Penguin Ai, a startup that has constructed an AI-based platform designed to streamline administrative inefficiencies in healthcare, has pulled in $29.7 million in enterprise funding to pay for product improvement and to scale up deployments with payers and suppliers. Fawad Butt, founder and CEO of Penguin Ai and former chief knowledge officer of UnitedHealthcare, Kaiser Permanente and Optum, lately spoke with Healthcare Innovation in regards to the transition going down to the brand new world of agentic AI.
The Palo Alto, Calif.-based firm says its flagship platform combines task-specific small language fashions (SLMs), digital staff and brokers, with a healthcare-specific AI platform to streamline processes resembling prior authorizations, claims processing, medical information summarization, and appeals administration.
Healthcare Innovation: May you speak a little bit bit about your background as a chief knowledge officer and the way it helped you kind the concept for this firm?
Butt: Earlier than beginning Penguin, I spent a little bit little bit of time within the VC world at Canvas Ventures, being an working associate, and earlier than that I used to be the chief knowledge officer at Optum, answerable for all knowledge and analytics capabilities throughout all three strains of enterprise at Optum. Earlier than that, I used to be on the insurance coverage aspect of the home at United Healthcare because the chief knowledge and analytics officer. Previous to that, I used to be in the identical function at Kaiser Permanente. So when you might have that distinctive vantage level, you see patterns. One of many patterns I noticed was that the info may be very disorganized. That’s why they created roles for for individuals like me.
The info is disorganized as a result of over the course of a number of improvements, we purchased best-of-breed options, and impulsively we have got a spaghetti mess of 10,000 techniques attempting to push knowledge forwards and backwards, in order that was all the time a difficult factor.
Additionally, once I was in these positions, I might purchase any platform within the trade, as a result of we had the budgets to do it. I might go to AWS, Google Cloud or Azure, however the issue was that these are horizontal, generic platforms. They did not perceive healthcare. When you purchased that know-how, you needed to assemble a group and work out tips on how to use these generic instruments and apply them towards healthcare issues. So to me, the thesis was all the time that healthcare deserves its personal platforms, proper? And why aren’t there extra of these? And if I ever had the chance, I used to be going to construct one.
HCI: Isn’t it additionally a problem that historically the payers had the claims knowledge and the suppliers had the EHR knowledge, they usually did not actually need to share?
Butt: The truth is that for our well being system to function, that knowledge does get shared. A supplier has to offer medical information if you happen to’re submitting a declare or a previous authorization, in order that knowledge does get shared. The foundational argument that I’ve heard all through my profession is that the incentives are misaligned. I agree with that, however the actuality is that the incentives are misaligned, and we share the info nonetheless.
The larger problem I see is that loads of these firms have grown by acquisitions — United Healthcare, for instance. Each time you buy a plan, you get 13 core techniques that include it. When you try this 20 instances, impulsively you might have spaghetti techniques doing too many issues.
The truth is that there hasn’t been a know-how evolution, till lately, that might take that spaghetti mess and in reasonably priced approach give you a brand new structure that may very well be deployed. However now the world goes agentic for probably the most half, which suggests the codecs do not matter anymore. Brokers can just about perceive and eat each structured and unstructured knowledge and context round that.
So the subsequent model of healthcare is agentic healthcare. If we imagine that premise, and you are a CIO or a CEO at a hospital system or a payer, you may say, I’ve to construct 1,000 brokers, proper? You want a platform to have the ability to try this on. You might use the Azure platform or AWS and attempt to educate it healthcare. Or you’ll be able to come to Penguin and speak to us, as a result of we constructed the elements which might be required for an enterprise to undertake a platform. Now we have the connectors to your knowledge, whether or not it is in Epic or Cerner or athena or Oracle or Information Bricks or Snowflake — you title it. Now we have that inbuilt. Now we have a privateness engine inbuilt that de-identifies that info. Now we have a bias mitigation and scoring algorithm that checks to see if you happen to’re introducing bias into your fashions. We constructed our personal small language fashions for prior auth, threat adjustment, and claims adjudication, after which we provide you with our brokers out of the field. That is what a platform is meant to do. It’s supposed to provide you what you want so you may get to ROI in 90 to 120 days.
HCI: So are you envisioning each the well being techniques and payers as potential clients?
Butt: 100%. As a result of, to me, it is a false dichotomy in some ways. Issues begin on the payer aspect and finish on the supplier aspect, or begin on the supplier aspect and finish on the payer aspect. They only name them various things, proper? One is likely to be known as declare scrubbing and one is likely to be known as claims adjudication, however it’s basically a really comparable processes. So why not construct it as soon as, after which let’s convey the info and the intelligence collectively in a single place, so it isn’t payer towards supplier, it’s payer and supplier.
HCI: I used to be speaking to a well being system CIO who stated they had been beginning to construct brokers in home, and the payers are constructing their brokers. And it is nearly like it is going to change into this battle between the 2 to see whose are higher. And he or she stated that agent struggle is just not the place they need to be.
Butt: No, however that struggle has began. The agent wars are right here, proper? It isn’t this futuristic factor that is going to occur. It is occurring right this moment. I sat with the CEO of one of many largest regional well being plans within the nation. He stated what they’re seeing is that, in some methods, the suppliers have adopted brokers rather a lot faster than the payer aspect, as a result of the payers’ processes are extra complicated. In a single situation, he stated, a small community of suppliers that used to do 5% appeals on denials is now doing 100% appeals on each denial the well being plan is sending them. He believes the supplier group has an agent on their aspect, and the well being plan has eight individuals on its aspect. So how are they going to win that?
HCI: Properly, as a part of your pitch to those execs, have they got to ditch loads of this funding they’ve in all these costly legacy instruments that they’ve already made a guess on?
Butt: No, you probably have a beginning place that claims, let’s name that sunk price and begin afresh, you have not been in healthcare lengthy sufficient, proper? That is simply not how it is going to work. The funding when it comes to know-how is likely to be legacy, however when it comes to info, it’s gold. All the enterprise’ processes are captured in knowledge all throughout these enterprises. So if you’re envisioning an agentic world, then you do not have a look at it as outdated know-how or new know-how. You have a look at it as helpful knowledge or not helpful knowledge, proper? And I can guarantee you that there’s some very helpful knowledge in these legacy techniques that’s going to complement the intelligence. When you’re constructing small language fashions or refining massive language fashions, that info goes to be essential. We have been listening to that knowledge is the brand new oil for a very long time, however the sincere reality is that now could be the time the place, if you happen to can construct the appropriate refinery, you’ll be able to flip that oil into gas in your group.
HCI: Does generative AI have potential to alleviate loads of the issues that individuals describe about knowledge requirements or semantic interoperability?
Butt: I believe it does. It is already enjoying a significant function. It was that the healthcare knowledge world operated in buildings or in knowledge fashions. So I’ve an information mannequin and you’ve got an information mannequin. If I have to eat your knowledge or share my knowledge with you, our knowledge fashions should be aligned by constructing a bridge within the center which says your x means my y. So that you spent loads of time and vitality constructing these bridges as a result of that requires material specialists to weigh in, and people are laborious to search out and costly to retain. However now as a result of we’re not attempting to normalize knowledge earlier than we will apply intelligence to it, we will eat that info in each codecs and be capable of analyze it in very comparable methods and derive insights in very comparable methods, in order that step that used to take 18 to 24 months of simply aligning the info…… I am not going to say ETL [extract, transform, and load] is lifeless, however it’s much less related within the agentic world.
HCI: UPMC Enterprises is one in every of your traders. That looks as if a company that may be an apparent potential buyer.
Butt: We hope so. We can not touch upon that. They have been a implausible associate for us. They had been one of many early ones to to understand what it’s that we had been doing, they usually’ve been supportive persistently all through the method. I’d say in our earliest days, the establishment that acknowledged what we had been doing was UPMC.
HCI: Is a part of what traders the group you’ve been in a position to construct when it comes to execs with loads of expertise in healthcare?
Butt: Sure, three of the technical leaders — head of AI, head of supply, and head of engineering — are ex-Optum individuals. Most of the group that we’ve got both labored at Kaiser, United, Optum, CVS and others on the technical aspect. Then we’ve got our chief technique officer, Mark Caron, who was the CIO at three completely different Blues plans and a CTO at Catholic Well being Initiatives, in addition to the CIO of the Collaborative Care Division at Optum.
And Missy Krasner, who’s been an advisor for us from the start. She’s been at Amazon, Google Well being, and Redesign Well being. I believe that exhibits within the completeness of the imaginative and prescient and and it exhibits within the understanding of the nuance on governance and safety and privateness that’s explicit to healthcare.
HCI: Are there some issues on the coverage and regulatory aspect, or involving market pressures, which might be supplying you with tailwinds to get extra engagement?
Butt: I believe there are two massive tailwinds. One is that payers have been decimated over the course of the final 18 months. The Medicare Benefit enterprise that was extremely worthwhile has turned and their medical loss ratios have gone by the roof. So there’s huge stress on them to scale back prices. And the fee that they’ll management is just not the MLR, it is the working price of operating the enterprise.
Then CMS has some rules round interoperability and particularly round prior authorization that persons are attempting to recalibrate round. With an agentic world turning into actuality, lots of people are selecting brokers to try this automation vs. one other software that they used to do. So we’re seeing an incredible quantity of demand and plenty of engagements on that use case on the payer aspect. Danger adjustment is one other use case on the payer aspect that’s fairly strong for us. Claims is creating as one other space of of demand. On the supplier aspect, I’d say it is round income cycle administration — the claims scrubbing, the extraction of medical codes. Medical coding itself is an enormous use case for us. After which appeals is the opposite one. We’ll be launching some further capabilities that we’re piloting round sufferers and suppliers that will probably be coming down quickly.
HCI: Do some agentic effectivity beneficial properties to well being techniques or payers come from decreasing administrative worker head counts? Or are they seen as instruments for these staff to make use of?
Butt: I do not see any substitute of head depend anytime quickly, frankly, and it is as a result of the system is capacity-constrained proper now. The nurses or docs or admin staffers are being requested to do increasingly. An instance is prior authorizations. One of many massive payers instructed us their pharmacists used to should assessment 40 instances a day for prior authorization. Then that went as much as 70 instances a day. Now they’re asking their pharmacists to do 100-plus case opinions a day. And guess what’s occurring? They’re burning out. They’re making errors. They’re quitting and leaving the sector. I’ve a private story round this, as a result of my spouse was a previous authorization pharmacist, and I noticed her go from working eight hours a day to 14 hours a day attempting to make quota. So I believe it is a capability subject. It will simply relieve the individuals who have the duty to do that work to deal with crucial a part of the work and work on the prime of their license.
