Bobbi Pritt, M.D. (00:34):

Hello, I'm Dr. Bobbi Pritt, a clinical microbiologist and laboratory leader at Mayo Clinic, and your host for today's episode. I'm excited to have Dr. Bill Morice joining me for both the news segment and the deep dive. We'll discuss some trending topics and offer a forward-looking perspective for the new year. Bill, welcome back as always.

William Morice II, M.D., Ph.D. (00:54):

Yeah, good to be here.

Bobbi Pritt, M.D. (00:56):

Well, you have been doing some traveling, which is nothing new for you. I understand you just came back from the JP Morgan Healthcare Conference, and I would love to hear your insights you may have gained from that. Can you tell us first a little bit about what the JP Morgan Healthcare Conference is?

William Morice II, M.D., Ph.D. (01:12):

Yeah, sure. I think we might have discussed this in the past, but it's always worth a good reminder. It's been a while. I've been attending this conference for the last several years, back to when I was department chair, and actually, I think even pre-COVID. It's kind of how we think about epoch now, pre- and post-COVID. Anyway, it's organized by JP Morgan, so you know, the investment bank. And it's to bring together healthcare leaders at the beginning of the year, really from the business of healthcare perspective. It's not an academic meeting. It's a lot of investors. The investment bankers are there and then companies are there, and company leadership making presentations to these audiences. And so, Mayo Clinic has been attending for the last several years. There is a whole section on non-for-profit, which Mayo Clinic typically presents in.

I've been attending for the last several as well, because it's a great place. It really serves two functions. One is, it has been in the past a meeting where a lot of major deals are announced. So people kind of go, it's the beginning of the year. It's what major deals are out there that are going to really portend what's going to happen in the healthcare business sector, both domestically and globally. And then, it's a great networking [opportunity] because it draws so many people in. All the major leaders tend to be there. So it tends to be a very good networking event as well, and relationship-building. And that's really why I've gone. I have not presented at that meeting. And each year it has a little different flavor. And this year, certainly, no exception.

Bobbi Pritt, M.D. (02:39):

Well, tell us about that. What were some of the things you learned while you were there? Any big takeaways that our audience would be interested in?

William Morice II, M.D., Ph.D. (02:45):

Yeah, there's a few, that are interesting takeaways, at least to me. And I think they should be of interest to all of us. And I would encourage anyone who has like a curiosity around the business of medicine. But, basically this year has been a little different than those in the past. In part, this was not a conference where a major deal was announced. We discussed, you know, that the biggest deal in our sector and in healthcare this year was actually announced late last year, the acquisition of Exact Sciences by Abbott.

So that's the kind of thing that people go there anticipating, which really kind of indicates that there's just sort of ongoing business. Rather than having these kind of big landmarks, people are just continuing to kind of march through in the healthcare sector and look at different ways to approach the industry and approach consolidation. That was one thing. There were no big deals, but still a lot of really important presentations. Number two, interestingly, there was not a big presence of payers this year. Which is probably part of why there weren't a lot of big deals announced.

And then third, I think the big thing taking away, and you can go look in Fierce Healthcare and others, lots and lots about AI. OpenAI announced a deal to acquire a company that does a lot of like medical records. I think Torch is the name of the company, but basically it compiles a lot of information, including wearables, right? That was out there. There was Anthropic, which has Claude AI, made announcements. So really, a lot both in pharma as well as in healthcare. I think that was probably one of the bigger themes here, was just how much the focus is going to be on AI and these companies really making major investments. Claude is HIPAA compliant. So, I think with that investment, my interest has always been, gosh, you look at where the investments are, we're going to feel that downstream. And I think that's definitely true here in the labs.

Bobbi Pritt, M.D. (04:34):

Well, that's really interesting. I hear about AI just on the regular news every day now, so there's no surprise that it's in healthcare and there's so many potential wonderful uses for it along with the concerns and things like HIPAA compliance will be very important, are very important. So we'll keep an eye on this field. This will be a good one to circle back to.

William Morice II, M.D., Ph.D. (04:55):

I agree. And then the other two things to keep an eye on, number one, it does appear that wearables are really starting to get traction. You know, companies like Oura and others are really seeing themselves entering the healthcare sector, which is probably, again, a little bit like anything, it's good and bad for us, right? It's good to think about diagnostics more broadly. It's important that those of us that have a profession in diagnostics participate in those discussions. And that means watching trends and maybe inserting ourselves rather than being invited to be at the party. The other is that there's still a lot of thought that there'll be consolidation across the diagnostics in the private sector like we saw with the Exact Sciences deal. There's still a sense that there's going to be more consolidation there. Which again, will change things for all of us working in the laboratories, both opportunities as well as risks.

Bobbi Pritt, M.D. (05:44):

Yep. That's for sure. Well thanks, Bill. These are useful insights, and it's always great talking to you.

William Morice II, M.D., Ph.D. (05:49):

Yeah, it's always great talking to you too and sharing whatever I can. So, it's an interesting time, and I think 2026 is going to be a very interesting year for sure.

Bobbi Pritt, M.D. (06:02):

Welcome to today's deep dive. We're going to go beyond the headlines now with Dr. Bill Morice to explain more about what's ahead for clinical diagnostics in 2026. Now I have a few questions for you, Bill. AI comes top of mind. It will, of course, continue to advance our diagnostics. What do you think will look different in 2026 compared to what we've seen in recent years?

William Morice II, M.D., Ph.D. (06:27):

Great question as always, and one that's thought-provoking. I think to kind of step back and almost feels like too brief to even use AI, but where that whole domain of change is going in terms of AI and society, I think number one, in healthcare and diagnostics, first and foremost, there continues to be massive amounts of investments in the capabilities to execute on AI. I was just visiting a city where they're making another, building another one of these huge data centers. And we see these in the news in Texas and all over the country, right? So there's going to be more and more computational power out there. And we know that the cycle of advancing these computational capabilities of AI continue to accelerate as well. You know, that the models get better and better.

You know, they can pass graduate-level exams and all these things that we hear. So what does that mean for diagnostics? I think it means a couple of things. At least this is where my head's at today, who knows where it'll be, you know, midyear or at the end of the year. I think on the precision medicine side, what we're going to see is continued compression. As you and I grew up, when you think about like, as we were training and doing research work, there was a pretty long lag time between what you would discover in a lab and then how that would translate ultimately to be in healthcare. In this case, maybe like in diagnostic, the stuff that I did my Ph.D. on in the mid-90s didn't really hit healthcare impact at all until maybe 10 years later.

I think with AI, we’re going to see that start to really compress, because AI is accelerating research. There's in silico research, for instance, in pharma research, you can screen hundreds of thousands of compounds in silico to identify the few that might have a mechanism of action. So, I think that is going to compress then also to diagnostics. We're going to see probably a shortening that window of when something becomes an observation in research where there's an expectation or capability to use it in a diagnostic domain. It's not new. I think this is what we saw with NGS, but again, when you think about how long it took for even the work being done in your division, which I was so familiar with and been inspired by because I was a department chair in terms of microbial metagenomics. I mean, how is that going really, it took so long. How much are we going to compress those sorts of things?

And I think the other's going to be just the desire for and the capability of AI to look at lots of different things in the health record, including the diagnostic data, and draw observations, and including wearables. So I think you'll see, the two things I think trends we'll see are a speeding pace of diagnostic innovation and introduction because of AI, as well as more and more tools that sit on top of our data that we'll need to interact with and help shape, actually, to make sure that they're providing the answers in an accurate way that people need. I did see just recently a Dark Report about the work that's being done at Harvard where they do a lot of image AI on digital pathology and just things that they're seeing now around like racial differences that they didn't anticipate with algorithms brings up again, even identifying demographic information out of H&E slides. So, it's going to be an interesting year.

Bobbi Pritt, M.D. (09:31):

I agree. And I think you just highlighted why it will be important to have the human in the loop, but I am excited, cautiously and optimistic, about what we're going to be able to use AI for. We're now talking about agentic AI models that can do things on their own. And I like what you mentioned about a greater connectiveness of data, being able to pull data from multiple places. So maybe in, let's say, the microbiology world, I want to have the culture data, the medical record data, the radiologic data, have that all pulled together. Now, my question for you is, with this increased connectedness, what do you think this means for the clinical diagnostics industry? You know, now I'm thinking like wearables. Yeah, true multiomics.

William Morice II, M.D., Ph.D. (10:14):

Yeah. I think number one, it's something you and I have talked about for a long time, that as diagnosticians, as laboratorians, as pathologists, and we've really always been focused on getting answers from the tools that are available to us, right? And so, with this, we have to continue to think in this way because that universe of tools will continue to expand, to your point, right? But it's still going to be human-in-the-loop or whatever. It's like making sure that we make the right diagnosis for the right patient at the right time.

As you look across now an ever expanding universe of data that will be created, and I think all the way from the wearables and mass data and how we would think about identifying flags from your watch about when you need to go to the ER, you need to go see a cardiologist or neurologist, all those sorts of things. All the way to that will connect, eventually, to a PET scan that may connect your movement pattern on your watch to a PET scan showing a plaque or tangle in the brain that's associated with Alzheimer's or Lewy body, or something like that.

So we could see that, which is all super exciting, right? Because what that does is, it shortens the patient journey. And that's where you and Mayo and others in healthcare, not just Mayo Clinic, but that's where we really find joy, is when someone comes with an odyssey and no one can tell them what's going on, and then you can use the data to pull that together. But it comes with a lot of different risks with that as well, that I think we really also have to be front of mind, because if we're thinking of the needs of the patient, we have to think about those as well.

Bobbi Pritt, M.D. (11:40):

Yeah. What are some of those risks that come to your mind?

William Morice II, M.D., Ph.D. (11:44):

I think as an educator, which you are so great at and we both think about a lot, how are we training our workforce in the future, right? That's number one. How do we make people comfortable with these tools? And also, on the flip side, those who are educating and those who are in practice who we need to educate. What are some of the shortfalls, right? What are the pitfalls we need to think about with these things? Because you have to understand at some level how a tool works if you're going to really be able to use it as someone that's providing guidance in healthcare for an individual. That's one.

I think the other is just the fact that now we have another dependency for healthcare. In terms of infrastructure, in terms of data, in terms of power grids, in terms of all these sorts of things that once we get dependent on these tools, they're not fail-safe.

We've seen this even this year. We've had a couple of instances here where we've had challenges with Amazon web servers and things that's had impacts on healthcare. So I think about when I was traveling a year ago in Italy and there was that the whole flight system went down.

And then, last but not least, certainly not least, just actually the whole concept of privacy and the individual and this universe of data, right? As I mentioned, there was just this study out of Harvard that showed that they could identify demographic information about an individual off of the H&E slide. You may or may not remember when, you know, again, when I was serving as department chair pre-COVID, there was a big push about, can we really have any de-identified specimens? And that was more focused on genomic sequencing.

Like, if you do genomic sequencing off of a paraffin block, can you ever get to true de-identification? Well, you start to think about that in this universe of data, we already know it works in social media, uou can start identifying a lot of very specific things about an individual when you have access to all that data. And when we say you, that could be the agentic AI program that's interrogating that data. So, really thinking about safeguarding the needs of the individual, individual rights to privacy, I think will become something we have to think a lot about in healthcare and as laboratorians as well.

Bobbi Pritt, M.D. (13:43):

Absolutely. There's a lot there. I'll ask you one last question, which is, beyond AI and data, what are two or three things that you think, beyond what we've just discussed, that will have a significant impact on our industry this year?

William Morice II, M.D., Ph.D. (13:56):

I think the two that come to top to mind are number one, reimbursement. You know, the RESULTS Act  is out there. I know there was actually a congressional hearing, not a hearing, but Congress came and asked people to come and opine on the RESULTS Act, which would be of course be the fix for the Protect Access to Medicare Act, or PAMA. So hopefully that will go through. If it doesn't, we've talked a lot about that. Either way, there will continue to be things around reimbursement, even if we are so fortunate to get that actually passed. There'll be other things around prior authorization and other things that are out there that will continue to kind of be things we have to deal with in the laboratory. Particularly if the economic changes, other things happening in healthcare that might leave patients with more out-of-pocket or more demands for transparency.

I would just say the reimbursement milieu is something that's going to continue to be something that is going to impact us over the course of the year, and regulation. So again, we talked about a lot about the LDTs and the FDA final rule and that getting rescinded. Everything we just talked about is software, you know, and all the applications of AI. We know the FDA, A, has the authority to regulate software as a medical device, and B, will also be thinking about these issues that we just talked about in terms of safety and privacy and other things. So I think it's the same things. It's just probably different flavors.

Bobbi Pritt, M.D. (15:11):

It's a lot to think about. We'll have a lot to talk about, as always.

William Morice II, M.D., Ph.D. (15:15):

Indeed. Yes. I look forward to it. It's awesome.

Bobbi Pritt, M.D. (15:17):

Me too. Well, happy New Year again to you and to all of our listeners, and I look forward to this year.

William Morice II, M.D., Ph.D. (15:23):

Yeah, no better way to kick it off than with a good “Answers From the Lab” podcast.

Bobbi Pritt, M.D. (15:28):

That's right. Well thanks again, Bill. Thanks

William Morice II, M.D., Ph.D. (15:30):

Thanks, Bobbi.

Bobbi Pritt, M.D. (15:36):

Let's wrap up with the top takeaways and how to learn even more on the topics we discussed. In today's news segment, Dr. Morice shared his top takeaways from JP Morgan's Annual Healthcare Conference. Then, in our deep dive, Dr. Morice stayed on to dive into trends expected to influence our industry in 2026. Thank you for joining us today. If you haven't already, make sure to subscribe so you never miss an episode. On our next episode, I look forward to welcoming Angie Reese-Davis for a behind-the-scenes look at managing logistics for Mayo Clinic Laboratories. I hope you’ll join us.