Andy Kessler

Dealbreaker Interview and Excerpt: Healthcare Hedgies

Dealbreaker has an interview and an excerpt from The End of Medicine.
Ex-hedge fund guy Andy Kessler, recently took time to talk to DealBreaker's Carolyn Okomo about his new book, The End of Medicine, a witty, engaging examination of the heathcare industry in the not-too-distant future.

DealBreaker: Finance and technology has sort of always been your thing. In The End of Medicine, you utilize your expertise to analyze the healthcare industry. Was this an easy transition to make?
Andy Kessler: I spent 20 years looking for ever cheaper silicon that could change industries. Over the last few years, I’ve gotten bored. Wi-Fi and Wikis are cool, but a little dull. So I started looking for something else besides computing and telecom and music and stock trading and banking that technology would surround, squeeze, suffocate old business models and reshape in its image. In the meantime, a friend was diagnosed with cancer, only because he banged his head on a mogul skiing and an X-Ray showed a tumor on his neck. And a brother-in-law had a heart attack in the middle of the night. I wondered if there was some technology that could find this stuff early, before it was life threatening. Us baby boomers (I’m a late boomer at 47) are entering that fragile age. So I started following doctors around, cardiologists, radiologists, researchers at cancer centers and universities, looking for silicon.

Read the rest of the interview here.

Excerpt: Healthcare Hedgies

I was eavesdropping on two guys I recognized from the past. One guy used to run some tech money, I think I remember him getting blown out in 2000 for being long and wrong. But he’s obviously still in the business. I strained to read his name tag, without luck. The other guy was a classic popcorn hedgie. Always showing up where the action in, figuring out some angle and trading rapid fire looking for returns.

“For me, it’s just one thing.”

“Market size?”

“Nope, these are all billion dollar markets.”

“Management?”

“Nope, they’re all trying to hit fish with a baseball bat.”

“True. So what is it? Balance sheet? Partners? Their logo?”

“You just play the trials. I don’t give a shit what drug it is, it almost always works the same way.”

“Get out of here.”

“No, check it out. Preclinical is bullshit, you could get gum off the sidewalk to reduce tumor size in rats. So what? Even Phase 1 is a load. They are mostly bent around to get decent enough results so you can get to Phase 2. I’ve tried to time Phase 1 announcements, but no dice. You always wait until you are about a third of the way into Phase 2, then you buy the shit out the stock."

Read the entire excerpt here.

End of Medicine Excerpt: Breakfast at Bucks

This excerpt of The End of Medicine originally ran on GigaOm.

I never turn down a chance for breakfast at Bucks in Woodside. Any place with a motto of ‘Flapjacks and Tomfoolery’ gets my devotion. It’s a daily ritual for venture capitalists - the khaki patrol is out early, snagging the tables and booths with the best views of the room so they can spy who is talking to whom and have something to talk about with their venture partners over lunch.

I come here every so often, but it seems that the same folks – hey, there’s Steve Jurvetson doing another nanotech deal – are here every time I come, almost no exceptions. Over the years, I’ve gotten to know Jamis, the owner, proprietor, and self described Pancake Guy, and he made sure I had a table with a view of the viewers.

“Hey, sorry to be late. Don Listwin,” he said as we shook hands and he slipped into the booth. I could almost hear the gears sputtering and subtle whispers, ‘Hmm, hedge fund guy and networking exec - avert gaze - wireless, maybe, how ‘90’s, nothing of note here. Better to check out that other table with blog index guy and venture stud dripping yolk on each other.’

USA Today Review of The End of Medicine

Medicine + tech = great investment (someday)
By Kerry Hannon, Special for USA TODAY

It's hard to know what to make of Andy Kessler's latest book, The End of Medicine.

The former research analyst and investment banker spent 20 years on Wall Street analyzing and investing in the latest and greatest technology. He ran a successful tech hedge fund from 1996 to 2001 with Fred Kittler.

In his last outing, Running Money, he served up investment advice, but not here. Instead, he paints a futuristic Silicon-Valley-meets-medical-technology scenario that he's convinced will open fabulous investment opportunities — someday.

Kessler is witty and sarcastic in the kind of way that makes you want to sit down for a pitcher of beer with him to shoot the breeze

Kessler has observed medicine and technology for a long time. "Working on Wall Street, I'd listened to plenty of pitches for the latest miracle drug or medical device. But every time I looked at health care, costs were going up, not down."

Wall Street Journal Review of The End of Medicine

BOOKSHELF
The Art of Navigating Arteries
Andy Kessler wonders why medicine can't be more like computers.

BY WILLIAM TUCKER
Tuesday, July 18, 2006

Health care has always been the White Whale to Silicon Valley entrepreneurs. Recall "The New, New Thing" (1999), in which Michael Lewis chronicled venture capitalist Jim Clark's efforts to upend the status quo with Healtheon (now part of WebMD). Mr. Clark hoped that his new company would smooth down the rough inefficiencies in health care by digitizing medical records and joining doctors, patients and payers in a streamlined--and online--system. The verdict is still out; the results, so far, have been modest.

Mr. Kessler sets out on an odyssey...he gets it all down with Jack Kerouac-like authenticity

Andy Kessler has similarly grand ambitions, although without the venture-capital part. "Why," he asks, "can't medicine scale the way computers do?" In information technology everything can be reduced to chips, which keep getting smaller and cheaper, making costs go down. In medicine, everything works in the opposite way. Costs keep going up. Why?

Excerpt: CT Anxiety

Originally posted on Slashdot
The same technology and silicon and 3D algorithms we play around with every day are about to invade medicine. The following is an excerpt from Andy Kessler's new book, The End of Medicine: How Silicon Valley (and Naked Mice) Will Reboot Your Doctor.

CT Anxiety

I always feel a certain anxiety when I walk into the Hyatt Regency at the bottom of California Avenue in San Francisco. The cutsie Trolley car outside, the Embarcadero tile pattern on the sidewalk — they are all part of the package. But as I've done every time I've been there, I head straight into the lobby, tilt my head back and scan the Escher-like floors, starting at the top and then down and outwards to the bottom until I start feeling dizzy. I thank Mel Brooks for this.

This guy was zooming through someone's brain like it was a Sunday drive. More like a Sunday afternoon video game.

With my head spinning from this "High Anxiety" flashback, I stroll into the conference, half expecting to be given a barium enema by a cross between Nurse Diesel from Mel Brooks' flick and Nurse Ratched from One Flew Over The Cuckoo's Nest. I really gotta switch to decaf on days like this.

The 7^th International Multi-Detector Row Computed Tomography Symposium sounded innocuous enough. I assumed it would be a bunch of technical papers on the future of scanning, where I would read the paper in the darkened hall until lunchtime and then head off for some hot Hunan and home.

Instead, the place was like a carnival for cardiologists.

Excerpt: CAVE

An excerpt from my book The End of Medicine: CAVE

I was still chuckling when I stepped off the elevator on the sixth floor of Rhodes Hall. I followed signs for the CAVE - Computer Assisted Virtual Environment. The demo sounded good in the activities description, but it was past three and my interest was fading. I was due to meet friends at Ruloffs for bloodies. The door was closed, and as I opened it slightly, the room was mostly dark and thirty or so people were sitting around wearing funny looking oversized glasses. I spied an empty seat in the front row, tripped over a couple from the Class of '55 and sat down, almost crushing a pair of those glasses.

"You want to wear those. You won't get the 3D effect from that end." The voice came from a guy with a bizarre looking headset and a short Harry Potter like wand attached to a cord. He was standing on a 10 foot by 10 foot floor, and in front of two more 10 foot by 10 foot walls - three faces of a cube.

I'll remind you, these glasses are liquid crystal shutters, synched up to the display. We calculate and display images for your left eye and block out your right, and then every 60^th of a second flip over, display images for your right eye and block out the left. No more of the red and green glasses from the '50's."

The couple next to me nodded to each other and I thought I heard him whisper, "like at the drive-in, darling."

Townhall Podcast and TCS Daily Review

Podcast with Nick Schulz at Townhall Radio/TCS Daily

TCS Daily presents What's The Big Idea? Andy Kessler, author of "The End of Medicine," suggests that an effective use of technology could drastically reduce health care costs. Listen to podcast.

Glenn Reynolds review at TCS Daily

Andy Kessler has worked in Silicon Valley for a long time. He's seen the way that improving technology can lower costs and increase capabilities in all sorts of areas, and now he says that it's time for silicon to do for medicine what it's done for so many other fields.

That's the topic of his new book, The End of Medicine: How Silicon Valley (and Naked Mice) Will Reboot Your Doctor. And he thinks there's plenty of room for improvement. I agree...It's certainly the case that we're a lot more likely to see that sort of thing if health care consumers demand it. Which I guess is a reason to hope that his book sells well, particularly among policymakers and healthcare consumers. Perhaps you should send a copy to your Senator.

Read the whole thing.

Podcast with John Furrier of Podtech

A podcast on The End of Medicine with Podtech.net's John Furrier (available via iTunes as well):

Analyst, Investor and Silicon Valley Guru, Andy Kessler on the “End of Medicine". Andy Kessler, the guy behind the books Wall Street Meat and Running Money, just published a new book End of Medicine. Andy, who has been a wildly successful analyst and investor can smell the trends and in his new book. He declares the next major bubble and innovation boom from Moore’s Law - Medicine.    PodTech’s John Furrier sat down with Andy at his Silicon Valley home to talk candidly about his book and his views on the “end of medicine”. Andy delares in this podcast: “What technology did for businesses will happen in Medicine”….”where the ATM machine replaced the bank teller… the same will happen to the medicine industry…very soom (if not already) a computer will replace your doctor.”  In terms of “innovation in medicine”, Silicon Valley is leading the way and with that some big wealth creation opportunities.  Andy’s right-on and has some great stories from his travels in researching the End of Medicine.

Listen at podtech or download here.

Excerpt from The End of Medicine: RAD or CAD

Excerpt originally posted at AlwaysOn

OK, nothing in that one, let’s keep going.” Dr. Solon Finkelstein was cranking through these at a pretty good clip. About a minute each.

The light box seemed like something out of the 1970’s. Films were clipped in two rows to some white flexible plastic. Dr. Finkelstein would hit a button and a motor would whir and the films would move to the left, wound onto some spool buried in the machine and a new set of films would roll into view.

“I’ve been doing these since 1967, you know. Not much has changed. Oh, the film is better, but the rest of this…” he waved his hands in front of the contraption.

To his right were color-coded files, the same ones I remember seeing in my pediatrician’s office in, well, 1967. Dr. Finkelstein wore a head mounted magnifier, one that you might see a jeweler wear. He would occasionally lean forward to look closely at the films.

“Some like to hold up a magnifying glass  but I like to keep my hands free for the papers and the dictation machine,” he  said.

After peering at the films, Dr. Finkelstein would push a button and a view of the films would come up on two small monitors that seemed to be gerry-rigged to the light box. He would then read a barcode on the patient’s records - how ‘80’s - and push a button on a phone and talk into a microphone “Patient Smith, negative, 12 month review, Solon Finkelstein.” Two marks with a pen on a sheet of paper and then “OK, let’s go onto the next one.”

I stifled a yawn. I had somehow neglected to tell my wife I was going to be checking out women’s breasts all morning. I think she’d understand. Staring at mammograms with a 70 year old radiologist is probably not considered, er, titillating.

“OK, here’s  something.” I shot up in my seat. Finally, some  action.

“Looks like some calcification there, no problem.” Oh. “But what’s this?” He took out a red grease pen and circled what he was looking at.

“Granular tissue, perhaps?” I was glad he was thinking out loud so I could understand what was going on, but I remembered that most doctors tend to think and talk simultaneously. It can be unnerving.

“Let’s see what R2 thinks.” He pushed a button those two tiny monitors lit up. They had the same identical views as the films we were looking at, except there were a few black triangles and asterisks on them as well.

“Uh huh, R2 sees it too. These triangles are just calcifications, but that asterisk means it might be a mass. Yup, we agree. Usually do. It might be a mass, let’s check last years film. Might be something. No, this is probably no problem. See, it’s the same size, it hasn’t grown. No problem. Good.”

Reviews and Excerpts for The End of Medicine

John Mauldin's Investor Insight Thoughts from the Frontline: The End of Medicine

a very well-written story in Andy's sarcastic, witty, and easy-to-read style, but the message is also one of how fast the world of medicine is going to change in the next ten years

The Gilder Technology Report
Book of the Month: The End of Medicine - Andy Kessler

Excerpt at www.dailywealth.com

“Great, this should take about 3 minutes. Put your hands over your head.” I watched a few lasers light up my torso. He must be aligning the thing.

“OK, take a deep breath and hold it,” garb-man said. I held my breath and could feel my heart beating. And then a strange sensation. After each heart beat, the opening of the machine would move back slightly. Beat, move. Beat, move. Beat, move. I got a little spooked when it stopped moving, until I realized that we were done.

“OK, you can collect your things and wait out in the lobby.” I picked my phone and pen and noticed about a dozen ants scattered along the counter. Either the staff all met for donuts that morning or had their own poker party in the scanning room over the weekend. Not a great sign.

The procedure took all of three minutes but I sat in the lobby for another 30 waiting for Dr. Zander, rocking out to Barry Manilow on Mix 106 and then the damn butterflies started flapping again.

Something must be wrong. The S55 was gone. I think I’m the  only one here. They must be phoning an ambulance and the EMS team.

I picked up another magazine and flipped through it looking for anything to take my mind off the pounding in my chest, most certainly caused by ever shrinking arteries. I found an article about a convicted killer, always a good diversion. On July 3, 1981, a petty crook Joseph Paul Jernigan was in the middle of stealing a microwave oven from the home of 75-year-old night watchman, Edward Hale. As Jernigan was sneaking out, Hale surprised him and Jernigan quickly stabbed Hale and then blasted him three times with a shotgun. I love these kinds of stories and quickly forgot about my potentially sclerotic ticker.

Read the entire excerpt here.