The startups threatened by Epic's new AI

Epic Systems announced a bevy of new AI products at the annual meeting for its EHR customers this week, including an AI scribe and AI assistants aimed at clinicians, patients, and admin staff. My colleague Brittany Trang was on the ground reporting from the event. Read her full dispatch here.

Epic is one of the most powerful health technology companies on earth. It owns over 40% of the hospital EHR market and handles medical records for millions of people. Given its control over the software that's central to care and a captive customer base, it can quickly roll out AI products in a way that others can't.

So what happens to all of the startups and smaller companies selling products that look a lot like something Epic just announced? They'll hang on for dear life and hope their software is so good that customers won't default to the option offered by Epic.

A few categories of startups that should be worried:

AI scribes

This one's obvious right? Companies like Ambience Healthcare and Abridge have raised close to $1 billion this year for technology that automatically drafts clinical notes for doctors. Abridge has partnered with Epic a number of times and in 2023 was the first "pal" named to Epic's Partners and Pals program. Now Epic plans to offer its own charting feature powered by Microsoft's technology. The rest better hope their products offer a lot more benefit (see another story from Brittany below).

Real world data companies

Epic is bypassing third-party tools that serve up data on what treatments worked in real patients by integrating insights from its Cosmos database of de-identified patient data directly into the EHR. Existing companies like Atropos may be more sophisticated, but can Epic eat some of the market?

Clinician copilot companies

Epic's new Art assistant promises to surface timely information during a patient visit, offering new competition to clinician nudge companies like Navina and RhythmX AI.

Automated coding and revenue cycle companies

Revenue cycle management is one of the hottest areas for health tech development. In an example of the scale, Waystar just spent $1.25 billion to acquire Iodine, a company that simplifies claims processing for providers. And there are plenty of other automated coding companies, both AI-powered and not, that have so far been relatively unbothered by Epic's existing automated RCM tools. But Epic's new admin assistant Penny introduces new AI revenue cycle tools for autonomous coding, autonomous billing follow-up, reporting about denials, and more. Maybe it can make inroads.

Clinical trial management companies

Epic is launching Forward, a clinical trials management system. The Epic-based system could offer an advantage over other CTMS companies because it can theoretically make it very easy to both manage clinical trial requirements and help ensure that health systems don't bill insurance for trial participants.

wearables

CGMs walk a fine line between wellness and medicine

There's long been an interest in using data from continuous glucose monitors for more than just managing diabetes. But the launch of a Dexcom device available without a prescription suddenly made the technology widely accessible to anyone who could pay — and a number startups now offer apps that help users take advantage of the data and are even selling the devices.

In a new story, STAT's Katie Palmer explores how companies using blood glucose data to offer insights about weight loss and more, which are supposedly aimed at promoting wellness, veer very close to offering medical advice. Dexcom-funded Signos just announced it received Food and Drug Administration clearance for its application. Nutrisense and Levels? Not so much.

artificial intelligence

How AI provider tools my drive up health care costs

Providers are adopting AI scribes that draft clinical notes for doctors at a speedy clip in large measure because they can help take the burden off stressed out clinicians. But as Brittany reports, the tools my also drive up health care costs by helping providers bill more comprehensively.

AI scribes have been open in marketing their ability to make hospitals and other customers more money, but they offer unsatisfying answers for who foots the bill. Money for Medicare and insurance payments comes out of all of our pockets in the end. The story is also the topic of this week's STATus Report with Alex Hogan.

Health tech news roundup

Google announced that its wearable company Fitbit will be introducing an "AI-powered" health coach in its app, mirroring similar products from other wearable manufacturers.
EliseAI raised $250 million led by Andreessen Horowitz. The company develops AI to assist with operations and in an unusual pairing, it serves both health care providers and property management companies.
Develop Health raised $14 million led by Wing Venture Capital to automate prior authorization with generative AI. The prior-auth space is getting busy!
Eleos, an AI scribe company that serves community mental health providers, announced a new tool to "proactively detect potential changes to Medicaid eligibility during client sessions." The company says the tool was launched in response to Medicaid funding cuts in President Trump's big tax cut bill. In January, I wrote about Eleos' $60 million fundraise.

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