How US Healthcare Actually Works, the WWII Tax Loophole that Broke it Forever, and How AI Can Fix it | Nikhil Krishnan, Out of Pocket

**Turner Novak** (0:02)
Nikhil, welcome to the show.

**Nikhil Krishnan** (0:04)
What's up? Excited to be here.

**Turner Novak** (0:07)
I'm excited to have you too. We're going to talk, I think, healthcare more broadly, but also tactically, and then some content creation stuff, because I guess we're both content creators, and people always want to know about that kind of stuff.

**Nikhil Krishnan** (0:18)
So it feels like, you know, like when Twitch streamers collab on a thing, the people freak out, like this is how I view this. This is like the Avengers of people that are too online, me and you.

**Turner Novak** (0:29)
Yeah, I think the comments for this people are going to be just absolutely losing their minds about two just heavy hitters from the internet, just coming together.

**Nikhil Krishnan** (0:37)
From the extremely specific niche of the internet.

**Turner Novak** (0:41)
Yes. But really quick for people who do not know, let's just say, you know, they've never come across you on the internet before.

**Nikhil Krishnan** (0:48)
Five of the best. For both of us.

**Turner Novak** (0:52)
How do you describe yourself and then Out of Pocket more generally?

**Nikhil Krishnan** (0:56)
Yeah. I mean, so I try to make healthcare more entertaining and accessible. That's like the short version. We're trying to teach people how healthcare works. So I write a newsletter, we do a bunch of courses, we have a bunch of events, blah, blah, blah. General idea is we want it to be easier for people to understand how healthcare works. And we hope that people will build more interesting things that makes more sense to them.

**Turner Novak** (1:19)
That makes sense. So I mean, that's probably a good first topic. How would you describe the healthcare industry to someone? Like just pretend I just have no idea how it works. Like how would you describe this whole thing?

**Nikhil Krishnan** (1:30)
I would just like, I would just step on your foot really hard and just be like, how does that feel? That's the entire healthcare system, to the nutshell.

**Turner Novak** (1:36)
That's it. But then you hand me a bill after you step on my foot, right?

**Nikhil Krishnan** (1:40)
Yeah, exactly. This is for your own good.

**Turner Novak** (1:43)
But you send it like three months later and I can't access it online. And it's like an envelope that gets lost in the mail, right?

**Nikhil Krishnan** (1:49)
As it should be.
I think the US healthcare system is messed up, right? It's very confusing. You know, I think the reality is like US healthcare was not a planned healthcare system, like a lot of other countries where they sort of like actually planned out what the healthcare system would look like. It sort of just appeared and kind of congealed over many, many layers. And because of that, like we've created these like bespoke rules that exist for different slices of the healthcare system. And so as a result, what we now have is actually, it's more like, you know, 50, 100 billion dollar microsystems in a trench coat underneath this like, you know, what we call like a 5 trillion dollar, whatever, 6 trillion dollar healthcare industry. It's really like a bunch of micro healthcare systems. And each one of them have different regulations. They have different people who pay for it. They have different services they are allowed to offer and not. But they all have different rules, right? And so, you know, one of the reasons healthcare has so much administrative sort of bloat and what people complain about is because you have to now track all of these different rules. And if someone jumps from like one system to another, you have to understand like, what does that mean? And you have to go chase down a bunch of information, all that kind of stuff. So it's a very messed up system. But I really think of the US healthcare system as like a bunch of really small micro health care systems within like a larger umbrella, basically.

**Turner Novak** (3:18)
And you said 50, is it because like it's just each state is different? Or is it just like different aspects of it?

**Nikhil Krishnan** (3:23)
Or I shouldn't have used 50 That's like a little too perfect on the nose for states. No, it's like I would say the the categorization is more around like who pays, right? So like it could be a state, for example, if it's Medicaid, it could be the federal government if it's Medicare. But now the federal government also contracts with private insurance companies for Medicare Advantage. So each one of those is like a different set of rules. If you get your employer, if you get your health insurance through your job, that's a different set of rules. But also sometimes an employer will pay for the medical bills directly rather than go to an insurance company. And that's its own set of rules. So like all of these are like different. It's actually probably more than 50, if you really think about it, but it's not just state-based. It's really just whoever is footing the bill at the end of the day. Versus like a lot of other countries, for example, if you ever hear like a single payer system, there's one payer, right? So it's like the government is footing the bill at the end of the day. In the US, we have a multi-payer system and each of those payers have different rules basically.