While VC firms chase quick returns on consumer AI applications, family offices are quietly putting their money into health care AI with longer-term horizons. The timing mismatch between traditional VC expectations and health care implementation realities could create a market inefficiency that more patient family offices are uniquely positioned to target.
Citi Private Bank's 2024 Global Family Office Survey found that 53% of family offices now maintain health care AI ventures, with another 26% actively exploring the space. European, Middle Eastern, and African family offices have shown the strongest interest, with only 12% saying AI assets are not a priority.
Simcha Hyman, CEO of TriEdge Investments, is pursuing a strategy of collaboration with the health care companies in which his family office invests. The firm is working to establish strong foundations in health care AI, particularly in terms of addressing provider-patient communication challenges and burnout.
"Most AI startups building in health care haven't experienced the problems they're trying to solve," said Hyman. "Our operational experience running health care businesses gives us firsthand insight into the real problems that need solving."
Addressing Administrative Waste
It's no secret that there are long-running structural inefficiencies in the U.S. healthcare system. Consider the following:
— 19.7% of gross domestic product is consumed by health care spending.
— A Stanford study found that physicians spend nearly 50% of their workday on electronic health records-related tasks rather than patient care.
— The Journal of the American Medical Association estimates over $265 billion is wasted annually on administrative complexity.
— A recent Notable Health survey found that 61% of patients avoid doctor visits due to scheduling difficulties.
Yet, U.S. health care doesn't necessarily suffer from a lack of talent and opportunities for technological innovation. Rather, health care providers often face fragmented implementation of technology that fails to decrease an administrative burden. The EHR systems meant to streamline health care can, in some cases, create a sort of documentation tax paid in clinician time and burnout.
But the hope is that AI can address this problem by automating and organizing time-consuming administrative tasks.
Data Infrastructure: Breaking the Interoperability Deadlock
The health care industry generates vast amounts of data with the potential to improve patient outcomes, yet it often struggles to extract actionable intelligence from it. According to the Government Accountability Office, health care data remains "fragmented across multiple systems and formats" and often "low-quality or inconsistent."
Investing in data infrastructure — typically a multi-year project with less short-term ROI — could be one area where family office patience creates a competitive advantage. By supporting the standardizing of data infrastructure for portfolio companies, family offices could enable AI implementations that would be impossible across fragmentary systems.
Opportunities in Nonclinical AI
The first wave of successful health care AI implementations is targeting administrative overhead rather than clinical decision-making, avoiding regulatory red tape while delivering immediate results.
Oscar Health provides a case study in this approach. Its AI system reduced clinical documentation time by nearly 40% using OpenAI's API. Its claims assistant cut resolution time for claims processing by 50%, with accuracy on par with or better than human agents. Oscar expects to automate investigations for at least 48,000 tickets by year-end.
Meanwhile, a study published in JAMA Internal Medicine found that AI chatbot responses to patient questions were preferred over physician responses 78.6% of the time. Evaluators rated chatbot replies 3.6 times more likely to be of "good" or "very good" quality and 9.8 times more likely to be empathetic. AI-generated answers were also significantly longer, with a median of 211 words compared to 52 words from physicians. The researchers suggest AI could assist in drafting responses for doctors to review, potentially improving communication and reducing clinician burnout.
At TriEdge, Hyman’s team is working on leveraging large language models’ ability to organize information and communicate clearly to help doctors and patients connect with families while maintaining clinical rigor.
"We're developing technology that makes health information accessible to both families and providers," explained Hyman. "With LLMs, we can now let a doctor enter a chart note and give family members the ability to interpret it based on their level of clinical understanding."
Crossing AI-Adoption Barriers
Despite exponential leaps in AI capabilities in the last few years, technology deployment fails without workforce adoption and AI is no different — a fact driving family office ventures in both AI development and health care workforce education.
"A large part of what we're doing involves increasing the technological skill set of healthcare workers," said Hyman. "AI has enormous potential to aid clinicians, but only if they understand how to effectively incorporate it into their practice."
This approach aligns with leading academic medical centers like Stanford and Cleveland Clinic that have launched dedicated AI education programs for clinicians, recognizing that technology adoption depends on user capability. While there’s general enthusiasm for AI, the fact remains that widespread LLM use is still in its nascent stages, and clinicians will look for transparency and explainability of new processes before incorporating AI.
"The immediate technical challenge involves creating systems that can translate complex medical information while maintaining privacy safeguards," Hyman said. "The longer-term challenge involves integrating these systems into existing workflows without disrupting care delivery."
Rather than complete disruption, the goal, especially in these early days of AI, is to seek calibrated integration — technology that enhances health care's human elements while systematically addressing its administrative inefficiencies.
Website of Source: https://www.triedgeinvestments.com/
Source: Story.KISSPR.com
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