AI has been enlisted in the fight to streamline the healthcare sector in the U.S., a giant bureaucratic maze. So many processes, so many forms to fill, so many rules to navigate. A number of startups, using generative AI, agentic AI, and other new AI tools, have started to address different corners of the healthcare system, in focused attempts to reduce costs, errors, and frustrations.
Using AI to Streamline Prior Authorizations
House Rx, a startup focused on helping clinics dispense specialty medications to their patients, announced today a generative AI feature that streamlines prior authorizations, one of the most time-consuming and error-prone steps in the specialty drug process. The increasingly complex specialty pharmacy market is valued at over $250 billion and accounts for over half of U.S. drug spend.
House Rx was founded in 2021 by Ogi Kavazovic and Tesh Khullar, whose own experience dealing with specialty pharmacy roadblocks when his mother was battling breast cancer motivated them to start the company. To date, it has raised more than $40 million in funding from First Round Capital, Bessemer Venture Partners, Khosla Ventures, and others.
With its new generative AI feature, clinics can generate answers for a prior authorization within 15 seconds and submit in less than 60 seconds. 92% of prior authorizations submitted through House Rx’s platform are approved on the first submission. Clinics using House Rx and its AI-based platform see an average time to fill a prescription of just 3.5 days as compared to the 15.5-day industry average.
Administrative Burden Leads To Physician Burnout
The U.S. healthcare system is widely recognized as one of the most administratively complex in the world. A combination of structural, regulatory, and operational factors creates significant administrative burdens for providers, payers, and patients. The fragmented nature of the healthcare system and the complex interactions between payers and providers lead to high administrative costs, accounting for as much as one-third of total healthcare expenditure. In hospitals, administrative costs account for more than 40% of the expenses hospitals incur in delivering patient care.
Nearly half of all physicians who leave the profession attribute their departure to burnout caused by administrative burdens. Physicians suffering from burnout are more than twice as likely to be involved in patient safety incidents than physicians who are not suffering from burnout.
A 2020 study quantified the mean time required for a PCP to provide guideline-recommended preventive, chronic disease, and acute care to a hypothetical patient panel. PCPs were estimated to require 26.7 hours per day (!) to provide these healthcare services, including 3.2 hours per day for documentation and inbox management. Another study found that physicians spent twice as much time on paperwork as they did with patients.
AI Health Startups Address Administrative Roadblocks
Many startups have started to address these administrative challenges, focusing on workflows within hospitals and clinics. Pieces, for example, uses AI to draft, chart, and summarize clinical notes, integrating with hospital EHR systems. CodaMetrix automates medical coding, improving hospitals’ financial results by assigning accurate billing codes.
Covering other complex processes and segments in the healthcare system, Cohere Health contracts with health plans to automate prior authorizations and optimize care delivery. Suki provides clinicians in all settings with an AI-based assistant that generates notes automatically, recommends codes, generates orders, and answers questions. Notable’s AI agent manages a patient engagement platform that reduces patient check-in times and increases patient satisfaction.
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About the Author: Cohere Health
