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Generative AI claims its space in the doctor's bag

May 15, 2024
Sachin Jain of SCAN Group speaks to Lynn Chou O'Keefe of Define Ventures

SCAN Group's Sachin Jain and Define Ventures' Lynne Chou O'Keefe at the Axios BFD expert voices lunch. Photo: Chris Constantine

In today's doctor's office, generative AI is already more prevalent than the stethoscope, said attendees at the Health Tech Expert Voices lunch at BFD San Francisco on Tuesday.

Why it matters: As AI's role in health care becomes clearer, dealmakers see potential for a stratified model, not unlike CVS' MinuteClinic.

The big picture: "There's some subset of work that is being done right now that requires absolutely no judgment," says SCAN Group CEO Sachin Jain.

  • Generative AI will "supplement the labor arbitrage taking place" as it turns "doctors into super-doctors," he says.

Yes, but: Lack of interoperability presents issues, especially with clinical documentation, says Montage Ventures vice president Nia Patel.

  • "We've been speaking to a lot of founders in the space and one thing we hear is until there's a change in infrastructure — who's using Epic, who's using Cerner — it's really hard to implement the level of accuracy needed to have an impactful inflection point," she adds.

Between the lines: Investors and entrepreneurs must clearly understand the difference between use cases, particularly when selling to strategics, says Define Ventures partner Lynne Chou O'Keefe.

Friction point: Health systems and payers are looking for comprehensive, end-to-end generative AI solutions — a big ask for nascent startups.

  • "When have you seen an early-stage startup actually support a massive transformation of a scaled company? I can't think of one," Jain says.
  • "I do think that strategics believe that the companies on the application layer should be doing all of that quality control for bias and toxicity on their own," Chou O'Keefe says.

State of play: Most startups rely on models created by players like OpenAI, which are constantly being updated.

  • "One thing we've started to ask ourselves internally when we're looking at investments is ... 'Does the company we're looking at stand to gain a lot by a stepwise improvement in the foundation model?'" says Susa Ventures partner (and former MD) Derick En'Wezoh.
  • "If the answer is no, that's a pretty damning sign," En'Wezoh says. "Dozens of companies are being put out of business with each one of these dev days."
  • "It's not just what you're releasing this particular year, but how far in the stack do the application layers have to go," says Chou O'Keefe.

The bottom line: "The stethoscope is only one tool and most physicians I know don't carry one," En'Wezoh says.

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