What I learned this Week: April 14, 2024
1% of the federal budget is spent on kidney dialysis. 6-7% of Medicare's overall budget. Two providers control >70% of the market. 75% of kidney failure is from diabetes and high blood pressure.
Lessons of the Week
I spent Tuesday at The Friedman School of Nutrition and learned a lot. Triggering a thought: It is in the pharmaceutical companies’ interest to disrupt their model towards functional medicine, with GLP-1 as one imperfect but example to shift lanes. Driving the healthcare cost of poor nutrition to zero instead of the current strategy to make GLP-1 the new statin.
What I learned this week….
The Friedman School at Tufts is the only stand-alone school of nutrition in the country. If you are in the Food is Health or Food is Medicine market, proximity to Friedman gives you a competitive advantage.
With less physical labor needed to survive and easy access to calories, we probably consume 25% more calories than we need. If the market realizes this, how will it change our economy?
3B people cannot afford a healthy diet.
CPGs are starting to detect better nutrition quality in their regeneratively sourced soy but at a higher cost. Do we know the price elasticity of quality protein in staples like mayonnaise?
It would be helpful to have an accurate inflammatory test. However, the markers are still too subjective but may be better with more longitudinal data. This will matter as we get more data on variability in food micronutrients.
At Friedman, I found other crazy people who think we can fully digitize food science. Building an in-silico model that speeds development 1000x. This would answer last week's question as to whether we should insert nutrition density in the crop, via fortification, or in supplements. Predicting technoeconomics and health. Allowing rapid trade studies that boost nutrient density and reduce product cost. (Brightseed)
To improve innovation in food, CPGs should take more employees to farms to help educate them on the possibilities. (Farm Foundation)
To improve farmer/Co-Op profitability and reduce the cost of good nutrition, Farmers and Co-Ops should work more directly with CPGs. This mimics the Design for Manufacturing movement in Auto/Aero in the early 90s.
Cell phones can operate pretty much anywhere on the planet at near 5G capability, but food quality is more variable.
Farmers will sell their data if they see value. There is likely an opportunity for someone to build a farm data Co-op that trains AI and compensates the farmers (See Henrietta Lacks)
What are the supply/demand dynamics in an abundance economy? Who are the leading economists?
1% of the federal budget is spent on kidney dialysis. 6-7% of Medicare's overall budget. Two providers control >70% of the market. 75% of kidney failure is from diabetes or high blood pressure.
The cost of Small Modular Reactors may not be less when you include security, interconnect, and other infrastructure costs.
Some Conclusions
The Healthcare Cost of Poor Nutrition is $1.9T in the US and $14T globally. The combined market cap of the top 10 pharmaceutical companies is < $1.9T. The combined annual market for nutrition in the US is $3.6T – $1.7T in food and the $1.9T in the healthcare cost required to fix what is wrong with calorie-dense food. The bulk of US healthcare costs is tied to the co-morbidity associated ultimately in some fashion with diet.
Functional medicine represents a shift in health delivery. The functional medicine approach, led mainly by Dr. Mark Hyman, intervenes with diet, exercise and other preventative measures to avoid developing co-morbidities. With the decline of doctors going into front-line patient care and the evolving shift in care delivery towards urgent care clinics and other models, the care delivery of traditional medicine is going away faster than innovation fills the gap. Leaving patients adrift in the clumsy and frustrating wake of the Forces of Creative Destruction.
It is probably in the pharmaceutical companies’ interest to disrupt their business and move to functional medicine. GLP-1 may be a tool to shift lanes. Frankly, you should be able to walk into a Costco and treat your diabetes or obesity, in some cases with food, in others with GLP-1, or even better with bioactives. But grocery alone can not figure out all the issues in nutrition. They need partners. Pharmaceuticals need to be sure new drugs like Ozempic are not abused. Food companies need more connectivity to early adopter consumers seeking nutrition density and functional medicine. Agriculture needs a market that prices in the value of nutritional density. The trillion-dollar opportunity for grocery, food, agriculture, and health companies is thinking about innovations that drive the healthcare cost of poor nutrition to zero.
One potential way to stir more innovation would be if the Friedman School of Nutrition, Purdue School of Agriculture, and the Lilly Foundation teamed up to build cross-disciplinary research to guide the Food is Health innovation community, policymakers, and regulators. Combined, they could set better nutritional targets, improve crop and livestock nutrition density, and shift care delivery systems closer to points of nutrition, like grocery.
While GLP-1/Ozempic is a powerful pharmaceutical solution, abuse of GLP-1 will kill the golden goose like it did with Oxycodone and COX2/Celebrex. Aligning to the new paradigm of functional medicine and $0 healthcare cost of poor nutrition is a “First Principle” path to profit and redemption.
AI Applications
I remember spending way too many hours on college essays that revealed very little about me and a lot more about the advice of various college advisors who think they understand what matters to an admissions committee. Has anyone ever run a randomized control trial to see if admissions offices actually improve the quality of the education product? It seems more voodoo than science.
The AI tools may offer a blessing in disguise.
First, AI eviscerates the notion that any student will bother to write their own essay in the future. For $20 and a month's subscription to OpenAI, you can beat the high-priced admissions advisors. Why waste hours doing it manually when some ex-admissions officer will write a bot trained to trigger the neural simulators that excite admission boards?
Second, AI can step in and lend a hand. Replacing the essay concept. Train the AI to act a bit like Socrates. Have the applicant chat with the bot. The bot asks Socratic questions about this or that. The bot focuses on the things important to that school’s differentiated value (if any). Going to MIT, your bot is Einstein. Going to Yale, maybe Plato. Judge the student on their engagement, curiosity, and ability to expand the discussion. At that point, it’s probably easier to look across the applicants and interpret their diversity of thought.
Failing the traditional or Socratic approach, choosing the list of students with scores above a certain level and then randomly picking a subset for admission would probably do the job just fine.
Reflections
In 1980, I tried to persuade my father to buy an IBM PC, arguing that it could help him balance his checkbook. He demurred.
He ultimately became an active power user of computers for work. He died of a sudden heart attack in 1998.
Now, I can buy a $99 device linked to my mobile phone to take my own EKG. I can order my own labs at Quest for cholesterol and inflammation markers. My watch reports my resting heart rate and hours of sleep. I have a record of my time series heart rate for every bike ride since 2009. I have a low-cost automatic defibrillator in my home.
Each is better and cheaper than the alternative.
Nutrient Density Tech Stack
The “Tech Stack” to nutrient density and Food is Health includes:
Holobiome - Mastering the microbiome
Brightseed - Engineering micronutrition
Holganix - Soil Microbiome
Kula Bio - Nitrogen Fixation
Benson Hill - Genetics
White River Soy - Mini Mill
Edacious - Nutrient density optimization
Bushel - Financial Services and payments
The tech stack will expand to include additional platforms for financial services, human health, and in-silica models for soil, human nutrition, and animal nutrition.
On X…
No one is partisan when it’s better and cheaper.
And so another season begins. It takes about 10-13 years to train labor when it ships new from the factory…
ETF investment in companies on the scale of BlackRock may create synthetic monopolies where the ETF has material ownership in otherwise competing companies. If one does not care which company in the portfolio gains profit, the ETF still benefits in aggregate. This motivates the investor to control product prices, regulation, and other rent-seeking behavior in lieu of innovation. Also known as a monopoly.
On Substack….
For more on why dialysis is 1% of US federal spending.
This Weeks Charts
Which is more to blame for increased diabetes? Sugar or Seed Oils? Why can’t it be both?
Opportunities for Livestock
Millions of farm animals are forced to find new work due to the increasing pressure to reduce meat in our diet. And with the economy at full employment, good labor is hard to find.
Livestock have been on the front lines of climate change for more than a billion years, maintaining the world's grasslands. Who better understands the value of nuclear power?
The Tennessee Valley Association recently started a new training program for constructing Small Modular Reactors (SMRs) with livestock who know more about bullshit than Tony Soprano. Consider your neighborhood bull if you are in the market for an SMR.
With less physical labor needed to survive and easy access to calories, we probably consume 25% more calories than we need. If the market realizes this, how will it change our economy?
Do we see more upward pressure on calories burned(exercise && nutrition), or downward pressure on foods(packaged and otherwise) to be less calorie dense/greater volume.
Or which one of these do we see *more*?