Roundup: All the News You Missed from HLTH, Plus a Q&A on the Future of Health Payments

What a whirlwind week at HLTH! This is an abnormally jam packed edition because of how much news was announced at the conference. On a personal note, I spoke on several panels and smaller breakout events on the topic of my recently-published book. Storytelling was an important theme for this year, particularly amongst the clinicians and entrepreneurs in attendance, which I was heartened to see.

I also moderated two panels on topics that are near and dear to my heart. The first was on the extreme cost pressures that employers are grappling with moving into 2026, and what they’re doing about it. More and more we’re seeing the topic get elevated in the press, and we’re finally asking the question of whether we’ve got the healthcare system we deserve - particularly given how much we spend on it. America’s biggest employers are genuinely now making moves when it comes to cost containment and increasingly starting to say no – one example is in large employers starting to put their foot down on covering GLP-1s for obesity. 

I also spoke with Centene CEO Sarah London about the future of Medicaid at a time when millions face losing coverage in the coming years. London said Centene, which insures about 1 in 15 individuals across the country, is doing what it can to ensure those who are eligible for Medicaid can still access it. A big focus is rural underserved communities, where Centene is training its own members to take on roles as caregivers and doulas. We also discussed a potential bright spot – ICHRA – and whether employers will increasingly jump on the bandwagon. ICHRA essentially offers a way for employees to provide a monthly, tax-free allowance to employees that they can use to purchase health insurance. London thinks it’ll grow slowly for a while, but has the potential to shoot off like a flood assuming policymakers continue to view it favorably. Also notable: London says she’s switching to an exchange plan herself, and offering ICHRA as an option to workers in Indiana next year.

I did ask around in meetings this year about employers considering the switch. A few told me they got close, and saw some potential cost savings, but felt deterred by the uncertainty related to the future of the ACA. My sense is 2026 will see some growth for ICHRA, but primarily early adopters. If policy is favorable, 2027 will be the year to watch.

Overall vibe check this year: More subdued than prior years, with an increasing recognition of what’s broken versus unbridled optimism about AI (that’s honestly what I expected). The most popular session involved Mark Cuban talking about the problems he perceives with pharmacy benefits managers and drug pricing. Wearable players and other online consumer health providers were also out in force this year. Consumer companies rallied audiences around the concept of a more convenient system without insurance. Notably absent from the stage: Anyone from the federal government on account of the shutdown. All the leaders expected to speak this year cancelled.

How was your HLTH? Drop me a line. Would love to hear your lowlights and highlights. 

With Annalisa Merelli

Lyra Health launches mental health chatbot

The news: The mental health benefit company Lyra Health announced the launch of Lyra AI, a generative AI product allowing its members to discuss their mental health.

What Lyra said:“ This is real, and clients and patients are very, very comfortable with using gen AI for therapy needs,” Jenny Gonsalves, the company’s chief product and technology officer, told STAT’s Mario Aguilar. 

Why it matters: AI talk therapy is under a lot of fire lately, and fears that the technology can behave unpredictably — spiraling into delusions, or encouraging self-harms — are supported by reported incidents. This launch shows the companies who intend to operate specifically in the AI and mental health space are not deterred. 

Hers discovered menopause and perimenopause, too

The news: Hims & Hers Health will launch treatment plants built specifically for the trendiest reproductive health phase these days, menopause (and the increasingly popular perimenopause).

The numbers: Hers has half a million subscribers, and is expecting to use this new service to expand its patient base, tapping into the 1.3 million American women who experience menopause every year. This solidifies the company’s trajectory toward $1 billion worth. 

Why it matters: Hims is launching testosterone treatment next year, and with Hers offering various hormonal treatments for menopause, endocrinology is increasingly a focus of the digital clinic.

Verily launched a new consumer health app

The news: Precision AI health company Verily launched Verily Me, a consumer health app, at HLTH. The app offers personalised recommendations from clinicians based on the user’s medical history.

The offer: The app also offers an AI “companion” (essentially a health-focused assistant) and a photo-based meal tracker. 

The market: According to a Verily-sponsored survey, 75% Americans say they would like an app that gives personalized clinical recommendations. 

Trilliant Health rolls out an AI bot to check hospital prices

The news: health data analytics company Trilliant Health is releasing a free AI bot that can dig into hospital prices, empowering patients to compare offers. 

What Trilliant Health said: “Although this data is now public, it is often published in formats that make it unusable—or hidden behind paywalls. Trillian Health's AI chatbot removes those barriers "by making hospital price transparency data freely available to everyone," Trilliant's CEO Hal Andrews told Fierce Healthcare.

Why it matters: Although price transparency laws are in effects, many hospital systems publish their price list in formats that are unreadable for humans. This could allow price transparency to actually work as intended and give patients comparison tools.

Up next

The latest class of Mayo Clinic Platform_Accelerate health startups has been announced. It comprises 11 companies developing AI for health care products, including at-home cancer detection tests, ADHD treatment, and precision psychiatry. 

Deals

Vega Health raises $4 million: Seed funding from Bessemer Venture Partners will support the startup to curate a marketplace of AI interventions.

A $440 million health equity AI fund: Town Hall Ventures raised its fourth fund with the goal of supporting startups bringing AI health developments to underserved communities. 

Redox and Kno2 partner up: The two companies will work together to solve the challenge of transferring data between health systems while making them immediately usable. The financial details of the partnership have not been disclosed. 

A $20 Series A for Weave Bio: The funding, led by USVP, will support its AI-native platform regulating clinical workflows. This brings the company’s total capital raised to $36 million. 

$38 million for OneImaging: The radiology platform, which has grown 50x in the past three years, aims to make imaging more affordable by connecting people with a broad, nationwide network of accredited imaging centers. 

Marble Health raises $15.5 million: The youth mental health company works with schools to provide mental health care to students. 

Pear Suite gets $7.6 million: The startup closed the Series A round, led by Rock Health Capital and Nexxus Holdings, to support its mission of providing AI tools to empower community health care workers.

$10 million seed financing for OutcomesAI: The AI-enabled nursing care platform secured seed financing led by Santé Ventures to combine AI voice agents with licensed nurses to expand nursing capacity. 

Well Theory raised $14 million: The series A, led by General Catalyst, will expand the startup’s women-led and personalized approach to treating autoimmune conditions. 

Hazel Health acquires Little Otter: The pediatric behavioral health company, which has raised at least $86 million so far, had recently acquired mental health startup BeMe Health. The financial details of the Little Otter deal were not disclosed. 

1. Given how closely you follow goverment policy, what’s your prediction — will the existing subsidies actually expire at the end of the year?

In their current form?  Yes. I think there will be some last-minute agreement to provide some relief, but the extended subsidies from The American Rescue Plan and the Inflation Reduction Act that were designed to expire this year are not going to move forward in their current form.

2. The government is currently shut down, and a lot of what’s at stake is healthcare. Do you see room for bipartisan collaboration here across any part of healthcare; if so - what?

At the federal or state level?  I know all conversations are federal currently, but let’s not forget how much of what we all experience is actually happening at the state level, and more on that in a second. On the federal level, at some point the government will reopen, and anything meaningful in healthcare has to happen with bipartisan support. I think the public's appetite for another 51-vote reconciliation package is pretty low. I think this current situation is reckless, but I do think there might be a silver lining. Whether you’re for it or against it, it's clear the original Patient Affordable Care Act, foundational to this whole argument, aimed to tackle access rather than cost.  Those debating it even admitted as much. The drivers of cost in healthcare are more politically fraught and complicated than access, so that’s what they did.  I think what you’ll see when the subsidies expire and people start to feel the true explosion in the cost of plans, goods, and everything else…without it being refracted through employer plans and subsidies…there will be the political will to tackle cost. One thing I would do if I was in the Trump administration is I would offer a carrot in the form of loosening some of the Medicaid cuts, in exchange the elimination of Certificate of Public Need laws at the state level for the 35 states that still have them. That would open up competition in those states and drive prices down. Could be a bipartisan compromise in a world where we really need one.

3. AI is super focused on administrative use cases in healthcare, including RCM. How big is the cost savings really, especially as these are software and would want high-margin.

Enormous. Estimates on administrative costs in healthcare hover between $1T to around $1.5T depending on who you talk to. Billing and insurance-related costs alone cost close to $800B, similar in size to the budget for the Department of Defense. Anywhere from 30% to 50% of admin cost in healthcare is waste, so anywhere from $300B-$500B, with much of it benefitting the industry. I don’t think it is nefarious, it's just where we’ve gotten, and I think it can change. AI is no panacea, and I don’t even think it’ll be the biggest catalyst for change (I think a generational shift is), but the reason AI can offer us a path out of this insanity is because it can offer clarity where there was previously obfuscation, and the profit margin for AI businesses is larger than in traditional SaaS. 

Where a traditional software margin for a business might be 30%-60%, for AI is 70%-80% or better.  That would allow you to operate for a lower price point, and potentially steal share faster — a bigger share of a smaller pie. Obviously it’s more complicated than that and the devil is in the details, but it’s now feasible to eliminate huge chunks of yesteryear’s business drivers. 

On the table now could be anything from: (crawl/walk) - can we operate the same billing and insurance-related billing and insurance-related processes at half the cost with the same profit profile to (run) can we eliminate RCM? The growth in the cost of administering healthcare relative to waste has to go down for the country to operate. The future business winners will drive that, not add to it.

4. In ten years does prior authorization exist?

I hope not, but probably, in some form. Look no further than The Centers for Medicare and Medicaid Services (CMS) contemplating prior authorization in traditional medicare. I get it, 10 years from now sounds like an eon in the world of AI development.  On the other hand, Jeff Bezos shipped his first book in 1995 and we still don’t have reliable online scheduling in specialty care 30 years later. 

My opinion, but prior authorization is a motivational challenge and financial lever … not a technological one. As long as there is a “need” to gate spend, there will be prior authorization until providers, payers and employers are willing to come together and contract differently. Until recently, I don’t think the technology existed to offer them the common tools to do it, and present the “non zero sum” financial tools to make it happen. I think now, the tools do exist to offer such a pathway, but it’ll take some time to unwind the financial motivations that drive prior authorization.

I don’t really think technology that simply makes the authorization easier really does a ton to solve the issue. Prior authorization gates things payers really don’t want to pay for, so, they won’t. That has to change upfront in the negotiations. I’m not pessimistic, I actually have high hopes it will happen…in fact I’ve seen it start, but a decade in healthcare is the blink of an eye and these interests are deeply entrenched.