Weekly Health Tech Reads 7/20/25

👋 Hey all! Kevin here. Welcome to this edition of my free weekly newsletter, where I share my perspective on healthcare innovation news from the past week (in this case, two weeks) that I found interesting.

As I’ve been doing the past few weeks now, here’s a reflection from me on the news before getting into the top stories of the week.

My Reflection

This week, like most weeks these days I suppose, almost everything seems to have an AI flavor to it. I am pretty convinced that AI adoption will in healthcare will have a positive impact on clinical outcomes, I think that is pretty self-evident at this point. But I am also equally certain it will drive upwards pressure on healthcare costs, even if I would love to be convinced that the opposite will be true.

The news this week provided some good examples of why I expect this outcome. Elevance noted on its earnings call that it is seeing pockets of providers using AI to upcode and increase revenue, which caused (a small) part of its cost issue on the ACA. On the other end of the spectrum, AdventHealth is suing BCBS KC because BCBS KC is using AI tools (Apixio) to review Advent’s claim submissions for inappropriate codes and remove them in order to reduce payments to Advent.

The Advent lawsuit included the interesting quote below in the introduction to the petition:

I think most here would agree that doctors should be making medical decisions, not auditors and accountants. Yet it’s fascinating to me to see Advent’s lawyers lump “artificial intelligence devices” in the same category as auditors and accountants. I think that inclusion will invite a lot more debate given the advances we’re seeing from AI models (this week brought another interesting study exploring how AI can be used to improve clinical practice, this time in cardiology). At the very least, it seems quite far from any sort of “fundamental principle” to me that AI can’t make healthcare decisions.

Regardless of where you net out on that debate, I think Advent’s argument provides yet another good indicator of how AI adoption will unfold in the industry, and how incumbents will attempt to harness it to protect their profit pools. Stepping back, I think it also provides a pretty good indicator that the more closely integrated payor / provider models should have a relative advantage versus peers moving forward.

Kevin

Other Top Headlines

• CMS issued its Calendar Year (CY) 2026 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System proposed rule this week. The proposed rule features a number of proposed changes that the public can comment on over the next 60 days. Some of the bigger suggested changes include site neutrality, phasing out the inpatient-only list, improving hospital price transparency, and adjusting the Hospital Star Rating system. A number of places had good coverage of the various impacts of the proposed rule, which I’m sure we’ll hear a lot more about as it is finalized later this year — I thought these HFMA and Healthcare Dive articles were good summaries, in addition to this Substack post from Trey Rawles highlighting key changes.

• The FDA sent Whoop a warning letter notifying Whoop that it’s blood pressure monitoring feature (BPI) is a medical device and needs FDA approval. The letter prompted a LinkedIn post from Whoop’s CEO in response, arguing that while Whoop supports the FDA’s ability to regulate medical devices, this is regulatory overreach and BPI isn’t a medical device. Whoop’s response falls a bit flat for me, given it markets two features specifically as “Medical Grade Insights” — BPI and AFib. AFib has FDA clearance. This all prompted a good conversation in HTN Slack about the tension between regulation and innovation here. Either way, I’m left scratching my head at how Whoop’s CEO went from being one of a handful of health tech leaders meeting with RFK to getting into a public spat with the FDA in a matter of months, particularly given the “wearables-for-all” opportunity in front of Whoop. It seems like a tactical misstep to not have resolved this issue with the FDA privately in the multiple meetings that were had prior to this.

• A group of Senators released a report on how Eli Lilly and Pfizer are paying telehealth startups to prescribe medications on their behalf via D2C channels. Stat provided a good summary of the report. The report gives a good sense of the financial relationship between the parties — i.e. Eli Lilly pays its telehealth partners $942,500 in three payments over a three year contract, and it receives data in return on the patients that it sent to those partners. The optics of these payments certainly seem challenging for pharma.

  • While some of the stats are a little alarming — the document notes repeatedly that 100% of people referred to Cove by Eli Lilly received migration medications. It seems worth that noting the N here is pretty small. The article uses data from 2H 2024 — and using Cove as the example, its only 15 patients who conducted a visit from Eli Lilly to Cove during that period. Eli Lilly referred 3,759 consumers to Form Health, and 620 consumers to 9amHealth. The article further notes that that 74% of people who received a telehealth visit from Eli Lilly ended up receiving a prescription, before noting that a larger number of patients used LillyDirect but didn’t end up doing a telehealth visit. Pfizer’s numbers were even lower — from Aug 27, 2024 to Jan 10, 2025, only 325 people connected to a telehealth visit through UpScript Health.

• UnitedHealth included $3.3 billion of asset sales in order to hit earnings targets last year, per Bloomberg reporting. The article notes that UnitedHealth pushed through a number of deals in Q4 in order to hit earnings targets it otherwise would have missed based on the performance of the business. The deals included PE-firm Warburg Pincus purchasing a controlling-stake in UHG’s hearing-benefits business Epic Hearing Healthcare, while KKR invested in another UHG business.

• AdventHealth and BCBS KC are in a legal spat, as AdventHealth Shawnee Mission Hospital is suing BCBS KC for withholding $2+ million in payments after using AI tools to identify and deny payment for clinically invalid diagnoses that Advent has submitted to BCBS KC. Advent argues that this clinical validation process BCBS KC has implemented via Apixio (and Cotiviti before that) violate a number of contractual and statutory provisions. The case highlights marketing materials from Apixio, noting that it markets itself as an AI-based solution that “markets its hasty reviews as a selling point”.

• Behavioral health providers Brightli and Centerstone announced their intent to merge. The combined entity would be the largest nonprofit behavioral health provider in the US.

• Lyra, a mental health provider for employers, acquired pediatric mental health startup Bend Health.

• Humana and Epic partnered, making Humana the first insurer to directly integrate into Epic.

• Johns Hopkins launched a new population health analytics startup, Illustra Health.

Social Post of the Week

Ari Gottleib’s LinkedIn post on the extent of the ‘fake member’ fraud problem that the ACA exchanges have is another eye-opening example of the issues the exchanges have in front of them. An excerpt of his post discussing the magnitude of the fake member problem is below:

2026 is looking increasingly dire for the exchanges, and this post does a nice job articulating just how big of a challenge this fake member issue might be — essentially wiping out the profit margin for a lot of plans on the exchanges. Elevance’s earnings call, suggesting it would be at a negative margin for the exchanges in 2025, provides a good indicator here as well.

Chart of the Week

On the topic of the exchanges… the WSJ and KFF analyzed 2026 ACA rate filings from seventeen states where the data are public, suggesting we should expect to see 10% - 20% price hikes in the exchanges. BCBS Illinois is currently seeking a 27% rate increase. Also worth noting the article says that Centene is in the process of refiling rates to account for the acuity increase in the ACA population, which seems to indicate.

Funding Announcements

• OpenEvidence, a AI-based medical search tool for physicians, raised $250 million at a $3.5 billion valuation. Check the section above for more details here.

• Numan, a D2C telehealth provider, raised $60 million. Numan reported it hit $90 million of revenue in 2024, more than double its 2023 revenue, while hitting profitability.

What I’m Reading

CMS 2026 Physician Fee Schedule: A Paradigm Shift Creating Unprecedented Opportunities for Health Technology Innovation by Trey Rawles
This post provides a helpful overview of the proposed 2026 Physician Fee Schedule, calling it the “most significant transformation of Medicare payment methodology since the establishment of value-based care initiatives.” Read more

Maternity Market Under Pressure by Sandbox Advisors
A good read from the team at Sandbox on how the maternity market needs to evolve in the US, highlighting a number of startups that are doing interesting work in the market. Read more

OBBBA's impact on the healthcare industry: Sweeping changes on the horizon by Yulan Egan & Jordan Peterson (Union Healthcare Insight)
This post does a nice job summarizing the impacts of the One Big Beautiful Bill and key takeaways for the industry. Read more

Seth Hain: 5 Thoughts on AI Heading into UGM by Seth Hain
Epic’s Seth Hain shared some perspectives on AI as Epic gears up for its August User Group Meeting. Read more

Survey on health & benefit strategies for 2026 by Mercer
Mercer surveyed employers earlier this year to understand how they are attempting to address continued cost growths. 51% of respondents think it is likely they will shift more costs to employees, while there is a meaningful uptick in employers willing to consider alternative plan designs (variable co-pays, high performance networks, etc). Read more

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