Joshua Kraus

One key reason why healthcare technologies like AI, telemedicine, and software haven't structurally lowered costs or broadened access for the entire system after decades of experimentation (excluding pure financial engineering of payer contracts) is the limited reimagining of care delivery itself, with asynchronous telemedicine as a notable exception. In the same way that digitizing physical paper failed to exploit the capabilities of a new computing medium for word processing, hosting physician-patient conversations over video does not transform the actual delivery of care. In telemedicine, many of the inputs (e.g., clinician time) and therefore cost structures of in-person care persist, which is why we often see fee-for-service telemedicine companies struggle to achieve economies of scale (i.e., growing revenues non-linearly while growing costs linearly). Until we deconstruct the components of a medical appointment – from intake and triage, to chart review, history gathering, physical examination, diagnosis, treatment, and follow-up – we will continue to be underwhelmed by the disconnect between the transformative potential of these technologies and real-world patient/system impact. I’m optimistic that the emergence of reliable and performant medical AI agents will urge us to perform this deconstruction and redesign the fundamental building blocks of a “medical appointment.”

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Eye Opening! As noted by Matthew Holt below, Doximity promotes itself as “The Professional Medical Network for Physicians” with a mission to “help clinicians be more productive so they can provide better care for their patients.” Sounds simple enough, a community built for doctors—a space where they can connect, share insights, and access tools to support their work. Their main source of revenue, subscriptions. Of course, you'd think the subscribers would be the doctors using this valuable platform and its tools, like video calls, hiring services, and various apps, platforms. But look a little deeper at their financials? Yuck. Doximity’s revenue doesn’t come from clinicians at all. The“subscriptions” (main source of revenue) are actually sold to pharmaceutical and other industry players that want access to docs and the powerful (and profitable) prescription pads they wield. These “Marketing Solutions” subscriptions allow advertisers to push tailored content directly into doctors' "news" feeds, with pricing set according to the type and number of doctors targeted. In effect, the platform sells access to doctors to those looking to drive up utilization of their products. Doximity’s real revenue engine (which is pretty amazing, see post below) lies in its advertisers. Life sciences companies and the highest bidders pay for the privilege of influencing what doctors see in their feeds—not just ads, but entire modules and news updates. What seems like a physician’s trusted source of industry news and updates is, in reality, a curated stream designed to serve business interests. This brings us to the key question: when doctors use Doximity as their “news feed” and source of the latest research, are we comfortable knowing their information stream is largely influenced by advertising dollars? When we scroll through platforms like Instagram or Facebook, we’re well aware of how advertising shapes our experience. Mention a skincare product in a text, and suddenly, your feed is filled with face cream ads. We know this, we accept it, and we view each ad with a healthy dose of skepticism. But are we okay with doctors facing the same experience? Are we comfortable with Doximity’s advertisers shaping the content doctors see, especially when they rely on this platform for up-to-date clinical research and product information? Let's hope our docs approach these tools with the same skepticism I do when I'm promised younger looking skin:). Jessica DaMassaPreston AlexanderDutch RojasPatient Rights Advocate Marilyn BartlettDave Chase, Health Rosetta-discovering archaeologistAnn LewandowskiJeffrey HoganDavid Contorno Stacey RichterLee Lewis Shawn GremmingerAndré WENCKER Renzo Luzzatti

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There’s a category we believe is getting too little attention when it comes to AI in healthcare: AI Clinical Documentation Integrity (CDI) While AI ambient scribes and autonomous medical coding solutions have gotten most of the headlines, we’d argue AI CDI is equally impactful when it comes to quality care and accurate billing. For those not familiar, CDI ensures that clinical documentation accurately reflects the patient’s medical condition and the provided care. Historically, CDI was a manual slog, with dedicated CDI specialists, nurses, and physicians painstakingly reviewing patient charts to ensure documentation supported the care delivered. Today, AI is reshaping this landscape. While it’s still early days, we’re seeing three primary approaches to applying AI when it comes to CDI: 1️⃣ CDI + ambient scribing—an AI ambient scribe and AI CDI assistant operate simultaneously, generating comprehensive notes and surfacing codes for physicians to review at the point of care. (Example: Ambience Healthcare’s AutoCDI) 2️⃣ CDI via real-time diagnosis support—diagnoses are suggested at the point of care based on clinical data in the EHR, with auto-generated documentation and audit trails. (Example: Regard) 3️⃣ CDI via an AI-driven post-coding / pre-billing review—the entire patient record is ingested and analyzed against what is coded, surfacing suggestions for revenue and quality opportunities. (Example: SmarterDx) To date, AI in healthcare has focused primarily on administrative use cases. With the increasing adoption of AI CDI solutions, we’re now taking a step closer to clinical workflows. As clinicians get used to AI-suggested diagnoses in the CDI context, it will be interesting to see if this increases their comfort with AI playing a role in clinical care. Here's our working list of AI CDI vendors. Anyone else we should add? • Ambience Healthcare • Brellium • Iodine Software • Regard • Semantic Health • SmarterDx   

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I’m worried about the state of venture capital and direct-to-consumer (DTC) healthcare startups. Hims & Hers is the poster child for DTC healthcare at $1.2B proj 2024 revenue and a $3.6B valuation. By most accounts, they have been an outlier success for DTC since bottoming out in May 2022. So why is this bad news for DTC healthcare? Because the market leader (Hims) trades at a 3x forward revenue multiple. And the category leader typically gets a higher valuation multiple than smaller startups. We see this phenomenon in private equity. They “roll up” smaller companies within the same category at a lower multiples just to create one larger platform that trades at higher multiples. Now back to DTC healthcare startups. If Hims commands a 3x revenue multiple, it’s not unrealistic that smaller, unprofitable startups may be valued 1-2x revenue at exit. At 2x revenue, a startup must generate $500M to produce a $1B exit in today’s market (depending on growth and profitability). Series A/B venture capitalists must see a pathway to $1B outcomes. And if the growth-stage investors with billions under management are less interested in DTC healthcare, the future funding rounds necessary for fueling growth are not guaranteed. Juxtapose this against 2017-2022 where DTC could raise Series B-E funding. Let’s take a DTC startup doing $25M after 3-4 years of operations and has already raised a Series A. By most accounts, it would be a phenomenal accomplishment. But today, investors will question the chances of that same company scaling from $25M to $500M revenue in the next 3-4 years with unknown future funding sources from Series B and beyond. You're stuck in VC-funding purgatory. Some of these companies will shut down. Some may sell for 1-3x revenue. And some may try to transition to profitable, cash-flowing businesses. All of which are certainly not the venture-backed goal the founders, investors, and employees often had in mind when first taking capital. I say this all with friends working at or starting DTC healthcare companies, I feel bad for them. I also feel bad for the patients who enjoy those products or services. To caveat (b/c I know people will object), there will be other DTC brands that exit for $1B+ (i.e., Ro). However, they were forged and scaled during a different time period where seemingly endless venture capital was available for DTC healthcare. Now we're in a different time with no end in sight. Thoughts?

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Healthcare is highly suited for AI automation, with many opportunities to improve accessibility, affordability, and outcomes. AI can drive efficiencies across various functions, though it will inevitably reduce the need for some human roles. #higherorder #ai #automation #healthcare #healthtech

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Key trends and takeaways from HLTH 2024: 1. AI's Evolving Role: AI dominated discussions, with executives acknowledging its potential while also recognizing challenges in accuracy and clinician trust. There's a shift towards focusing on the practical applications of AI, with a call for partnerships to ensure reliable testing and implementation. 2. Infrastructure Focus: Beyond the glitzy AI tools, there's a growing emphasis on the "picks and shovels" needed for healthcare data accessibility, including infrastructure, compliance, and interoperability. Executives believe that improving data flow will facilitate the effective use of AI. 3. Middlemen Under Scrutiny: Pharmacy benefits managers (PBMs) faced criticism for their role in rising drug costs, with discussions highlighting misaligned incentives and the need for transparency in healthcare pricing. 4. Women's Health Spotlight: Women's health initiatives gained attention, particularly following government funding announcements and personal stories shared by advocates. However, investment in women's health remains minimal compared to overall healthcare funding. 5. Interest in Psychedelic Medicine: The potential of psychedelics for treating mental health conditions garnered significant interest, with discussions about funding and research moving forward, especially within the Veterans Affairs system. Executive Takeaways: Leaders from various sectors emphasized the importance of consumer-focused strategies, collaboration, and the need for responsible AI usage. There was a consensus on the critical role of addressing healthcare accessibility, improving patient experiences, and fostering innovations that genuinely enhance care delivery.

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Great breakdown from McKinsey & Company here on current Medicare Advantage dynamics. TL;DR they have some levers but margins are as thin as they've been in recent memory in 2024. McKinsey called out the following as challenges for MA players moving forward: -Little to no rate increases from CMS -Broker commissions changes -V28 changes -Star ratings (the biggest near-term lever) -Utilization trends -Part D and other regulatory changes Source: https://lnkd.in/g9U4h2Gp

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Kind of wild how the Particle vs. Epic legal showdown is bubbling into something a lot bigger than we ever expected. Quick recap: 🏥 Particle is accusing Epic of anti-competitive practices, alleging the EHR giant is blocking access to patient data to dominate the payer platform market. 🏥 Epic, meanwhile, calls the claims baseless but they’ve filed a dispute through the Carequality network. Epic alleges that some Particle customers used the platform to gather medical records under false pretenses. They singled out Integritort, a business they accuse of pretending to treat patients while actually gathering their records for personal injury lawsuits. 🏥 Both sides are calling out monopolistic behavior—Epic accuses Particle of undermining privacy, while Particle argues Epic is using market power to block access. What’s the bigger picture? These types of conflicts potentially shape access and use of patient data + the future of the emerging market for data sharing platforms. Staying tuned...

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M7 Health is scaling, and we are growing our team! Two years ago, Eric Gruskin and I had just incorporated M7. We had no team and most days we were working off of a folding table in the (truly) empty NYC apartment that my husband and I had just moved to.   We were cold-calling nurse managers around the country to give us feedback on our MVP. We didn't even have software - we serviced our first clients with elaborate spreadsheet models. Two years later, a lot has changed.   🚀 We have a fully functioning product that has evolved far beyond schedule balancing.   🚀 Nurses depend on our software every single shift.   🚀 We have 8 (and counting!) mission-driven employees on the team.   🚀 We've more than tripled our customer base since January. 🚀 We raised a $4M seed round to step on the gas. The vibe at M7 is electric. We're doing what we set out to do.   We are actively hiring across engineering, operations, and analytics.   If you or anyone you know is interested in joining a mission-driven startup making waves to support the nursing workforce, please send them my way! #hiring #opentohire #openroles

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After a brief writing hiatus… Part III of “Who Pays for Healthcare AI” is live. The third installment defines five performance-based pricing models for healthcare AI and explores: • Four types of Return on Investment (ROI) in healthcare and life sciences • The importance of shielding at-risk pricing models from operational externalities • How better pricing model design can mitigate negative working capital risk under performance-based models • Taming the beast: attribution Check out Part III below, and subscribe to receive the final post of the series! https://lnkd.in/dPZSHMiy

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Last week, Elion covered the AI prior auth space for providers. This week we're looking at it from the payer side. For payers, prior authorization (PA) is a necessary burden: important for utilization management (UM) and financial planning, but a nightmare to manage. After PA requests are sent in, payers have to process the request from various channels into a case, match it with clinical criteria, validate required information, review and make the PA determination, then respond and iterate through any appeals. As payers update their procedures with new clinical evidence guidelines and new diagnostics and treatments, managing policies and creating decision trees for PA decisions requires enormous effort. Payer-facing AI prior authorization platforms have a huge opportunity to streamline these workflows by: 📒 Improving rules-engine generation and updates from unstructured policy documents and PDFs 📤 Automatically processing PA requests across all channels ✅ Matching the case to the right clinical criteria, validating data completeness, and determining if policies have been met through machine learning models and generative AI 📬 Generating decision documents and automating appeals correspondence with providers Several vendors are already making strides in AI-enabled PA for payers. Banjo Health offers tooling both for the PA request and clinical decision policy creation workflows for health plans, TPAs, and pharmacy benefit managers. basys.ai uses LLMs to offer rapid ingestion of policy documents for fast integration and up-to-date policies. Cohere Health is one of the more mature vendors in the space, and offers a variety of products for UM. Co:Helm is a generative AI platform for payers, with initial use cases around enabling UM nurses to make complex PA decisions more quickly. Finally, GenHealth.ai has built their own large medical foundation model and is using it to enable both rapid policy ingestion and PA review. We see PA as the first place where payers will incorporate advanced clinical AI. Although PA denials should never be fully automated, vendors that can drive efficiency here stand to become a core part of payers’ clinical decision-making process. --- We received a number of interesting responses last week regarding the AI prior auth space. We're continuing to dive deep here, so please reach out if you're currently investigating it and would like to discuss.

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🌟 Boston’s Trailblazing Health Tech Startups! 🌟 I thought it would be nice to give a little shout out to some of the health tech startups in Boston putting in work. PathAI – Leveraging artificial intelligence to enhance the accuracy of pathology diagnoses, PathAI is paving the way for more precise and efficient disease detection. Akili Interactive – Bridging healthcare and digital therapeutics, Akili is developing video game-based treatments for cognitive disorders, bringing a unique approach to mental health and wellness. Biofourmis – This predictive health analytics leader offers remote patient monitoring solutions, allowing healthcare providers to offer personalized care and anticipate patient needs. Ginkgo Bioworks, Inc. – Specializing in synthetic biology, Ginkgo Bioworks is transforming drug development and diagnostics by creating custom organisms, fueling innovations in biotechnology Omada Health – A pioneer in virtual care, Omada Health provides digital health solutions to manage chronic conditions like diabetes, hypertension, and mental health, bringing healthcare directly to patients. Buoy Health – Powered by AI, Buoy Health offers personalized health guidance and telehealth support, helping users make informed decisions about their health from home. Eqrx R – Focused on affordable drug development, EQRx is working to make essential medicines accessible, addressing one of healthcare’s biggest challenges—affordability. #BostonHealthTech #InnovationEcosystem #DigitalHealth #HealthcareInnovation #Startups

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There is a blueprint for success and MDisrupt has the experts to deliver it!

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Imagine swallowing the competition whole. That's what many players in tech do via roll-up strategies, gobbling up smaller firms to deliver richer solutions and amass greater market share. Where else are roll-up strategies common? // HEALTHCARE Picture being a patient at a medical practice that’s been part of a roll-up in Healthcare Services. It's an industry ripe for roll-ups due to its fragmented nature and potential for greater efficiency. // CONSUMER SERVICES Or let's say you needed your HVAC serviced, and notice your local repairman is now part of a bigger Consumer Services entity? Centralized management and scale economy turn these localized businesses into roll-up targets. // FINANCIAL SERVICES Think about your insurance agent or wealth management advisor. They're working in complex, highly regulated environments. In the Financial Services sector, roll-ups offer an effective way to consolidate expertise, streamline operations, and enhance customer offerings. // MANUFACTURING Now, imagine driving past factories under a new name — the result of Manufacturing and Industrial Services roll-ups. Bulk purchasing reduces costs, enhances production capabilities, and expands geographical footprints. // REAL ESTATE Lastly, envision your real estate brokerage firm. The industry sees roll-ups as a strategic move to increase market penetration, enhance service offerings, and hike up portfolio value. Roll-ups play a huge role in most industries, rather like a snowball rolling downhill, gaining momentum, and size. Are you seeing roll-ups in your sector or considering M&A?

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Proud to announce a strategic partnership between Salient Health and Revelar Analytics that is set to transform the landscape of healthcare pricing transparency! 💡 By combining Revelar's innovative approach to price transparency with Salient's core competency in turning complex data into actionable intelligence, we're unlocking new levels of value and efficiency for healthcare organizations. Our mission? Empowering providers, payers, and patients alike to make more informed, data-driven decisions that improve care quality while controlling costs. This collaboration is about more than just technology – it’s about creating a sustainable impact on the healthcare industry by delivering insights that matter, driving efficiency, and advancing patient outcomes. 🎯 Stay tuned as we continue to push the boundaries of what's possible in healthcare innovation! #Healthcare #Analytics #PriceTransparency #Innovation #SalientHealth #RevelarAnalytics #ValueBasedCare #DataDriven #Efficiency #HealthcareTransformation

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Absolutely, great insights Rock Health. Focussing on what you're best at can be key. Optum and Walmart have struggled because they tried to do too much. Pure-play virtual health providers, like Amazon in retail, could excel by specializing and creating their own space. It's like playing to your strengths rather than spreading yourself too thin. Pure play may be the winners ultimately. Tele health is here to stay. Devicharan Reddy Neelam Sharma Balaji Prasad Goli

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Strategies for Success in the Face of Medicare Advantage Challenges As the Medicare Advantage landscape becomes increasingly complex, with regulatory changes, high utilization trends, and funding stagnation, it is essential to identify and implement effective strategies to ensure success. **1. Membership Shifts and Pricing/Benefits Adjustments:** Anticipate shifts in membership and proactively adjust pricing and benefits to cater to the changing needs of the target population. **2. Synergistic Approach to Coding, Quality, Engagement, and Network Management:** Break down silos and establish a collaborative process that integrates coding, quality, engagement, and network management to optimize performance. **3. Utilization Management and Total Cost of Care Control:** Implement strategies to manage utilization and control the total cost of care, including exploring digital, virtual, and alternative forms of care to enhance affordability and accessibility. For further insights and a more detailed discussion, please feel free to reach out directly. #medicareadvantage #affordability #totalcostofcare #healthcareinnovation #optum #utilizationmanagement

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Last but not least at Becker's Healthcare CEO/CFO conference - terrific panel led by my ECG Management Consultants colleague Steve McMillen, including Andrew Chang from UChicago Medicine, Patrick Cockey from Jefferson Health, and Maura Buxton from CVS Health. Topic: The Digital Patient Experience. Fascinating discussion in which the panelists agreed on many things, but productively disagreed on some topics. These are my favorite panel discussions, where constructive disagreement fosters truly engaging dialogue. Some of my takeaways (not attributed to any individual member of the panel): (1) The term "digital front door" can imply that we want everyone to begin their journey with us on a device or through an app; we really should be talking about making every channel accessible and seamless. (2) Improving patient experience is necessary but not sufficient; any solution should also simplify provider workflow. (3) We have a lot to learn from our existing patients and consumers, but also much to learn from those who choose NOT to engage with us digitally. #patientexperience #leadership #healthcare

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