Weekly Health Tech Reads | 3/23/2025

INNOVATORS AND POLICY

Aledade and General Catalyst share policy perspectives on driving innovation

It has been interesting to watch over the last few months as health tech companies take more active approaches toward influencing healthcare policy. Given the amount of uncertainty and change afoot in DC, companies seem to view this as an opportunity to influence healthcare policy decisions. I’d imagine that these attempts to influence policy come from trying to improve healthcare in this country. At the same time, it is also not surprising that these efforts pretty clearly tie back to positive business outcomes for the companies proposing them.

This week provided two really good examples of this sort of activity from two very different healthcare innovators, Aledade and General Catalyst. I’ll dive into both below:

Aledade

• Aledade, which launched a policy institute in January focused on strengthening primary care and driving VBC adoption, penned a piece in NEJM Catalyst this week articulating a proposed a path forward for driving VBC adoption.

  The article was co-written by Geoffrey Moore, author of Crossing the Chasm, which provides for a general theme of the article — the need for VBC to “cross the chasm” from early adopters to the mainstream. It suggests five key changes needed to drive more VBC adoption: 1. focusing VBC efforts on primary care, 2. making it clear FFS is bad, 3. making MSSP the chassis for VBC, 4. covering the whole patient panel, and 5. leveraging physician enablers. They seem like a reasonable set of suggestions that would help drive the adoption of VBC in primary care. They also have an obvious bias towards supporting Aledade’s core business model of enabling PCPs to succeed in the MSSP program.

  As I mentioned in the HTN Slack this week, the “crossing the chasm” metaphor is a little confusing to me when applied to VBC. As the article notes, 45% of PCPs already participate in Medicare ACOs, which I think, by definition, would mean that the chasm has already been crossed. It seems that this might imply a different set of challenges related to the diffusion of innovation. But stepping back, I’m not sure whether VBC is even a concept that would follow a diffusion model like Moore’s theory suggests. Instead, a VBC program like MSSP seems like an incentive that changes the diffusion rate, more akin to government programs incentivizing EV adoption.

General Catalyst

• General Catalyst recently launched the General Catalyst Institute to work with governments worldwide to build global resilience, focusing on AI and healthcare, among other efforts. This week, the General Catalyst Institute released its first policy paper, advocating for various ways that technology innovation can transform US healthcare. The image below summarizes the set of short-term and long-term actions that GC is advocating for:
  
  

  

  Source: GCI White Paper

  
  It should come as no surprise that a large asset manager with significant capital deployed in healthcare investments is making the case for a free market system in healthcare with less red tape for implementing innovation.

  Similar to Aledade’s position piece, it seems like GCI is making a pretty sensible set of suggestions, although GCI’s piece feels more aspirational and less tangible in nature. While I can grasp what it means to make MSSP the VBC chassis for CMS moving forward, I’m not quite as sure what it would mean for CMS to launch regional healthcare innovation sandboxes. Particularly when GCI suggests that it is a short-term action that could be taken over the next several months. That strikes me as a recipe for chaos. At the same time, I can see common themes across the rural healthcare perspectives Dr Oz shared in his confirmation hearing and those expressed here, and so it seems worth paying attention to these ideas.

INCUMBENTS AND POLICY

HCA highlights the importance of advocacy efforts across ACA, Medicaid, and Medicare

Policy advocacy isn’t just for innovators, as HCA highlighted the importance of its advocacy work at the Oppenheimer investor conference this week, where it was the first topic discussed. HCA leadership noted it is focused on three key cross-industry advocacy efforts: ACA subsidies, Medicaid reform, and Medicare site neutrality.

You can see the Q&A below, lightly edited by me for clarity. Between this quote, and the General Catalyst and Aledade pieces above, you can feel the opportunity (and urgency) for these organizations to influence policies in directions that support their underlying businesses:

AI & HEALTH SYSTEMS

Provider execs’ views on the opportunities presented by AI

Accenture recently surveyed 300 C-suite healthcare provider executives regarding their use of generative AI. The high-level takeaway is that while 83% of these executives think their organizations are piloting generative AI, less than 10% are investing in widespread deployment today. But the more interesting data in the survey to me were the two charts below, which highlight two clear opportunities and outcomes from Gen AI for provider organizations: revenue growth and productivity gains. They dwarf other opportunities, including often-discussed concepts such as patient empowerment and employee retention.

It’s not exactly surprising to see provider leaders recognizing that AI can lead to better employee efficiency and productivity gains, which feels very similar to the argument that disruptors make about the ability of AI to drive the marginal cost of care delivery to zero. Yet, simultaneously, the health system execs surveyed seem to think their organizations will be making more revenue while also becoming more efficient. What is the result of driving revenue up while driving costs down? Healthcare costs go up as profit pools increase.

I think this is yet another data point suggesting that AI is on a trajectory to increase healthcare costs in this country, despite all the conversation about the opposite happening. In theory, reducing the marginal cost of care to zero could drastically reduce healthcare costs in this country. In practice, the profit pools that dominate the industry always seem to find ways to grow.

Other Top Headlines

• DispatchHealth and Medically Home announced they are merging, combining two of the bigger startup names in the home care market. DispatchHealth will be the parent entity moving forward, and the two organizations combined will serve 50 major metros with 40 health system partnerships. DispatchHealth and Medically Home have raised almost $1 billion in equity and debt between the two companies over the last decade. DispatchHealth appears to have raised $676 million in equity funding. It last publicly announced a $259 million funding round in late 2022, with up to $150 million in debt financing alongside it. Before that, it announced a $200 million funding round at a $1.7 billion valuation in 2021. Meanwhile, Medically Home last raised a $110 million round back in early 2022, and has reportedly raised almost $200 million in total. While the press release mentions the massive opportunity for the hospital-at-home in the future, it also seems like this merger reflects a challenging market currently as momentum during COVID-19 has subsided. There was a good conversation in Slack this week digging into some of the challenges facing the hospital-at-home market.

• OptumRx is removing prior authorizations for several drugs, eliminating 10% of total prior auths. The move focuses on eliminating the need for reauthorizations, where a patient has to get reapproved for something they have previously been approved for.

• A group of senators led by Senator Durbin (D-IL) recently sent letters to several telehealth startups, questioning whether their partnerships with Eli Lilly and Pfizer to launch D2C telehealth platforms violate the Anti-Kickback Statute. STAT provided a helpful overview of the letters, while Foley and Lardner provided good perspective on related legislation that Durbin recently introduced seeking to give the FDA more oversight over social media influencers and telehealth companies.

• Akido Labs appears to be going a step further than many other clinical organizations in implementing AI in medical visits, as covered in this Endpoints article. The article highlights how Akido is attempting to leverage AI to allow medical assistants to essentially conduct an entire patient visit, from intake to diagnosis, with the results reviewed by a physician who may or may not even see the patient. Akido launched the AI tool for its cardiologists in a single clinic six months ago, and it has been used on ~450 patient visits to date. The AI tool has a 92% success rate, defined as identifying the correct diagnosis within the top three suggested diagnoses. Akido, which originally launched as a data analytics platform for public health, acquired a 30+ practice medical group in the Los Angeles area in 2022.

• Aledade announced it is expanding its VBC relationship with Humana, now enabling FQHCs and rural health clinics to generate shared savings in Medicare Advantage. Humana and Aledade previously announced a ten-year VBC partnership agreement for Medicare Advantage members one year ago.

• Primary care startup Patina Health announced a new population health model this week, Patina Total Health, shifting to provide wrap-around care coordination services to members regardless of what PCP they see. It’s an interesting move that I’d imagine is driven by both payer interest in impacting Stars performance and the challenges in VBC primary care. Patina is launching the new model in Charlotte in partnership with Aetna.

• VC fund SemperVirens raised a new $177 million fund focused on workforce transformation via investments in enterprise, healthcare, and financial services innovation.

• Minnesota-based VC fund Bread and Butter Ventures raised a new $40 million fund focusing on digital health as one of its three core focus areas.

Featured Jobs

Other Worthwhile Reads

Medicaid Fraud: The Improper Use of Improper Payments by Andy Schneider
This blog provides a rebuttal to the recent Paragon and EPIC white paper suggesting Medicaid fraud is higher than previous government estimates. Among other things, the rebuttal argues that improper payments are not fraud, and many improper payments are just a function of missing administrative paperwork in the program. Read more

MSSP rebasing: A fresh start by Chris Smith, Erin Birkeland, and Brandin Kuklinski
A Milliman team looks at how MSSP ACOs have the opportunity to rebase their ACO contract by exiting an existing 5-year contract early and starting a new contract, which allow providers to change their benchmark period and take advantage of recent MSSP program changes, among other things. It includes some helpful math on how different ACOs should take different paths depending on performance and other factors. Read more

On TPAs, PBMs, and SMBs by Duncan Greenberg and Jan-Felix Schneider
A good deep dive into innovations in the small group market, focusing on plan design / underwriting, network / formulary design, and plan administration. Read more

The Evolving Role of Operating Partners in Private Equity: What’s Changing and Why It Matters by Maura McGinn / Impetus Talent
This was an insightful blog post on the rise of Operating Partner roles at private equity firms. Particularly the point made about these roles as a way for investors to keep top talent close during a period when there is limited deal flow. Read more

Unhinged: The Virtual MSK Reckoning (and What Comes Next) by Ben Schwartz
A helpful addition to the discussion about Hinge’s S-1, posing some critical questions about Hinge’s clinical model and what it will take to drive meaningful change in the MSK market. Read more

Sword Health, the Hinge Health S1, and me by Matthew Holt
Also on the topic of MSK, this post provides a fascinating look into the MSK startup world from Holt’s perspective as a patient using these tools for a knee issue. Holt’s experience is with Sword, a competitor of Hinge, but it notes two key challenges with the model — 1. the lack of integration with other healthcare providers, and 2. the high cost of a virtual PT model. Read more

The Business of Promoting Longevity and Healthspan by Eric Topol
This piece provides a good overview of the current longevity startup craze and Topol’s concern that there isn’t much data on the various approaches. Given the nature of the critique on businesses promoting longevity, it felt a bit odd that the piece ends with Topol promoting his own book on longevity, Super Agers. Read more

Startup Funding Announcements

• Inspiren, an AI-based software for senior living facilities, raised $35 million. Interesting to note the quote in the article about how Inspiren is helping senior living facilities identify an additional 30% revenue capture for these facilities.