AI Therapists in VR Help With Provider Shortage

New research in npj Digital Medicine suggests that virtual reality might be part of the answer to the nation’s mental health provider shortage, as long as patients don’t might if their therapist is an AI avatar.

The small study had 14 participants with moderate anxiety or depression undergo immersive therapy sessions led by a trained digital avatar developed by Cedars-Sinai.

Known as XAIA, or the eXtended-Reality Artificially Intelligent Ally, the program provides a way for patients to self-administer conversational therapy in relaxing virtual reality environments, such as a creek-side meadow or a sunny beach retreat.

  • It’s unclear what the therapist avatar actually looks like, but we’re going to choose to believe it looks like this picture of XAIA in the diagram of the conversation logic.

Throughout the 30-minute therapy sessions, with topics ranging from loneliness and family problems to financial distress, XAIA successfully applied key psychotherapeutic techniques:

  • Observations that reflect an understanding of the user’s issues; Ex. “Your worries about your health and your living situation are clearly causing you a lot of distress” 
  • Normalizing feelings; Ex. “It’s understandable to feel like a failure when life gets rough”
  • Showing empathy; Ex. “It must be a challenging time for you”
  • Validation and praise where appropriate; Ex. “Your practice of not taking these relationships for granted is truly commendable”

Participants frequently responded to XAIA as if it were a human therapist, sharing raw emotions like, “I feel like I’m a failure. The only thing I have to look forward to – I know you’re going to laugh – is to go see Taylor Swift … I’m sorry I’m crying.”

  • XAIA’s response: “Firstly, there’s no need to apologize for crying. These feelings are valid.”

Most participants described XAIA as approachable, empathetic, and intelligent, but it’s worth noting that a few mentioned they would still prefer a human therapist if given the choice.

The Takeaway

Although this wasn’t exactly the largest study we’ve ever covered, the results provide early evidence that a combination of VR and AI therapy could be part of the solution to balancing behavioral health’s supply and demand equation. Over half of people facing mental health disorders aren’t getting the treatment they need, and if XAIA isn’t already a clearly better alternative than no treatment at all, new advances will only make the AI+VR path more promising going forward.

Turquoise Takes $30M Step Along Path To Transparency

Healthcare pricing looks like it’s on its way to becoming more transparent, with Turquoise Health landing $30M in Series B funding to shine an AI-powered light through the fog of medical costs.

Since launching in 2020 prior to hospital and payor transparency regulations, Turquoise has built a comprehensive database of negotiated prices for healthcare services, allowing patients to understand costs beforehand… similar to pretty much every other industry.

  • While that information is publically available through Turquoise’s website, payors and providers use the Turquoise platform to ensure they’re well-armed at the negotiating table and compliant with current regulations.
  • Turquoise also recently expanded its platform to include Clear Contracts, a tool that leverages AI to streamline the direct contracting process and uncover relevant insights from its dataset.

Over 160 partners already work with Turquoise, ranging from payors and providers to employers and device manufacturers looking to understand their markets. The latest funding will help onboard these recently-added clients into Turquoise’s growing product suite.

  • The funding will also accelerate the introduction of new AI features aimed at making Turquoise’s data as intuitive to use as possible, such as by allowing hospitals to upload their contract documents before asking the AI how certain terms compare.
  • Although transparency compliance has been heading in the right direction, Turquoise is also gearing up to help more organizations meet new reporting requirements that are just around the corner (which it did a great job outlining here).

Now that Turquoise seems to have cracked the code on compiling negotiated rates, it’s setting its sights on moving past data toward an integrated platform centered on administrative efficiency. New AI tools are almost purpose-built to wade through the PDFs where pricing policies hide, and Turquoise won’t be wasting any time incorporating those tools into its platform.

The Takeaway

Price transparency data has come a long way since 2021, and it’s safe to say that AI has come just as far. With transparency requirements only set to become more stringent, demand for platforms using AI to transmute that data into operational gold will only continue to grow, and Turquoise now has $30M to help ensure it’s healthcare’s alchemist of choice.

Closing the Women’s Health Gap

Despite living longer than men, women spend a quarter of their lives in worse health, prompting the World Economic Forum and the McKinsey Health Institute to publish an in-depth report to unpack the underlying factors driving the disparity.

The report explores the root causes of the women’s health gap, which span far beyond sexual and reproductive health even though the area is a go-to oversimplification for many gender differences. (Chart: Contributing Factors to Women’s Health Burden)

  • Just 5% of women’s health burden is related to gender-specific conditions (maternal and gynecological)
  • 47% stems from conditions that affect women either disproportionately (depression, auto-immune disease) or differently (AFib, colon cancer)
  • 43% comes from conditions that don’t affect women disproportionately or differently (ischemic heart disease, tuberculosis, etc.)

The large disparity resulting from conditions that impact everyone more-or-less equally can be attributed to several systemic issues, which the report does a great job outlining alongside possible solutions.

  • Better clinical trial design is needed to ensure equitable representation for conditions that affect women differently, such as incorporating male vs. female disease prevalence mix and using sex-specific thresholds for biomarkers.
  • Accurately assessing the prevalence of conditions such as endometriosis and menopause is needed to improve the notoriously underestimated metrics, which leads to underinvestment due to misunderstood market potential. 
  • Enhancing access to gender-specific care is critical to improving outcomes, which might include health systems implementing new guidelines (e.g, sex-specific cutoffs for biomarkers, discharge checklists) to guide decision making and minimize biases.

In typical McKinsey fashion, the report devotes significant real estate to the economic burden of the women’s health gap, which if closed could boost global GDP by $1T due to improved workforce participation. It’s also worth noting that 10 conditions contribute over half of the economic burden. (Chart: Economic Burden by Condition)

The Takeaway

Tackling the women’s health gap is essential for far better reasons than boosting GDP, but regardless of the justification, progress depends on addressing the issues outlined in this report. Glaring research gaps, disparities in care delivery, and underinvestment have led to massive disparities in women’s health, but they’ve also created a huge opportunity for those that can help to solve them.

Innovaccer Acquires Marketing and CRM Platform Cured

Innovaccer shook things up last week by making its first-ever acquisition, a move that positions healthcare marketing and CRM platform Cured as a cornerstone of its patient experience roadmap.

Although Cured’s platform might initially seem like an odd fit for Innovaccer’s portfolio of data analytics and population health solutions, the acquisition quickly starts to make sense in the context of Innovaccer’s three-pronged forward strategy:

  • Value – transitioning from fee-for-service to value-based care (the Health Cloud and Data Activation Platform)
  • Productivity – shifting from burnout to AI-driven productivity (the recently debuted Sara AI suite)
  • Experience – moving from encounter-based care to experience-driven care (where Cured comes in)

Cured leverages data and AI to help healthcare organizations boost their patient experience campaigns, not unlike the data-first approach that Innovaccer takes to the provider space.

  • Cured’s marketing and CRM platform engages patients throughout their care journey to build relationships, improve outcomes, and generate revenue – three areas where billing-focused EHR systems and bolt-on CRM platforms notoriously fall short.
  • It maintains a library of 80+ healthcare-specific engagement journeys and propensity models, which are poised to gain plenty more horsepower when combined with Innovaccer’s unified patient data platform and contact center.

As a cherry on top, Cured is adding over 20 health system and digital health clients – including Sutter Health, UCHealth, and VCU Health – to Innovaccer’s current roster of ~95 customers.

  • Cured’s three co-founders will also assume leadership roles within Innovaccer to help drive a CRM strategy that now revolves around delivering a Healthcare Experience Platform (HXP) as much as a customer relationship management solution.
  • While time will tell how different an HXP looks from a CRM, marrying Innovaccer’s 360 degree view of clinical, claims, and patient behavior data with Cured’s marketing and engagement prowess sounds like a solid way to unlock some powerful capabilities.

The Takeaway

Healthcare organizations have long struggled with either CRMs layered on top of EHRs built for other purposes, or industry-agnostic CRMs that need to be customized to fit their specific needs. By joining forces with Cured, Innovaccer is looking to combine its data intelligence and contact center capabilities with a marketing and engagement force that’s strong enough to overcome that struggle through a new type of Health Experience Platform.

Artisight Closes $42M to Put Eyes on Operational Inefficiency

Major inefficiencies are often caused by pixel-sized pain points that are hard to see one at a time, so Artisight just closed $42M in Series B funding to help hospitals combine those pixels into high resolution images of their operations.

To unlock new efficiency gains, Artisight is turning to new methods. Its Smart Hospital Platform consists of ambient IoT sensors coupled with two-way audio and video, improving the coordination of people and processes so that clinicians can focus on caring for patients.

  • In patient rooms, that looks like using cameras and microphones to support tasks such as fall prevention and pressure ulcer prevention, as well as more robust use cases like virtual nursing (popular among current partners like WellSpan).
  • In the OR, the same platform is used to automate documentation, enhance communication, and provide data for real-time decision making.
  • All of that data then feeds into Artisight’s platform to glean insights into process improvement and train its task-specific algorithms.

Although patients probably don’t jump at the idea of having a camera pointed at them during some of the most vulnerable situations of their lives, it’s also safe to say that many of them would prefer a camera over having their health deteriorate due to a preventable cause.

  • The same goes for providers, where the tension of having an observer is offset by the fact that the same observer is helping monitor patients, coordinate supplies, and reduce administrative burden.

The Series B is going toward scaling the Smart Hospital Platform across more organizations, as well as deeper into the 11 systems where it’s already deployed. 

  • Artisight is also looking to expand the number of workflows that can be improved or automated using its algorithms, and $42M should go a long way toward making that happen through new health system partnerships.
  • The partnership component is key, given that Artisight trains its algorithms locally to address specific issues at each site – an approach that seems to be resonating with the partner health systems that participated in the round.

The Takeaway

While Artisight’s quest to redefine hospital efficiency involves the unenviable task of introducing cameras into delicate situations, it believes that improving the outcomes of those situations is worth the effort, and it has a roster of strategic investors who seem to share that belief.

Rock Health 2023 Full-Year Funding Recap

Rock Health’s 2023 digital health funding numbers are in, and although they’re every bit as bleak as expected, there were some silver linings that could bode well for the year ahead.

Here’s 2023 by the numbers:

  • US digital health funding totaled  $10.7B across 492 rounds ($21M average)
  • Q4 funding totaled $1.9B across 122 rounds (lowest quarterly total since Q3 2019)
  • Unlabeled rounds accounted for a record 44% of annual total
  • Surprisingly no pronounced spike in startup shutdowns

Last year’s $10.7B funding total was the lowest seen since 2019, but Rock Health points out that the real story often gets missed by the headline number. (Chart: Funding Trend)

  • Most startups tend to raise every 12-18 months, however Rock Health’s database shows that 81% of US digital health startups that raised in 2021 or earlier haven’t closed a subsequent labeled round.
  • Silent rounds (quiet raises from existing investors), Series extensions, and unlabeled rounds appear to have been the tools of choice to stay afloat.

Rock Health’s predictions for 2024 

  • Labeled raises will return – The startups that extended their runway with creative financing will need to produce proven outcomes data or showcase new products to keep investors interested. This year will separate the best from the rest, and the latter group will be looking at adjusted valuations (down rounds) or restructured cap tables.
  • M&A pace will accelerate – 2023 failed to produce the uptick in M&A that was expected to be brought on by attractive valuations, due in part to “higher for longer” interest rates and market volatility. In 2024, getting acquired will start to look like the best path for startups struggling on the fundraising front. (Chart: M&A Trend)
  • The public market cohort will recalibrate After a year without a single digital health public exit, we should see a few of the late-stage players that delayed their listing to wait out market choppiness finally take the plunge, especially those with strong financials. (Chart: Digital Health Exits)

The Takeaway

While last year definitely delivered on “financial creativity” from nimble founders, the transition period can’t last forever, and Rock Health expects some startups will have to face the music in 2024 (i.e. raise at a reduced valuation, seek an acquisition, call it quits). Those are tough decisions to make, but the silver lining is that they’re also the decisions that will strengthen the sector in the long run (i.e. smaller cohort of stronger companies, platform synergies unlocked through M&A, and a more successful IPO class).

Nabla Kicks Off the Year With $24M Series B

Nabla hit the ground running in 2024 with the close of $24M in Series B funding, vaulting the startup’s valuation to $180M less than year after the US launch of its Nabla Copilot ambient AI assistant.

Nabla Copilot checks all the usual boxes for an automated clinical note solution, quickly transforming patient-provider conversations into note drafts that can be customized to meet different format preferences.

  • Since the US rollout in March of last year, Nabla Copilot has grown to over 20k users at small practices and larger systems alike, mostly split between primary care physicians (50%), mental health providers (30%), and a mix of other specialties.
  • While Paris-based Nabla maintains a strong position in the European market, it hasn’t wasted any time finding US customers, and recently chained together marquee partnerships with Permanente Medical Group and NextGen Healthcare.

Nabla’s approach to model development is where it starts to differentiate itself from a pack of equally hungry competitors like Abridge (which just closed its own Series B) and Nuance (which is full-speed-ahead with the deployment of DAX Copilot).

  • Although Nabla has historically leveraged GPT-4 to power its backend, it’s now focused on migrating toward a combination of homegrown and open source AI models like those championed by Meta AI Chief Yann Lecun, also an early investor.
  • By constantly testing and fine-tuning different models for specific tasks, Nabla is aiming to be one of the most nimble companies in the medical scribe arena, while also sidestepping the hefty licensing fees charged by commercial models.

The next step for Nabla outside of breaking its reliance on OpenAI is to launch a new solution geared toward automatically generating billing codes, which could debut before the end of the quarter. Mandarin, Portuguese, and Russian translation features are also on this year’s roadmap, and would add to Nabla’s existing capabilities for English, French, and Spanish.

The Takeaway

Nabla is making its agility the driving force behind its business strategy, turning away from generalist AI models in favor of a collection of more narrow algorithms designed to excel at specific use cases. It now has another $24M to fuel the transition, and also hinted that another $10M could be on the way as early as February.

Does Private Equity Spike Adverse Events?

Private equity firms are back under fire for their impact on healthcare, this time for driving an outsized number of adverse events at the hospitals they acquire.

A large study published in JAMA showed that Medicare patients at hospitals acquired by private equity firms went on to experience significantly higher rates of adverse events – such as infections and falls – within just three years of the acquisition.

After comparing data from over 660k hospitalizations at 51 PE-owned hospitals to data from 4.2M hospitalizations at 259 non-PE-owned control hospitals from 2009 to 2019, researchers found that patients at the PE-owned hospitals experienced 25.4% more hospital-acquired adverse events (+4.6 events per 10k hospitalizations).

The increase in post-PE adverse events was driven by:

  • a 27.3% increase in falls 
  • a 37.7% increase in central line-associated bloodstream infections (despite PE-hospitals placing 16.2% fewer central lines)
  • a doubling of surgical site infections from 10.8 to 21.6 per 10k hospitalizations (despite an 8.1% reduction in surgical volume)

Another interesting finding was that the PE-hospitals had a slightly lower rate of in-hospital mortality than the non-PE-controls, which the authors said was likely because of the shift in patient mix once PE acquires a hospital.

  • Patients at the PE-hospitals were modestly younger, less likely to be dual eligible, and more likely to be transferred to other acute care hospitals after shorter lengths of stay.

The authors point out that many private equity firms take on heavy amounts of debt to acquire hospitals and flip them within a short timeframe, which has led to over $1 trillion of private equity investment flowing into healthcare within the last decade alone.

The Takeaway

This study is the latest addition to the growing mountain of research calling attention to private equity’s business-first perspective on healthcare, which often leads to the prioritization of revenue generation over things like… caring for patients. It might not take much longer for that attention to turn into action, with the Senate Budget Committee recently launching an investigation into the impact of PE hospital ownership and the consequences of post-acquisition cost-cutting.

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