Medicine & Science, Strategic Growth, and Talent committees. Raj’s leadership stabilized the company’s operations and financials, while allowing its shareholders to choose their future direction.   

Prior to CTCA, Raj was a Senior Partner in McKinsey & Company’s New York Office for ~25 years. He co-led the health care practice at McKinsey and served leading institutions across the U.S., Europe, and Asia, where he advised CEOs and other C-suite leaders. He established McKinsey’s pharma R&D practice and its health care practice in India. His experiences focused on health care ranging across biopharma, medical products, providers, payors, and ancillary service companies (e.g. lab, CROs). Over the course of his career, he led 500+ engagements across nearly every functional area including strategy, M&A, post-merger integration, sales and marketing, and operations. In global public health, he worked closely with the UN Special Envoy on Malaria and other NGOs to mobilize $5B+ and reduce malaria mortality by an estimated 6M lives in Sub- Saharan Africa.   

Currently, Raj works with a small group of tech-enabled growth companies that are helping to define the future of health care. He is on the Board of Koning Corporation, a company transforming breast imaging. He is an advisor on health care to MHR Fund and to Medocity, the leading cloud- based enterprise-wide solution for digital patient care. Until recently, he was on the board of the National Spine and Pain Centers, the leading provider of non-surgical pain management services. He has served on the boards of various non-profit organizations, including the New York Blood Center, where he chaired the Governance Committee and initiated significant governance changes.  

Before joining McKinsey, Raj worked as a physician, and as a healthcare attorney for the Manatt Law Firm in Los Angeles. He is a graduate of Stanford Medical School, Yale Law School, where he co-founded the Yale Law and Policy Review, and the University of Pennsylvania, summa cum laude.   

Raj is licensed to practice medicine in California and law in California and the District of Columbia. 

Mr. Funtleyder is a Healthcare Portfolio Manager at E Squared where he is responsible for conducting fundamental and valuation analysis of public and private companies within the healthcare industry.  Prior to E Squared Mr. Funtleyder was the Director of Strategic Investments for Opko Health and a healthcare strategist portfolio manager for the Miller Tabak Health Care Transformation Fund (Symbol: MTHFX). He joined Miller Tabak after managing a healthcare portfolio for Provident Advisors. Before joining Provident, Les worked as a medical device analyst at UBS Warburg. He also covered Biotechnology stocks at Bigelow and company. His industry experience includes directing clinical and business research at Innovative Health Solution, a joint venture of Merck and Wyeth, and as a consultant to HMOs and hospitals for Coopers & Lybrand and Health Strategies Group. He started his healthcare career at Empire Blue Cross/Blue Shield. 

Mr. Funtleyder wrote Healthcare Investing: Profiting from the New World of Pharma, Biotech, and Health Care Services, which bridges the gap between health reform, innovation and investing. He is widely quoted in the Wall Street Journal, the New York Times, and the Financial Times, and is a frequent guest on CNBC, Bloomberg, and NPR for his perspective on the healthcare sector and its constituent companies. He is also a consulting partner to Bluecloud Health and holds boardships with several healthcare companies and foundations. Les is currently at Adjunct Professor of Public Health at Columbia. 

Les earned his Masters of Public Health from Columbia University Mailman School of Public Health, and studied English and Economics at Tulane University.  

Episode Transcript:

Gautam Mukunda:

Move fast and break things. It's an approach that served the tech sector well, but how well does it apply when lives are at stake?

Speaker 2:

I think of it is trying to create a new world. A kind of world that we perhaps have always wanted to live in.

Speaker 3:

Climate change is a systemic risk to the entire economy. You cannot diversify away from it.

Speaker 4:

To intervene when your country, your company, your family need you to do so, that's leadership character.

Speaker 5:

World Reimagined with Gautam Mukunda, a leadership podcast for a changing world. An original podcast from NASDAQ.

Speaker 6:

Why do leaders fail? Unwillingness to learn, a fear of showing their vulnerability, and a fear of being themselves. The lack of authenticity.

Speaker 7:

Character of a corporation is not the personality. Character of corporation is the integrity and the morality for company.

Speaker 8:

So without truth and trust, there is no democracy.

Gautam Mukunda:

Most of us begin our life in hospitals and then spend the rest of our lives trying to avoid them. It's not hard to see why. Setting aside the fact that when you're visiting a hospital, you're probably not there for an enjoyable reason, they're usually just unpleasant places to be. From the squeaky wheel of a gurney down a long echoey hallway, to the squawk of someone being paged over the intercom.

Speaker 9:

Paging Dr. Benson. Dr. Benson to the OR.

Gautam Mukunda:

They can be an assault on the senses and the exact setting where we most want peace and calm. Why is that? In an era of technological advancement where billions of dollars in DC investment flow into apps promising to optimize our user experience, why do hospitals and our entire healthcare system for that matter, remain so, well, bad?

Gautam Mukunda:

Every year, Americans spend per capita, almost $11,000 on healthcare. That's almost twice as much as Germans and more than twice as much as Canadians. And yet Canadians and Germans and the citizens of 38 other countries live significantly longer than we do. Imagine paying twice as much as your neighbor for a Lexus, only to find out that what you actually bought was a used Prius. And yet, as frustrating as that is, there's another sector of the American economy that seems to be just as far ahead of everyone else as healthcare is behind: tech. In the past few years, Silicon Valley has revolutionized working, paying bills, even hailing cabs, and more and more tech companies are turning their vast resources and deep talent pools toward the world of medicine. Could they hold the secrets to healing healthcare, too?

Speaker 10:

Well, I have the misfortune or good luck depending on how you look at it of having worked in pharma payers and providers over the years. And I can tell you the biggest challenge from my perspective is that people don't like change, especially in systems that have been in place for a really long time. I mean, I can envision a situation where if you wanted to change the size of the paperclips people use, there would be an uproar among the staff.

Gautam Mukunda:

Les Futleyder is the author of Healthcare Investing: Profiting from the New World of Pharma, Biotech, and Healthcare Services, a Columbia professor and a portfolio manager for E Squared Capital Management. He serves on the boards of, among others, Applied Therapeutics and Acalis. We invited him to talk with us because we wanted to know what leaders could learn from combining the fast paced world of tech with the cautious and deliberate rhythms of the healthcare industry.

Gautam Mukunda:

We were joined in our conversation by Raj Garg. Raj had a legendary career at McKinsey where he was a senior partner in the healthcare practice. He was one of the most trusted advisors to the CEOs of the world's largest healthcare companies so much so that few people had more influence on the industry from behind the scenes. Raj's practices both a physician and an attorney, and after McKinsey, was the President and CEO of Cancer Treatment Centers of America. Now, he serves on the boards of HealthAI360, The National Spine and Pain Centers and others. I was curious to ask them: Why is there such a large contrast and the ability of tech and healthcare to deliver value to American consumers and patients? And what can leaders in healthcare tech and government do about it?

Gautam Mukunda:

When I think about the American economy as a whole, I tend to think of the healthcare sector as a problem, right? That the United States government pays more and gets less from its healthcare sector than just about any other developed country. You can argue that we get innovation from that, but in terms of actual healthcare outcomes, our outcomes are really bad by almost any way you'd care to measure them. And at the same time, the American tech sector is just sort of the rest of the world's tech sector combined is probably not 25% of the US tech sector in terms of its global importance. And it's seen as highly innovative, unconventional thinking, and also, of course, driving costs down on a continual basis. So, let me ask first, if those are the stereotypes of the two sectors, do you think there's truth to those stereotypes? Am I being unfair in that assessment?

Raj Garg:

Well, I can jump in. I think there's a certain degree of truth to both of those. I mean, certainly to the second assertion that tech in America is actually larger although I would imagine that other nations are starting to catch up. Healthcare, on the other hand, we are fast approaching 20% of our GDP, I think is the number in terms of spend. And I think we'd all agree that in terms of cost and efficiencies, levels of quality that you would expect for that level of spend and satisfaction, whether it be on the part of providers or patients is probably a lot less than one would want for how much we're spending on it. So I think the net answer is yes. I probably would agree with you.

Les Futleyder:

I'll say that in my judgment, it depends. So at the very high end, I don't think you'd want to go anywhere else for your healthcare than the US. But for primary care and sort of the basics, I think you'd probably want to go anywhere else but the US. Like a lot of things, it depends on where you are in the system and obviously, folks with higher income, it's been shown, have better healthcare outcomes. So where you live and how much money you have will make a difference to not only how satisfied you are but your actual measurable outcomes for your health.

Gautam Mukunda:

Given that reality, is there a short, good answer for why healthcare in the United States is so much more expensive than it is anywhere else in the world?

Raj Garg:

Yeah, I mean, I think the pricing, if Les, what you're saying is that it's an issue of pricing, that's probably true. If you actually break down healthcare costs, the vast majority of what we spend, I think the number is somewhere in the order of 70% plus, is actually on the services side of healthcare versus on the product side of healthcare. And so that speaks to the fact that we probably have a pricing issue. We probably have a volume issue as well in terms of just how much we throw at it. And we certainly have an information exchange issue, which contributes to the volume issue.

Raj Garg:

So we're all cognizant of the fact that you get an MRI at one place and then you go to the next hospital and they want to repeat that same MRI. I think other nations are for several reasons more efficient in that regard. One is they don't have the ubiquitous insurance coverage that has historically existed in the US. A lot of it is consumers pay, and when that happens, you do infuse a certain level of discipline into the market. The other factor is that, at least in the US, by having created these barriers to health information exchange, in some sense, you insent the volumes that of course plays into the hands of providers.

Les Futleyder:

I'll just add on to this. We have a bunch of well-noted market failures. Asymmetries of information. We had adverse selection. We have inefficiencies, misallocation of resources. I mean, there's a reason why wealthy towns have 10 MRIs and poor parts of town don't. We have variations that we can't explain. We have supply-induced demand. We have principal agent problems. As Raj was saying, we have a misallocation of resources because you have county and state and federal and different regulatory bodies, and it's not always clear who is watching who and who is responsible for what.

Gautam Mukunda:

Healthcare is the rare system where a technological miracle like the MRI has become a source of inefficiency. Why? In theory, free market competition is supposed to lower prices and improve quality. How much after all did you pay the last time you did a Google search? It's hard to get cheaper than free. But economists have identified many situations where this won't happen in an unregulated market. They call such situations market failures. Les identified a few just now that are plaguing our healthcare system so let's talk about some of the more common ones: information asymmetry, adverse selection, supply and use demand, and the principal agent problem.

Gautam Mukunda:

Let's say you're buying a used car on Craigslist. Can you really tell for certain if it was only used once a week to drive to the grocery store? The seller knows more about the car than you do. That's an information asymmetry. Healthcare is rife with them. If you're not a medical professional, can you really tell if the treatment that's being prescribed is the right one? And even if you are a medical professional, how capable are you of making that decision when you're in the emergency room? Adverse selection occurs when, for example, young, healthy people opt out of an insurance pool that's designed to share costs for the sick, driving prices up and more people away until the whole system collapses. And supply induced demand happens when someone like a doctor has the ability to drive demand for something they supply, like medical care.

Gautam Mukunda:

That isn't to say there's something nefarious going on in every hospital in America. Just the doctors provided very specific service that patients aren't usually fully-equipped to understand, and in a lot of cases, can't turn down. Which brings us to the granddaddy of all market failures, the principal agent problem. That happens when you, as the principal, can't do something so you hire someone else, an agent, to do it for you. And it gets tricky because while that agent may truly have your best interest at heart, they also have their own interest to look out for, and you can't control them perfectly. After all, when was the last time you tried to perform surgery on yourself?

Gautam Mukunda:

Now, for all these market failures, our system has some countervailing advantages. The most important of those is innovation. Healthcare innovation is disproportionally an American game. Take what is arguably one of the most impressive scientific advancements of all time which came to market just last year, highly effective vaccines against a novel virus that shattered the previous record for vaccine development by a factor of four.

Gautam Mukunda:

In the last year. Obviously we've seen what has to be one of the most extraordinary medical miracles in history, right? The deployment of a new vaccine for a novel disease in about a year. One half of it led by Pfizer, that sort of traditional big pharma company, and the other by Moderna, where it was literally the first drug they had ever brought to market. This is an industry that has historically burned through enormous amounts of cash and not been profitable. Is the analysis saying that that curve is finally bending? And if so, right, how do we know? Is this an N of one, or are we actually seeing the first shot of what's going to be a huge new wave?

Raj Garg:

Les, I'm sure you've got a perspective on this one from the investment angle. What I would say, just from an observational angle, let's just take cancer as an example. I mean, we've seen an amazing emergence of new clinical entities for cancer, which is fundamentally reshaping the face of cancer, right? With the American oncology products and other cellular therapies that are coming to market for cancer. Not only are they new and approved, but they're having fundamental impact on cancers that were previously very hard to treat.

Les Futleyder:

I would add, I want to be cautious when saying there's going to be a huge wave of new drugs because we've heard this before, and it's always disappointed people. But that said, we have seen an uptick in R&D productivity which, of course, that ultimately winds up being great for investments. I'd point to things that are maybe assistive technologies. So things like x-ray microscopy and Raj mentioned CRISPR and x-ray crystallography, and some of the software that have just gotten a lot better, and we can analyze things much, much better and get things to the clinic. Once upon a time, it took a year to do x-ray crystallography. Now, it's a day. The same thing with the genetic sequencing. And the data usage around genetic sequencing, it's now cheaper, it's easier, and that's leading to faster drug development and more accurate targeting for drugs. So I don't want to promise that we're going to have a lot more new drugs, but it sure seems that way.

Gautam Mukunda:

But as amazing as those technological advancements may be, they can't do much good if they're not widely available. After all, as Emory University Infectious Disease researcher, Walter Orenstein, famously quipped, vaccines don't save lives. Vaccinations save lives. And that's true of just about everything. You can lead your team to create the most spectacular industry revolutionizing widget anyone has ever seen, but without a plan to get it into the hands of people who need it, all you've made is a very expensive paperweight. And keep in mind, the COVID vaccine is a once in a century exception where a life-saving drug has been made widely available to every American adult for free. We all want to live in a world where medicine is cheap and available to everyone so I asked Les and Raj what we need to do to get there.

Les Futleyder:

Policy responses tend to be a blunt instrument, but if you think about what we could do, we can regulate. Then, there are really two issues on the cost side. It's either price of drug device process or volume. So you have to control one or the other if you want to control costs. So, we'd have to focus on one or the other P or V and you can do that through regulation. As I mentioned before, there are probably too many market failures to allow just the market to deal with it.

Gautam Mukunda:

So what would that regulation look like?

Les Futleyder:

Well, I would say, and we're so early days, but it would be priced for value or value for money. So, and there are sort of these nonprofit groups like ICER who are working on trying to figure out what is this treatment actually worth. Britain has an agency and Germany as an agency, I think China is working on an agency, to try to figure out what the value is. Then, we can actually place a value on. So I'd say that's the most likely near term, because otherwise you do run into the question of rationing either via the government or via out-of-pocket costs.

Gautam Mukunda:

And that's something we've sort of been unwilling to do here explicitly. We sort of rationed by pushing it out into patients, but the government doesn't say, "Oh, well, we can't pay for X."

Les Futleyder:

Right, the government hasn't said that and I would be very surprised if that happens in the near term. But we are effectively rationing in some cases because even in Medicare patients have a burden. Goes up, it becomes a decision as opposed to, "Of course, I'm going to do it." I mean, at certain price level, it's fine. $300 is a ticket to Cabo San Lucas or a biopsy. But as you go to $30,000 or $300,000, that equation looks different for different people.

Gautam Mukunda:

R&D is incredibly hard in healthcare because human beings are a lot more complex than computers are. When you write a new piece of software, you test it. If it doesn't work, you tweak it until it does. With a new drug, you need to test it on tens of thousands of people and look for side effects that might take months or even years to appear. And if it doesn't work, you might kill some of them. That makes drug development slow and expensive. Developing a drug often takes 10 years. And for cost, well, research by LSC Economist, Olivier Wilder published in the Journal of the American Medical Association found that on average, it costs more than $1.3 billion, with a B, for each drug. For years, the number of new drugs approved by the FDA was falling. But lately, those trends have reversed as new drugs are starting to get approved more frequently than they have been for a long time.

Raj Garg:

It might be worth pointing out that in certain areas and it's for both regulatory reasons and otherwise, but in, for example, rare diseases, and even in oncology, that rate of success has in fact gone up across every therapeutic area now. But as I recall the numbers, in rare diseases you got 30% chance of success of getting approval for a drug or getting your drug through. Oncology's actually higher than the rest. So there are areas, there are pockets, where we're seeing shifts relative to that 10% from discovery to market. Great that you speak historically true and probably still is another is, I mean, I would expect that in CNS and some others that probably hasn't changed that much.

Gautam Mukunda:

Would you agree with that?

Les Futleyder:

Oh, absolutely. It really depends on the therapeutic class and how far along we are on the development. You basically want to get sick, but the right thing.

Gautam Mukunda:

So at least on the drug discovery side, things are looking up. Why? Technology. New technologies have increased R&D productivity and led to the approval of more and more new drugs. And hopefully this is just the beginning.

Raj Garg:

I think that healthcare as a sector has, one is technology as a panacea for healthcare. Then, we need to keep in mind is that healthcare is a sector that has always been driven by technology. I mean, if you really go far back enough, and you'd say, well, the stethoscope was a big advancement in technology and so what's new about this? This is just an ongoing evolution in healthcare, right? The application of new technologies, which just keep coming in waves. But at the same time, one could take a little bit of a different perspective and say, "Well, there's something different and maybe the difference lies in the degree to which the types of technologies that are on the horizon, and they're now available to us, and the degree of impact that they could have." In those two factors lies maybe the potential for real step changes to quality cost, inefficiencies, satisfaction, et cetera.

Gautam Mukunda:

Can we drill down on that? What's a concrete example of a technology and how would that ripple through the healthcare system?

Les Futleyder:

The easy one, Gautam, are administrative costs in the US are something like 3.5 times bigger than any other country because they have generally centralized healthcare systems and we do not. I mean, if payment systems would even talk to each other, we could probably reduce costs.

Raj Garg:

Because we have tens of thousands, about hundreds of thousands of employees, just pushing paper to submit claims, get the claims back, having them rejected, resubmit them, get the documentation. I mean, that type of back office bureaucracy is a major burden on healthcare in America and we're all paying for it. But let's go back to the technology question. So number one is the information technologies that are now already been applied in other sectors like finance or financial services or official intelligence machine learning, robotic process automation, right?

Raj Garg:

On the other side of the equation, there's life science technologies that are clearly heralding in new therapies. And what's different about them is that historically everyone says, "Well, I went to the doctor and I got a drug and I've been treated." But actually that's a stretch because you're not being treated. Your symptoms are being treated. You're not being cured, right? And what we're getting to is a series of life science technologies, not all, but some that are actually moving towards being curative in their nature. And that's a real step change in where we're heading to.

Raj Garg:

And I'd say just the third one is just physical sciences being applied again to healthcare, which are now creating new med tech opportunities that, again, will create material advances in terms of what we can accomplish for patients that have frankly been underserved in terms of their needs. So then the question putting all those together: are we actually creating a fundamental shift in the quality of healthcare that Americans are receiving and ultimately bringing down the cost as a result of it, or at least increasing the productivity of the economy as a result of it. I think you have to look at it from both angles.

Gautam Mukunda:

There is no doubt that cutting edge drugs and medical devices save lives, but to truly revolutionize the industry, leaders in healthcare and outside of it are going to have to look beyond them and change the way healthcare is matched. That means acquiring two completely different skill sets, one for tech and another for healthcare. And that can be really hard.

Raj Garg:

I think the greatest challenge actually exists in the provider segment and probably the payer segment. I say that because I think that life science companies and med tech companies, they're inherently driven by technology and they understand the value of technology in terms of bringing their products to market, and so they're relatively faster adopters. But let's just leave that aside.

Raj Garg:

So if you look at the providers in particular, yes, they've used IT and their operations are driven by products that are inherently based on technology, but I think, especially in this realm of IT, there's a couple of things that happen. Number one, familiarity. IT is not the thing that leaders want to delve deeply into historically. That's what I would argue. I think it's something that sort of makes many leaders of organizations serve ice glaze over and there's a whole vocabulary to it, and that's just sort of been the way it's worked for a long time.

Raj Garg:

But what I think is going to happen and needs to happen is that there's going to be a need for a lot more comfort to be developed with these new technologies and what they mean for providers. Meaning, what can they unlock for providers? Where are they helpful? And frankly, what are their limitations as well? That means that you have to be more conversant with these technologies and that's going to be a leadership requirement. Another key, not the only other key, but the other key element here is that you have to evolve your organization. So with some of these new technologies, there really is a need for a head of data and a head of digital innovation officer, not just the CIO. I think those are two different roles from the traditional CIO role, right? Or for example, a head of digital user experience, not just for providers but also for patients. And so you have to evolve the actual organization and bring in the expertise to allow one to understand how to leverage these technologies to their maximum benefit, both in the front office, as well as in the back office.

Gautam Mukunda:

The key point here stretches far beyond healthcare. When we think about revolutionary new technologies, we think of new drugs or devices, and those are important. But just as important are technologies that require changes in business processes and even business models. Those new technologies are far harder for large incumbent businesses to adapt to.

Gautam Mukunda:

Xerox basically invented the modern computer technologies that Apple and Microsoft would use to become the world's most valuable companies. Xerox's failure to capitalize on those revolutionary new technologies was so complete that the classic book written about it is called Fumbling the Future. Why? Xerox's business model had no way to profit from these new technologies so it ignored them. The leaders of companies facing this kind of challenge are dealing with one of the hardest problems in all of business, but we need them to succeed because only those sorts of innovations can lower the sky high costs that are crippling not just our healthcare system but our entire economy. Lowering those costs is just going to become more important with time because as we've seen with the first two MRNs vaccines ever approved, new technologies might be beginning to usher in a new wave of revolutionary treatments.

Raj Garg:

Some would argue that they're changing the face of cancer, go from being a disease that leads to, more often than not, death to what many would say, I think, is that this could ultimately become a chronic disease treated on an outpatient basis, and that we'll see an evolution of the provider infrastructure to that over some period of time. I think we're seeing the same thing in terms of rare diseases, right? So you're seeing, because of some of the new technologies, genetic technologies, in particular CRISPR, et cetera, and emergence of new therapies already having occurred in rare disease but occurring even more accelerated potentially coming to market.

Raj Garg:

Then, of course, Les just referred to it in terms of the mRNA-based technology, which was used for vaccines. By the way, mRNA is now one-angled. So I think what that argues for relative to the historical paradigm was that we were limited by our own technology and we're now coming to a world where we're not going to be in. What I would actually predict is that the next couple of decades are going to really be an age of biology and an age of technology and healthcare that will cause pre fundamental shifts. I'm hopeful that it'll cause those, because I think we desperately need them.

Les Futleyder:

I'm actually quite optimistic particularly about pediatric cancers where we will be able to solve a number of these. In my lifetime, I think we'll get to our pediatric cancer and we will probably make a lot of those acute diseases chronic a la HIV, right, which was at one time was a killer and now it's basically a thing you just have.

Gautam Mukunda:

I think, sort of in perspective, HIV is the viral disease which we are most able to treat, which is genuinely mind-boggling.

Les Futleyder:

Right. If we had had this conversation 30 years ago, you would have looked at me like I was crazy. But even things like stents, which seem very basic now were a game changer. There was a time when, if you had a heart attack, you were in the hospital for weeks and weeks and weeks, and you didn't come out as well as you went in. I mean, now you definitely do not want a heart attack, but with stenting it could be a sleepover procedure.

Gautam Mukunda:

We don't usually think of a stethoscope as technology. When we talk about medical tech, we usually think of things that are complex and cost millions of dollars. But when the stethoscope was invented, it was a revolution. The medical historian, Jacalyn Duffin pointed out that until the stethoscope, there were no non-lethal ways to explore the body's anatomy. Today, you can buy one on Amazon for 20 bucks. But what made the stethoscope so influential wasn't just its capabilities. It was that every doctor could afford one. It's cheap, ubiquitous and extremely user-friendly. All attributes every new app would love to have and it's pitched at. For all the criticism of the American healthcare system, the innovations that it's developed have made it possible to live longer, healthier lives than anyone would have thought possible not that long ago. But the cost has been backbreaking and not even all Americans have access to them. Let's not even talk about people in poorer countries.

Gautam Mukunda:

The new treatments that are coming have the potential to be every bit as revolutionary as anything we've seen in the past. But they won't matter to most of us if we can't afford them or if they bankrupt governments and insurance companies that try to pay for them. So solving the business problems that make American healthcare so expensive will get more important with every day and every invention. While the American tech sector has figured out how to deliver constant innovation at low price to consumers, move fast and break things doesn't come without a cost. Leaders who can master the skills required of both the healthcare and technology industries, who can step beyond their narrow backgrounds and think differently about the critical problems of America's largest industry, are the key to solving this puzzle. If they can succeed, they will create huge value for society and for investors. Given this focus on people and experiences and yes, medical weapon that changes minds and perspectives, I was excited to ask Les and Raj, our final question.

Gautam Mukunda:

So, in the course of your career, you've undoubtedly met a great number of really extraordinary people. Is there one who most impressed you? And if so, who and why?

Les Futleyder:

I'm afraid that there's been many but I want to make two points. There've been mentors who've been great and who I've modeled myself after. Then, there are anti-mentors who I look at and say, "I never want to do that." They have both been quite helpful. I mean, my first boss in the industry was Arthur Kenna. She a doctor in Manhattan and I learned a lot of things about healthcare in the eighties from him that strangely enough are still relevant today.

Gautam Mukunda:

And Raj?

Raj Garg:

I've been lucky enough to interact with a number of notable figures, both from corporate world and otherwise over the course of a career. I think one individual that's always stood out in my mind is Judge Leon Higginbotham who was on the Third Circuit Court of Appeals. Beyond the fact that he was a tall, formidable figure, sort of like a James Earl Jones, the thing that mattered about him, and I think again, it sort of really speaks to what I think you need to see in people, is that he had a lot of character. Dealt with a lot of barriers in his own life being a black man, going to University of Purdue and then ultimately law, and unable to get a job in a law firm.

Raj Garg:

So, when he spoke, what he spoke about was the need to apply a value oriented lens to things around you and to really do what's right and not convenient. I think in that lies so many lessons for what we all need to do as leaders at institutions, as individuals. So for me, he's been a great mentor, a great shaper, and always valued the lessons I've learned from him.

Gautam Mukunda:

Nearly a century ago, Alexander Fleming looked at contaminated petri dishes he was using the study bacteria and discovered a mold that was killing the microbes. 14 years later when Fleming became the first physician to treat a patient with pure penicillin, the sample he used was the only one in existence. Though its revolutionary potential was fully understood, penicillin was so rare that if both Churchill and FDR had needed it at the exact same time, only one could have gotten it. Penicillin only became something other than a scientific curiosity. One scientist working for Pfizer and for the government discovered how to manufacture it. That took everything from adapting fermentation practices to finding a cantaloupe with just the right strain of mold for penicillin production.

Gautam Mukunda:

By June, 1945, American factories were producing almost 650 billion antibiotic doses a year. Penicillin didn't change the world. Cheap penicillin did. And that was possible only because the American government and private industry worked together and figured out how to manufacture the world's most rare and valuable substance. New medical technologies have the potential to change healthcare every bit as much as penicillin did, but only if they can be used by everyone, not just a select few. Leaders in healthcare and every other industry need to think of technology as more than just new drugs and new diagnostic devices, but as something that requires them to adopt profoundly new skills and attitudes and rethink every part of how they do business. They'll need, in other words, to be as creative and open-minded as the person who first drew inspiration from a moldy cantaloupe.

Speaker 5:

World Reimagined with Gautam Mukunda, a leadership podcast for a changing world, an original podcast from NASDAQ. Visit the World Reimagined website at nasdaq.com/world-reimagined-podcast.

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