Medical Care
Funding for AI in Biotech/Healthcare Startups Rebounds After 2023 Dip
2024-12-12
This week in the world of AI has been a fascinating journey. From the announcement of Dimension Capital's new $500 million second fund for healthcare-related AI startups to the various significant rounds in the field of AI biotech/healthcare. It's clear that AI is making its mark across industries, and biotech and healthcare are no exception.

Uncovering the Impact of AI on Life Sciences and Venture Capital

Dimension Capital's New Fund and Its Significance

Earlier this week, life sciences venture firm Dimension Capital made a significant move by announcing the raising of a new $500 million second fund. This comes just two years after their first fund, highlighting the growing excitement among investors in healthcare- and biotech-related uses for AI. It shows their confidence in the potential of AI to drive innovation in the life sciences sector.In 2023, venture funding to AI-related biotech and healthcare startups was $4.8 billion, a decrease from 2022. However, in 2024, funding to the area has bounced back, with such startups raising $6.7 billion through early December. This indicates a renewed interest and momentum in the field.

Notable AI Biotech/Healthcare Rounds This Year

In April, Xaira Therapeutics emerged from stealth and secured more than $1 billion of committed capital. Led by lead investors Arch Venture Partners and Foresite Capital, who jointly incubated the company, Xaira is using AI models to find new drugs. Its founding CEO Marc Tessier-Lavigne, who previously served as president of Stanford University, brings significant expertise to the venture.In February, Abridge, building AI-powered clinical documentation tools, raised a $150 million Series C led by Lightspeed Venture Partners and Redpoint Ventures. The new round valued the Pittsburgh-based startup at about $850 million, demonstrating the market's belief in its potential.In June, EvolutionaryScale, developing a large language model for creating novel proteins, raised a $142 million seed funding. Led by Daniel Gross, Lux Capital and Nat Friedman, with Amazon Web Services and NVentures also participating, it shows the diverse range of investors interested in this space.Finally, in October, Terray Therapeutics, a biotech startup developing small molecule drug therapeutics through its AI platform, raised a $120 million Series B led by new investor Bedford Ridge Capital and existing investor NVentures.

The Impact of AI on Data Centers and Venture Funding

We've seen a lot of focus on data centers in this space, and this week a related startup raised big. London-based AI hyperscaler Nscale raised a $155 million Series A led by Sandton Capital Partners. Launched just in May, the company develops sustainable AI-ready data centers, deploys GPU infrastructure and delivers AI cloud services. The booming AI cloud and compute services are also seeing significant venture funding.In conclusion, AI is clearly having a profound impact on nearly every industry, and biotech and healthcare are no different. The various funding rounds and startups in this space demonstrate the potential for innovation and growth. As we move forward, it will be interesting to see how AI continues to shape the future of life sciences and venture capital.
The Risks and Alternatives of AI Confidence Scores in Healthcare
2024-12-12
AI is making significant strides in healthcare, from diagnostic tools to personalized medicine. While healthcare leaders are optimistic, IT leaders have concerns. In this article, we'll explore the challenges and solutions related to AI confidence scores in healthcare.

Unraveling the Truth about AI Confidence Scores in Healthcare

Confidence Scores Explained in the Context of AI

Confidence scores in AI are numbers that indicate an AI tool's certainty about an output, such as a diagnosis or a medical code. These scores typically come from a statistical confidence interval, which calculates the probability of an AI output's accuracy based on its training model. Just like a dating app's match score, they can mislead users into thinking they're reliable. For clinicians using generative AI summaries, a displayed confidence score can lead to unintended errors if they trust the technology over their own judgment.

For example, an off-the-shelf AI tool might give a high confidence score for a diagnosis based on population-level training, but it doesn't account for the specific clinician's population or local health patterns. This leaves clinicians with an incomplete picture and can lead to mistakes.

A Flawed Approach for Grading AI Output

AI confidence scores often appear as percentages, suggesting a certain likelihood of a code or diagnosis being correct. However, for healthcare professionals not trained in data science, these numbers can seem deceptively reliable. There are four significant risks associated with relying on these scores:

1. Misunderstanding of context: AI workflows only contain population-level training and don't account for a provider's specific demographic. This leads to broad assumptions and an incomplete picture for clinicians.

2. Overreliance on displayed scores: A 95% confidence score can make clinicians assume there's no need to investigate further, oversimplifying data complexities and encouraging them to bypass their own critical review.

3. Misrepresentation of accuracy: The intricacies of healthcare don't always match statistical probabilities. A high confidence score might match population-level data, but it can't diagnose a particular patient with certainty, creating a false sense of security.

4. False security generates errors: If clinicians follow an AI recommendation too closely based on high scores, they might miss other potential diagnoses, leading to delayed critical interventions or billing mistakes.

A Better Way of Helping Users Understand the Strength of AI Output

To create trustworthy AI outputs, it's better to use the following methods:

1. Localize and update AI models often: Tailoring AI models to include local data, such as specific health patterns and demographics, makes the output more relevant. For example, there are more patients with Type II Diabetes in Alabama than in Massachusetts, and timely, localized data is crucial. Regular retraining and audit processes ensure the models reflect current standards and discoveries.

2. Thoughtfully display outputs for the end user: Consider how each user interacts with data and design outputs to meet their needs. Instead of a single confidence score, show contextual data such as how often similar predictions have been accurate in specific populations or settings. Comparative displays help users weigh AI recommendations more effectively.

3. Support, but don't replace, clinical judgment: The best AI tools guide users without making decisions for them. Use stacked rankings to present a range of diagnostic possibilities with the strongest matches on top, allowing clinicians to use their professional judgment.

Clinicians need tech tools that support their expertise and discourage blind reliance on confidence scores. By blending AI insights with real-world context, healthcare organizations can provide safer patient care and build smoother workflows.

Brendan Smith-Elion is VP, Product Management at Arcadia. With over 20 years in the healthcare vendor space, his passion is product management. He has experience in business development and BI engineer roles. At Arcadia, he's dedicated to driving transformational outcomes for clients through data-powered, value-focused workflows. He started his career at Agfa, led the cardiology PACS platform, and later worked at Chartwise and athenahealth. His most recent role was at Alphabet/Google, working on a healthcare data platform.

This post appears through the MedCity Influencers program. Anyone can publish their perspective on business and innovation in healthcare on MedCity News through MedCity Influencers. Click here to find out how.

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Amazon & Walgreens Use Tech to Enhance Healthcare Accessibility
2024-12-12
In recent years, the pharmacy landscape has witnessed significant transformations. Traditionally, after a doctor's visit, a physician would fax a prescription to a pharmacy. Patients then had to make the journey, wait in line, and often remained in the dark about their out-of-pocket costs until payment time. This cumbersome process led to an estimated 50% of Americans not adhering to their prescribed medications. However, driven by the pandemic and the efforts of companies like Amazon and Walgreens, a new era of pharmacy is emerging.

Redefining Pharmacy - From Fax to Fulfillment

Amazon's Pharmacy Advancements

Amazon Pharmacy chief medical officer Dr. Vin Gupta emphasized the need to engage patients and ensure they stay on their medications. The company is working towards this by making prescriptions more accessible at lower prices. It recently announced plans to expand same-day prescription drug delivery to 20 U.S. cities by 2025, embedding pharmacies within its fulfillment centers. This means that about 45% of the country can get their medications within a few hours. Additionally, Amazon is leveraging its e-commerce platform to apply manufacturer coupons directly, saving customers around $50 million this year. Small changes like using AI to help customers estimate copays also enhance pricing transparency and patient confidence. As Amazon VP of Pharmacy John Love mentioned, each improvement leads to increased adherence rates.

For instance, imagine a patient with a sudden illness. With Amazon's expanded delivery service, they can have the necessary medication at their doorstep in a matter of hours, avoiding the hassle of traveling to the pharmacy and waiting in line. The direct application of coupons saves them both time and money, making healthcare more affordable.

The company's focus on simplicity and accessibility is truly revolutionizing the pharmacy experience, setting a new standard for the industry.

Walgreens' Expanded Services

Walgreens, facing challenges in refining its clinic model, has been making significant strides. In recent years, it has started offering vaccines, medical screenings, and virtual check-ins for non-emergencies. Pharmacists are now allowed to write prescriptions for certain conditions like COVID-19. For example, if a customer thinks they have COVID-19, they can get tested and, if positive, receive a prescription right in the store. This convenience not only saves time but also provides immediate care.

During the Forbes Healthcare Summit, Walgreens senior vice president and chief pharmacy officer Rick Gates highlighted the importance of these services. He said, "We are at the precipice of a new era in healthcare, where pharmacies are not just places to fill prescriptions but also providers of actual care."

By expanding its services, Walgreens is proving that pharmacies can play a crucial role in addressing various healthcare needs, going beyond the traditional pharmacy model.

Collaboration for Enhanced Care

Amazon Pharmacy is collaborating with One Medical to help patients obtain prescriptions for conditions they might be uncomfortable discussing with their primary care doctor, such as erectile dysfunction or hair loss. This collaboration shows the industry's recognition of the need for comprehensive healthcare solutions.

Gates emphasized that better outcomes are the ultimate goal. Pharmacy is well-positioned to drive this change, and continuous innovation is essential. As more companies like Amazon and Walgreens lead the way, the future of pharmacy looks promising.

These collaborations and advancements are not only improving patient care but also shaping the future of healthcare delivery. With each step forward, the pharmacy industry is becoming more patient-centered and efficient.

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