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AI Vendors vs. EHRs, Function Acquisition, and the Medicare App Library
April 13, 2026
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Together with
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“Scaling AI in healthcare isn’t about forcing adoption. It’s about earning it.”
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Abridge VP of Partner Experience Reba Schenk
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Anyone who has ever tried selling AI into health systems will tell you that it’s tough to compete with EHRs, but a new article in JAMA makes the case that it’s actually gotten too tough – and it might be time for regulators to step in.
Most markets reward the best products. The healthcare industry has a funny way of preventing that from happening, and EHR vendor dominance is a textbook example.
- EHRs hold advantages across infrastructure, workflow integration, procurement, and pricing that make it difficult for third-party tools to gain a foothold.
- A 2025 Health Affairs study backed that up by showing that 79% of U.S. hospitals use AI models from their EHR vendor, compared to just 59% that use AI from third-party developers.
- A Bain report drove the point home. Two-thirds of Epic customers said they’d pick a “good enough” Epic option over a better competing product.
These EHR advantages are a natural feature of the market. That said, it’s up to regulators to decide whether the status quo is serving patients and the overall healthcare system. The JAMA authors argue that it doesn’t, and offer three areas where targeted policy could level the playing field.
Infrastructure – Integrating AI tools into clinical workflows requires real-time data access and the ability to survive EHR upgrades intact, both of which are dramatically easier for EHR vendors – particularly as data fields get added or removed.
- Potential Policy – Mandate broader API adoption so third parties can access EHR data on equal footing, and use existing EHR certification and interoperability frameworks to do it.
Workflow and Usability – The authors specifically flag EHR vendors’ edge in understanding the trade-offs of allocating limited screen real estate to new AI tools, something that’s harder for third parties to gauge from the outside looking in.
- Potential Policy – Require EHR vendors to offer more robust developer sandboxes – similar to Apple’s iOS developer environment – so third parties can build and test without operating at a structural disadvantage.
Procurement and Pricing – Long-standing health system relationships give EHR vendors a streamlined path through procurement, as well as the leverage to “use pricing structures that incentivize adoption.”
- Potential Policy – Although this is the hardest area for a policy fix, the authors suggest that improving transparency around AI performance could at least help health systems make more informed decisions regardless of where a tool comes from.
The Takeaway
EHRs are in a powerful position, and companies in powerful positions have a long track record of making life harder for their competition. Healthcare is too important of an industry to not have the best products rise to the top, and this article offers some sound strategies to make sure that stays possible.
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State of Payer Enrollment and Credentialing
Over half of provider orgs are losing revenue due to credentialing delays – with many missing out on over $1M annually. Medallion’s new report unpacks the forces quietly undermining operational and financial performance, and how leaders across the industry are addressing them. Check out the full report to get insights tailored to your role and org type.
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Improving GLP-1 Treatment for the Long Term
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- CMS Launches Medicare App Library: The wait for the Medicare App Library is officially over after CMS unveiled its first wave of digital health tools during last week’s HealthTech Ecosystem Live! event. The agency showcased solutions from 50+ companies that represent “the first real-world implementation of a connected digital health ecosystem,” where patients can access and share their health information through trusted applications. More than 700 organizations have reportedly pledged support to Kill the Clipboard since CMS put the call out eight months ago, and the Medicare App Library offers a good look at the ones that have already made it through the vetting process.
- Function Acquires Getlabs: Whitehot diagnostics startup Function just acquired Getlabs so that its members no longer have to leave their homes to get blood draws. Getlabs brings licensed specialists directly to the member’s location – home, office, or anywhere in between – for blood draws and other in-person sample collection. Function members will soon have the option to either go to Quest or have Getlabs come to them, which will make the $365 membership an even more convenient way to detect 1k+ conditions through 160 lab tests.
- Belonging Cures All: Results from a large provider survey in JAMA Network Open showed that prioritizing teammate support and workplace culture might be the best way to keep docs happy. Responses from 14k physicians across 85 organizations showed that 80% feel their teammates have their back and 60% have a strong sense of belonging. A strong sense of belonging was not only associated with less burnout (OR 0.22), but also significantly lower intent to leave the organization (OR 0.23) or reduce clinical hours (OR 0.48).
- Luminai Series B: Luminai hauled in a $38M Series B to scale its AI platform that automates administrative workflows for health systems. A nice proof point that separates Luminai from probably a dozen similar companies we’ve covered this year is that Cleveland Clinic has been using the platform to automate high-volume processes, starting with referral management. Another differentiator is reportedly Luminai’s knowledge graphs of how each health system operates, including routing rules, policies, exceptions, and institutional judgment.
- Epic AI Doesn’t Perform Straight Out-of-the-Box: A meta-analysis in Springer Nature confirmed what many folks have already been saying about Epic’s AI: the out-of-the-box tools don’t perform well in the real world. Northwell Health researchers reviewed 22 studies covering Epic’s Deterioration Index, Sepsis Model, Unplanned Readmission Model, End of Life Care Index, and Risk of No Show Patient Model. The primary takeaway was that none of the models surpassed an AUROC of 0.79 (a common threshold for acceptable performance), and that health systems really need to validate these tools locally before deploying them.
- Long-term Enhanced ACO Design: CMMI announced its latest alternative payment model with LEAD, or Long-term Enhanced ACO Design. The LEAD model is positioned as a replacement for ACO REACH and designed to increase participation among hesitant providers, primarily by giving them more flexibility and tools to meet the long-term needs of their patients. The ten-year model has a fixed benchmark that never rebases, a ramp designed to bring in orgs that have never participated in VBC, and a plan to eventually replace traditional risk adjustment with an AI system.
- Click Therapeutics Lands $50M: Click Therapeutics landed $50M in Series D funding from Boehringer Ingelheim, which also tossed Click the keys to its CT-155 prescription digital therapeutic for schizophrenia. CT-155 received Breakthrough Device Designation in 2024 after completing the first trial and only to show a significant reduction in experiential negative symptoms of schizophrenia alongside standard antipsychotic treatment. Click’s DTx expertise and experience in the mental health arena make it an ideal partner to bring CT-155 to market, which is why Boehringer signed over the commercialization and marketing rights alongside its $50M investment.
- Hospital M&A Rebounds: Hospital mergers and acquisitions hit a multi-year high in the first quarter, bouncing back from a significant slowdown in 2025 due to policy uncertainty. Kaufman Hall counted 22 transactions during Q1, a number that outpaced first quarter totals for the past five consecutive years. Three “mega mergers” in which the smaller party has over $1B in annual revenue boosted the total transacted revenue in Q1 to $14.5B – another recent record – thanks in large part to Sutter Health’s proposal to acquire Allina and form a $26M combined system.
- Insight Series A: Insight Health closed $11M of Series A funding to chip away at healthcare’s $1T mountain of annual administrative waste with voice-first clinical agents. The suite of agents tackles phone and front-desk coordination, referral and fax processing, pre-clinical intake, and clinical documentation – engaging directly with patients via voice or text. Insight has reportedly slashed over $50M in administrative costs for clients like The Oregon Clinic and Pacific Sports & Spine.
- 10-20-70 Rule for AI Innovation: A recent report from Boston Consulting Group offered some sage advice for anyone looking to succeed as AI helps push the industry from reactive to proactive care. BCG focused on its 10-20-70 rule for healthcare AI innovation, which says that a company should dedicate 10% of its effort to algorithms, 20% to technology and data, and the remaining 70% to people and processes. “This emphasis is crucial because change management is difficult to get right – and successful transformation depends on people.”
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The Virtual-First Difference at MetroHealth
When the MetroHealth System needed a comprehensive, scalable solution to help its patients access care, it turned to Ovatient’s virtual-first care model. Ovatient isn’t another point solution, it’s a virtual care partnership – integrated clinically, operationally, and technologically with your existing infrastructure. Discover how MetroHealth’s virtual-first approach is keeping patients connected to high-quality care whether they’re at home, at work, or on the go.
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A Care Partner for the Full Clinical Day
Patient conversations are more than just a note. Heidi supports clinicians across the day from documentation to decisions and follow-ups, without adding any burden. See why clinicians around the globe are turning to Heidi for a true AI Care Partner.
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- Shape Health AI at DHAI 2026: Mark your calendars. The Digital Health & AI Innovation Summit is bringing together AI leaders from across the industry for a live event in Boston on June 8-9th. This year’s agenda is packed with 150+ speakers and content curated specifically for the pioneers shaping health AI. Reserve your spot for DHAI 2026 today.
- Unlock Accurate Transcription With Medical Mode: Unlocking accurate transcription of even the most complex medical terminology is now as easy as adding a single line of code. AssemblyAI’s new Medical Mode eliminates errors on the words that matter most – medicine names, dosages, and clinical diagnoses – so that you can ship solutions that perform when accuracy isn’t optional. Start building with Medical Mode today.
- Abridge Named #1 Best in KLAS – Again: KLAS just named Abridge #1 Best in KLAS for Ambient AI for the second year in a row. The recognition was based on direct customer feedback from the nation’s largest and most complex health systems, which gave Abridge the highest overall satisfaction score and A+ ratings across Culture, Loyalty, Relationship, and Value. Discover why Abridge is the market-leading AI platform for clinical conversations.
- Making the Case for AI: Healthcare organizations have a lot to gain from implementing AI that can enhance coding accuracy and quality metrics, but securing buy-in from leadership is a crucial first step. Check out Navina’s new guide by Dr. Michael S. Barr to see exactly how to demonstrate clear financial benefits, ROI potential, and alignment with organizational priorities to help ensure AI projects are successful.
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