Month: May 2025

PHTI Gives High Marks to Virtual Mental Health Solutions

Posted on by Jason Barry

Virtual mental health solutions were the latest segment to fall under the piercing gaze of the Peterson Health Technology Institute, and in typical PHTI fashion the reviews were mixed.

The evaluation incorporated over 5,000 articles, input from clinical advisors, and interviews with depressed or anxious patients to evaluate three kinds of mental health solutions on their clinical effectiveness and economic impact:

  • Self-guided solutions – content that people can work through on their own, typically offered directly to employers or health plans (AbleTo, Dario, Headspace, Learn to Live, Meru Health, SilverCloud, Talkspace, Teladoc)
  • Prescription digital therapeutics – FDA-cleared interventions often used in conjunction with clinician-supervised outpatient treatment (DaylightRx, Rejoyn)
  • Blended-care solutions – build on self-guided treatment with integrated virtual care teams of therapists and psychiatrists (AbleTo, Brightside, Headspace, Koa Health, Lyra, Meru Health, Modern Health, Spring Health, Talkspace, Teladoc)

The good news? All 15 of the solutions produced meaningful improvements in symptoms of anxiety and depression, especially for patients not already in therapy.

The catch? While these solutions have the potential to improve access and outcomes, their net impact on overall spending varies by payor and category.

  • Self-guided solutions demonstrate clinically meaningful improvements in both anxiety and depression (6.9-point reduction in PHQ-9), with a relatively low cost (~$2 PMPM) that’s estimated to reduce spending in commercial settings by $0.30 PMPM.
  • Prescription digital therapeutics deliver equally strong symptom improvement, and because they’re expected to be reimbursed on a per user basis (~$280 per episode) rather than across all plan members, they save an estimated $0.72 PMPM.
  • Blended-care platforms show the strongest clinical outcomes, but with pricing models (~$6 PMPM plus $792 in annual therapy costs per user) that tend to increase overall health spending by an estimated $2.10 PMPM.

The Takeaway

PHTI gave virtual mental health solutions a glowing report card, and it seems like even the lone negative review – blended-care platforms – have their place for patients with severe symptoms.

SmarterDx, Thoughtful.ai, and Access Healthcare Form Smarter Technologies

Posted on by Jason Barry

New Mountain Capital just hit us with one of the biggest blockbuster mergers of the year, combining portfolio companies SmarterDx, Thoughtful.ai, and Access Healthcare into a new RCM powerhouse dubbed Smarter Technologies.

Payors and providers are at war over every dollar, and Smarter is leveling the battlefield by arming health systems with a comprehensive revenue cycle management platform built on the unique strengths of its founding companies. That includes:

  • SmarterDx’s clinical AI for revenue integrity and care quality
  • Thoughtful.ai’s agentic AI for healthcare operations and revenue cycle automation
  • Access Healthcare’s established RCM and outsourcing expertise

As a combined force, Smarter’s “Automation and Insights Platform for Healthcare Efficiency” includes three core pillars, complete with a sleek intro video for the visual learners.

  • Nebula trains and deploys virtual AI agents that can automate the resolution of up to 70% of revenue cycle tasks while adjusting on the fly to unexpected payor responses.
  • Overwatch is the “lowest cost-to-serve global workforce platform,” enabling healthcare orgs to slash labor costs and lost collections with quality guarantees of 99%.
  • Spotlight delivers AI-driven clinical insights to surface pre-bill revenue and augment claims adjudication, but can be used at any stage of the rev cycle to optimize collections.

“Rip-and-replace” isn’t an approach that many health systems are eager to risk with their entire RCM systems, which is why Smarter CEO Jeremy Delinsky emphasized the platform’s modularity during his excellent Slice of Healthcare interview.

  • Smarter’s menu of EHR-agnostic solutions target specific areas like patient eligibility verification, prior auths, or AR followups – allowing its partners to adopt new AI capabilities without overhauling their existing tech stacks.
  • That leaves plenty of room to layer on more solutions down the road, and Smarter is already serving over 200 clients while managing 400M+ transactions annually. 

The Takeaway

It’s easy enough to announce a massive merger, but integrating three separate companies is a whole different story. Smarter Technologies has all the makings of a platform that can be more than the sum of its parts, but if it wants to ensure that more health systems have the margin to fulfill their mission, the real work is just getting started.

Cohere Raises $90M for AI Prior Authorizations

Posted on by Jason Barry

Cohere Health just locked in $90M of Series C funding to keep doing what it does best, offloading painful prior authorization processes from humans to AI.

Cohere works with health plans and risk-bearing providers to automate prior auth workflows and accelerate time to care… or at least quicker denials.

  • The platform’s “precision clinical insights” mean up to 90% of requests can be auto-approved, slashing administrative burden and opening up bandwidth for more collaboration between physicians and payors on critical cases.
  • Cohere’s been moving quickly. It’s raised 200M since launching in 2019, and now processes over 12M prior auths for 600k+ providers annually.

As an early mover in the booming segment, Cohere is doing more than digitizing an outdated prior auth system.

  • Its AI facilitates new ways for plans and providers to collaborate while incorporating the best clinical evidence / guidelines, an approach that seems to be working.
  • Cohere boasts a 93% provider satisfaction rating, and is now setting its sights on other areas of the healthcare ecosystem.

The Series C funds will accelerate Cohere’s next phase of growth, which involves scaling up its Cohere Unify platform and adding a thick layer of AI paint to the entire portfolio.

  • Cohere Unify not only streamlines payor-provider collaboration, but also modernizes utilization management by personalizing provider workflows and optimizing engagement with real-time performance data.
  • These capabilities are the foundation for Cohere’s broader vision of transforming clinical decision-making, and it sounds like we won’t have to wait long to see them expand to new use cases like synthesizing records when multiple departments are involved.

The Takeaway

Prior authorizations are a pain, full stop. If Cohere can use its Series C to give clinicians more time practicing at the top of their license instead of going back and forth with payors, that seems like a great outcome all around.

OpenAI Dives Into Healthcare With HealthBench

Posted on by Jason Barry

OpenAI is officially setting its sights on healthcare with the launch of HealthBench, a new benchmark for evaluating AI performance in realistic medical scenarios.

HealthBench marks the first time the ChatGPT developer has taken a direct step into the industry without a partner to hold its hand.

  • Developed with 262 physicians from 60 countries, HealthBench includes 5,000 simulated health conversations, each with a custom rubric to grade the responses.
  • The conversations “were created to be realistic and similar to real-world use of LLMs,” meaning they’re multi-turn and multilingual, while spanning a range of medical specialties and themes like handling uncertainty or global health.

Here’s how current frontier models stacked up in the HealthBench test.

  • OpenAI’s o3 was the best performing model with a score of 60%
  • xAI’s Grok 3 ranked second with a score of 54%
  • Google’s Gemini 2.5 Pro followed close behind at 52%

All three leading models outperformed physicians who weren’t equipped with AI, although physicians outperformed the newer models when they had access to the AI output.

  • The paper also reviewed other LLMs like Llama and Claude, but unsurprisingly none of them scored higher than OpenAI’s model on OpenAI’s own test.

Even the best models came up short in a few common places, AKA areas that developers should focus on to improve performance.

  • Current AI models would rather hallucinate than withhold an answer they aren’t confident on, obviously not a good trait to bring into a clinical setting.
  • None of the leading LLMs were great at asking for additional context or more information when the input was vague.
  • When AI misses, it misses bad, as seen in the sharp quality dropoff with the worst 10% of responses.

The Takeaway

Outside of giving us yet another datapoint that AI is catching up to human physicians, HealthBench provides one of the best standardized ways to compare model performance in (simulated) clinical practice, and that’s just what the innovation doctor ordered.

Chronic Care Startup Omada Files for IPO

Posted on by Jason Barry

The IPO winter might finally be over after chronic care startup Omada Health filed to go public just a few short weeks after Hinge broke the ice.

The digital health darling is best known for its virtual diabetes management programs, but has grown into a comprehensive offering for hypertension, MSK (courtesy of its 2020 Physera acquisition), and a GLP-1 Care Track that drives sustainable results through behavior change.

The S-1 vital signs are mostly encouraging:

  • Omada generated $55M in Q1 revenue, up 57% YoY.
  • Gross margin is strong and getting stronger at 60%.
  • 2024 revenue climbed 38% to $170M.
  • Profitability remains elusive with a $47M loss last year.

Omada has more than 2,000 customers, primarily employers and health plans, with 679k members enrolled in at least one of its programs.

  • Members engage an average of 30 times per month, and over half are still active at the one-year mark.

A key part of Omada’s growth story is its partnership with Cigna, which made the GLP-1 Care Track a core component of Evernorth’s EncircleRx program for employers looking to manage the explosion of interest in the drugs.

  • Most of Omada’s 2024 revenue came directly from Cigna (55%), a double-edged sword considering that investors don’t exactly love having that many eggs in one basket.

Looking ahead, Omada plans to keep producing more evidence that its behavior change interventions make a meaningful impact on long-term success with GLP-1s.

  • The first wave of digital health IPOs – think Teladoc and Amwell – banked on convenience over outcomes and eventually got burned.
  • Omada is setting out to prove that the second wave can truly move the needle on outcomes and costs, making them non-negotiables rather than nice-to-haves.

The Takeaway

There’s a lot riding on these IPOs. If Omada and Hinge can stick the landing, it could be the spark that reignites investor confidence in digital health. No pressure, we’re all rooting for you.

Carta Healthcare Closes $18.25M for Data Abstraction AI

Posted on by Jason Barry

Manual clinical data abstraction is a prime target for AI automation, and Carta Healthcare is looking to hit the center of the bullseye after raising $18.25M of Series B1 funding.

Carta’s data abstraction platform leverages AI and a team of expert abstractors to automate the collection of clinical data and surface actionable insights.

  • The platform converts both structured and unstructured data into standardized datasets, giving healthcare orgs a foundation of high-quality data to build on. 

Although AI’s potential in the data abstraction arena has attracted an army of new competitors, Carta’s been duking it out against manual workflows since 2017.

  • That gave it a big head start to refine its tech and build trust with partners, many of which participated in the round, including MemorialCare, Memorial Hermann, and MGB.
  • Carta plans to put the new capital toward expanding its customer footprint, particularly in the life sciences market where it can help match patients to clinical trials using AI it acquired from Realyze.

The Takeaway

Traditional methods of data abstraction are about as labor-intensive and time-consuming as you can imagine, which makes them ideal targets for AI solutions and startups like Carta that are bringing them to market.

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More Reasoning, More Hallucinations for LLMs

Posted on by Jason Barry

Better reasoning apparently doesn’t prevent LLMs from spewing out false facts.  

Independent testing from AI firm Vectara showed that the latest advanced reasoning models from OpenAI and DeepSeek hallucinate even more than previous models.

  • OpenAI’s o3 reasoning model scored a 6.8% hallucination rate on Vectara’s test, which asks the AI to summarize various news articles.
  • DeepSeek’s R1 fared even worse with a 14.3% hallucination rate, an especially poor performance considering that its older non-reasoning DeepSeek-V2.5 model clocked in at 2.4%.
  • On OpenAI’s more difficult SimpleQA tests, o3 and o4-mini hallucinated between 51-79% of the time, versus just 37% for its GPT-4.5 non-reasoning model.

OpenAI positions o3 as its most powerful model because it’s a “reasoning” model that takes more time to “think” and work out its answers step-by-step.

  • This process produces better answers for many use cases, but these reasoning models can also hallucinate at each step of their “thinking,” giving them even more chances for incorrect responses.

The Takeaway

Even though the general purpose models studied weren’t fine-tuned for healthcare, the results raise concerns about their safety in clinical settings – especially given how many physicians report using them in day-to-day practice.

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Teladoc Adds In-Network Therapy With Uplift Acquisition

Posted on by Jason Barry

Teladoc wrapped up a bumpy Q1 with the acquisition of virtual therapy provider Uplift, a move that it hopes will help turnaround its persistently problematic BetterHelp segment.

UpLift provides virtual therapy, psychiatry, and medication management services – all crucially covered by most major commercial payors, as well as Medicare and Medicaid.

  • The deal adds over 100M covered lives and a network of 1,500 mental health clinicians, which Teladoc plans to integrate with BetterHelp to give its customers access to in-network treatment options.

The $30M acquisition shores up one of the most glaring weaknesses of BetterHelp’s cash-pay-only DTC mental health offerings, with Teladoc citing out-of-pocket costs as one of the primary barriers preventing potential customers from signing up.

  • UpLift generated $15M of revenue last year – a drop in the bucket compared to the $1B that BetterHelp brought in – but it’s anyone’s guess as to how much of a lift Teladoc will see from the “significantly higher conversion rates” it expects for new members.

In the wake of the pandemic, BetterHelp has eroded from one of Teladoc’s most promising assets to a constant pain point on investor calls, including a $790M impairment in Q2 2024.

  • Setting aside the scathing short report that accused BetterHelp therapists of using ChatGPT to respond to patients during sessions, the segment’s also been facing pressure from rising ad costs that have made it difficult to keep user growth steady.
  • Teladoc now expects BetterHelp revenue to fall between 7.5% to 11.25% next quarter, before returning to form later in the year thanks to stickier relationships courtesy of Uplift.

It’s also interesting to see Teladoc pick up another company at a 2X revenue multiple after paying the same rate for Catapult Health back in February.

  • Not exactly a lofty valuation for an established company with real revenue, especially considering the fairytale multiples we’re seeing startups command in AI Land.

The Takeaway

Acquiring Uplift’s existing payor partnerships should definitely accelerate BetterHelp’s ability to start accepting insurance, a much needed move given its recent difficulty wrangling new customers. Although an immaculate M&A track record isn’t something that Teladoc has going for it, this particular acquisition seems to make a lot of sense on paper.

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