Pete Shalek, founder of Valerie Health, is a multi-time healthcare entrepreneur who previously founded Joyable in 2013 (one of the earliest digital mental health platforms) and served as Chief Product Officer at AbleTo and Stellar Health. Pete discusses why AI in healthcare needs to move beyond selling software tools to actually doing the work for providers. He shares hard-won lessons from a decade in digital health, including why the shift to quality-based care in behavioral health has been surprisingly slow and why Joyable's therapist-free model was ahead of its time relative to payment models. The conversation covers Valerie's approach of building an AI front office that handles referrals, scheduling, and intake for independent medical practices without requiring them to learn new software, achieving 3-4 week implementations and 5-7% conversion lifts. Pete explains the technical challenges of structuring unstructured healthcare data with 100% accuracy, the strategic choice to own operations end-to-end rather than just provide tools, why referrals are the perfect wedge product as the most upstream data point, and his evolving views on how quickly AI will impact the gray area between administrative and clinical work. Throughout, he emphasizes the importance of meeting healthcare where it is (turning faxes into structured data rather than trying to force system-wide transformation) and building for today's payment models while working toward a bigger vision.

(0:00) Intro
(0:52) Pete's Journey in Digital Health
(1:45) Challenges in Behavioral Health
(3:38) Valerie Health: An AI Front Office
(4:47) Valerie's Unique Approach to Software
(6:16) Customer-Centric Solutions
(8:38) Data and AI in Healthcare
(10:19) Building a Successful Health Tech Company
(13:19) Future of AI in Healthcare
(16:16) Operational Challenges and Solutions
(28:57) Pricing and Value Delivery
(30:12) Quickfire

Out-Of-Pocket: https://www.outofpocket.health/

This episode announces the launch of CMS's ACCESS (Advancing Chronic Care with Effective, Scalable Solutions) model - a groundbreaking payment innovation that enables technology-enabled care organizations to treat Medicare fee-for-service patients with chronic conditions through outcome-aligned payments rather than traditional fee-for-service. Abe Sutton (Director of CMMI) and Jacob Shiff (Chief AI & Technology Officer at CMMI) explain how the model addresses a fundamental gap in healthcare: while commercial and Medicare Advantage patients have access to digital therapeutics and technology-enabled chronic disease management, original Medicare beneficiaries have been left behind. ACCESS changes this by paying providers monthly fees for managing conditions like diabetes, hypertension, obesity, behavioral health issues, and musculoskeletal pain - but only when patients achieve measurable clinical improvements. The model is designed to be deflationary rather than inflationary, encourages innovation by simplifying go-to-market for digital health startups, integrates with existing risk-bearing models like ACOs, and represents a broader CMMI strategy to shift from activity-based to outcome-based payments while leveraging new AI capabilities to democratize high-quality care.

(0:00) Intro
(0:57) The ACCESS Model: Advancing Chronic Care
(4:35) Outcome-Aligned Payments and Technology
(7:40) Encouraging Innovation and Investment
(09:23) Practical Implementation and Examples
(24:28) Evaluating Success and Future Goals
(26:18) Connecting the Dots: Broader CMMI Initiatives
(28:40) Generous and Its Impact on Drug Pricing
(30:11) Challenges and Benefits of Prior Authorization
(35:19) The Role of Technology in Healthcare
(37:59) AI and Technology-Enabled Care
(40:26) Reflections on Value-Based Care Models
(43:51) Encouraging Competition in the Healthcare Market
(48:24) Quickfire

Out-Of-Pocket: https://www.outofpocket.health/

The episode explores how Warner Thomas is transforming Sutter Health into a digitally-enabled, ambulatory-focused health system that can navigate major industry headwinds through growth rather than contraction. Thomas discusses Sutter's aggressive expansion of its physician network and ambulatory footprint, the system's push to dramatically improve consumer experience through technologies like online booking and ambient AI documentation, and their strategic pivot toward value-based care models as Medicare payment pressures intensify. Throughout the conversation, he emphasizes that successful health systems must embrace AI and digital tools not as futuristic concepts but as immediate operational necessities, while maintaining focus on integrated care delivery that keeps patients at the center—a philosophy shaped by his experience building integrated systems at Ochsner and now applied to reimagining Sutter's historically hospital-centric culture into one that blends physical and digital care delivery across the full continuum.

(0:00) Intro
(1:01) Overview of Sutter Health
(1:56) Comparing Sutter Health and Ochsner
(4:08) Key Focus Areas for Sutter Health
(6:49) Consumer Experience and Technology Integration
(10:56) The Role of AI in Healthcare
(18:03) Advice for Startups in Health Tech
(21:19) Navigating Financial Challenges in Healthcare
(24:23) Healthcare Policy and Advocacy
(25:59) Competition and Differentiation in Healthcare
(29:58) Value-Based Care and Medicare
(34:03) Quickfire

Out-Of-Pocket: https://www.outofpocket.health/

This episode features Viren Shetty, Vice Chairman of Narayana Health, discussing how his father founded a cardiac surgery hospital in India 25 years ago that revolutionized healthcare delivery by applying manufacturing efficiency principles to drastically reduce costs while maintaining quality. The conversation explores how Narayana Health scaled from one cardiac center to 19 multi-specialty hospitals across India and one in the Cayman Islands by implementing supply chain optimization, standardization of care, physician specialization, and high-volume operations—enabling them to perform cardiac surgeries at a fraction of Western costs. Shetty discusses the challenges and opportunities of operating in India's largely out-of-pocket healthcare market, the hospital's expansion into insurance and primary care to become a fully integrated provider, their measured approach to AI adoption, and why their high-volume, efficiency-driven model wouldn't directly translate to the US healthcare system despite offering valuable lessons in operational excellence and cost reduction.

(0:00) Intro

(1:20) Founding and Growth of Narayana Health

(2:48) Cost Reduction Strategies in Indian Healthcare

(6:04) Challenges and Cultural Shifts in Standardization

(8:16) Scaling and Expansion Bottlenecks

(14:10) Impact of COVID-19 on Narayana Health

(19:15) Medical Tourism and the Cayman Islands

(23:03) High Patient Volume in Indian Hospitals

(24:29) Exploring Healthcare Ecosystems

(25:25) Automating Healthcare Administration

(26:39) Challenges in US Healthcare

(28:18) Innovative Healthcare Models

(30:28) AI in Medicine

(33:22) Driving Efficiency in Hospitals

(37:48) Opportunities in Indian Healthcare

(40:34) Quickfire

With your co-hosts: 

@jacobeffron 

- Partner at Redpoint, Former PM Flatiron Health 

@patrickachase 

- Partner at Redpoint, Former ML Engineer LinkedIn 

@ericabrescia 

- Former COO Github, Founder Bitnami (acq’d by VMWare) 

@jordan_segall 

- Partner at Redpoint

This episode captures Walid Mehanna's perspective on how Merck KGaA has approached enterprise AI adoption through a federated strategy that prioritizes people over technology. The core message is that successful AI implementation requires building organizational capability across three dimensions - people, processes, and technology - rather than seeking a single transformative solution. Walid argues that companies must establish a broad foundation of AI literacy (exemplified by their internal MyGPT tool reaching 25,000 users) before pursuing specialized applications, while maintaining human accountability to prevent complacency. He emphasizes that AI works best when it's treated as an experimental, iterative capability distributed across the organization rather than controlled centrally, with success depending on persistence through the inevitable J-curve of initial productivity drops. The conversation reveals how a large multinational navigates the practical realities of AI deployment - from managing regulatory complexity across different geographies to making pragmatic build-versus-buy decisions - while maintaining focus on the fundamental principle that AI should augment human expertise rather than replace human judgment and responsibility.

(0:00) Intro
(0:29) How AI is Used at Merck
(2:18) AI Applications Across the Value Chain
(4:31) Challenges and Risks of AI Implementation
(5:35) Federated Approach to AI Prioritization
(6:44) Future AI Use Cases and Data Challenges
(10:38) Building and Partnering for AI Solutions
(15:11) AI in Drug Discovery and R&D
(26:47) Quickfire

Out-Of-Pocket: https://www.outofpocket.health/

In this episode, Jacob sits down with Joshua Meier, co-founder of Chai Discovery and former Chief AI Officer at Absci, to explore the breakthrough moment happening in AI drug discovery. They discuss how the field has evolved through three distinct waves, with the current generation of companies finally achieving success rates that seemed impossible just years ago. 

The conversation covers everything from moving drug discovery out of the lab and into computers, to why AI models think differently than human chemists, to the strategic decisions around open sourcing foundational models while keeping design capabilities proprietary. It's an in-depth look at how AI is fundamentally changing pharmaceutical innovation and what it means for the future of medicine.

Check out the full Chai-2 Zero-Shot Antibody report linked here: https://www.biorxiv.org/content/10.1101/2025.07.05.663018v1.full.pdf

(0:00) Intro
(1:25) The Evolution of AI in Drug Discovery
(5:14) Current State and Future of AI in Biotech
(10:08) Challenges and Modalities in Therapeutics
(14:44) Data Generation and Model Training
(22:52) Open Source and Model Development at Chai
(29:52) Open Source Models and Their Impact
(34:36) How Should Chai-2 Be Used?
(38:53) The Future of AI in Pharma and Biotech
(42:46) Key Milestones and Metrics in AI-Driven Drug Discovery
(47:20) Critiques and Hesitation
(54:01) Quickfire

Out-Of-Pocket: https://www.outofpocket.health/

Elliot Cohen—PillPack co-founder and now co-founder of General Medicine—joins Jacob Effron and Nikhil (Out-of-Pocket) to unpack what “best care” really means in 2025. He explains why General Medicine is building a broad front door to care. Elliot also revisits the PillPack vs. PBMs saga, what Amazon Pharmacy got right (and what was unexpectedly hard), and how AI is already raising the bar in intake, clinical prep, and follow-up.

(0:00) Intro
(0:58) Simplifying Healthcare with General Medicine
(1:53) The Importance of Triage in Healthcare
(3:22) Consumer Empowerment in Healthcare
(5:10) Patient Experience and Structured Forms
(6:27) Challenges in Healthcare Pricing Transparency
(8:28) Diverse Patient Needs and Quality of Care
(10:00) The Philosophy Behind General Medicine
(16:43) Consumer Directed Care: Pros and Cons
(18:57) PillPack
(35:53) Debating Insulin Search Results
(38:16) AI in Healthcare: A New Era
(39:15) Integrating AI with Clinical Teams
(41:39) Challenges and Opportunities in Digital Therapeutics
(58:21) Building a Healthcare Company: Lessons from Amazon
(1:01:25) Quickfire

Out-Of-Pocket: https://www.outofpocket.health/

Flashback episode in honor of Hinge Health's IPO this week. In the episode, Jacob and Nikhil sit down with Daniel Perez, the Co-Founder and CEO of Hinge Health, a digital clinic for patients with joint and muscle pain. They discuss Hinge Health’s strategy for selling to employers, how digital health solutions can reach and retain users, the role of software x hardware in disrupting healthcare, and more.

(0:00) Intro
(2:34) The Evolution of Employer Health Solutions
(4:03) Challenges and Strategies in Digital Health
(7:07) Focus on Musculoskeletal Care
(9:51) Engaging and Retaining Patients
(16:17) Marketing and Awareness Strategies
(19:31) The Role of Independent Validators
(22:27) Clinical Validation and R&D Excellence
(23:04) Healthy Competition and Market Differentiation
(23:59) Product Superiority and Customer Validation
(26:05) Team Dynamics and Tough Decisions
(29:49) Future of Hinge Health and Healthcare Automation
(31:44) AI and Technology Integration
(36:18) Hardware Innovations and Market Impact
(39:19) Value-Based Care and Outcome Guarantees
(41:14) Regulatory Challenges and Innovation Constraints
(43:38) Closing Thoughts and Entrepreneurial Advice

Out-Of-Pocket: https://www.outofpocket.health/

Jacob and Nikhil sit down with Otto Sipe. Otto is the CEO and Co-Founder of Photon Health, which enables patients to select their own pharmacies with price and inventory transparency. The company has raised over $16 million from investors including Flare Capital Partners and Notation Capital. They discuss where pharmacies and PBMs are headed, the evolution of E-Prescribing, the impact of GLP-1s & AI, and more.

(0:00) Intro
(0:51) History and Evolution of E-Prescribing
(3:02) Challenges in Current E-Prescribing Systems
(6:28) Photon Health's Innovative Approach
(8:17) Patient and Provider Behavior Changes
(11:21) Pharmacy Industry Landscape and Future
(13:43) Interactions with PBMs and Market Dynamics
(16:48) Future of PBMs and Drug Pricing
(20:38) Quality and Marketplace Experience in Pharmacies
(23:30) Advising Independent Pharmacies for Future Success
(24:24) Challenges and Strategies in Retail Pharmacy
(25:45) Pharmacy Economics and Supply Chain Issues
(30:21) The Role and Potential of Pharmacists
(36:01) AI in Pharmacy: Photon’s Approach
(38:28) Quickfire

Out-Of-Pocket: https://www.outofpocket.health/

Jacob and Nikhil sit down with Dr. Rushika Fernandopulle. Rushika is the former CEO and Co-Founder of Iora Health, a primary care provider centered around value-based care and Medicare that One Medical acquired for $2.1 billion. They discuss why we’re still in the second inning of value-based care, intersections of tech and healthcare, what it takes for VBC to succeed, and more.

[0:00] Intro
[0:29] Early Days of Value-Based Care
[2:34] Challenges in Commercial Value-Based Care
[5:20] Adapting Care Models for Different Populations
[13:08] Medicaid and Long-Term Care Issues
[16:30] Big Tech's Foray into Healthcare
[20:37] Amazon's Healthcare Strategy
[21:09] Challenges in Serving Low-Income Seniors
[21:43] Innovative Solutions for Patient Transportation
[22:16] The Economics of Healthcare Visits
[23:22] Building a Custom EHR System
[27:34] The Role of AI in Modern Healthcare
[33:17] Future of Primary Care and Policy Implications

Out-Of-Pocket: https://www.outofpocket.health/