Catching the Right Wave in Digital Health

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.

OpenEvidence Partners With JAMA Ahead of Next Raise

“The fastest-growing platform for doctors in history” continues to step on the gas, and OpenEvidence is reportedly on the verge of notching a $3B valuation after inking a deal to bring JAMA Network journals to its AI medical search engine.

The multi-year content agreement will make full-text articles from the American Medical Association’s JAMA, JAMA Network Open, and 11 specialty journals available directly within the OpenEvidence platform.

  • OpenEvidence’s medical search engine helps clinicians make decisions at the point of care, turning natural language queries into structured answers with detailed citations.
  • The model was purpose-built for healthcare using training data from strategic partners like the New England Journal of Medicine, which joined the platform through a similar deal earlier this year.

The Disney+ content strategy has arrived in healthcare. OpenEvidence compares its approach to streaming services that drive subscriptions through exclusive movies.

  • If a physician wants information from top journals to support decision making, they’ll either have to get it straight from the source or use OpenEvidence, just like how anyone who wants to stream Moana needs to go to Disney+.
  • The kicker is that OpenEvidence is available at no cost to verified physicians, and advertising generates all of the revenue. 

The blueprint is working like a charm. OpenEvidence has over 350k doctors using its platform plus another 50k joining each month, and it’s apparently close to raising $100M at a $3B valuation just a few months after closing its $75M Series A.

  • It’s rare to find hockey stick growth in digital health, and OpenEvidence is a good reminder that many areas of healthcare change slowly… then all at once.
  • It also isn’t too surprising to hear that VC’s like Google Ventures and Kleiner Perkins are lining up to fund a company with a similar ad-supported business model to Doximity – one of the only successful healthcare IPOs since the start of the pandemic.

The Takeaway

Content is king, and OpenEvidence is locking in partnerships to make sure its platform is wearing the crown. The results have been speaking for themselves, but healthcare’s genAI streaming wars are just getting started.

Text Nudges Show Potential in Primary Care

Even the simplest text messages can help patients get more out of their primary care visits, at least according to new research published in NEJM Evidence.

The study out of Ascension health system – “A Digital Care Plan Nudge to Improve Primary Care Outcomes” – spanned 76 primary care practices and 29,000+ patients.

  • Patients were randomized to receive either usual care, or a digital nudge sent three days prior to their appointment.
  • The nudges were a simple text message highlighting up to three preventative care needs to address during the visit, such as cancer screenings or vaccinations.

The results speak for themselves. The digital nudge group saw:

  • An increase in appointment completions (+2.8 percentage points over usual care)
  • A decrease in appointment cancellations (-1.5 percentage points)
  • A decrease in appointment no-shows (-1.2 percentage points)

What about the care gaps? The digital nudge group addressed a care gap during 23.5% of visits, compared to 20.3% for usual care (P=0.08). In case anyone skipped stats class, that’s a bigger P value than we were going for, which basically means the jury’s still out on this one.

  • On the bright side, digital nudges did show a statistically significant improvement to care gaps closed at 90 days (+5.4 percentage points over usual care), specifically for breast and colorectal cancer screenings, diabetes testing, and flu vaccines.

Although the study didn’t meet the primary outcome of addressing gaps on the day of the visit, digital nudges showed promise as a scalable way to improve outcomes over time by encouraging patients to be proactive with their health.

  • Not a bad outcome considering that many patients arrive to primary care visits focused on immediate concerns, and springing new topics on them isn’t exactly a great way to inspire quick action.

The Takeaway

Patient activation works, and this study adds to the mountain of evidence supporting it. In the words of Ascension Chief Clinical Transformation Officer Mitesh Patel, “Most importantly, it reflects what’s possible when we combine behavioral science, digital tools, and a learning health system mindset.”

Epic Announces Launchpad to Fast-Track GenAI Deployment

Epic is looking to accelerate generative AI adoption with the surprise unveiling of Launchpad, a new program designed to help provider orgs “move from idea to operational gains in a matter of days.” 

Launchpad’s grand unveiling included little more than a LinkedIn post, but Epic AI Director Sean McGunigal told Fierce Healthcare that the program includes guided AI implementations and a fast track to live workflows.

Here’s the general outline of how Launchpad works.

  • When an organization joins the program, Epic staff shepherds them through any roadblocks they’re facing with active genAI implementations.
  • Epic’s experts will assist with getting genAI use cases configured, turned on, and operationalized – all while establishing appropriate governance structures.
  • Launchpad also includes a starter kit of 10 high-impact genAI applications that can be deployed within days, covering both clinical and operational workflows.

Epic views low AI literacy as one of the biggest barriers to industry-wide adoption, and McGunigal made it clear that Epic will go to great lengths to overcome that hurdle. 

  • “We’ll help coordinate. We’ll get the right stakeholders on the phone and we’ll help this thing along.’ The [genAI] roadblocks tend not to be necessarily performance challenges or end user training. It tends to be the project management-type work.”

MyChart In-Basket Augmented Response Technology – better known as ART – marked the launch of Epic’s first genAI feature in April 2023.

  • Since then, over half of Epic’ customers have started using at least one of its genAI features, and it’s making some big investments to pump that number up.
  • Epic has over 100 new genAI use cases in the works, spanning everything from lab and imaging recommendations to fully automated patient-agent interactions, and Launchpad is going to ensure that providers have the support they need to adopt them.

The Takeaway

As Epic gears up for a tidal wave of its own AI roll outs, healthcare orgs are going to need customized support, implementation kits, and governance guidance to take full advantage. Epic just showed us that it’s willing to build its own Launchpad to make that happen.

PHTI Gives High Marks to Virtual Mental Health Solutions

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

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

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

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

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

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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