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Bill, baby, bill: Abridge announces $250 million raise
Abridge announced a $250 million Series D fundraise co-led by investor Elad Gil and IVP with participation from many other notable venture firms. Abridge, which has emerged as one of the leaders amid the boom in companies using technology to streamline clinical documentation, announced today it has over 100 health system customers, including big names like Duke Health, Johns Hopkins, and Mayo Clinic.
This fundraise was initially reported back in the fall, but the announcement highlights a few trends we’ve seen emerge already this year. First, digital health investment has receded from its pandemic high-water mark, but if you’re a company making use of large language models and other AI technologies, investors are still interested. And second, some AI companies reducing “administrative burden” are seeing rapid adoption — by health care industry standards at least — because many are able to quickly deliver financial return.
The benefits of technology that can take the load off providers should not be understated, and it’s understandably the focus of the conversation about clinical AI. Products like Abridge allow providers to spend more time talking to patients and less time after work filling out fields in Epic. But at least some of the ROI here is all about making sure that the claims get filed just right, and Abridge knows this: Its new release billboards the company’s ability to streamline financial workflows and mentions a derivative of the word “bill” six times. It didn’t come up once in the release for the company’s Series C fundraise a year ago.
I spoke to Abridge CEO Shivdev Rao about a month ago and he highlighted to me that he believes a key differentiator is that a platform is both “clinically useful and billable.”
“In this country, we’re not compensated for the care that we deliver.” he added. “We’re compensated for the care that we documented that we deliver.” Providers choose Abridge because “they’re getting a note that is helpful, is useful, and checks off all the boxes for communication with their other colleagues” but also because “we’re also generating those notes off the bat in such a way that check off all those revenue cycle boxes.”
Around the same time I talked to Rao, Sachin Jain, CEO of the SCAN Health Plan, posted on LinkedIn that “The underlying purpose of clinical documentation improvement is improving reimbursement or risk adjustment associated revenues,” adding, “Who pays for the bigger bill that will come from provider organizations that become elite billers with the support of technology?”
FDA cuts target AI, as HHS fires thousands
On Friday, thousands of workers at the federal health department and its sub-agencies began receiving termination notices, the latest cuts by a Trump administration dead set on reducing what it sees as a bloated government workforce. In interviews, both workers who were fired and who remain at agencies said they feared the cuts would negatively impact Americans who rely on agencies to keep the public healthy and safe. Read Helen Branswell’s analysis, with contributions from many others, here.
The terminations go far beyond technology, but as STAT’s Lizzy Lawrence reports, workers tasked with reviewing artificial intelligence products at the Food and Drug Administration‘s devices center were let go. The move comes as use in AI in health care has grown and as Trump himself has made clear his desire to prop up the industry. Experts told Lizzy that the cuts could hinder the development of AI by slowing down evaluation of new products and work on safety frameworks many developers, and potential customers, hope will ease barriers to adoption.
We’re keeping a close eye on how of these staff reductions are playing out. If you’re impacted, reach out to your favorite STAT reporter. In addition to email, many are using secure communication tools such as Signal and have posted their addresses on social media. If you would like to speak to me or one my colleagues my username on Signal is mariojoze.13
Virtual reality companies combine as provider-based model emerges
We’re over a decade into the virtual reality hype cycle and computers you strap to your face are not yet something you see on the bus everyday. But in health care, a company called XRHealth thinks it’s cracked the business model that might help make VR-based treatments for chronic pain and mental health more accessible. Rather than hope for reimbursement or contracts with in-person providers who might adopt the technology, XRHealth has opted to be the provider itself.
Over the last few years, the company has made a series of acquisitions as it hope to become the leading platform for therapeutic VR. The latest: It’s acquiring RealizedCare, a company we’ve written about a few times over the years. Read more here
Prenuvo banks $120 million for body scans
Prenuvo, a company that offers full-body imaging to sniff out potentially serious health conditions, announced a $120 million fundraise in a very unusually phrased press release that makes clear the money was raised in 2024. The company in January received FDA clearance for its Body Composition software that “is intended for non-invasive fat, muscle and organ quantification.” According to FDA documents, “All reported metrics in the Body Composition Report are known in the practice of medicine.”
Prenuvo is one of several companies at the center of a debate about the value of preventative screening for underlying health conditions, and the company last year announced a study to help illustrate the value of the practice.
What we’re reading
- The lasting human impact of Trump funding freeze: An 86-year-old’s ride to dialysis now feels tenuous, STAT
- FDA staff reviewing Musk’s Neuralink were included in DOGE employee firings, sources say, Reuters
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