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Once again, it’s time for some seriously spicy healthtech news from September on the Digital Health Inside Out podcast, the Digital Health Vitals edition. 🌶️🔥
But first, I’m excited to be attending HLTH USA 2026, the marquee healthcare innovation event, Nov. 15-18 in Las Vegas! Join me: https://app.ingo.me/q/56jqv
On Monday, Sep 28, Alex Koshykov and I recorded the September Digital Health Vitals with special guest Patrick E. Donohue, founder of Hill Capital Corporation, a former healthcare analyst and banker whose next fund is all health tech. Stephanie Davis had to skip this one.
And here is August’s recap.
TL;DR
Oura postponed its $2.1B IPO on Tuesday, a day after we recorded. I called the 4x book weak on air.
ChatGPT inside Epic is a distribution event, not a technology event.
CommonSpirit paid $1.9B to leave Conifer, an RCM company. Patrick and I expect more insourcing.
Who owns the clinician AI layer in 5 years? I said Epic. Patrick said foundation models.
Thumbs: Heidi 3 up (mine with an asterisk), Tandem 2 up, Archy 3 up, Rightway split 3 ways.
Here is the episode outline:
1. Oura: Recorded Monday, Postponed Tuesday
2. ChatGPT + Epic: Distribution, Not Technology
3. The 5-Year Bet: Epic or the Foundation Models
4. CommonSpirit Paid $1.9B to Get Rid of RCM
5. Thumbs 👍🏼, Thumbs 👎🏼: Heidi, Tandem, Archy, Rightway
1. Oura: Recorded Monday, Postponed Tuesday
Alex’s setup: $2.1B, a book reportedly only 4x covered. The next morning Oura postponed, and I published Oura Is Peloton 2.0, and Not in a Good Way: 3 VCs selling 73% of the shares, $6.2M left for Oura after RSU taxes, and a 4x book against a 20x median. So much for lock-ups making the VC pump and dump impossible.
Patrick: “It is eye-opening to see the majority of the proceeds going to selling shareholders.” Verdict: great private company, hard public company. “If only Oura can tell me I’m about to have an asthma attack, that’s worth a lot of money.” That product is in CEO Tom Hale’s keynote, not the S-1.
My Peloton analogy: same 19.8% subscription share, same platform pitch, growth that stalls once enthusiasts have bought, as with Teladoc, Amwell and Cue Health.
Alex’s analogy was Fitbit 2015, and he’s right: Fitbit popped 48% on day one and sold to Google at 63% below its IPO price.
Wellness without the ring? Patrick: “A great company and a good investment can be two very different things.” His picks: National Beverage, Planet Fitness, Life Time. Mine: whoever the payer market pays, since there is no money in prevention. Alex: “Let’s all invest in our own health.”
2. ChatGPT + Epic: Distribution, Not Technology
I got plenty of grief for calling it the end of the healthtech AI industry. Alex: “You use your stories as clickbait.” 😉
The largest consumer AI product on the largest EHR, read-only because liability still belongs to the doctor. If “we integrate with Epic” is your moat, OpenAI’s relationship with Epic beats yours.
Patrick: a wrapper is valid only with a deep vertical edge. In EHR, “I would be very concerned.” His analogy: Target built its e-commerce on Amazon, then had to leave. Amazon won. Target survived.
Patrick’s filter: founders who design the human in the loop on purpose. My pushback: Hippocratic AI still has nurses babysitting AI conversations. Patrick: which 1%, 5% or 10% of the process needs a human?
OpenEvidence’s founders are reportedly fielding acquisition interest. My sources say Daniel Nadler has wanted to sell almost from day one, and the Anthropic announcement is packaging for a buyer. The moat was never the technology, the Llama derivative or the 100% accuracy claims. The moat is the 40% of US physicians using it.
3. The 5-Year Bet: Epic or the Foundation Models
Me: Epic, the easy bet. At UGM they covered everything, down to 10-clinician practices. Only antitrust would change that, and I actually hope it does.
Patrick: foundation models. “This is Netflix coming in during the era of Blockbuster.”
Alex: “It’s healthcare. It might be 20 years.” Not wrong. 😉
One agreement: frontier models beat fine-tuned wrappers, as I wrote in August 2024 and when fine-tuning died. My bet: they partner with Epic rather than replace it.
4. CommonSpirit Paid $1.9B to Leave Conifer
CommonSpirit pays ~$1.9B over 3 years to exit Conifer 6 years early. Conifer lays off 1,037 in November.
After 14 years with a specialist, CommonSpirit’s cost to collect was double the industry average. Paying $1.9B was cheaper than staying. 🤯
Everyone else is buying RCM: R1 at $8.9B, Ensemble at $12B, Commure at $7B, and Waystar exploring a sale after buying Olive AI’s remains. Somebody’s math is wrong.
Patrick expects more: “The ROI calc has literally changed dramatically in the last 6 to 12 months. Now Claude and GPT are just doing the models outright.” My caveat: real AI adoption in healthcare is 10%, and “autonomous” coding often means Bangalore.
5. Thumbs 👍🏼, Thumbs 👎🏼: Heidi, Tandem, Archy, Rightway
Heidi, $340M at $900M. My asterisk: still no peer-reviewed study, and $240M of it is General Catalyst lending against revenue. Patrick pushed back: founders protecting equity, and 70% non-dilutive means the lender trusts the revenue. “Stuff I see all the time that never hits the headlines.” Heidi stays a strong maybe.
Tandem Health, $100M Series B. Me: up. 3 EU MDR Class IIa devices, no Epic to depend on. Abridge should be frightened: it is not FDA cleared. Alex’s counter, via Nabla’s Alexandre LeBrun: once cleared, every release needs FDA sign-off, and scribes ship every 3 days. Patrick: neutral, a U.S.-only investor.
Archy, $50M Series C. All up. Dental is fragmented, and Archy takes a cut of $300M in payments. Me: It’s Stripe for dentists.
Rightway, $155M at $1.75B. Patrick: up, PBMs are “ripe for disruption.” Alex: down. Me: neutral, though the PBM revolt is overdue. Its moat is transparency, and the Consolidated Appropriations Act makes 100% rebate pass-through law for employer plans by 2029. When transparency is the legal minimum, what’s left of that moat? 🤷🏼♂️
Catch the full episode here:
👉🏼 And don’t forget to subscribe. 😉
Upcoming events: Patrick’s Hill Capital Summit is Nov 12 in St. Paul. Alex and I are recording at HLTH, Nov 15 to 18 in Las Vegas. See you there. Daniel Nadler, the invitation stands. 😉
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👉👉👉👉👉 Hi! My name is Sergei Polevikov. I’m an AI researcher and a healthcare AI startup founder. In my newsletter ‘AI Health Uncut,’ I combine my knowledge of AI models with my unique skills in analyzing the financial health of digital health companies. Why “Uncut”? Because I never sugarcoat or filter the hard truth. I don’t play games, I don’t work for anyone, and therefore, with your support, I produce the most original, the most unbiased, the most unapologetic research in AI, innovation, and healthcare. Thank you for your support of my work. You’re part of a vibrant community of healthcare AI enthusiasts! Your engagement matters. 🙏🙏🙏🙏🙏