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Episode 117
Duration 38:22
Farzad Mostashari

Farzad Mostashari: Aligning Incentives to Fix Primary Care

Howie and Harlan are joined by Farzad Mostashari, co-founder and CEO of Aledade, an "accountable care organization" that seeks to align patient-provider incentives so doctors can make a profit by prioritizing preventive care. Harlan discusses a study suggesting that physical exercise may be protective from severe COVID. Howie highlights the introduction of Apple’s VR headset and the importance of further study to understand the technology’s capacity to “rewire” our brains.


"Aledade: Home Page"

“Farzad Mostashari: Man On A Digital Mission”

“Health Reform and Physician-Led Accountable Care:The Paradox of Primary Care Physician Leadership”

“Staggering Rise in Catheter Bills Suggests Medicare Scam”

“Accountable Care Organizations (ACOs): General Information”

“Novid: Definition”

“Prepandemic Physical Activity and Risk of COVID-19 Diagnosis and Hospitalization in Older Adults”

“VR risks for kids and teens”

“2024 Outlook: Despite hurdles, stakeholders bullish on VR in behavioral health”

“AI therapy and ICU training: A first look at health apps for Apple Vision Pro”

“Effects of an Immersive Virtual Reality Intervention on Pain and Anxiety Among Pediatric Patients Undergoing Venipuncture”

“Virtual Reality for Management of Pain in Hospitalized Patients: Results of a Controlled Trial”

“Virtual Reality Reduces Pain in Laboring Women: A Randomized Controlled Trial”

“Apple Vision Pro”

Learn more about the MBA for Executives program at Yale SOM.

Learn more about the Pozen-Commonwealth Fund Fellowship in Health Equity Leadership.

Email Howie and Harlan comments or questions.


Harlan Krumholz: Welcome to Health & Veritas. I’m Harlan Krumholz.

Howard Forman: And I’m Howie Forman. We’re physicians and professors at Yale University. We’re trying to get closer to the truth about health and healthcare. We’re excited to welcome Dr. Farzad Mostashari today. But first, we always check in on what’s… current hot topics in health and healthcare. And Harlan, what are you thinking of today? Surprise me.

Harlan Krumholz: Well, just today I saw a headline that talked about “Novid.” Do you know what a Novid is, Howie?

Howard Forman: I do not.

Harlan Krumholz: Come on, a Novid.

Howard Forman: A Novid. I don’t know.

Harlan Krumholz: Someone who hasn’t had Covid.

Howard Forman: Oh, I should have known that. That’s a good one. So tell me about that. Tell me about that.

Harlan Krumholz: Well, I don’t know. So there were these headlines today that said there was a paper that came out that said if you were physically active, then you were more likely to be a Novid. And I mean, it’s just one of these things that’s sort of blasting out. So I thought, well, let me just take a closer look at this paper and see really what it says. And this is something that appeared in JAMA Network Open and it’s called “Prepandemic Physical Activity and Risk of COVID-19 Diagnosis and Hospitalization in Older Adults.” This group of investigators pooled three different prospective studies and they had asked people before the pandemic about their exercise level and then after the pandemic they asked them about whether they had had Covid and then they were sort of putting together, well, who was more likely to have had Covid or to have been hospitalized with Covid? But when these things come out in the headlines, they come out in such authoritative ways.

Howard Forman: Oh, yeah.

Harlan Krumholz: In sort of saying, well, people should have exercised or people who exercised. Well immediately you might be thinking, well, people who exercise are probably different than people who don’t exercise.

Howard Forman: Yeah, is it causation or is it association? Yeah.

Harlan Krumholz: But there’s a lot more to these papers too as you dig in. I mean, look, I always want to honor the fact that academics are putting together things out there—it’s a question of how it gets translated. But this was about self-reported physical activity. So all the physical activities levels were self-reported, which can induce a bit of recall bias, whether they’re accurately classifying themselves. These were all studies. Two of them are vitamin studies, so they’re all studies that are attracting specific kinds of individuals to even join them. So there’s a bit of about selection bias and questions whether it can be generalized to other populations. And then the question is really, how well could they tell who hadn’t been infected by Covid? Because a lot of people were infected, maybe not, they didn’t know it.

Howard Forman: But that would still be a good thing to know. If people that were more physically active had a lower likelihood of symptomatic Covid, that would still be a good finding, right?

Harlan Krumholz: Yeah, but I’m just saying that again, you’re depending on people’s reporting for all of this stuff. And maybe it’s true. I mean, I’d like to think it’s true, by the way. I mean we do know that there are a lot of risk factors for adverse events with Covid. I mean, obesity—

Howard Forman: Hypertension.

Harlan Krumholz: Cardiometabolic risk factors, or like you said hypertension for example. So, but I guess I’m just sort of saying when you see this broadcast, it always makes me wonder what people are thinking about when they read this because it’s more like a study that’s throwing out there the possibility that physical activity could help you ward off the adverse effects of an illness like Covid. It would be a good thing if that’s true. I’m just saying that we’re sort of early in the stage of trying to understand it, rather than that this “proved” it.

Howard Forman: It’s a lot harder to tell people that you can’t be obese or that you must get thin. It’s a lot easier to say to people that some minimum level of physical activity is protective for you, particularly for those that aren’t disabled. And so it is something that we should talk more about because people are always like, you should wear masks during Covid season. You should do this. Well, physical activity may be just as protective as any of those items.

Harlan Krumholz: I think it’s a good point. I’ll tell you this. In the areas that we have uncertainty, I’m not one of those people that says, well, those people shouldn’t do it. I think it’s a good place to place your bets. I mean, both you and I believe strongly in the value of physical activity.

Howard Forman: Yep.

Harlan Krumholz: We think it’s important for people to maintain function and overall health. There’s lots of good studies that suggest that that’s true. I think it’s worth doing it until proven otherwise, but I’m just saying this study to me is not strong evidence—

Howard Forman: No. Right.

Harlan Krumholz: …that it help people prevent. But yeah, I remain a big promoter of exercise and physical activity for sure.

Howard Forman: Me too.

Harlan Krumholz: Hey, we got a great guest today. Let’s get onto the next segment.

Howard Forman: Dr. Farzad Mostashari is the chief executive officer and co-founder of the public benefit corporation Aledade. We’ll get into what Aledade does in a few minutes, but suffice it to say that it’s one of the most exciting startups in healthcare over the last decade, and nobody is better able to tell the story than this man. Our listeners will recall that two years ago almost exactly, we had the CEO of Aledade Care Solutions on the podcast, and she’s now the director of the CDC&P, Centers for Disease Control and Prevention. That being our alum, Mandy Cohen. Dr. Mostashari is passionate about the intersection of healthcare and technology. Before founding Aledade in 2014, he was the Department of Health and Human Services National Coordinator for Healthcare Information Technology. He also created the New York City Primary Care Information Project and worked at the Brookings Institution in an expert role for the Engelberg Center for Healthcare Reform.

He received his undergraduate degree and master’s of science and population health from Harvard and then his medical degree from Yale School of Medicine before doing his internal medicine residency at the Massachusetts General Hospital. And I want to start off from there, although feel free to go back even beyond that, but what caused you to want to go right to work in the Epidemic Intelligence Service of the CDC right after residency? In today’s day and age, not that many people do that, but it is a very proven path for a career. What caused you to think about that?

Farzad Mostashari: The Epidemic Intelligence Service is a dream job, actually. When I was doing residency, I absolutely knew that I wanted to do it, and I was truly inspired by the combination of epidemiologic rigor starting with Alex Langmuir, and really it is the signal institution that has trained so many of public health leaders, but also the ability to be in the work. I was at the School of Public Health before I did med school, and one of the things that I loved about the EIS is how gosh darn applied it is. On my first day at the job in the New York City Health Department I showed up a little late and Emily, my boss said, “There’s a foodborne outbreak, go investigate it.” And I got into a car and went out to see it. So it was just an unbelievable opportunity, and for me it was this concept almost of pure public health as opposed to healthcare. And I think in my career to come, I ended up actually bringing those two closer together over time.

Howard Forman: You definitely did. And I want to just point out, because we didn’t make your bio big enough, like you went to work in public service in the New York City Commissioner’s Office of the Department of Public Health, I think, and then as we did note, went to work in government. So just as one quick follow up before I turn it over to Harlan, did you foresee when you were in medical school at Yale or even before, did you foresee that you would have a career that would be unusual for a typical physician of that time?

Farzad Mostashari: I knew that I was asking questions that other people weren’t. I knew that I didn’t feel like I totally fit in. When I was in med school, I definitely felt like I’m a little bit like insider-outsider, which is why I like the bow tie. To me, it exemplifies a little bit of the, you’re a weirdo, but also maybe you went to Mass General. And to me it was like I’m in the emergency room and we’re learning and we’re being taught about persons having trouble breathing with asthma, and you give them nebulizer treatments and how do you monitor that and how do you take care of that human being in front of you? And I would be there wondering, well, why is this kid here? Why this kid? Why from this zip code and why today? What’s going on today? And that to me is the essence of epidemiology.

Harlan Krumholz: I’d just like to take a few minutes before we get into Aledade to talk a little bit about your role as the national coordinator for health information technology, ONC at the U.S. Department of Health and Human Services. You just served for a really relatively short time. I think it’s only 2011 to 2013 or something. It was a relatively short time, but you really played a pivotal role during that time on so many key initiatives. I mean, when I look back on a promotion of electronic health records, you were instrumental in the implementation of the Meaningful Use Incentive program, which was established to try to guide the proper implementation of EHR, the expansion of health information exchanges, a lot of support for innovation and interoperability, recognizing that for this to work well, systems needed to be able to talk to each other.

You were a champion for patient engagement. There was really a strong emphasis on patient engagement and empowerment through this technology, which found its manifestation later on in the 21st Century Cures Act and continues to today. Public health, I think probably building on what you were doing in CDC and really focusing on how do you leverage health IT to improve public health outcomes. And then also as I looked at, there was cybersecurity and privacy stuff that was also at the center. I mean, in a very short time you got a lot done. I wanted to ask you what you’re most proud of during that time and what was the secret to being able to make those accomplishments on so many fronts at a time of sort of great transition in the healthcare system and in the IT systems?

Farzad Mostashari: Well, I’m not good at the “what are you proud of?” Because as you rattled those off, most of what went through my mind was the ways in which I felt that I didn’t do a good job. It’s true that we went from, I joined actually as principal deputy national coordinator. David Blumenthal, who was the first post high-tech national coordinator in charge of rolling out the Regional Extension Center program, the State Health Information program. Programs and policies. Right. That was my job. And that plus the time I was national coordinator, in that roughly five-year time period, four- or five-year time period, we went from 9% of hospitals being on electronic health records to 90%. It’s true, but I didn’t go into it to get adoption of electronic health records. I went into it because I really believed in my bones that if we did it right, we could get to some of the outcomes. That was the reason I got interested in the first place. And prime among them, Harlan, was reducing heart attacks and strokes through better hypertension management.

Harlan Krumholz: We’re still working on that.

Farzad Mostashari: We’re still working on that. And the reason why we said you got to standardized medication databases, the reason why you got a standardized problem list, the reason why we want to have decision support, why you want to have registry functions, why you want to have quality measures, these were all a cluster of capabilities that would lead us to be able to solve what I thought was the heart of the problem, which was the lack of information and computable data. And it turned out that wasn’t the heart of the problem. And blood pressure control didn’t fricking change. And the Million Hearts program that I helped get off the ground didn’t save a million lives from heart attacks and strokes.

So yes, I think I now can look back and say, yes, we did some good things. But what I felt when I left during the government shutdown in October of 2013, I put my badge on my desk and I walked out and I went by the Washington… I rode my bicycle home past the Washington Monument, and I may have shed a tear. And it wasn’t from pride, it was from the feeling that I had kind of won the battle, lost the war.

Harlan Krumholz: You know what? And you and I have had this discussion before, I think I’ve told you that I think you’re hard on yourself in that way because what you built has foundationally allowed so much more to go on top. And it probably is unrealistic to think in a healthcare system like we have that immense change can occur rapidly. But I will tell you that a lot of the things that are in the works today that I believe will ultimately manifest in those improved outcomes that you saw, could not have occurred without the foundational efforts that were made while you were there. So maybe we all feel at times we wish we could have done more, but it also I think is important to reflect on what was laid down because it’s very important.

Farzad Mostashari: Thank you. No, and I do think that if you do have the right… so then what is the heart of the problem? And the heart of the problem is that people make a lot more profit treating strokes than preventing strokes from happening in the first place. There are huge buildings, some of them visible behind you, that are built on treating strokes and heart attacks, and there aren’t some really tall buildings that I can see built on preventing heart attacks.

Howard Forman: So I want to take off on that, though, Farzad. So you go from working for arguably the most important regulatory apparatus around healthcare IT, you are leaving the administration that was implementing the ACA, including ACOs, accountable care organizations. You’re a primary care physician by training with an epidemiologic fellowship on top of that. And if I recall correctly, 10 years ago or a little more than 10 years ago, you hatched the plan on the back of a napkin, or at least that’s how I remember the story going. Can you tell us about how you wanted to leverage your specific expertise, which quite frankly is unique in that way to launch Aledade, and what the original mission of Aledade was and how you started that?

Farzad Mostashari: This idea had me by the lapel. You know when people say, “Oh, I want to do a startup and I’m looking around for ideas,” like I don’t get that. To me, the most powerful ones are when the idea possesses you, you couldn’t imagine not working on this issue in some capacity. And to me, that idea was if we align incentives so that it’s profitable to prevent strokes, then everything changes. Everything changes. And so I went to Brookings. I think I left my job on Friday and I started on Brookings on Monday. It had been a grueling five years of federal service, and I was excited as hell Monday morning to show up at Brookings and learn about physician-led accountable care organizations. I just couldn’t wait and I couldn’t imagine that there weren’t 10 other people doing the same thing and who were going to start companies to help independent primary care practices prevent hospitalizations and redouble their investments in community primary care.

It seemed so fricking obvious to me. And the napkin that you’re talking about was this, we wrote this, “The Paradox of Primary Care“ in JAMA where I laid out the whole plan for Aledade, and I was like, look, you get 100 primary care docs together. Each of them has 2,000 patients on their panel and each person costs, let’s say, only $5,000 a year in total medical expense. That one group of 100 primary care docs is a billion-dollar-a-year business. It’s a billion dollars of total medical spend that if they can manage it better, can be plowed back into growth and improvements. And that was the idea then. It is the idea now. It absolutely has not changed one bit, Howie. Like looking back 10 years later, it’s still exactly the same business model. There’s been no pivots, there’s been no—it’s just been, like I literally on my first day at home after I was like, okay, I’m going to start this company. I wrote, “get docs, get contracts, get savings, get capital.” But now we don’t have to worry about that anymore.

Howard Forman: And tell us just briefly, and I’ll turn it back over to Harlan, if you had to grade yourself on those measures right now, how successful are you on each of those?

Farzad Mostashari: Well, like I told Harlan, I’m tough on myself.

Howard Forman: I know you are. Yeah.

Farzad Mostashari: So we’re 7% of the Medicare Shared Savings Program, which is the biggest value-based model in the country. About 5% of independent primary care docs are working with us in one way or another. The largest independent network in the country. But I would give us there as a very incomplete mark on that. We have a lot, lot, lot, lot of room to grow.

“Getting contracts,” I think we are good at, and we signed 60 new contracts last year. We’re offering more and more value to our health plan partners and through more value with health plans, more value to practices, which gives more value to health plans, which gives more value to practices. So that is I think, going well.

On “get savings,” we get about 2% a year incremental cumulative savings. So 2%, then 4%, 6%, 8%. We’re about 14% savings on total cost of care now. And I’ll tell you, there’s a lot more to do. It is, like that is nowhere near the peak in terms of what we could do. So I would give us kind of an incomplete on that. That having been said, I said we’re 7% of the lives in the program. We were five out of the top 10 ACOs by shared savings rate. So we are, relative to others, we are the best at reproducing savings no matter if you’re in Mississippi, or Utah, or West Virginia, or Arkansas. But we have a lot of room to grow.

Harlan Krumholz: I wonder if you could share with listeners a little bit about the origin of this, because you’re not a guy who went to business school and then were sort of steeped in business and spent time at McKinsey and then rolled out and said, “I’m going to start a company.” We’ve seen that model before. You’re a guy who, and you didn’t leave medical school to say, “I’m going straight into this.” You did a residency, you go to CDC, spend time in public service a while, make great contributions. Now you’re thinking about transitioning to a for-profit company.

Farzad Mostashari: Yeah.

Harlan Krumholz: So you got a great idea. It’s got you by the lapels. What do you do next? It’s one thing to look at you now and go like, “Wow, that was amazing.” But what was it like in those first days where you’re trying to figure out how do I get anyone to invest in this and how do I figure out what I need to know to succeed?

Farzad Mostashari: Well, look, I kind of slipped it in, but I literally left federal service when Congress couldn’t agree on funding the federal government. And I was like, that sucks, like being at mercy of appropriators and am I going to get the budget from the mayor next year? To be at the mercy of that, I thought, what an unbelievable thing it would be if we just did a business that created profits and I got to plow those profits back into growing the damn thing and I didn’t need permission. I don’t need authorization. I don’t need, like what a hack to do good if your private profit is tied to public good. And that to me is kind of why it makes sense for us to be a public benefit—

Harlan Krumholz: But it’s a great idea, but you don’t have those skills. So what did you do? How did you make it work?

Farzad Mostashari: I read books.

Harlan Krumholz: Yeah. Really? Wow.

Farzad Mostashari: I’ve got a really great team of investors at Venrock.

Harlan Krumholz: I mean, how did it work? You just picked up the phone and said, “I’ve got an idea.” You of course knew some people because they’d been in the administration, right? Probably.

Farzad Mostashari: Yeah. Bryan Roberts actually, who’s probably the best healthcare investor in history, had come in and slept on my sofa when I was rooming with Todd Park during the Obama transition, and the dude can afford a hotel room, but he stayed in our un-air-conditioned August Craigslist co-op because we just wanted to talk. Now, we had kept in touch, and when I went and talked to him and Bob Kocher, who he said was in the White House before working for Larry Summers, they were like, “Yeah, we like this idea. We’ll fund you.” And that was it.

Harlan Krumholz: Wow.

Farzad Mostashari: We were off to the races.

Harlan Krumholz: Wow. So you didn’t have to shop this around. It was love at first sight. You had relationships, you were able to make your pitch, people liked it, and you were off to the races. That’s great.

Farzad Mostashari: But I think it’s also the difference between being a 45-year-old founder versus being a 25-year-old founder.

Harlan Krumholz: Yep.

Farzad Mostashari: And I think we need more 45-year-olds who’ve done something in their life who then want to say, you know what? I have something to prove, but I also, like what’s the worst thing that can happen to me? I make less than my SES salary of $177,600. What’s the worst thing that’s going to happen?

Howard Forman: But the bow tie must have helped at least a little bit, right?

Farzad Mostashari: Howie, I want to see you in a bow tie.

Howard Forman: No. You buy me a bow tie, I’ll learn how to tie it. I want to pivot to something that’s been in the news lately. There is a brewing fraud scandal occurring at the Pretty in Pink Boutique, if it even exists, where $2 billion in urinary catheters have been seemingly billed for, for patients that either don’t exist or never receive the catheters. And we can put in the link a little more information about it, but I’m bringing it to you not to discuss what went on, because none of us even know all the details, but Aledade was one of the institutions that brought this to light, because as I understand it, because you’re looking at cost of care, you notice some of these trends occurring in your patient population, and so Aledade got brought into this story as sort of a hero of this story. Can you briefly comment on what you know about that?

Farzad Mostashari: Yeah, look, there’s fraud in—surprise, surprise!—in fee-for-service healthcare system where if you claim that you provide a service, you get paid and sometimes it’s easier to not provide the service and get paid or claim that you did more and get paid higher or whatever, do things inappropriately. Those are all I think on a spectrum between fraud and overuse and misuse and overcoding and whatever that are inseparable from a fee-for-service payment environment. And when you have organizations like ours who not only have completely flipped incentives from every other provider in the healthcare ecosystem but also have access to data and analytics and technology and relationships with actual human beings in primary care and patients, then they can become a potent force for not just doing good within their patients but also with positive spillover and positive externalities to your economist lingo.

And I think that we have not yet begun to tap the power of these associations, these accountable care organizations in policy and in payments. There is no—right now—there’s no pathway for us to get paid more by preventing fraud than by committing fraud. There’s no pathway for us to do that. And similarly, I thought, Howie, that during Covid, the program was put on pause almost, whereas I was like, what the heck are you thinking about? ACOs can be your best friend in getting vaccines out there. They can be your best friends in doing surveillance and being sentinel surveillance sites, right? We’re not some distraction off to the side that you can’t deal with during Covid. We can be the shock troops of public health and public good, and I think if I ever went back into public service, that would be a lever that I would be sure to pull.

Harlan Krumholz: Yeah. Maybe you could just take a second because some people listening might be hearing this word ACO, and it comes by and what is an ACO and why is it a good idea and how is what you’re doing with ACOs different from what other people might be doing with an ACO? What’s the secret sauce?

Farzad Mostashari: Remember I said you get 100 primary care docs together? That is an ACO. It’s when you bring together primary care providers and they can be in multiple practices or they could be in one big practice that collectively account for enough lives that you can make it a risk pool where you can have actuarily sound estimates of what would you expect costs to be next year, and then we can compare that to what costs actually are. And if you reduce costs below your budget, below your benchmark, then you’ve created savings. And some of those savings go to the government, some of them—

Harlan Krumholz: And just to be clear, instead of paying each of those individuals for everything they do, you’re paying them to take care of people in what’s called a capitated arrangement. And what you’re doing is trying to estimate what would be the cost. You’re pulling people together who ordinarily wouldn’t have any sort of ability to negotiate individually, but you’re bringing them together to be able to negotiate en masse, to be able to provide things at a certain quality. Is that right? I mean—

Farzad Mostashari: Not exactly. Not exactly. No. That’s a little bit like kind of the fee-for-service model was you bring people together and then you can negotiate usually higher rates from payers because you now have more market power. This is the reason for bringing people together here is to create a population of patients that you can be accountable for that is large enough that it is statistically reliable. When we say costs went up or cost went down, there has to be a minimum number of people in a pool. So you can make accurate projections and then you can give me credit for the counterfactual against that benchmark.

Our practices continue to be paid fee-for-service for seeing patients in primary care visits, but they now also have a different income stream that comes in, if collectively we kept people healthy and out of the hospital. And it is Harlan, it’s like 50% more pay per Medicare patient for these primary care practices. The average primary care practice with three docs is getting a check from us of over $200,000. This is real money. We are going to—collectively, our practices earned almost $400 million from reducing cost of care from—

Harlan Krumholz: I mean, my point was that they can’t do this on their own. They need to be able to come together to do it, and your Aledade is enabling them to actually stay in practice as—

Farzad Mostashari: That’s right. Independent.

Harlan Krumholz: …with what they’re doing. Otherwise, they need to be sucked up into larger healthcare systems and become employees, because it’s very difficult for individual practices to sustain themselves, given the sort of pressures, right? I mean...

Farzad Mostashari: And that consolidation—I think Howie will back me up on this—is the single biggest driver of increasing healthcare costs.

Harlan Krumholz: I think we’ve probably kept you long enough today. There’s so much we could talk about with you given the sort of breadth of things you’re involved in. We all want you to be less hard on yourself, because really there’s a lot to give yourself credit on and it’s a pleasure to talk to you on the podcast.

Howard Forman: And I hope we get you back again soon because there’s a lot more to talk about as Harlan said. But thank you so much.

Farzad Mostashari: Thanks, team. The one thing if I can end with is what makes it tick isn’t clever business model or good investors or technology. What really drives it is service, whether it was in working for the New York City Health Department or the federal government or now at Aledade, the biggest thing that has benefited the efforts I’ve been a part of have been the other people who have signed up because they believe in service, service to their fellow humans. And that is as strong at Aledade as any of the public service places I’ve ever worked.

Howard Forman: Well, thank you for what you’ve done.

Harlan Krumholz: That’s great. Well, that was terrific, and Farzad’s such a great guest. But now we get to one of my favorite parts of the program, which is to hear what Howard Forman thinks this week. So what’s on your mind?

Howard Forman: Yeah, I wanted to talk about something a little provocative today so that we could just talk a few minutes. So a week ago, roughly, Apple introduced the Vision Pro. It’s a virtual reality headset, resembles a pair of ski goggles. It’s neither the first nor the last virtual reality headset that is already in significant use by gamers and some tech-forward individuals who’ve been developing or testing applications. And in fact, such instruments have been available for two decades, but this is Apple, which means it’s sort of much more likely to enter the mainstream. The implications for healthcare are substantial. So I just want to emphasize that anything I say today will probably be outdated in a few months, but it’s still worth highlighting the big questions and some of the early answers.

And so do we know the impact of virtual reality headset use on young or even old brains? Because there is strong evidence that it can “rewire the brain,” and almost certainly more so among young than old. We just don’t know enough about this technology where it could be actually enormously beneficial or enormously harmful if we don’t pay adequate attention. Content alone can be dangerous for young individuals, as we’ve seen with social media, and caution is urged in this regard at this moment. We probably can’t impede diffusion through the commercial markets, but we can recommend limits and supervision and work with manufacturers to establish guidelines. So that’s the first point. Second point, we should absolutely be doing studies on the impact of this new technology. As the barriers to use are really high right now, remember this device is I think $3,500 and really even more than that once you walk out the door. It’s much easier to imagine doing randomized studies now when this is not that accessible than when it scales and almost everybody has it like a smartphone, if that is the future.

And then I wanted to just tell our listeners, there are already a lot of healthcare applications. I mean, a lot. I can’t even name all the categories in our short segment, but they run the gamut from training healthcare workers in managing patients or managing equipment or performing new procedures to treating post-traumatic stress disorder or minimizing the pain associated with back pain or childbirth. They’ve even demonstrated that the discomfort associated with getting an IV in a child can be reduced using a virtual reality headset as compared to the usual distractions that pediatricians and pediatric practices use. And then there’s all the additional issues that you and I, Harlan, have talked about over the last few months regarding privacy and AI and so on. So to me, it’s a really exciting topic, and you’re tech-forward. You’re a guy who thinks about these things way ahead of anybody else. I’m curious what you think on each or any of those.

Harlan Krumholz: Yeah. Well, I think we’re at the cusp of an entirely new era. I’ve seen a lot of the demos. I haven’t laid out the money to purchase one of these yet, but yeah, I did go by the Apple Store, take a look at what they look like and how they feel, and it’s pretty impressive. Lots of people think as version one, as you see the versions come out, it’s going to become really remarkable. Yeah, the applications in healthcare are immense, and we’ve seen in other fields how people have used augmented reality in lots of different ways. Fighter pilots, others are able to do this. I think the question is, really almost want to turn back to you, Howie, because I think the only restraint here will be on the business model, which is our healthcare system in the U.S. is very dependent on incentives and business models for speeding adoption of specific technology.

So imagine that we have the potential for a wide range of technologies that could dramatically improve patient outcomes and improve patient comfort and experience, improve the effectiveness of the healthcare professionals in everyday systems. But is it going to be an externality where it’s, yeah, we could do that, but there’s no revenue implication on it, there’s no way to directly pay for it. We don’t have a way to support it, or are we going to be focusing on, yeah, if it gets better outcomes, we got to figure out how to use it.

Howard Forman: So two things I wanted to just mention. One is I actually tried to sign up for a demo and it’s not available to people that have prisms in their glasses like I do. So I’m going to encourage you to sign up for it because you got better vision than me and you can do it. They literally won’t let me do it. But I want to put that aside.

I did a little back-of-the-envelope math on almost exactly what you were asking about. I can imagine a scenario where a company rents these goggles and then is able to bring them to your door like Uber Eats at probably a marginal cost for the equipment in the range of $2 to $5 for an hour’s worth of time using a software that could be almost marginal cost of zero and still provide services that might be comparable to a clinical visit that would otherwise cost $50. I’m imagining that this actually does scale even at the high price today because it is a very portable device. It’s not like moving a CAT scan machine to someone’s door. You could get these goggles to eight different homes in a day to deliver services to them.

Harlan Krumholz: Oh my God. This is just like Farzad said, where a business plan got them by the collar. Howie, this is your calling.

Howard Forman: No, it is not. Yeah. Yeah.

Harlan Krumholz: And if being a CEO at 45 is good, being at your—

Howard Forman: 58, 58. Yes.

Harlan Krumholz: Must be even better.

Howard Forman: Yeah. No.

Harlan Krumholz: It’s a great idea.

Howard Forman: I am not an entrepreneur, but I do think there’s, like when I tried to do the math, because I thought about this, Harlan, in the sense of like, is this scalable? It’s scalable. I’m convinced it’s scalable.

Harlan Krumholz: I just think we need to get, roll up our sleeves and actually do the work to prove where does it actually make a difference. So it’s not just about a cool device. For example, like the da Vinci robotic devices in surgery have yet to be shown—

Howard Forman: That’s right.

Harlan Krumholz: …that they improve outcomes. I think that a lot of people have more fun using them than they do with traditional surgery, but when these billboards say, “go here because we’ve got the da Vinci robots,” like you’re not—

Howard Forman: And I am worried about the non-healthcare stuff. I mean, I think we should be studying that now. I mean, we should be doing randomized trials with kids, with adults, studying their brains, making sure we’re not harming people when they—

Harlan Krumholz: No doubt rewiring people’s brains. So yeah, there’s lots here to do and I’m really glad you brought this up today. Yeah, I’ve been looking at them with some envy. Not buying them yet, but because I don’t know what I would do with it. I think I might get a headache.

Howard Forman: Oh, I watched the demo and I know what I would do with it. I’d probably just sit and watch a video all day.

Harlan Krumholz: Yeah. For weeks on end. You’ve been listening to Health & Veritas with Harlan Krumholz and Howie Forman.

Howard Forman: So how did we do? To give us your feedback or keep the conversation going, you can find me on Threads. I’m at @the4man. That’s at the, and the number four M-A-N.

Harlan Krumholz: And I’m still procrastinating figuring out what I’m doing with social media, but I’m still on Twitter, X @hmkyale. That’s H-M-K-Y-A-L-E.

Howard Forman: Yeah. And you can also email us at aside from Twitter and our podcast. I’m fortunate to be the faculty director of the healthcare track and founder of the MBA for Executives program at the Yale School of Management. Feel free to reach out via email for more information on our innovative programs, or you can check out our website at

Harlan Krumholz: And we got this great email we were going to mention on the thing from John Brush in Sentara in Virginia. I’m not even going to read it because it’s so nice. He wrote such a nice email. But just to say thanks, John, and to encourage other people to reach out to us, send us notes, we read them, we appreciate them and any constructive comments, we’re looking forward to also getting.

Howard Forman: Okay. Come on, Harlan. Just read the whole thing. It says, “Your Health & Veritas podcast is just terrific, so informative. I learned more in that short period of time than in any other available information source or learning activity week after week.” That is nice.

Harlan Krumholz: Thanks, John. Thanks, John.

Howard Forman: If you like the podcast, please rate and review us on your podcast app. We always read your reviews, and it does help other listeners find us.

Harlan Krumholz: What if they don’t like it?

Howard Forman: They can still rate us, but we prefer them to lie about it.

Harlan Krumholz: Health & Veritas is produced for the Yale School of Management and Yale School of Public Health. Thanks to our researchers, Ines Gilles and Sophia Stumpf, and to our producer, Miranda Shafer. Extraordinary people helping us so much. Thank you. Thank you. Thank you.

Howard Forman: We are so lucky to have them.

Harlan Krumholz: Talk to you soon, Howie.

Howard Forman: Thanks very much, Harlan. Talk to you soon.