Category: Uncategorized

Menlo Ventures: The State of AI in Healthcare

Posted on by Jason Barry

Of all the AI market overviews that have hit the wire recently, none have generated more buzz than Menlo Venture’s State of AI in Healthcare. One look at the report and it’s easy to see why.

First things first. Here’s a couple high-level callouts before we zoom in on the details:

  • Healthcare AI spending has already topped $1.4B in 2025 – 22% of healthcare orgs have now implemented domain-specific AI tools, a 7x increase over last year [Chart 1].
  • 85% of all healthcare AI spend is currently flowing into startups (faster cycles, clearer ROI), rather than incumbents (often layering AI on legacy platforms) [Chart 2].

Providers accelerate, payors deliberate. Providers dominate AI adoption in healthcare, especially health systems – supplying $1B of the $1.4B total spending.

  • Outpatient providers represent $280M, while payors surprisingly contribute just $50M.

The song remains the same. Menlo found that leading health systems are choosing AI based on themes we’ve covered plenty of times before. They prioritize:

  • Tech maturity – providers prioritize production-ready solutions that perform at scale. 
  • Risk level – tools that don’t directly interface with patients see less scrutiny.
  • Quick value – a 2025 favorite, rapid ROI and organizational confidence are essential. 

What solutions check all the boxes? Two categories account for the lion’s share of AI budgets, in large part because they quickly address acute operational pain points.

  • Ambient documentation ($600M), no surprise here. This puts it in perspective [Chart 3].
  • Coding and billing automation ($450M), hard to think of a quicker ROI.

Bonus chart. Here’s the closest we’ll ever get to official ambient AI market share [Chart 4].

IT is good, services are great. Total U.S. healthcare administration spending reaches $740B annually, yet IT spend represents <10% of that. The report has a top tier breakdown [Chart 5].

  • AI’s frontrunners found success carving into existing IT budgets, but the future victors could be the teams that convert services dollars into software dollars for the first time.
  • AI offers the ability to automate workflows that have always been “people-intensive” – prior auth, patient engagement, front-office RCM – and Menlo believes 80% of this market is still completely untapped.

The Takeaway

Healthcare’s AI moment is here, and most of its potential has hardly been touched.

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.

Amwell Launches Comprehensive Behavioral Health Program

Posted on by Jason Barry

It’s officially #MentalHealthAwarenessMonth, making it a great time to show some genuine support to your friends and colleagues, and an opportune moment for virtual care providers like Amwell to launch behavioral health solutions.

Amwell recently debuted the Amwell Comprehensive Behavioral Health Program, combining the digital cognitive behavioral therapy programs of SilverCloud Health (acquired last year) with virtual care provided by psychiatrists from Amwell Medical Group.

  • Members undergo individual evaluations before selecting either self-guided or coach-supported care, and can then be referred to virtual therapy and psychiatry as needed.
  • The solution can be tailored to meet specific population needs, enabling payors and providers to deliver personalized experiences for various severities and care delivery preferences.

The new program extends Amwell’s growing suite of behavioral health tools, which includes Amwell Psychiatric Care for acute psychiatric needs and ED clinical support, as well as the SilverCloud Health Family Support Suite to help new parents and their children manage mental health concerns.

  • Behavioral health is one of healthcare’s most capacity-strained areas, and the pandemic has only exacerbated the problem.
  • Amwell cites research that 60% of US counties don’t have a single psychiatrist, and that 41% of adults have felt anxious or depressed during the pandemic.

The Takeaway
Amwell is clearly committed to quickly scaling its virtual behavioral health portfolio, which is a pretty natural direction to pursue given the huge need and telehealth’s ability to help address it. Behavioral health might also be one of the only clinical areas where telehealth represents a truly preferred substitute to in-person care, and Amwell’s recent investment in the area should go a long way toward making its services durable as patients begin returning to in-person care.

GoodRx Launches Online Health Resource

Posted on by Jason Barry

Digital pharmacy tool GoodRx recently launched an expansive online resource called GoodRx Health to provide research-based answers to popular health questions.

GoodRx Health takes a different approach than other consumer health destinations, offering actionable insights through GoodRx Answers and a Health Wizard for navigating difficult decisions.

  • GoodRx’s current services include app-based prescription tracking and a telehealth platform called GoodRx Care, which provides virtual primary care services.
  • GoodRx Help adds new ways for users to explore the company’s library of Video Explainers and editorial content, a large strategy shift that pushes the company beyond its current role as a comparison tool.
  • GoodRx’s new strategy targets every stage of a consumer’s healthcare journey, uniting the company’s platforms by directing diagnosis-seeking consumers from GoodRx Health to its GoodRx Care telehealth service for treatment.

The Takeaway

GoodRx Health is far from a small content play to drive more traffic to a website. GoodRx is doing everything in its power to leverage the 20m monthly users already visiting its site, from hiring a 50 person editorial team helmed by the former executive editor of WIRED, Thomas Goetz, to acquiring health video company HealthiNation for $75m in April.

WebMD and symplr announced a similar partnership in August, which allows WebMD users to go from a health information search to scheduling a telehealth appointment in three clicks. GoodRx’s vertical integration of these services could position it as a leader among companies operating in the overlap between health information and treatment.

Get the top digital health stories right in your inbox