Weekly Health Tech Reads 10/18/26

The spat between Atrium and the North Carolina State Health Plan continues to escalate this week. On Tuesday, Atrium issued a press release noting that the SHP’s legal case was dismissed, applauding the court decision as a cost-saving tool for SHP members and citing language on the SHP website from a September interim agreement that Atrium isn’t more expensive than other health systems in North Carolina. In response, the SHP issued a press release on Wednesday noting that it is “building on” Atrium’s commitment to consumer affordability by… moving Atrium out-of-network. Per the SHP, this will save the health plan hundreds of millions of dollars by their estimates. Continuing the theme of last week’s newsletter, I’m not sure I understand the legality of any of these moves, but I am fascinated to watch what happens next in this escalating war of wills, as the current situation seems untenable. Hopefully they can resolve some of the uncertainty for SHP members quickly, as open enrollment opened this week.

Welsh Carson has exited its stake in the CenterWell joint venture with Humana, with BlackRock purchasing the stake for $2.8 billion. This move marks Humana’s second JV with BlackRock this year, after it acquired a minority stake in hospice provider Gentiva earlier this summer. This CenterWell deal seems like a win for all parties, particularly given how much the market has shifted since the original terms of this deal were struck in 2020 (and then re-upped in 2022). In 2020, the press release about the original JV noted that Humana held a small minority stake in Centerwell, presumably somewhere in the 20% to 30% range, which would imply an overall valuation of Centerwell around $3.5 to $4 billion. BlackRock’s structure in this iteration of the JV appears shorter-term and more flexible in how it deploys capital. BlackRock will invest in CenterWell over the next two years, including clinical operations across CenterWell’s ~150 existing clinics, opening de novo clinics, and making strategic acquisitions. Starting in 2028, Humana will have the option to acquire the CenterWell clinics; if it does not by 2033, BlackRock can sell them. As this Reuters article notes, this move seems to buy additional time for Humana to continue improving the profitability of the clinics before it needs to make a decision on whether to acquire them, while also removing a liability associated with WCAS’s put option that has loomed on Humana’s balance sheet.

Zocdoc announced it acquired Sohar Health, a startup that automates insurance eligibility checks. The move doubles down on Zocdoc’s recent announcement that it is shifting its focus to building the infrastructure layer for access to care, moving away from its historical focus of being a “front door” marketplace for scheduling. Note the quote in the press release from Vinod Khosla comparing Zocdoc’s ambitions as akin to Stripe in payments, Shopify in retail, and Sabre in travel. The Sabre mention in that sentence is particularly notable to me, as it isn’t usually mentioned in the same breath as Stripe or Shopify by VCs, but it does seem like a good analog here.

CareMore and SCAN announced a co-branded HMO MA plan in Los Angeles and Orange County, centered around 10 CareMore Care Centers in the area. The plan offers $0 co-pay primary care, among other benefits. CareMore is currently part of Mosaic Health, a partnership launched in 2024 between Elevance and Clayton, Dubilier & Rice. Mosaic also includes CD&R portfolio companies Apree Health and Millennium Physician Group. Given Elevance’s stake in Mosaic, it seems notable that CareMore is launching a co-branded plan with SCAN first.

Indiana-based health system Parkview Health acquired Ovation Healthcare, a PE-backed organization providing strategic support to rural hospitals. Ovation has 500+ clients across 47 states, ranging from critical access hospitals to health systems. It seems notable to see a not-for-profit health system acquiring a PE-backed services organization, particularly one focused on supporting rural markets (with a new Rural Health Transformation Program offering).

Shortly after Alignment indicated in an 8-K that it would commence litigation to address CMS’s 2027 Stars approach, it did indeed file suit against CMS in the D.C. District Court. Alignment argues that its main plan, which fell to 3.5 Stars for 2027, should be at 4 Stars if CMS calculated its score excluding ten measures that were also the focus of Clover’s lawsuit against it. Given how other court cases have been resolved here, Alignment seems to have a reasonable case to regain 4 Stars for 2027.

Rush University System for Health and Endeavor Health announced their plans to merge, creating a combined Chicago-based health system that would include 12 hospitals and 400+ sites of care. Endeavor will make an incremental $1 billion investment in the region, and both brands will operate under Rush.

Suki, one of the leaders in the market formerly known as ambient scribes, raised $90 million in Series E funding. Like other players in this space, Suki has expanded beyond documentation to revenue cycle, clinical reasoning, and operational workflows. Just last week, it launched “Ask” a clinical reasoning tool that integrates data from Wolters Kluwer’s UpToDate Expert AI API. Suki noted that patient encounters have grown 190% YoY in 2026, with revenue doubling in 2025 and 2026m, and that its partner business is growing 10x over the last two years. Suki’s partner business appears to be its technology integrated into other platforms, including HealthEdge, athenahealth, Zoom, and WellSky.

Abby Care, a model that trains and pays family caregivers, raised $82 million in Series C funding. Transformation Capital led the round. Abby’s core model supports family caregivers in becoming home health aides, while this funding round suggests Abby Care is evolving into a broader platform that provides infrastructure to manage home health care needs. The press release notes that Abby currently serves thousands of families across eight states and has grown its census 5x since raising its Series B in 2024. I find it particularly interesting to frame this investment through the context of the healthcare industry as a countercyclical jobs program. It is worth keeping in mind that healthcare jobs are the only thing driving job growth in this country over the last several years, while the economy faces fears of increasing job loss due to AI. At the same time, the country still faces massive shortages of healthcare professionals. What's a good win-win to help solve those issues? Training a new, lower-cost workforce of family caregivers. As someone who generally believes healthcare will slowly shift toward lower-cost settings and labor over the long term, this concept seems like something we’ll be talking about more in the years ahead.

Otter Health, a utilization management platform, raised $8 million in seed funding. Fika Ventures and Evidenced led the round. Otter is helping payors and providers use the same evidence-based clinical criteria, turning the adversarial utilization management process into a collaborative one that reduces costs.

In Health Affairs Forefront, David Brailer makes a strong case that AI will inflate healthcare costs by identifying more diagnoses and comorbidities in each visit, enabling billing for higher complexity without changing clinical care. Brailer looks back at the adoption of EHRs, which similarly improved documentation while showing no improvement in outcomes or cost savings. He suggests the answer here is structural, and that the changes needed to improve outcomes and costs in American healthcare are fundamentally payment and market structure changes, not technological.

This is an interesting Forbes article on why Eucalyptus’s CEO Tim Doyle sold the business to Hims & Hers for $1.6 billion, offering an insightful look into the mind of a successful venture-backed CEO and how he defines success at a company like Eucalyptus. I mostly find it interesting because it is essentially the polar opposite of what I tend to think. For instance, it eschews building “merely durable” businesses in favor of failing spectacularly while attempting a moonshot. This mindset came into play in 2023, when Eucalyptus laid off 30% of staff after its core business failed as digital ads skyrocketed, before speculatively pivoting to GLP-1s. Doyle then shared that he sold the business after realizing Eucalyptus wasn’t the future of health, but acknowledged that was what his talk track was supposed to be about. This is just one founder’s perspective, but I think it is emblematic of why venture-backed D2C healthcare moonshots can feel disingenuous when founders only admit after an exit that their public talk track was a ruse designed to drive to an exit. Personally, after reading this article, I’m left more convinced that healthcare would be better off in this country with more people focusing on building merely durable healthcare businesses, not speculatively gambling on D2C revenue growth while focused on the exit door.