| A healthcare veteran's perspective
Fawad Butt, CEO of Penguin Ai, has watched the market become flooded with startups promising transformative technology — but he believes much of the industry's messaging is more hype than substance. Before launching Penguin Ai in 2024, Butt had held C-suite data leadership roles at both Kaiser Permanente and UnitedHealthcare, as well as served as an advisor and board member for several health tech startups. Drawing on these years of experience, he has developed a candid perspective on what's actually driving progress in the sector. Technical differentiation? No way
The market for healthcare AI products is getting more and more crowded, and rapid advances in cloud tools and large language models make it easy for new startups to quickly replicate what others build, Butt pointed out. "For customers, they're seeing 30 companies come in and pitch the exact same thing, so they're confused as hell. I think, if the question is, what's the differentiation that can sustain it, then I think the answer is, I have no freaking idea. Honestly speaking, I think whoever is telling you that they have differentiation right now is making it up," he declared. Agentic AI has limits
Butt believes AI agents do a swell job of handling small, discrete tasks but struggle to coordinate more complicated workflows that require various parts working together, such as managing the full medical coding-to-claims submission process. Data leakage could be pushing AI forward
Knowledge and performance among healthcare AI models had hit somewhat of a plateau a few years ago — but they have gotten a lot smarter since, Butt noted. They're getting smarter because they're accessing more data, which he suspects might partly come from healthcare employees unintentionally feeding sensitive enterprise data into tools like ChatGPT and Claude. "The only way you can make these models smarter is to give them more data. And my assumption is that all the public data had been consumed, and all the rest of the data was in private places like United and Humana and Elevance and Cleveland Clinic and so forth. But somehow these models keep popping up and getting smarter and smarter, and there's only one answer. They're getting access to some of this data somehow," he remarked.
Some humans must be removed from the loop
As AI models continue to improve, keeping humans in oversight roles will likely become inefficient and ineffective because people start automatically approving outputs, Butt said. In the next five years or so, he expects automation to take over many administrative functions, which would allow staff to focus on clinical work where shortages persist. — By Katie Adams | 
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