Category: Digital Health

Particle vs Epic: The Lawsuit Moves Forward

Posted on by Jason Barry

For the first time in history, Epic will have to face antitrust claims in court after it failed to dismiss Particle Health’s allegations that the EHR giant has been wielding its monopoly power to stifle competition.

Here’s the overly-simplified version. Particle combines health data from 270M+ patients’ medical records by aggregating “thousands of sources”… sources like Carequality.

  • Carequality is effectively one of the largest health information networks, facilitating data exchange between network members (like Particle) who agree to only query patient data for “Permitted Purposes” such as Treatment, Health Operations, or Public Health Activities.
  • The problem at the heart of the lawsuit arises due to the fact that Treatment is the only purpose that organizations like Epic are actually required to respond to, causing all sorts of companies to warp their true purposes to Treatment-shaped requests.

Particle vs. Epic. Particle’s case alleges that Epic used its EHR monopoly to hamstring competition in the market for “payor platforms,” which allow payors to retrieve patient data to make decisions about care and coverage.

  • Last spring, Epic said that Particle was allowing its customers to inappropriately label their Carequality data requests as Treatment, then proceeded to stop responding to EHR requests from 34 Particle customers.
  • Particle’s lawsuit alleged that Epic trumped up the Carequality accusations in order to block it from serving its payor platform customers.

Epic filed to dismiss all nine of Particle’s claims. On Friday, the judge sided with Epic on five of the nine claims, dismissing the allegations that Epic maintained a conspiracy to uphold its market dominance, as well as claims of defamation and trade libel.

  • However, the court declined to throw out all three of Particle’s federal monopolization claims, as well as a state claim that Epic had interfered with a business contract.
  • Those claims will move forward into discovery, and Epic will now have to turn over documents that can shed light on whether its practices withstand legal scrutiny.

The Takeaway

Get the popcorn ready. Epic’s motion to dismiss was only partially successful, meaning it will now have to actually admit, deny, or qualify Particle’s remaining allegations. That deadline is quickly approaching on September 16th – then the real legal fireworks can get started.

Justifying Healthcare AI Valuations

Posted on by Jason Barry

A stellar report from Flare Capital Partners suggests that there’s some surprisingly sound justifications for the sky-high valuations we’re seeing with healthcare AI companies.

Numbers talk. The report – based on an analysis of 4,500 digital health VC rounds and an exec survey – found that a record 58% of deals involved AI companies in H1 [Chart: AI Funding].

  • Over 10 healthcare AI startups joined the unicorn club in the last year, and the investor enthusiasm only kept surging after five exits over $1B: SmarterDx, Iodine Software, Machinify Health, Office Ally, and Tempus AI.
  • That’s resulted in AI-focused companies commanding valuations 50% higher than the healthcare industry average [Chart: Valuations]. 

What’s fueling the fire? Companies that handle administrative tasks like revenue cycle management and contact center operations are leading the pack, at least for now.

  • Administrative AI companies are shining by having LLMs help turn messy data into measurable ROI, but clinical support based on structured sources (ex. OpenEvidence) continues picking up steam [Chart: Category Adoption]. 
  • One of the best charts unpacks the DNA of market leaders, and it turns out quick deployments and immediate ROI work well regardless of category [Chart: Leaders]. 

It’s not just FOMO. Flare’s exec survey found that half are already carving out over 10% of their IT budget for AI, and 83% plan to dial that percentage up going forward.

  • There’s a meaningful level of product-led “pull” driving AI adoption, especially compared to the “push” that drove past cycles like EHRs.
  • There’s also a high amount of confidence that AI startups will push into new areas (ex. scribing to RCM), and investors are giving them a lot of credit for unrealized growth based on what customers are saying about future budgets and expansion plans.

The Takeaway

Healthcare AI has moved from experimentation to execution, with wider adoption, bigger budgets, and value concentrating around market leaders. Flare doesn’t necessarily believe that justifies billion-dollar valuations for companies that are years away from profitability, but it at least sheds light on why the top players are blasting into orbit.

Make Health Tech Great Again

Posted on by Jason Barry

CMS just wrapped its Make Health Tech Great Again event at the White House, and it unveiled an ambitious new strategy to modernize how healthcare data is exchanged.

This time is different. We’ve heard similar promises before, but the administration plans to “stop theoretical debates and start delivering real results” by taking a two-pronged approach.

  • The first priority is establishing a CMS Interoperability Framework to enable seamless information exchange between patients and providers. 
  • The second step is building a Health Tech Ecosystem to improve access to personalized tools so that patients have the resources they need to make better health decisions.  

The CMS Interoperability Framework includes voluntary criteria for data sharing across different network types – health information exchanges, EHRs, and tech platforms.

  • The blueprint covers everything from patient and provider access to transparency and security, complete with implementation guidelines co-developed with the early adopters. It’s completely aligned with TEFCA, which CMS is still participating in.
  • Over 20 networks pledged to meet the criteria to become CMS Aligned Networks, such as delivering data through FHIR APIs, updating the national provider directory, and providing metrics on network queries for patient records.

The Health Tech Ecosystem is a “standards-based digital health environment” that will integrate apps, EHRs, and care delivery organizations with the new CMS Aligned Networks. 

  • The ecosystem will leverage these integrations to develop new solutions for: (1) managing diabetes and obesity, (2) conversational AI to help check symptoms and navigate care, (3) “killing the clipboard” by replacing paper forms with digital solutions.
  • Over 30 companies and 11 major health systems signed on to “deliver results for the American people” by the first quarter of 2026, and the full roster includes some of the biggest names in healthcare.

The Takeaway

We apparently won’t have to wait long for the CMS Interoperability Framework and Health Tech Ecosystem to deliver results, although what those deliverables will look like remains to be seen.

Samsung Leans In On Healthcare With Xealth Acquisition

Posted on by Jason Barry

It was already shaping up to be a great year for digital health exits, and Samsung just kicked things up another notch by acquiring tech integration platform Xealth.

Xealth was the first spin out from Providence’s Digital Innovation Group back in 2017. The platform integrates 70+ partner solutions for everything from RPM to patient engagement into a single user interface that allows providers to manage them within their existing workflows.

  • That not only allows clinicians to avoid juggling separate apps, but it also gives health systems an orchestration layer for controlling the data and painting a complete picture of their patients.
  • Over 500 hospitals are already in Xealth’s network, and they’ll now be gaining access to Samsung’s connected care ecosystem when the acquisition gets finalized.

Samsung’s no newcomer to healthcare. It’s fresh off another acquisition with prenatal ultrasound startup Sonio, and has been loading up its wearables with FDA-cleared features like sleep apnea detection and irregular heart rhythm monitoring.

  • It’s also developing a new health hub to let users share Galaxy Watch and Galaxy Ring data with their providers between visits, which would be a solid step toward making the data clinically useful – assuming they can get docs to use it.
  • A standalone Samsung health hub sounded like a tough pitch without a way to plug into provider workflows, which happens to be exactly what Xealth brings to the table.

Samsung isn’t just acquiring an integration platform, it’s acquiring a bridge between its consumer ecosystem and actual healthcare delivery.

  • Xealth CEO Mike McSherry said the move will enable “health data from wearables to fill in context that is missing to hospitals and bring more data analysis possibilities that were not available just with clinical records.”
  • Decent enough reason for an acquisition, but then again so is hitting a growth ceiling and needing a Korean tech giant with deep pockets to help you keep scaling, which is the logic that McSherry gave to MedCityNews.

The Takeaway

Samsung and Xealth are keeping the M&A momentum rolling, and we’re already on pace to double 2024’s deal volume. So far this year we’ve seen an end to the IPO drought thanks to Hinge and Omada, Arcadia just got scooped up by a PE firm, and now Big Tech is coming in hot with platform plays. Who said there’s no exit in digital health? 

Catching the Right Wave in Digital Health

Posted on by Jason Barry

The ocean of digital health innovation seems to have a wave of new trends breaking every year, which is why Rock Health teamed up with LG NOVA to give enterprises a framework for “discerning promising currents from passing swells.”

Riding the wrong hype cycle can strain health systems’ limited resources with costly implementations or investment mistakes, so Rock Health divided the digital health landscape into 50 segments to see which show the most promise based on:

  • Value potential (VP) – share of total digital health venture funding, disease burden (degree of economic cost), and addressable population size.
  • Capturable opportunity (CO) – funding velocity, funding concentration (share of capital already held by large companies), and market maturity.

The “Goldilocks” waves include segments that are big enough to support a large market and ripe enough (but not too ripe) for new entrants to gain traction. [Chart: Strongest DH Segments]

  • High VP, High CO: Weight Management stood out with the highest scores in both VP and CO. The disease burden and funding levels don’t get much higher, and the balance of early- and late-stage companies signals a strong market with room for new entrants. 
  • Low VP, High CO: Patient Adherence was docked for its smaller share of overall digital health funding, but stood out for its favorable funding concentration and market maturity.
  • High VP, Low CO: Disease Monitoring had the opposite mix. The segment enjoys a large slice of the funding pie, but most of that is getting eaten by a few mega companies.
  • Low VP, Low CO: Dermatology received the low marks across the board, with poor scores for funding velocity, disease burden, and overall share of funding.

To complement its framework, Rock Health analyzed over 70 digital health unicorns to find other success signals from waves that the industry is already riding. Unicorns tended to:

  • separate from the herd with larger Series C rounds (ex. Abridge)
  • support care delivery or access and are often consumer-facing (ex. Wheel)
  • be therapeutic area agnostic w/ broad addressable markets (ex. Included Health)

The Takeaway

Timing the digital health market is no small feat, but Rock Health’s framework provides a helpful tool for those looking to catch the best wave with their investments and implementations.

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.

CB Insights State of Digital Health Q1 2025

Posted on by Jason Barry

CB Insights put out its State of Digital Health report for the first quarter, and it looks like it’ll take more than a stock market nosedive to stop the health tech rebound.

Although some of the themes might sound familiar to those that keep up with Rock Health’s analysis – primarily more funding directed toward fewer companies – CB Insights adds some interesting findings that it broke down into four main buckets.

Investors are concentrating their capital. Total VC funding jumped 47% QoQ to reach the highest level seen since 2022, even as the total number of rounds dropped 9%. (Obligatory Disclaimer: CB Insights’ definition of “digital health” includes more AI drug discovery and clinical trials than Rock Health).

  • One of the most striking changes was in investment size: median late-stage checks grew 96% QoQ, compared to 41% for mid-stage and 25% for early-stage rounds. [Chart 1]

Mega-rounds are back, and AI is claiming most of them. Funding from $100M+ mega-rounds surged to $2.5B across 11 deals in Q1, capturing 46% of total investment (highest since 2021).

  • AI startups secured 8 of these 11 mega-rounds, a strong signal of where investors are expecting outsized returns. AI startups pulled in 60% of Q1 funding [Chart 2]

Billion-dollar moves mark an M&A revival. M&A activity surged 27% to 51 transactions in Q1, with the U.S. demonstrating “renewed market confidence in high-value digital health platforms.”

  • Q1 featured two $1B+ acquisitions, with Roper Technologies acquiring autism care software provider CentralReach for $1.6B, and Paulus Holdings picking digital pharmacy platform Alto Pharmacy for $1.5B. [Chart 3]

Unicorn creation rebounds, driven by AI platforms. Digital health saw 6 new unicorns minted in Q1, more than all of 2024 and the highest quarterly total since Q2 2022.

  • With half focused on AI for provider workflows, the report suggests investor conviction is highest where AI directly supports care delivery. [Chart 4]

The Takeaway

CB Insights just delivered more evidence that the digital health market is impressively resilient, even if its definition of that market is a little wider than we’re used to.

Rock Health Q1 2025 Funding Recap, Late-Stage is Back

Posted on by Jason Barry

In a first quarter packed with uncertainty and policy shifts, digital health didn’t skip a beat.

Rock Health’s Q1 Digital Health Market Update counted $3B in venture funding across 122 rounds (up from $2.7B in Q1 2024), and it sounds like there’s finally some optimism in the air again.

Early-stage startups dominated the deal count, with Seed, Series A, and Series B raises comprising 83% of labeled rounds in Q1 (in line with 86% last year).

  • Those included some extra-large investments like Achira’s $33M Seed, Open Evidence’s $75M Series A, and Hippocratic AI’s $141M Series B.

The bigger story was the triumphant return of late-stage mega-rounds, headlined by Innovaccer’s $275M Series F and Abridge’s $250M Series D.

  • While Q1 only clocked five raises that were Series D or later, this cohort lifted the quarter’s median Series D+ round size to $105M – almost double the $55M median Series D+ size seen in 2024.

Success in this climate requires “leapfrogging.” Rock health devoted a large section of the report to its four strategies for leapfrogging over market shifts using their unique circumstances.

  • Tapestry Weaving – using M&A to integrate new features and offerings into your capability mix. Of the 46 M&A deals tracked in Q1, 67% involved digital health startups acquiring other digital health startups, up from 53% across 2024.
  • Modular Tech Stacks – designing flexible infrastructure that reduces dependencies and allows for new integrations. Lumeris’ newly introduced Tom AI platform is a perfect example, leveraging capabilities of 60+ LLMs depending on use case.
  • Platforms and Channel Partners – building platforms that can plug in channel partners and key experiences. Q1 was brimming with good examples, including Eli Lilly bringing GLP-1 partners onto Lilly Direct and Teladoc expanding its Connected Care Program.
  • Engaging Disruptors – embracing solutions that challenge the status quo. Rock Health highlights Labcorp’s participation in Teal Health’s $10M raise, which proactively aligned it with an in-home cervical cancer screening startup that’s disrupting traditional pap tests.

The Takeaway

Following a year of valuation corrections and down-rounds, digital health VCs are showing signs of life, but we’ll have to wait until Rock Health’s next report to see if the momentum can stand up to a trade war.

Dr. Oz Sheds Light on Potential Priorities at CMS

Posted on by Jason Barry

Dr. Mehmet Oz appears to have passed his Senate testimony with flying colors, and the surgeon-turned-TV-personality’s confirmation as CMS administrator seems all but locked in.

The nearly three hour testimony wandered through a range of topics with a direct impact on digital health, giving us a first look at what might change – or get axed – in the years ahead.

  • Prior auth topped the hit list. The most concrete policy idea that Oz offered was limiting the number of procedures subject to prior auth in Medicare Advantage to 1,000, a steep reduction from ~15,000 today. Oz said the “pre-approval process is expensive and wastes time,” especially when we have AI that can “pretty quickly adjudicate whether you should have to wait even a day to have the medication that will get you out of pain.”
  • AI was a major theme throughout the testimony. Oz plans to use AI to help doctors “optimize care” and focus on their patients, making several references to its ability to augment treatments and cut down on paperwork. He also said “we should be using AI within the agency to identify [fraud] early enough so that we can prevent it.”
  • Medicare Advantage was another big focal point. Oz cited MedPAC research showing that MA is more expensive than traditional Medicare, but attributed much of the cost to upcoding from payors. He promised to hit the problem head-on with an AI hammer.
  • Medicaid was a mixed bag. While Oz said he fully supports the program, he also agreed that spending has gone off the rails since the ACA, and was in favor of implementing work requirements. Oz sidestepped questions about potential cuts by saying “the way you protect Medicaid is by making sure that it’s viable at every level,” which includes having enough practitioners, compensating them fairly, and improving patient access.

The Takeaway

It’s hard to take the other side when a charismatic doctor vows to fix a broken healthcare system, but it’s also tough to tell the difference between empty promises and real reform until action backs it up. Part of that will have to wait until the actual confirmation, but as Oz put it, “part of this is just recognizing there is a new sheriff in town.”

HIMSS 2025 Recap, Launches, and Major Announcements

Posted on by Jason Barry

It’s the final day of HIMSS 2025 in Las Vegas, and although the exhibitors are still diligently manning their stations, most of the announcement cards have already been dealt and it’s time to round up the biggest stories from the show.

HIMSS centered around the familiar themes of digital transformation, cybersecurity, artificial intelligence, and workforce development, but the single biggest trend landed at the intersection of all four: agentic AI.

The industry is embracing AI agents everywhere from the bedside to the contact center, and it was amazing to see how quickly last year’s hallucination worries gave way to what feels like a pedal-to-the-metal approach to new AI rollouts. 

You would have been hard pressed to find a dozen booths in the exhibit hall that didn’t mention AI, and the same could be said about the announcements from the show.

HIMSS 2025 major announcements, launches, and partnerships:

  • 1upHealth debuted the latest release of its 1up Platform, which introduces a modern lakehouse architecture designed to scale with healthcare’s growing data needs and improve control over real-time management and analytics. Check out our interview with CEO Andrew Boyd for the full overview.
  • Arcadia is bringing its longitudinal patient data to League’s CX platform to let healthcare orgs deliver individualized health recommendations and activate consumer engagement through AI and behavioral science. CEO Michael Meucci shares all the details.
  • eClinicalWorks can now connect and exchange data with PointClickCare applications in long-term and post-acute care settings to support remote and bedside physician encounters.
  • Elsevier expanded its flagship ClinicalKey AI clinical decision support solution through new workflow integrations with Epic and DrFirst’s iPrescribe platform, not to mention the launch of a dedicated mobile app.
  • Google Cloud rolled out new GenAI capabilities in Vertex AI Search for healthcare, including a multimodal search feature called Visual Q&A that ingests tables, charts, and diagrams to build a more comprehensive view of patient health.
  • InterSystems debuted its IntelliCare AI-powered EHR that includes an AI assistant to enable natural language commands, automatic patient history summarization, real-time note generation, and prepopulated billing codes.
  • Kontakt.io bolstered its Responsive Care Operations platform with Kio Agents, which help prioritize day-to-day management of patient flow, assets, and nurse staff while forecasting potential bottlenecks and dynamically redistributing resources in real-time.
  • Medallion enhanced its automated credentialing and compliance capabilities to support Joint Commission standards with electronic privileging workflow management and automated submission of privileging applications to partner hospitals.
  • Microsoft took the lid off Dragon Copilot, an AI assistant that combines the natural language voice dictation of Dragon Medical One with the ambient listening capabilities of DAX Copilot to support everything from documentation and after-visit summaries to referral letters and clinical evidence summarization.
  • Notable released the next generation of its Flow Builder, which rounds out the solution with a new Builder Assistant for AI-powered workflow creation, intuitive visualizations of data flowing through the automations, and granular role-based access controls.
  • Rush University System for Health expanded its partnership with Suki and will be deploying the AI clinical documentation assistant system-wide, allowing clinicians across 28 specialties to generate patient summaries and simplify coding.
  • RevSpring unveiled SeatMate, an AI assistant that guides customer service reps with intelligent scripting, infuses every conversation with patient insights, and enhances self-service through conversational chat capabilities.
  • Salesforce debuted Agentforce for Health, a library of pre-built agent skills to streamline tasks like benefits verification, clinical trial recruitment, provider search & scheduling, care coordination, and customer service.
  • Surescripts released its 2024 Annual Impact Report, highlighting its Touchless Prior Authorization capabilities that helped patients get medications faster by reducing the average time to approve a prior auth from over an hour to just 34 seconds.
  • symplr launched the first of many AI solutions coming to its symplr Operations Platform, a symplrAI Evidence Analysis chatbot designed to accelerate clinical research and streamline the medical device and technology decision-making process for health plans.
  • Talkdesk revealed its AI Agents for Healthcare, which not only automate common patient and member inquiries, but can also schedule appointments, verify benefits or prior auths, and manage prescription refills in any language.
  • TigerConnect announced the general availability of its TigerConnect Pre-Hospital solution that streamlines a wide range of EMS, ED, and transfer workflows to improve patient throughput and outcomes (think better prep for patient arrival and digitized transfer coordination).
  • Withings published an analysis of 3.4M smart scale users, finding that 38% of people classified as “overweight” and 2% classified as “normal” on the BMI scale actually have an unhealthy amount of fat – based on their body composition analysis – and should seek further screenings (6% of those with an “obese” BMI actually had a healthy body composition and should be considered “healthy”).
  • Wolters Kluwer Health is integrating UpToDate with Microsoft Copilot Studio to deliver patient-specific, evidence-based medical content through Microsoft Dragon Copilot ambient listening and other point of care workflows.
  • Zoom announced the public beta of Zoom Workplace for Clinicians, building on its partnership with Suki to automatically generate visit notes for both virtual and in-person appointments by simply clicking on the ‘Clinical Notes’ icon in the Zoom Workplace app.

We hope that everyone had an awesome time if you made it to Vegas, and welcome all of our new readers that we met at the show. Stay tuned for a deeper dive into some of these announcements next week.

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