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Midstream Health nabs $20M series A to help hospitals recover lost margin

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Midstream Health nabs $20M series A to help hospitals recover lost margin

Health systems are losing margins they’ve already earned, according to Sumit Kadakia, CEO and co-founder of Midstream Health. The startup bets artificial intelligence can improve hospital margins by finding money that is already embedded in contracts and transactions.

Midstream Health, an autonomous financial operations platform for health systems, picked up $20 million in series A funding to expand its AI financial platform. The company is expanding across a customer network representing more than $100 billion in annual operating expenses and over 250 hospitals nationwide.

Valtruis led the financing round with continued participation from Andreessen Horowitz (a16z), Foundry and CommonSpirit Ventures, bringing Midstream’s total funding to $29.2 million. Fairview Health Services and Keck Medicine of USC are among the newest health systems to join the platform, alongside CommonSpirit Health, Mount Sinai Health System and Houston Methodist.

Midstream says its AI financial platform helps health systems find and recover margin across revenue and cost, strengthening the financial capacity needed to keep investing in care and serving their communities.

"We bring all of a health system’s data together, across pharmacy, supply chain, managed care, revenue and cost, into a single source of truth, and then put AI agents on top of it to find and recover money the system is owed. We call it the 'second financial brain' for a health system," Kadakia said in an interview.

He added, "That’s a lot of technical talk for a pretty shocking problem: hospitals are multibillion-dollar enterprises, and most of them don’t have any form of managerial finance."


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