I’ve been staring at our favorite chart lately and wondering if we can make a bottoms up case for making the expensive stuff cheaper (healthcare + education). And I don’t mean just sub-inflation growth in prices - I mean decreasing prices.
Anyways I tortured the gpt-5.2-pro model a bit with a few assumptions:
- widespread GLP1 usage’s direct and indirect impact on healthcare spend
- increasing student / administrator ratios in education
- AI driving significant gains in productivity for white collar work, with dramatic gains in areas that are purely administrative (phone calls, document processing, RCM etc)
And a constraint:
- assume all the market forces assumptions play out (ai / glp 1s etc) but the market structure changes won’t happen
So here is what you have to believe to get the very exciting new chart; the goals are 1.6%/yr price decline in healthcare and 1.8%/yr in education, compounded:
Healthcare gates
1.Admin automation must be deep: on the order of ~40%+ reduction in the effective admin-cost bucket (which is plausibly 25–40%+ of hospital cost).
2.GLP‑1–driven weight loss produces meaningful reductions in downstream spending (e.g., studies associate 10–15% BMI reductions with ~15–22% lower annual spending in relevant cohorts), and adoption is high amongst the costly populations.
3.Pass-through happens despite no site-neutral reform: i.e., competition/payer pressure forces these cost declines into lower negotiated prices rather than purely higher margins.
Education gates
1.The “support/admin” share (often ~35–50% in the Delta Cost function categories) must be cut by roughly 40–50% per student.
2.Instruction must see single‑digit to low‑double‑digit productivity gains without torpedoing outcomes.
3.Savings must translate to lower tuition, not just expanded services or cross-subsidies (this is where enrollment pressure and alternative credentials matter).
I’ll let you all decide how achievable you think this stuff is, but nothing seems outlandish …
Here is the ChatGPT conversation if you’re curious: https://t.co/yu8GmVPoAU
Here is the result if we do manage to stick the landing:
AI Apps investing @ A16Z; A1111; Boards of Krea, Deel, Clutch, Titan, Arc Boats, Untitled, Happy Robot + more; If you’re not at the table, you’re on the menu