Weekly Health Tech Reads 6/1/25

Quote of the Week

Direct Primary Care (DPC) is one of those interesting examples in healthcare of an idea that should work, but for whatever reason has struggled to gain meaningful traction over the years. It’s not a new idea — you can go back 15 years to Qliance’s $6 million funding round from Jeff Bezos and Michael Dell as just one example of this.

It appears that DPC is again picking up momentum, both as a more appealing model for providers and a more consumer-friendly model, but also given the one Big Beautiful Bill making DPC accessible to HSA dollars.

Given those tailwinds for DPC models, it’s interesting to see the quote below with non-DPC primary care providers pushing back in this NEJM perspective against DPC as turning primary care into a “free market commodity” that will hurt efforts promoting VBC and also exacerbate provider shortages because of smaller patient panel sizes in DPC models (providers see ~400 patients versus 2,000 patients in traditional FFS models).

Other Top Headlines

• During its Q1 2026 earnings call on Thursday, Best Buy announced the restructuring of its health business, incurring $109 million in charges as it scales back services and workforce in the business. If you listen to the earnings call, it’s pretty clear the health business is not a huge strategic priority for Best Buy at the moment - it’s hardly mentioned at all in the opening comments, and only comes up in the last analyst question during the call. It’s understandable a retailer would be focused on other topics at the moment, but notable nonetheless given Best Buy’s healthcare buying spree from a few years ago. The restructuring appears specifically related to the Current Health business, as Best Buy leadership noted that provider partnerships to deliver hospital-at-home care have taken longer than expected to materialize, pointing to provider financial challenges and uncertainty around hospital-at-home waivers as two key challenges. Best Buy leadership noted that its other efforts to support care in the home remain viable, seemingly imply that the hospital-at-home model is no longer viable in their eyes.

• New Mountain Capital announced it is combining three of its AI-focused investments into a AI revenue cycle platform called Smarter Technologies. The three companies, Access Healthcare, SmarterDx, and Thoughtful.ai, all have products that use AI to address different parts of revenue cycle management, and combined the the platform will support over 500,000 providers, process more than 400 million transactions annually, and manage $200B+ in revenue. This move follows New Mountain Capital’s general playbook of stitching together assets into larger platforms (see Signify Health and Machinify as two other emails).

• CMS announced a set of changes to the ACO Reach Model starting in PY 2026. The tightening of risk score growth gaps (particularly for Standard ACOs) coupled with changes to benchmark calculations mean less ability to boost benchmarks via coding and a harder path to generate shared savings, particularly for organizations that historically served higher-risk populations. It could potentially disincentivize new entrants or growing ACOs and make financial performance less flexible in a VBC model.

• Elevance Health’s Blue Cross Blue Shield of Georgia sued two Georgia-based providers and HaloMD over No Surprises Act allegations. The case appears to echo a similar lawsuit filed by Aetna against Radiology Partners, where Aetna accused the group of exploiting the NSA to inflate out-of-network reimbursements. These lawsuits underscore growing tension between payers and providers over the use (and potentially the abuse) of the NSA’s independent dispute resolution (IDR) process.

• Axios reports that data analytics platform Clarify Health is for sale. Clarify raised a $150 million Series D round in 2022 at a $1.4 billion valuation, led by Softbank. Per the Axios report, Clarify is currently generating ~$30 million in revenue and losing $5 million in EBITDA annually.

• R1 RCM, a revenue cycle management platform that was taken private by TowerBrook and CD&R in late 2024 at a $8.9 billion valuation, announced it received an investment from Khosla Ventures after launching a new AI lab a few months back. The AI lab, named R37, was created in partnership with Palantir and appears set to deploy agentic RCM workers to enterprise customers later this year.

• Regeneron Pharmaceuticals will buy genomics firm 23andMe for $256 million through bankruptcy auction. That was the highest bid by a mile, with the second highest bid coming in at $146 million, which was submitted by a nonprofit research institute started by Anne Wojcicki, 23andMe’s co-founder and former CEO.

• Walmart is launching new offerings aimed at helping customers with Medicare Advantage plans to optimize their supplemental benefits, noting that two-thirds of MA members never use their over-the-counter benefits.

Featured Jobs

Startup Funding Announcements

• Abridge, an AI scribe / billing platform, is reportedly in talks to raise another round of funding at a $5 billion valuation, up from the $2.75 billion valuation it raised funding at just three months ago.

• OpenEvidence, an AI medical assistant, is rumored to be raising over $100 million at a $3 billion valuation.

• General Medicine, a virtual care marketplace, raised $32 million. This funding round generated headlines given it was started by the founders of PillPack and has ties to Amazon, which seems notable given Amazon’s efforts to build a seemingly similar offer.

• Reperio Health, a distributer of at-home health screenings, raised $14 million.

• AssistIQ, an AI supply chain management platform, raised $11.5 million.

• Axle Health, a home healthcare technology company, raised $10 million.

• Rad AI, a radiology-focused AI company, raised $8 million from four health systems.

• Brooklyn Health, a mental health assessment, raised $6.5 million.

• WellTheory, a platform for autoimmune disease, raised $5 million.

What I’m Reading

2025 Milliman Medical Index by Milliman folks
A team at Milliman published a helpful paper looking at rising medical costs over the last twenty years, finding that healthcare costs have grown almost 3x over that period, with pharmacy and outpatient costs as the biggest drivers of that growth. Read More

Workforce-Focused Analysis on GLP-1s: Research Findings and Methodology by Aon folks
A team at Aon analyzed claims data from 50 million commercial insured lives from 2022 - 2024 to understand the financial and clinical impacts of GLP-1s. It appears that the costs of GLP-1s are quite high, although sustained usage leads to better health outcomes and could lower medical trend growth over time. Read More

What Health Systems That Are ‘Losing on Medicaid Advantage’ Can do by Sachin Jain
Jain’s article offers a pragmatic roadmap for healthcare organizations struggling with Medicare Advantage profitability, urging them to focus on operational excellence, care delivery innovation, and strategic alignment. Read More 

What Cuts to Medicaid and Obamacare Could Mean for Hospitals, Insurers and You by Leslie Walker
The Tradoffs podcast discusses how proposed cuts could leave 14 million more Americans uninsured and remove ~$1 trillion from healthcare system over next decade. How states, hospitals, and insurers respond may have widespread effects beyond those directly losing coverage- impacting quality of care for the elderly and disabled, hospitals incurring uncompensated care costs, or insurers experiencing shifts in enrollment and financial strain- influencing the broader healthcare landscape. Read More

Digital Health Companions: Where Caregivers Can’t Go by Roy Schoenberg
This NEJM Catalyst article explores how digital health companions, integrating telehealth, AI, biosensors, and personal data, can support patients beyond traditional clinical settings. By extending the reach of healthcare providers, digital companions have the potential to positively impact patient outcomes and satisfaction. Read More

Chart of the Week

The WSJ highlighted the magnitude of changes on the horizon for HSAs as the big beautiful bill will potentially expand access to HSAs by 20 million people in the US, from 60 million to 80 million. HSAs have already grown substantially over the last decade, as highlighted in the chart below — total assets in HSAs have grown from ~$25 billion in 2015 to ~$150 billion in 2024: