Health-Tech: From high funding rounds to sharp slashes in EPS projections (July 19–25, 2025)
This week’s healthcare recap has some good and some not so good news. Below we break down the biggest stories – from funding wins and innovative care solutions, to the harsh realities hitting insurers – and what it all means for the future of health technology.
TL;DR
Revenue-cycle automation startup Charta Health snagged $22 million to supercharge AI-driven chart reviews and billing optimization. Investors are clearly betting big on health AI’s potential.
EHRs Tackle Maternal Health Crisis – The American Hospital Association (AHA) teamed up with Epic to roll out a postpartum hemorrhage risk toolkit embedded in Epic’s obstetrics EHR module. With postpartum hemorrhage causing 11% of US maternal deaths, this point-of-care digital tool aims to help clinicians catch bleeding risks early and save mothers’ lives.
Insurers Feel the Squeeze – It was a brutal week for payers. Centene reported a $253 million Q2 loss and slashed its 2025 earnings forecast by ~75%, citing sicker enrollees, higher utilization, and aggressive coding as drivers. Competitor Elevance Health likewise warned of surging costs, noting some providers are even using AI tools to “upcode” and inflate bills. And UnitedHealth Group confirmed the DOJ is investigating its Medicare Advantage practices, spotlighting industry-wide scrutiny on billing and risk adjustments.
Other Notables – A major health system (Texas Health Resources) sued the Blue Cross Blue Shield network for alleged antitrust collusion to depress provider payments, underscoring escalating provider-payer tensions. On a brighter note, the FDA granted a first-of-its-kind authorization for an AI tool predicting breast cancer risk (Clairity), pointing to regulatory acceptance of innovative digital diagnostics (announced just before this week). In all, the headlines show healthtech charging forward on multiple fronts – while legacy players scramble to adapt.
Funding
Hot on the heels of OpenEvidence’s mega-round last week ($210 million Series B round led by Google Ventures and Kleiner Perkins), Charta Health – a much earlier-stage startup – showed that even younger companies can attract serious capital if they’re tackling costly healthcare pain points. Charta, founded just one year ago, raised $22 million (Series A) to scale its AI platform for automating manual chart reviews. If that sounds unsexy, consider that coding errors and missed documentation cost providers billions in lost revenue and denied claims. Charta’s solution uses artificial intelligence to comb through patient charts before billing, catching missed codes, ensuring documentation supports diagnoses, and flagging potential claim denials. Essentially, it promises to boost billing accuracy and revenue by auditing 100% of charts with far greater speed and accuracy than human reviewers. Early results are striking: clinics using Charta report a 15% jump in billable value per patient on average. The new funding – led by Bain Capital Ventures – will help Charta grow its engineering team and integrate with more health systems and payers nationwide.
U.S. digital health startups raised $6.4 billion in H1 2025, slightly above the same period last year. Importantly, 62% of that H1 funding went into AI-enabled companies. In other words, even as total funding inches up modestly, the lion’s share is going to AI. The deals of the week reflect that concentration: OpenEvidence’s round is one of the biggest healthtech fundings of the year, and it’s entirely AI-centric. The fact that two digital health IPOs (Hinge Health and Omada Health) succeeded in the past two months after a long drought also boosts confidence. Healthtech investors seem to believe that the companies with clear ROI – especially those leveraging artificial intelligence to solve real problems – are now ripe to scale and even hit the public markets. AI is no longer just a buzzword to juice valuations; it’s driving tangible products that customers (doctors, hospitals, insurers) are actually adopting. As OpenEvidence’s rapid physician uptake shows, delivering genuine clinical value is key to widespread adoption – and in turn, key to investor enthusiasm.
Digital Tools Target Critical Care Gaps
Not all healthtech news is about flashy funding rounds – some is about life-saving collaborations on the front lines of care. This week saw a prime example: Epic Systems (the largest U.S. electronic health record vendor) and the AHA (American Hospital Association) joined forces to launch a postpartum hemorrhage (PPH) risk assessment toolkit within Epic’s EHR. This is a big deal because PPH is one of the leading causes of maternal mortality, implicated in 11% of maternal deaths in the U.S. Even more concerning, 40% of severe hemorrhages strike women with no prior risk factors – meaning every delivering mother is potentially at risk. The new toolkit directly integrates into Epic’s “Stork” obstetrics module used in labor & delivery units. It continuously assesses a woman’s hemorrhage risk throughout labor and postpartum, using evidence-based criteria, and updates the risk level in real time as conditions change. High-risk patients are flagged so clinicians can deploy preventive measures or heightened monitoring. And if a hemorrhage does occur, the toolkit provides embedded treatment guides and checklists right in the EHR interface, guiding the care team through best practices for managing an acute hemorrhage.
Why is this noteworthy? It shows how digital health solutions can tackle stubborn patient safety issues by embedding intelligence into clinicians’ normal workflow. Rather than expecting busy obstetricians or nurses to remember complex risk algorithms (or flip through a binder of protocols in an emergency), the EHR now proactively surfaces the risk stratification and step-by-step guidance. “Every mother deserves a safe childbirth experience,” said Epic’s Chief Medical Officer in announcing the collaboration. By leveraging the AHA’s expertise and Epic’s reach (Epic EHRs are used for over half of U.S. births), this toolkit could rapidly spread standardized best practices for PPH prevention to hospitals nationwide. It’s essentially packaging clinical knowledge + workflow integration as a scalable product – and that’s a sweet spot for healthtech. We often talk about AI and high-tech innovations, but sometimes a relatively straightforward clinical decision support tool, deployed widely, can save thousands of lives. The PPH toolkit also exemplifies a trend of major EHR vendors opening up their platforms to outside content and apps. Epic historically was a closed system, but here we see them partnering to incorporate an AHA-vetted module. It bodes well for future collaborations where EHRs become smarter by ingesting third-party tools (whether for maternal safety, sepsis alerts, or other critical areas).
For product folks, this highlights that healthtech innovation isn’t only about new devices or AI – it can be about smarter use of the ubiquitous systems we already have. EHRs have been blamed for physician burnout and alert fatigue, but efforts like this show they can be harnessed to improve care when thoughtfully designed. By aligning stakeholders (in this case a provider association and a health IT company), change can happen fast: the toolkit is immediately available to any hospital using Epic, essentially flipping on a switch that could improve outcomes for millions of births. That’s the kind of scale and impact that gets less attention than million-dollar funding announcements, but is arguably more important.
Storm Clouds for Insurers – and What They Mean for HealthTech
While startups and providers had some celebratory news, health insurers had a rough week – one that carries cautionary lessons for healthtech. The sector has been slammed by higher-than-expected medical costs this year, and multiple insurers chose this week to deliver bad news. Most dramatically, Centene Corp. – a major player in Medicaid and ACA exchange plans – revealed it lost $253 million in Q2 and is withdrawing most of its 2025 profit guidance. How bad is it? Centene’s prior forecast of ~$7.25 earnings per share for 2025 has been slashed to as low as $1.25 if trends continue. That kind of earnings implosion sent shockwaves across the industry. Centene’s CEO cited multiple headwinds driving up costs: higher morbidity in its insurance pools (meaning sicker patients, partly due to healthier people dropping out after pandemic Medicaid expansions ended), surging utilization of care as people catch up on delayed treatments, and more aggressive billing/coding by providers. In fact, Centene observed morbidity spikes of 16–17% year-over-year in some states’ exchange populations– a jaw-dropping jump.
It’s not just Centene. Earlier in the week, Elevance Health (formerly Anthem, another insurance giant) also cut its annual outlook and saw its stock plunge ~11% in a day. On Elevance’s earnings call, CEO Gail Boudreaux warned that unprecedented cost trends in ACA and Medicaid lines are hitting everyone, not just one company. Notably, Elevance pointed to an interesting culprit for part of the problem: “isolated pockets” of hospitals using AI-enabled coding tools to increase documented acuity and drive up reimbursement. In plainer terms, some providers are using advanced software (likely AI) to upcode – i.e. bill for more severe diagnoses or complications – which in aggregate is contributing to insurers’ payout costs. It’s a small factor compared to the bigger issues of sicker membership and general inflation in healthcare, but it shows how technology can cut both ways. The very AI tools that promise efficiency for providers might be seen as cost drivers by payers if they are used to maximize billing. (Elevance diplomatically said it wants to support “responsible innovation” in coding while cracking down on revenue-inflating abuses.)
This theme – AI’s double-edged sword in healthcare costs – was underscored by a legal battle that also made news. AdventHealth Shawnee Mission, a Kansas hospital, sued Blue Cross Blue Shield of KC alleging the insurer’s AI-driven claims auditing system (run by a vendor called Apixio) improperly denied or downcoded hundreds of legitimate diagnoses. The hospital claims Blue KC’s algorithmic “clinical validation” process declares certain diagnoses invalid after the fact, resulting in over $2 million in underpayments. Essentially, AI on the payer side is being used to push back on provider coding, while AI on the provider side is used to push payments higher – and they’re heading for a courtroom clash. In the lawsuit’s blunt words: healthcare decisions “should not be made by auditors, accountants or artificial intelligence devices,” arguing that AI is usurping physicians’ judgment. It’s a striking illustration of the growing pains as AI gets woven into the fabric of healthcare administration. We can expect more of these conflicts and the regulatory scrutiny that comes with them.
And speaking of scrutiny: UnitedHealth Group, the nation’s largest insurer, confirmed in an SEC filing that the Department of Justice is conducting a criminal investigation into its Medicare Advantage coding practices. This was reported back in May, but United’s official acknowledgment this week shows it’s heating up. Investigators are probing whether United clinicians were pressured to add diagnoses (to increase risk scores and government payments) – another flavor of the upcoding issue, albeit not necessarily involving AI. United has initiated an internal third-party review and insists its “long record of effective compliance” will prevail. Regardless, the entire Medicare Advantage sector is on notice: DOJ and HHS are looking hard at how plans code patients. Already, we’ve seen new risk adjustment rules this year and multi-billion dollar whistleblower settlements with other insurers for similar allegations.
Why do these insurer woes matter to healthtech? For one, they highlight enormous pressure to control costs – which spells opportunity for solutions that can genuinely bend the cost curve. When payers are desperate to reduce spending, they look to innovations like care management platforms, digital therapeutics to prevent hospitalizations, AI to detect fraud or identify high-risk patients for early intervention, etc. Expect insurers to accelerate adoption of tech that promises ROI. However, the flip side is caution: if insurers perceive a technology as fueling higher costs (e.g. coding software that just jacks up billing), they will push back aggressively, either via contract clauses, lawsuits, or lobbying for regulation. Healthtech products that live in the revenue cycle/billing space will need to emphasize transparency and value beyond just revenue uplift, or they risk being seen as part of the “gaming” of the system that regulators are clamping down on.
Another takeaway is that integration and alignment between payers and providers is increasingly crucial. The adversarial coding arms race is not sustainable. Tech that can align incentives – for example, tools in value-based care that help providers deliver better outcomes and document appropriately, rather than play coding games – will be on the rise. Interestingly, Elevance hinted that more tightly integrated payer-provider models (think Kaiser-like systems) might weather these dynamics better. That suggests a strategic direction where tech enables collaboration (shared data, unified care management) rather than each side using tech to one-up the other.
Finally, the sheer scale of financial strain on insurers (billions in unexpected costs) could drive market consolidation or exits – which in turn affects healthtech startups’ go-to-market plans. If certain insurance products shrink or carriers pull out of markets (Centene already quit some exchange markets), digital health vendors must pivot where they sell. For example, a chronic disease management startup targeting Medicaid plans might find fewer potential customers, but perhaps more interest from state agencies or providers taking on risk.
In short, this week’s bad news in the insurance world is a reality check. Healthcare’s economic pressures are mounting, and technology will be called upon to solve (not exacerbate) the cost/quality equation. It’s a reminder that successful healthtech innovations must deliver value to all stakeholders – clinical benefits, operational efficiency, and cost savings – to thrive in the evolving landscape.
Product Takeaways
Everyone is enamored with AI (But Needs Proof): Big founding round lik Charta shows investors and customers are hungry for AI-driven tools that demonstrably improve workflows or outcomes. As a product leader, double down on data-backed results for your AI feature – e.g. time saved, revenue gained, error rate reduced – to stand out in a crowded field. Hype alone won’t cut it; show real-world impact.
Integrate into Workflow: Epic’s postpartum toolkit success highlights the power of meeting users where they are. Embedding solutions directly into EHRs or existing systems can accelerate adoption and scale. Rather than forcing clinicians onto a new app, consider partnerships or integrations to bake your product’s capabilities into the user’s daily workflow. Convenience and seamless UX can be life-saving (literally, in the case of maternal hemorrhage).
Mind the Payer-Provider Balance: Technologies related to billing, coding, or utilization management live in a sensitive intersection. Ensure your product adds value without simply shifting costs around. For instance, if you offer AI coding assistance, emphasize accuracy and compliance, not just higher billing. Be prepared to provide transparency to payers or regulators. Building trust on both sides of the payer–provider divide can be a competitive advantage.
Solve the Cost Crisis: The financial pain insurers are feeling means cost-saving solutions are in high demand. Products that can reduce unnecessary ER visits, improve chronic care (to prevent admissions), or streamline expensive administrative processes will find eager buyers. Frame your value prop around helping healthcare organizations “do more with less” in this tight margin environment. If you can tie your outcomes to lowering medical loss ratios or admin overhead, shout it from the rooftops.
Stay Ahead of Regulation: With DOJ investigations and lawsuits making headlines, anticipate stricter oversight on healthtech activities like AI decision support, coding, and data usage. Bake compliance and ethical safeguards into your product design now. For example, if your AI makes recommendations, provide audit trails and the option for human override. Proactively engaging with regulatory changes (e.g. new CMS rules on risk adjustment or FDA AI guidelines) will protect your product and instill confidence in customers.
Sources
OpenEvidence raises $210M, unveils AI agents built for advanced medical research – Fierce Healthcare, Jul 16, 2025 fiercehealthcare.comfiercehealthcare.com
Charta Health picks up $22M to revamp manual chart review with AI – Fierce Healthcare, Jul 25, 2025 fiercehealthcare.comfiercehealthcare.com
American Hospital Association, Epic team up to better detect high-risk childbirth complications – Fierce Healthcare, Jul 25, 2025 fiercehealthcare.comfiercehealthcare.com
UnitedHealth confirms federal investigation into MA practices in filing – Fierce Healthcare, Jul 24, 2025 fiercehealthcare.comfiercehealthcare.com
Centene slashes 2025 guidance as it navigates ACA marketplace headwinds – Fierce Healthcare, Jul 25, 2025 fiercehealthcare.comfiercehealthcare.com
Weekly Health Tech Reads 7/20/25 – Elevance earnings and Advent lawsuit analysis – Health Tech Nerds (Kevin O’Leary), Jul 20, 2025 healthtechnerds.comhealthtechnerds.com
Blue KC wrongfully denied medical diagnoses, hospital alleges in AI-driven claims lawsuit – Fierce Healthcare, Jul 14, 2025 fiercehealthcare.comfiercehealthcare.com
Providers continue antitrust opposition against Blue Cross Blue Shield – Fierce Healthcare, Jul 24, 2025 fiercehealthcare.com
AI startups boost digital health funding in H1: Rock Health – Healthcare Dive, Jul 9, 2025 healthcaredive.comhealthcaredive.com
Omada goes public in second recent digital health IPO – Healthcare Dive, Jun 9, 2025 healthcaredive.comhealthcaredive.com
