Robert Mittendorff, MD, MBA

Doximity just released a free AI scribe for US clinicians, accelerating commoditization/the race to the bottom. Their product won’t integrate into the EHR like Abridge, but it’ll be interesting to see how much it impacts their ability to acquire customers, drive usage and maintain retention. This is the start of a trend that will continue across every vertical market. Counterpositioning with free products to undercut upstarts and incumbents alike. Buckle up. Your margin is someone else’s opportunity.

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Why Now Is the Best Time Ever to Invest in Healthcare AI Startups By Andy Reid, Managing Partner, M3A Healthcare Ventures We are entering a once-in-a-generation window for investing in Healthcare AI—one where timing, technology, and major shifts in care are aligning to create outsized opportunities for early-stage venture capital. At M3A Healthcare Ventures, we believe this is the moment to invest boldly. 1. Healthcare Is Ripe for Disruption—And It Has To Be U.S. healthcare costs are projected to hit $7.2 trillion by 2031, yet outcomes lag behind every other developed nation. Workforce shortages, and fractured data systems create inefficiencies that AI is uniquely positioned to solve. • 25% of U.S. healthcare spending is administrative waste. • 90% of hospitals face staffing shortages in key roles. • Doctors spend 2 hours on documentation for every 1 hour with patients. AI isn’t a “nice to have” anymore. It’s becoming a critical tool for cost control, productivity, and quality improvement. 2. We’ve Entered the Platform Shift Era Apple Intelligence, OpenAI, and other foundation models have catalyzed a new generation of startups. In healthcare, this means real-time ambient documentation, predictive care, smart inventory management, and even AI-generated clinical trial design—all happening today. This is akin to investing in SaaS in 2006 or mobile apps in 2011. Except this time, the TAM is $4 trillion larger. 3. Buyers Are Ready—and They’re Buying Just five years ago, hospitals were wary of AI. Today, they’re budgeting for it. Health systems, ASCs, pharma, and insurers are deploying capital to integrate AI that: • Shortens revenue cycles • Boosts clinician efficiency • Reduces preventable readmissions • Enhances training and education with immersive tools In short: the demand isn’t theoretical—it’s contractually real. 4. Healthcare AI Has Multiple High-Value Exit Paths M&A activity is accelerating, and healthcare AI companies are being acquired by: • Strategics like Stryker (e.g., $130M for care.ai) • PE-backed rollups seeking operational efficiency • Big Tech, which is aggressively moving into healthcare These aren’t just tech exits. They’re life sciences, SaaS, and data infrastructure exits rolled into one—often with 3–5x higher revenue multiples. 5. We Have the Talent, Data, and Infrastructure The convergence of: • Open health data regulations (ONC Cures Act) • AI-native medical founders trained in both tech and care delivery • Decreasing costs and better modeling We finally have a clear runway to build and scale. The Next MedTech Unicorns Will Be AI-First The next wave will be built on data, AI, and automation. Investors who move now will back the next Teladoc, Intuitive, or Epic—except leaner, faster, and born in the AI-native era. #HealthcareAI #HealthTech #VentureCapital #DigitalHealth #AIinHealthcare #MedTech #ArtificialIntelligence #StartupInvestment #HealthTechStartups #VCFunding #AIStartup

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Healthcare moves fast when the pain is obvious. EHRs took seven years with incentives while ambient scribes scaled in two years without subsidies. Providers and payers are building AI labs, which turns the buyer into a builder. Startups win by owning the workflow, delivering turnkey integration, proving ROI fast, and co developing with internal teams. Sell to the C suite, price on outcomes, and show repeatable production rather than pilots that never end. https://lnkd.in/gYxYDnBe

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Cohere Health’s Series C: Case Study… McKinsey estimates that there is nearly $1 trillion of healthcare administrative expenses each year, of which $200 billion is just on financial transactions. There are a staggering nine billion medical claims processed each year. A hornet’s nest of policies and procedures have evolved to manage these expenses from complex formularies, deductibles, co-pays, and prior authorizations (PA). Just in 2023, there were over 50 million PAs, 99% of which were for procedures for Medicare Advantage members. It was this market opportunity that Cohere Health was created to address. The vision of the company has always been to drive deeper payer/provider collaboration and in so doing create a “touchless authorization” business model. The company has successfully commercialized a suite of next-generation PA products that significantly rearchitect the way care pathways are delivered. Recent advances in AI have further catalyzed a drive to meaningfully improve clinical and administrative efficiencies for payers. In order to continue its rapid scaling and development of additional products, Cohere Health today announced a $90 million Series C financing, led by Temasek, a close partner of Flare Capital. Other thoughts/observations... https://lnkd.in/eAB-JvUp Flare Capital Partners

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Changing Healthcare's Innovation Playbook - Fascinating healthcare policy shifts creating opportunities for AI-native startups: 1. CMMI's aggressive push for digital health in disease prevention 2. FDA deploying GenAI to accelerate regulatory reviews! 3. Tension between deregulation demands and AI safety needs At C10 Labs, in healthcare we're backing founders building at these intersection of policy evolution, AI first thinking and technological capability. The winners will navigate regulation and leverage it as competitive advantage. Think where the puck is moving and build to it faster and better. #HealthTech #AIinHealthcare #VentureCapital C10 Labs

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Something to note from Menlo Ventures's incredible AI in healthcare report....their data confirm what many of us in health systems already feel coming: AI adoption will INCREASE administrative volume before it reduces it. Payers expect, in the next 12–36 months: 63% major jump in call volume 50% more codes per claim 40%+ higher claim volume 38% more prior auths 31% more appeals + resubmissions When documentation gets easier, volume is going to skyrocket. Implications we’re already planning against: - AI adoption doesn’t remove work inherently; it redistributes it across the ecosystem. Workflow redesign is critical. - Providers need guardrails to prevent over-generation of documentation and requests. More noise helps noone. - Startups must show cross-stakeholder ROI, not siloed productivity gains... - Health systems need a system-wide AI playbook, or every local win creates a downstream backlog. This next 2-3 years will either widen payer–provider tension or force real alignment. I'm not counting on the latter. Curious how others are preparing.

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#AmTech Weekly Roundup: Ambience Healthcare raised $243 million in Series C funding from Oak HC/FT, Andreessen Horowitz, OpenAI, Kleiner Perkins, Optum Ventures, and Town Hall Ventures. Ambience is building AI documentation software to record patient appointments, generate comprehensive medical notes, and standardize coding/authorization workflows.   Michael Ng, Nikhil Buduma    Reveal Technology raised $30 million in Series B funding from Ballistic Ventures, Shield Capital, Booz Allen Hamilton, and others. Reveal’s two main offerings are 3D mappings generated from drone videos and mobile biometrics. They are deployed with the US Army, Special Operations Command, Marine Corps, and other NATO forces.   Garrett Smith    Prophet Security raised $30 million in Series A funding from Accel and Bain Capital Ventures. Prophet is applying agentic AI to Security Operations Centers (SOCs), or hubs for cybersecurity defenses within an organization.  Kamal Shah, Vibhav Sreekanti #VC #HealthTech #Healthcare #Defense #Cybersecurity

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