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AI
Kaiser’s Nurse Call Center AI Woes
It was fascinating to read this week about Kaiser’s call center nurses who are upset about “AI surveillance” in Kaiser call centers, arguing that the AI is making patient care worse. The article doesn’t provide much in the way of specifics about how AI is actually being used by Kaiser in its call center, or how it has actually made care worse, beyond sharing the general concept that AI is being used daily to determine whether nurses are productive.
The crux of the argument, as I interpret it at least, is that nurses feel they are no longer able to treat people with a human touch, as this quote illustrates:
“I used to use humor as a way to help patients heal, and I don’t feel comfortable doing that here because I know the calls are being recorded. You can always tell when a patient appreciates the humor or your personal compassion, but I don’t feel like call centers have tolerance for that because that’s not part of the script,” she said. “That really takes away from the whole point of being a nurse and what patients come to know from nurses.”
This issue arises as part of a broader challenge Kaiser has faced with AI, highlighted by mental health professionals striking earlier this year. Now, it’s worth noting here that while Kaiser’s nurses have expressed concern, it’s not clear that this concern has materialized into any real issue yet. The report noted that Kaiser has received no patient complaints about call times and provides no examples of anyone being fired for being on the phone too long. Kaiser said it does not use the metric to assess performance.
Nonetheless, the article opens the door to a narrative in which Kaiser prioritizes profits over patient safety, as suggested by a nurse in the article. On some level, it has to be true that Kaiser is keeping an eye on profits here, right? I don’t think that is a nefarious statement to make. The patient safety issues being raised seem to be a much broader question that isn’t necessarily specific to AI implementation at Kaiser. Instead, it seems like a hard reminder of the broader workforce transformation and organizational redesign that healthcare organizations are grappling with. It doesn’t matter much how Kaiser is actually using AI in its call centers if it has lost the trust of the folks staffing them, as this article indicates.
It’s quite interesting to see how call centers have become the tip of the spear for this organizational redesign given the AI transformation afoot. It reminds me of reading this HBR article from a few weeks ago about the success of UHC’s Consumer Resolution Center, and how it is using “a combination of AI algorithms and well-trained, empathetic employees” to rapidly resolve consumer issues and apply those learnings more broadly across the organization. The UHC experience provides a useful foil to the Kaiser issues above, highlighting the positive side of an organizational transformation that has created a new key strategic asset benefiting consumers. The difference in tone between the articles is notable — UHC’s article offers a perspective on enabling employees to act with more empathy, while Kaiser’s offers a perspective on how employees feel they cannot act with empathy.
If I’m a healthcare exec considering this type of AI-centric organizational redesign within my operations function, I’m thinking long and hard about how to use the UHC CRC model as a blueprint for success while staying as far away as possible from the trust issues Kaiser faces.
HTN EXCLUSIVE
Exclusive: Evidenced, a venture fund focused on healthcare bets with regulatory tailwinds, raises $24 million
Evidenced, a VC fund run by industry veterans Bryan Sivak and Sean Glass, has raised $24 million for its first fund. We’ll be chatting with Bryan and Sean tomorrow on the Grand Round Up at 9:35am CT about the new fund.
Its list of LPs includes Rockefeller Foundation, Rock Creek Group, and Colibri, among others. Evidenced already has an impressive portfolio of healthcare companies we think are worth following, including Accompany Health, Fabric Health, Ilant Health, and Photon.
Evidenced’s thesis centers on identifying opportunities with regulatory tailwinds, which has always struck us as one of the most straightforward ways to identify alpha in healthcare services investing. It goes without saying that this is an incredibly volatile moment in state and federal policy, which I’d think would only increase the opportunity to generate alpha if one can read the policy tea leaves more effectively than others.
Given all the policy swirl, we’re looking forward to chatting with Bryan and Sean tomorrow to hear their thoughts on where durable policy tailwinds might be found and what seems more ephemeral.
CARE DELIVERY
Do you have access to the “Billionaire’s Vagina Club”?
One of the things I am always most intrigued by in the AI abundance narrative is the general sense that, because of AI, every person will have access to better healthcare than the richest person has today. Elon Musk made this point this week when speaking about the capabilities of his Optimus humanoid robot. In some sense, I don’t disagree. I’d also imagine that the average person today has access to better healthcare than the richest person did in the past, such is the nature of progress. Surgical robots have been around for decades, and it’s not hard to envision a scenario where combining that capability with AI would improve surgical outcomes. But the premise begs the question: what kind of healthcare do the richest people have access to today?
Enter the “Billionaire’s Vagina Club,” the moniker for an exclusive concierge OB/GYN practice run by a Stanford gynecologist that was highlighted by The New Yorker the other day. The practice, which helps women increase their “sexspan,” costs $30k - $40k a year and apparently has the Silicon Valley elite queuing in a long waitlist. The New Yorker article doesn’t mention this specifically, but it appears the practice is part of Private Medical, which has also previously been covered for its concierge model for Silicon Valley.
I saw this article because Joanna Strober, Midi’s Founder / CEO, posted about it on LI this week. Strober shared she was quoted as feeling sad that women feel the need to pay this much to access menopause care, while making the point that Midi’s care is equally good at a fraction of the price. I’d agree with that sentiment, and even go one step further by suggesting that Midi’s care should be significantly better in time, given AI’s ability to sift through more information than any human possibly could. The basic premise being that Midi’s platform has a larger user base, more data, and greater ability to invest in AI capabilities to use that data to suggest personalized care pathways for any individual using it.
So if all of that is true, why do the richest people still spend so much money on things like this Billionaire’s Vagina Club and not just use tools like Midi at a fraction of the price? That is something of a rhetorical question, as I think the answer is fairly obvious, for the same reason that I’d imagine not too many billionaires use TurboTax to file their taxes. I think this also points more generally to the limitation of the abundance argument, at least as it relates to healthcare.
The kind of healthcare that the richest people pay through the nose for is exclusive access to well-trained humans who provide white-glove service and handle everything they don’t have time for. That exclusive access to the best humans inherently creates scarcity that flows downward from the top of the market. Want to access Bryan Johnson’s Blueprint protocol, so you too can hallucinate about living forever before while hopefully not becoming an internet meme for the misfortune of having an incurable disease? Great, that’s free. Want Bryan Johnson’s medical team to guide you through the protocol? Oh, cool, please pay $1 million a year for that. And thus, scarcity persists.
I think all of this provides a good roadmap for how healthcare will continue to evolve in the years to come and the different paths of travel for those who can afford it versus those who can’t. One will be a more bespoke human (and capitalist) experience; one will be a more automated (and government-run) experience. Healthcare’s consumer-era seems to be speeding up the bifurcation here. So I’d imagine that Musk will be right that an average person will have access to better medical care than the richest person today. I’d also imagine this future state still looks a lot more like the scarcity-driven healthcare crisis we have today than the abundant robot utopia he seems to envision. That core dilemma, where healthcare seems to be in a perpetual state of being both better than it has ever been and an unmitigated disaster, seems well-positioned to persist.
CHART OF THE WEEK
Stat released a new investigative series this week called Out of Pocket, Out of Reach, focusing on the myriad issues facing employer-sponsored health insurance and how expensive it has become. The Stat series appears set to cover a wide range of future topics as well — the high costs of health systems and pharma, the inability for payers to manage those costs, and how this is increasingly a key issue for voters. One topic it highlighted in particular this week was the massive premium increases in the small group market, which it offers as a piece of evidence that the ESI market is crumbling.
The question of whether the ESI market is crumbling is a fascinating one to us, so we polled the community to get your perspectives. The distribution of answers was fascinating to me — see below:
It’s almost a dead split among the nerds who agree the ESI system is crumbling (21 of you) and those who disagree (20 of you), though those who disagree appear to feel more strongly than those who agree.
It strikes me as indicative of the general sense of uncertainty in the industry at the moment, with many differing opinions about how sustainable all this is moving forward. If I’m sure of one thing, it’s that this conversation feels like it is still in its early innings, and the uncertainty about the path forward for the employer market is sure to create opportunities for entrepreneurs navigating this market as political debates in both DC and states about what to do about healthcare heat up.
DATA TO PONDER
35x
The increased engagement CVS sees from Signify care management vs Aetna
On Thursday afternoon, I had the pleasure of interviewing Sree Chatuguru, CVS Health’s Executive Vice President and President of Health Care Delivery, about the state of care delivery at CVS across Oak Street, Signify, and MinuteClinic. We covered a lot of ground across how Oak Street is adjusting to the post-v28 world, how Signify is engaging patients in-home, and how MinuteClinic is expanding into primary care.
The most interesting part to me was picking up on the theme of trust, and how CVS is seeking to build trusted relationships with consumers. Sree shared an example of how CVS is publishing forthcoming data on what engagement looks like when Aetna conducts care management outreach versus when Signify makes a warm handoff from an in-home visit to care management. Signify sees a 35x increase in engagement rate versus Aetna, with 81% connected to Aetna’s high-risk care management program that day, which Sree points out is a big deal for MA members, as roughly 60% are essentially unreachable for health plans by phone.
It’ll be fun to see the published data when it comes out, but it’s another data point highlighting the immense value of a human connection, particularly in a world where nobody responds to automated spam an abundance of automated phone calls / emails.
Featured Jobs
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Pareto Health, a self-funded benefits platform for small and medium-sized employers, is hiring for the following roles:
VP, Account Management (Central Region) Remote (Chicago or Kansas City)
Senior Solutions Consultant Remote
Catalyst Health Group, a primary care enablement platform, is hiring for the following roles:
Manager, Marketing Communications Hybrid (Plano, TX)
Sr Medical Billing Coding Specialist Hybrid (Plano or Arlington, TX)
Contact us to feature roles in our newsletter.
Other News From the Week
On the heels of Clover’s Stars win against CMS and CMS’s decision to recalculate scores for other plans based on only a portion of Clover’s court case, both Elevance and SCAN have filed lawsuits against CMS in recent days. Elevance and SCAN are both seeking to have their Star scores recalculated in the same manner as Clover, as each party argues it would receive additional quality payments from a higher score. Elevance says it would receive an additional ~$115 million, while SCAN expects $125 million. SCAN’s lawsuit refers to the Stars program as “undeniably broken,” indicating how untenable the current state of the Stars program is in its current state. It will be interesting to keep an eye on what CMS does here and how they seek to address the massive uncertainty that looms over the Stars program as a whole, while avoiding a steady flow of lawsuits from plans over the coming years.
As ACA 2027 premium increase requests from payers receive more coverage, it appears we’re going to have another round of conversations about whether the ACA is in a death spiral, given the double-digit rate increases many payers have requested. The WSJ cited rising healthcare costs and falling enrollment in the ACA market as driving the premium increases, which feels like a textbook death spiral. Although when I read the varied reasons for requested increases — which range from the No Surprises Act, to provider AI, to market exits, and more — it strikes me as more a reflection that we’re in an extremely inflationary environment than a death spiral.
CVS soft-launched its new consumer-facing app, Health100, on the App Store this week. CVS has made this app a central part of its narrative around becoming a trusted consumer healthcare partner; it’ll be worth keeping an eye on updates around traction here on investor calls over the coming quarters.
Alignment is facing a whistleblower lawsuit from a former key exec alleging accounting improprieties, which drove its stock price down ~20% for the week. The lawsuit claims that Alignment inappropriately capitalized software development costs for a team of software engineers that should have been categorized as SG&A expense. We discussed the complaint in Slack this week,
Tampa General Hospital sued Eli Lilly over its recent 340B action, accusing Eli Lilly of monopolist behavior. TGH claims it will see a $24 million annual cost increase due to Lilly’s behavior, as its acquisition costs for Lilly medicines will increase by ~43%. If I were the hospital lobby, I may have preferred a different hospital to make the argument here — TGH, despite its argument that it is a safety net hospital in need of the 340B program to make ends meet, has consistently generated an 8% operating EBITDA margin the past few years on $400 million of operating profit annually.
Withings formally announced Withings Medical, formally marking its entry into the care delivery arena, with ACCESS serving as the first commercial test for Withings here. Withings is a fascinating entrepreneurial story in healthcare; since its founder repurchased it from Nokia in 2018, it reports having grown revenue by 90%, achieved profitability in 2025, and Withings’ remote patient monitoring offering now represents 17% of revenue.
Memorial Hermann joins the parade of health systems culling back insurance offerings, exiting the commercial insurance market. It will remain in the Medicare Advantage market, where it currently has ~15,000 members.
Funding Announcements
Pearl Health, a VBC enablement platform, raised $50 million in equity and $60 million in debt. a16z led the round. Pearl reported reaching profitability in 2025 while tripling its patient base between 2024 and 2026. It currently supports 10,000 providers across 40 states and manages $3.6 billion in annual medical spend. The press release takes an AI-centric view of Pearl’s platform, with a16z noting that Pearl is finding success in helping providers manage VBC contracts via technology versus clinical workforce expansion.
Handspring Health, a virtual mental health clinic for pediatrics, raised $19 million. RPS Ventures led the round. Handspring reports having served 4,000 families while growing revenue 10x over the past two years.
Queue, an automated pharmacy kiosk, raised $12.6 million. AlleyCorp led the round, and Queue reports having a national pharmacy chain as a key customer, with a working prototype in the commercial validation phase. Automated healthcare kiosks of various types have come and gone over the years — higi naturally comes to mind as a high-flying company from the previous digital health boom cycle where momentum has since petered out. The concept has a natural conceptual appeal given the issues pharmacies face these days. I will be curious to see whether this pharmacy-oriented model can achieve more durable success.
What I’m Reading
Venrock released its annual survey of healthcare leaders, offering an interesting look at how healthcare insiders view the state of the market. As I read the survey responses, the general sentiment expressed seems to be one of pretty deep cynicism. In particular, it doesn’t seem anyone is particularly optimistic about the impact AI will have on the industry or the current policy landscape. When asked how AI will impact the reimbursement landscape in the next 18 months, almost 1 in 4 respondents said they think CMMI’s ACCESS model will enable fraud by duping seniors into hard-to-cancel subscriptions. It’s not often that I feel like I’m the optimist in the room, but alas I guess I have reached that point in not thinking that ACCESS will enable fraud at scale. It is also a bit wild to see the shift in IPO expectations for digital health as well — last year, 42% of respondents thought there’d be an IPO in 1H 2026. Now 51% of respondents don’t expect an IPO until 2028 or later. I’d be curious whether that shift is more a reflection of the state of the public markets or the private markets. On the one hand, Hinge has done quite well since its IPO, as it currently is up ~118%. On the other hand, we’ve recently seen Ensemble sell to Thoreau and choose to remain private versus pursue an IPO. The benefits of remaining private seem quite appealing at the moment — between the public-private valuation gap, quarterly reporting requirements as a public company, and an active secondary market for private companies, what’s the benefit of being public?
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