Healthcare industry-focused artificial intelligence startup Opmed Inc., which likes to be known as Opmed.ai, said today it has closed on a $15 million early-stage funding round.
The Series A investment was co-led by NFX and Grove Ventures, with participation from Secret Chord Ventures, Unbox Ventures and the Impact investor Sir Ronald Cohen.
The startup has built an AI-powered Adaptive OR Optimization Engine for healthcare providers that’s focused on improving the efficiency of operating rooms to drive savings and improve profitability.
According to the company, its platform is powered by AI algorithms that run billions of permutations each second, in order to make predictions that can enhance the efficiency of operating room schedules. It generates alternative schedules that improve resource allocation. By accurately predicting case duration using operational data, past procedures, surgeons’ histories, the characteristics of each patient and other factors, Opmed.ai says, it can optimize staff scheduling to ensure each operating room has just the right number of staff on hand.
Opmed.ai claims that its “smart scheduling” capabilities can enable hospitals to handle an additional two-to-three cases per month, while reducing operating room operational costs by between 5% and 15%. What’s more, it can preemptively identify any possible disruptions to staff schedules, giving hospitals the flexibility to adapt and maintain higher operational efficiency when unforeseen changes occur.
The company said its platform is needed because healthcare operators lose between $50 and $150 in revenue for each minute that their operating rooms are unused, while losing around $1,000 in operating expenses for each unused hour. By ensuring optimal use of these facilities, Opmed.ai says, it can have an enormous impact on the financial bottom line of healthcare providers, delivering up to $1 million in additional revenue per year while reducing costs by up to $500,000 in the same timeframe.
Opmed.ai also says it’s helping to tackle a significant healthcare labor shortage that is expected to rise to 3.2 million professionals by 2026. In addition, it helps hospitals to better manage rising labor costs, which grew more than 20% in the last year alone.
Co-founder and Chief Executive Mor Brokman Meltzer said the funding will enable it to scale up its platform rapidly to meet strong demand from hospitals across the U.S. “Our mission is to support hospitals grappling with staff shortages and other critical issues by providing them a less labor-intensive, more effective way to perform at their best,” he said.
It makes sense to target operating room efficiency first, the startup said, since they typically account for around 40% of the average hospital’s costs, and often serve as one of the main sources of profitability. Even so, most hospitals continue to rely on outdated spreadsheets, resulting in significant operational inefficiencies.
Opmed.ai co-founder and Chief Technology Officer Avi Paz said today’s round validates the company’s vision of using AI to improve healthcare business operations by enhancing operational efficiencies. “Our commitment remains firm: to empower healthcare professionals with solutions that not only address today’s challenges but pave the way for a more efficient and effective future,” he said.
One advantage of Opmed.ai’s platform is its rapid implementation time, with the company saying hospitals can get set up and begin reaping the benefits of its optimizations within just two to four weeks. Once the platform has been initiated, it gets the ball rolling by detecting over- and under-estimations, accounting for gaps, anesthesia time, turnover time and other factors to enhance staff scheduling.
The issue of workplace scheduling has long been a challenge in many industries, with the cost of inefficiencies known to add up to millions, if not billions of dollars in the long term, said Constellation Research Inc. analyst Holger Mueller. It also leads to frustration among workers, managers and can often result in suboptimal customer outcomes too, so there’s definitely a need for improvement, he added.
“It’s good to see AI coming to the rescue, helping to solve one of the most complex scheduling challenges of all, in hospital operating rooms,” Mueller said. “What’s different here is that the constituents, namely the surgeons, are highly paid professionals, so moving the needle towards more efficient schedules brings quantifiable savings for healthcare providers. Not to mention, the possibility that more lives can be saved or improved. So this is good news all round, and there’s a good opportunity for Opmed.ai to expand.”
In most cases, hospitals will start seeing a return on investment in the platform in just three to four months, the company said. To date, it has already been deployed by leading health systems such as the Mayo Clinic and a number of hospitals in the U.S. and in Israel.
Renana Ashkenazi, a partner at Grove Ventures, said Opmed.ai delivers a “clear and significant” ROI from an early stage. “We’ve seen the millions of dollars it has saved and generated in hospitals where it’s already deployed, and as impressed as we were, the hospitals’ enthusiasm has been even greater,” he said. “Opmed.ai is a perfect representation of the next generation of great AI platforms. It solves a complex issue with a highly specialized vertical solution that has no alternative that comes close.”
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