What 100 Healthcare Startups Taught Me About Building AI

The first question that I asked Arvind Sarin when he showed me Copper Digital's product was not about the technology or architecture. I asked him to show me what the nurse actually sees when she walks into a patient’s home and does she feel prepared and confident for the discussion that she needs to have with the patient.

The UX question is the filter I use for the healthcare startups I work with. In the last 18 years, I have been a fractional co-founder to over 100 healthcare startups, invested in 50, and am an LP in 4 funds. I spent most of my 20s on Wall Street at Salomon Brothers, my 30s at Bristol Myers Squibb where I was fortunate to have worked across many disease states, countries and roles as well as various healthcare stakeholders. In 2006 I joined AstraZeneca to develop their digital health and partnership strategy & solutions. In 2008, I launched my own company, Health Innovation, to help early-stage healthcare companies design, build and scale innovative products & services as their fractional co founder. One key pattern that separates the startups that scale from the ones that do not has not changed. The ones that succeed focus on the users/people instead of the technology.

AI Will Have a MUCH Bigger Impact Than EHRs

I believe that AI will impact health and care much more than any other emerging technology, including EHRs. EHRs were supposed to reduce administrative burden. Instead, they became an administrative burden. Providers who used to hand write notes in minutes now spend much more time finishing their notes. EHRs were built for billing & compliance, not for clinical care or patient experience.

We may end up repeating this mistake with AI if we do not learn from the lessons of rolling out EHRs. The same forces that drove EHR adoption are driving AI adoption: financial incentives, regulatory pressure, and the assumption that more technology equals better outcomes. Technology that is deployed without understanding how all users are impacted may not improve health, care or operations. It could lead to unwanted & unnecessary disruption.

The question I keep asking every founder I work with is this: Have you sat in the chair of the person you are building for? Not watched a demo. Not read a workflow diagram. Have you physically been in the room, or the house, or the car, or the clinic and watched what happens in real time? Because that is where the real product requirements live. Not in the feature backlog. In the lived experience of the person.

Give AI Ethics Before You Give It Data

When we raise children, we give them a sense of how the other person feels and how what we say impacts other people. We teach kindness, compassion, patience & consequences. We help them understand that just because they can do something does not mean they should.

We have done the opposite with AI. We have given AI all the data first and many groups are working to teach AI morals after the fact. Imagine downloading the entire internet into a child's brain in one shot, with limited context, morals or ethics. That child will have amassed a lot of information but has no framework for what to do with any of it. That is essentially where we are with AI.

I am working with a company called Attune Media Labs that is taking a very different approach. Attune built and launched a conversational AI powered agent called MIM that reads real-time biometric data from the tone of your voice to determine your emotional state and adjusts MiM’s response based on how you are actually feeling in that moment. MiM actually responds to your actual emotional state like a person does. Attune has also given MiM an ethical framework & purpose focused on helping the user to flourish, not to maximize the users time on the platform.

That is the model every healthcare AI company should be developing and deploying. Real time understanding of a user that is used to genuinely help.

Humans in the Loop Is Not Optional. It Is the Adoption Strategy.

People ask me how far out we are from AI doing clinical work autonomously. My answer is that it depends on how you define ‘clinical work’ and ‘autonomously’. Some clinical work is being done by AI and for now clinicians are reviewing AI’s output. A Waymo's accident rate is already better than a human driver. Most people still feel more comfortable getting in a car with a person than a machine. Human beings are very poor at understanding risk. People make most of their decisions based on their perceptions & biases vs data.

In healthcare, AI will be ready well before humans are ready to trust them. Within 5 years, AI will be more competent than human beings at the majority of administrative, operational, and clinical tasks. Capability & competence will not be the only variables that drive adoption. The adoption curve will be driven by trust.

So human-in-the-loop will need to be part of the adoption strategy. Copper Digital's approach of never auto-submitting AI-generated documentation to the EMR and always requiring a clinician to review is where it needs to be today. Not because the AI cannot do the work but because users need to build trust. That trust gets built one correct output at a time, reviewed by a human who says, yes, that is right.

Disrupt Yourself Before Someone Else Does

If you are running a home health agency or any other healthcare company and you are not fully leveraging AI, you will not be able to get the attention of buyers or investors. AI has become table stakes!

Having an AI strategy does not mean bolting a chatbot onto your website. It means going back to first principles. What does your end user actually experience? Where does their time go? How does the information flow? How does the money flow? And where in all of that can AI genuinely reduce friction and improve UX without creating new problems?

Disrupting yourself is always a better option than having someone disrupt you. Netflix went from shipping discs to streaming. Blockbuster loved their stores. Only one thrived! The same dynamic is playing out in home health documentation right now. Agencies that figure out how to combine AI with their clinical expertise will serve more patients with fewer burned-out nurses. Agencies that keep doing 45-minute manual intakes will lose their referrals to the ones that do it in 3 minutes.

The opportunity is enormous. Over 7 billion people on this planet receive inadequate health and wellbeing care. We do not have enough providers & never will. The only way to close that gap is with technology that genuinely helps the humans providing the care. Not technology that adds to their burden.

Focus on UX & what needs to be done. Everything else follows from there.

Paulo Machado is CEO and Founder of Health Innovation Inc., a fractional co-founder who has worked with over 100 healthcare startups, invested in approximately 50 companies, and is an LP in four funds. His career spans senior leadership at Salomon Brothers, Bristol Myers Squibb, and AstraZeneca. He serves on the board of the Lung Cancer Foundation of America. Find him on LinkedIn at linkedin.com/in/paulojmachado.

TL;DR

I have worked with over 100 healthcare startups. The ones that succeed  focus on what the user is trying to accomplish and their experience? In home health, that means understanding what the nurse sees when she walks into a house alone with a laptop, a 23-page OASIS assessment, and 45 minutes before her next patient. AI will be transformational for Health, Wellbeing & Care Delivery. We need to embed ethics into our AI agents, keep humans in the loop during adoption, and stop building products that optimize for the quarterly earnings call instead of the clinician's & patient’s experience. Disrupt yourself before someone else does. Focus on UX & what needs to be done. Everything else follows from there.