Happy New Year! The way the calendar lined up, we decided not to publish during the holiday break. Now as we turn the page to 2025, we look forward to a year filled with IPOs, new payment types (looking at you crypto, stablecoin, virtual card and real time payments), and who knows what financial, banking, and payments policies and regulations from the new Trump administration. One thing we know won't change is our commitment to bringing you the best news and insights from the world of healthcare payments!
This issue we're delighted to welcome a guest writer to weigh in on the topic of AI in Healthcare. We've been covering AI's advances in healthcare payments for the past year, and frankly haven't seen much to get us excited. Happily, Rob Pinataro, with years of SaaS, fintech and healthcare leadership experience offers a great take on the promise of AI. We also look at the recently released 2023 National Healthcare Expenditure (NHE) data from CMS, and what some "Wall Street Titans" think about crypto today after dismissing it in the past (see What We're Reading section).
DEAL NEWS
Anatomy completes $19 million Series A raise
San Francisco-based Anatomy Financial has closed on a $19 million Series A funding round led by Canapi Ventures with participation from Lightspeed Venture Partners. Anatomy is focused on removing additional paper flows from provider billing operations, and converting paper mail to an "email-like experience". According to Anatomy, 27% of insurance payments to medical providers and an incredible 79% of payments to dentists are still on paper checks. Practices working with Anatomy simply reroute paper checks through the company's platform where EOBs are converted to electronic remittances and correspondence is automatically classified.
Diesta raises seed funding for insurance premium payments
London, UK-based Diesta completed a $3.8 million seed round last October, led by New York-based FinTech Collective. Commerce Ventures also participated, along with existing investors Restive Ventures and SixThirty. Diesta had previously raised $2 million in pre-seed funding in 2023.
Diesta is working to modernize insurance premium payments. Co-Founder and CEO Julian Schemig said at the ITC Vegas conference in October:
"We’ve shown that we can bring digital payment innovation to a space long considered an unsolvable burden. By working with everyone from nimble insurtechs to some of the largest brokers and MGAs in the London market, we know that the Diesta platform can deliver immense value for entities of all sizes."
It still amazes us that it takes a full year to compile the previous year's healthcare spending data! Every year in December, the U.S. Centers for Medicare & Medicaid Services comes out with updated U.S. healthcare expenditure data through the end of the previous year. So in December 2024, CMS published the 2023 data. This spending data is typically referred to as "the NHE numbers" (National Health Expenditures).
Health Affairs simultaneously posted an analysis of the data. Some highlights:
Total U.S. healthcare spending in 2023 was $4.9 trillion, which was 7.5% higher than 2022. The percentage increase was significantly higher than the 4.6% in 2022, and 4.2% in 2021.
NHE increase of 7.5% in 2023 outpaced GDP growth of 6.6%, which was probably due to medical inflation "catching" up to inflation in the rest of the economy which significantly exceeded NHE annual growth in 2021 and 2022.
U.S. healthcare spending equaled $14,570 per person, up from $10,579 in 2017.
The insured rate of U.S. population grew to 92.5%, driven by strong enrollment in private health insurance
Healthcare was 17.6% of the U.S. economy in 2023, in line with the 17.4% in 2022 but down from the peak of the COVID-19 pandemic which was fueled by government contributions.
The Health Affairs article is a great place to start understanding the numbers. For those interested in digging deeper, the 2023 and historical NHE data can be found at this CMS website.
Finally, while CMS does its own forecasting of future healthcare spending, WTW (the company formerly known as Willis Towers Watson) publishes a Global Medical Trends Survey. The latest version projects that growth in medical costs will remain high at a global average rate of 10.4% in 2025. WTW attributes this to new medical technologies and pharmaceuticals, increased utilization of private medical services as high demand for public health services can not be met with available resources, and an overall increase in healthcare utilization since the COVID-19 pandemic.
HEALTHCARE AND AI
With 25 years of SaaS, fintech and healthcare leadership experience focused on business strategy, innovation, transformation and growth, Rob Pinataro is the perfect person to weigh in on Healthcare and AI. He recently served as CEO and COO at Payspan where he led the company through two PE exits and raised over $330M in capital. Rob currently serves on the boards of Connexure and Atlanta’s Technology Executive Roundtable, and advises PE firms on fintech/ healthcare investment opportunities and value creation through better execution of digital and cybersecurity strategy.
Charting a Path to Value Creation in Healthcare AI
By Rob Pinataro, MBA, QTE
AI is a CEO and Board-Level Strategic Decision
CEOs and boards need to determine whether AI can help them achieve their value creation goals in healthcare-related businesses. U.S. healthcare with its $5T scope and exabytes of data presents an attractive AI transformation target. In fact, In June 2024, Silicon Valley Bank reported, “One in four dollars invested in healthcare companies is going to companies that are leveraging AI.” The hype around AI has been extraordinary and historically, heavily hyped innovations have turned out to be more narrowly useful than hoped. AI, however, is unique and, even after the hype dissipates, is likely to have an impact akin to that of software, the internet, or mass production.
AI is Over Hyped and Still More Promising than Previous Innovations
AI is unlike previous automation efforts because it is not rules-based and thus does not need to anticipate every use case in terms of inputs, environmental conditions, or outputs. AI achieves this by using data models and algorithms which outwardly mimic human abilities to absorb and apply information autonomously. An AI model then is like an assembly line for the real-time mass production of knowledge worker “assistants” increasing the supply of knowledge work. Greater supply will reduce prices enabling better healthcare outcomes at lower cost. According to a 2024 McKinsey study, early adopters of AI have identified seven promising market segments:
Success in AI Transformation Requires an Enterprise-wide Approach
AI transformation is difficult, and results take time. As of July 2024, 58% of healthcare firms striving to use AI, all subject to sponsorship bias, reported achieving positive ROI, yet most had not quantified the ROI. This reflects both the newness and the difficulty of AI. Firms will raise their probability of success if they approach AI as an enterprise-wide transformation like the introduction of Six Sigma, a new ERP system, or offshoring. Thus, culture, training, strategy, resources, and investment must be aligned and effectively governed. Success starts with setting a SMART goal for the program, e.g. “Increase yield on appeals of denied medical claims by 20% while reducing the cost per appeal by 15% relative to baseline within 24 months.” Evaluation of the investment need, capabilities of the firm and ROI requirements of shareholders can then inform final go/no-go decision making. Once a “Go” decision is made, firms will benefit from deploying best practices in enterprise change leadership.
Recommended Best Practices for Delivering Value through AI Projects
Human Capital:
Ensure CEO visibly champions the project through frequent communication
Ensure the firm or key leaders have experience leading enterprise-wide change
Ensure the firm has the internal AI leadership and technical talent needed
Train all staff on AI basics and the reasons for the initiative; train key staff to drive AI
Use KPIs, OKRs and bonus plans to align incentives across the firm
Train staff and implement policies and procedures to enforce ethical AI practices
Prioritize, allocate and maintain necessary resources throughout the project
Product-Market, Legal and Business Model Fit:
Evaluate before project launch whether customers will embrace the change
Consider potential changes in pricing models or contracts
Obtain legal counsel on AI, privacy, bias, cybersecurity, and liability regulations
Obtain legal counsel on the projected impact of intellectual property law on profit allocation between human and AI-model authors of IP
Technical:
Ensure the firm has sufficient data quantity and quality
Ensure reproducibility, credibility, and transparency of AI models
Ensure firm’s technology infrastructure is suitable
Use pilots to build support through early wins
Plan for integration of the AI into the firm’s ecosystem including DR/BCP/Audit
Conduct benchmarking visits to relevant firms with AI initiatives
Prudence Will Increase AI Returns
The value creation potential of AI is exciting and realizing it is challenging. CEOs and boards who succeed will deliver better revenue growth, profitability, customer engagement and valuation multiples than their non-AI competition. This is predictable based on the high probability that these firms will couple better current performance with the ability to innovate more rapidly and capital-efficiently than competitors. The AI transformation journey is one for the bold and those who couple prudence with their boldness will be the winners.
CEO CHAT
Curtis Bauer, CEO, Health iPASS
Click here to read our latest CEO Chat with Curtis Bauer, CEO of Nashville, TN-based Health iPASS.
Keeping cash may be critical for a resilient payment system. Climate change, wars and societal benefits should lead the U.S. to maintain greenbacks as an alternative to electronic money, one business professor argues, but he’s worried about preserving cash use. (Payments Dive)
ADDITIONAL RESOURCES
FMP Deal Tracker. Regularly updated list of healthcare payments related transactions since November 2023.
Conference List. Rolling twelve month look ahead at conferences and other events covering healthcare payments, revenue cycle, fintech and related areas. Updated through September 2025.
FMP Blog. Thoughts from healthcare payments CEOs and investors on their right to win and plans for the next 12 months, as well as data and perspectives on healthcare payments.
Newsletter Archive. News, trends, and insights from the healthcare payments industry compiled in our bi-weekly newsletter. Last six months of newsletters.
Epic MyChart. Excel sheet with full listing of all Epic MyChart instances as of May 2024, categorized by state, provider type and specialty.
All of these resources can also be accessed at the FinMed Partners Insights page.
We'll be at ViVE next month in Nashville - reach out to us here to arrange time to meet - we'd love to say hello!
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FinMed Partners is a management consulting and advisory business focusing at the intersection of payments/ fintech and healthcare. Our founders have developed deep expertise from decades of experience with health IT companies, healthcare providers and many players within the payments ecosystem. Investors, boards and executive teams work with us to maximize business value through strategic input and tactical execution.
FinMed Partners LLC, 34 Long Avenue, Belmont, MA 02478, United States
