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BFD Expert Voices - Health Tech Deals

BFD Expert Voices

As the AI hype cycle rages on, the question of user experience is becoming increasingly important, health care dealmakers said at the Axios BFD yesterday.

Why it matters: Companies can spend millions developing new AI tools, but it's all moot if physicians and patients can't practically use them, Claire writes.

The big picture: Health care is no stranger to AI. Use cases span clinical documentation to flagging potential medical issues in patients based on electronic health record data.

Yes, but: Not all algorithms are created equal.

What they're saying: "I'm a physician, I'm an ICU doc, and I can't tell you how many times I have these pop-ups [in our EMR] that are completely irrelevant," said Abridge chief clinical officer Tina Shah, speaking at the BFD's Health Tech Expert Voices roundtable.

"Like, 'Your patient's dying of septic shock' — and they're totally fine and talking to you," she added. "We've already lost trust. We now need to prove trust. "

And when it comes to evaluating the safety and efficacy of AI tools, "we need more than a white paper," said Atropos Health CEO Brigham Hyde.

"We have to up our game," Hyde added. "We can't ... just throw something out in health care that hurts people and then gets more people to leave the workforce."

Meanwhile, a lack of clear guidelines and regulation of AI further adds to the murkiness of utility, the speakers said — the FDA's newly established digital health advisory committee notwithstanding.

"The question is, who's going to [regulate]?" says Vytalize Health chief medical officer Amer Alnajar. " You have social media CEOs coming up and you have senators asking them, 'Is it true that Facebook uses Wi-Fi?'"

While Congress may not be up for the task, Hyde noted a progressive FDA and Shah suggested public-private partnerships as ways to accelerate more oversight.

Between the lines: AI models are only as good as the data they're trained on — and mitigating potential bias can be tricky.

"The bigger question is, 'What is the right data?'" said Oak HC/FT partner Vignesh Chandramouli. "Was it a good physician who did the medical record or a bad physician?"

Hyde and Brightside Health chief clinical officer Mimi Winsberg said their companies currently score datasets for appropriateness based on their applicability to a given population, question or treatment.

Be smart: Quality questions aside, there's no denying the speed at which AI can synthesize new clinical study information, said Alnajar.

"Medical research doubles every 72 days," he said. "Can anyone on this table double their clinical knowledge in 72 days? I don't think so."

1 big thing: Expert Voices talk user experience in AI 

(From left) Belwadi Srikanth of Suki; Dave Kerwar of Inbound Health; Kevin Davies of Mizuho Securities; Brigham Hyde of Atropos Health; and Amer Alnajar of Vytalize Health.  Photo: Beatrice Moritz

Artificial intelligence was the talk of the town at this year's HLTH conference in Las Vegas, Erin and Aaron write.

Why it matters: Rather than touting tools with lofty ambitions like replacing clinicians, founders and investors homed in on more practical applications of medical AI, such as streamlining clinical workflows and handling taxing administrative duties.

Details: Several promising use cases for AI tools have emerged. For example:

Generating clinical notes and assessing the quality of existing notes.

Alerting providers to patients who may need a higher level of care.

Honing communication between patients and providers.

Streamlining medical approval processes such as prior authorization.

What they're saying: "All we hear about is burnout among the clinical community, but we can reverse that trend," One Medical chief medical officer Andrew Diamond told Arianna Huffington onstage. "I think we can [use AI to] help offload the administrative burden."

"There are many applications of generative AI in health care, but communicating and guiding members to the right care at the right time is the biggest opportunity," said Carrum Health CEO Sach Jain.

"The winners will be made by those who focus on user experience for practical applications for appropriate use cases," said Atropos Health CEO Brigham Hyde.

"We can use new technologies and AI — to use the buzzword of the year — to better predict who is at risk and be more proactive," Diamond added.

"That's the key focus you should have: How we utilize and deploy technology so that the human moment is magical," Amazon SVP of health care services Neil Lindsay told Huffington on the panel with Diamond.

Reality check: Given market conditions and hype cycles, get ready to see the number of AI-touting companies winnow in the coming months, industry experts and founders tell Axios.

"The AI-first companies are going to pull away in the next nine to 12 months," said Bessemer Ventures VP Morgan Cheatham, "And it's going to be very apparent which companies are actually advancing state-of-the-art methods versus those that are thinly veiled wrappers over GPT."

"Although there is a lot of hype and news, the winning company for generative AI has not been built yet," Hyde said. "We're still very early and there's a lot more expanding."

2. The BFD: The AI buzz overheard at HLTH

Illustration of a phone wearing a doctor's coat and a stethoscope. 

Direct-to-consumer health care has retaken its seat at the table, industry observers told Erin at HLTH.

Why it matters: The shift in tune comes as rising health care costs see patients, particularly women, become more active health care purchasers.

Driving the news: The rise in recent years of high-deductible health plans means patients bear more of the risk for their care than payers. The average deductible for an employer-sponsored plan in 2023 was $2,004 for an individual and $3,868 for a family.

Telehealth-friendly regulations have been extended, including a last-minute reversal by the Drug Enforcement Administration (DEA) that extends a waiver to let providers prescribe controlled substances without in-person visits.

Women, including women of color, are increasingly turning to virtual care tools, including telehealth.

Of note: Women are also the most active users of health care services generally, particularly when it comes to preventive care.

Flashback: Many experts dismissed the approach several years ago, citing challenges including high customer acquisition costs and dependence upon developing name recognition and maintaining customer loyalty.

What they're saying now: "I used to say DTC was DOA," Bessemer partner Steve Kraus told Axios during a meeting at HLTH. "I don't say that anymore," he added, citing the success of companies such as One Medical.

"We are all about consumer-directed health care. You need to be able to deliver care in a cost-effective, accessible way," said 7wire Ventures partner Alyssa Jaffee told Axios during a meeting at HLTH.

Jaffee added one exception to that rule: Startups that don't accept insurance. "Cash pay I will never support — it contributes to health inequity."

Be smart: Peer-reviewed research and reports find women's medical concerns are dismissed by providers at far higher rates than those of men — and that, too, is likely underwriting increased demand for DTC approaches.

"Particularly for women of color, trust is central in re-orienting care relationships that have historically been rooted in violence, dismissal or other forms of discrimination," Rock Health analysts wrote in a 2022 report.

Meanwhile, the historic reversal of Roe v. Wade in 2022 has also turned investors toward women-focused startups.

What's happening: "One of the underlying mechanisms within women's health care today is that there's such a lack of trust in the system, because there's such a lack of trust from the system," Hey Jane CEO Kiki Freedman said during a panel at HLTH.

"Women are so underserved ... they are often the ones seeking out better options," Evvy interim CEO Priyanka Jain said on the panel with Freedman.

"People never believe me when I tell them our customer acquisition costs. People never believe me when I tell them our organic revenue. But here's the thing: That's where women are going when they're experiencing these symptoms," she said.

"I know there's a lot of DTC unfriendliness in the market right now, but I will say we just raised our Series A, so it's definitely possible," Jain added.

3. DTC is no longer DOA, experts say at HLTH

Illustration of a woman in a hospital gown made from a one hundred dollar bill sitting on an examination bed.

Many direct-to-consumer startups have attracted market attention in recent years, with several focused on women.

Amazon bought primary care network operator One Medical for a cool $4 billion.

Caraway, a startup offering youth-focused virtual mental, reproductive, and physical care, this June raised a $16.75 million Series A.

Abortion care provider Hey Jane last fall collected $6 million in Series A capital.

Virtual-first care provider Thirty Madison in June acquired assets from birth control startup The Pill Club for $32.3 million.

4. State of play: Direct-to-consumer health 

Illustration of a file foldler with a note that says "State of Play" paper clipped to it.

Want more health tech deals? Check out the Axios Pro Deals Tracker beta.

• Capital Rx, a New York City-based PBM and PBA, raised $50m from Atlantic Health System, Banner Health, Hawai'i Pacific Health, Inova Health System, Lehigh Valley Health Network, Memorial Hermann Health System, Nebraska Medicine, Novant Health, Ochsner Health, WellSpan Health and Transformation Capital. https://axios.link/46tbzWA

• Dutch, an Oakland-based pet telehealth startup, raised $18m in Series B funding led by Eclipse Ventures and joined by insiders Forerunner Ventures and Bling Capital. https://axios.link/3Q9qjUJ

• AOA Dx, a developer of a detection test for ovarian cancer, raised $17m led by Good Growth Capital. https://axios.link/3ZQQPpf

• Arctop, a Los Angeles-based developer of cognition software, raised $10m in Series A funding co-led by Fifth Growth Fund and Supermoon Capital. https://axios.link/48TPjqC

• Prevounce Health, a Agoura Hills, California-based remote care management software, devices, and services company, raised an additional $2.5m in new Series A funding, to a total of $7m led by Cloud Hill Partners. https://www.prevounce.com/

• EU antitrust regulators are ordering Illumina (Nasdaq: ILMN) to sell cancer test maker Grail. https://axios.link/3FaSzjE

• TPG and Leonard Green-backed WellSky acquired Corridor, an Overland Park, Kansas-based revenue cycle, coding, advisory and compliance platform for post-acute health care from HealthEdge Investment Partners. https://corridorgroup.com/

5. Deals o' the day

• Paula Stuck, formerly director of claims at Flume Health, joined Vitori Health as director of claims. https://vitorihealth.com/ 

• Tim Wentworth left a post as president of health services at Cigna to become CEO at Walgreens Boots Alliance. https://www.walgreensbootsalliance.com/

• Robbie Huffines, formerly a health care investment banker at JPMorgan Chase, will retire from the firm in the first quarter of next year, per Bloomberg. https://axios.link/3LWm0cU 

6. It's personnel

Situational awareness: Kaiser Permanente and Union workers reached a tentative deal, ending the largest-ever strike in health care.

ending the largest ever strike in health care

🛬 Erin wrapped up a month of travels with Axios' third inaugural BFD in NYC.

❤️ Thanks for reading, and extra thanks to newsletter editor George Moriarty and copy editor Jay Bennett. Please ask your colleagues, friends, and family to sign up.

October 13, 2023

1 big thing: Expert Voices talk user experience in AI