How Athelas is revolutionizing healthcare

talking about just one of the crazy things they found along the journey. Anything you wanna do in health care, you know, we we walked in on into an old health system, and they were giving out blood pressure devices. Six people needed to sign off on a clipboard before one blood pressure device got to a patient. That's all work tax.

And I think the the beauty of of large language models and artificial intelligence is that we can take all of that work tax and we can compress it and we can automate it. Othellus started as a one drop blood diagnostic.

and has now turned into a healthcare technology provider juggernaut with hundreds of millions of dollars in revenue. We're sitting down with the cofounder and CEO of Aethelis to learn how they did it. Aethelis is bringing what you've heard about, the compound startup idea that Rippling's doing for HR and IT, but instead, they're bringing it to the super important space of health care.

Let's get started. There are lots of health care companies, but in order understand Aethelis, you have to first know that the hardest people in the world to sell to in healthcare are probably the healthcare providers.

Providers are the heart of American healthcare. You have health insurance companies that are financializing a lot of the, you know, processes. You have pharma companies that are building a lot of the the important, breakthroughs and scientific advances that that make health care possible, but providers are really the conduit through which health care is rendered in the country.

Providers are actually the money.

that turns into care, and Athelis really figured out how to get in there. And they're the heart of the business where dollars are transacted,.

care is provided, and I think until you've actually been in a practice, until you've actually felt how a doctor operates, you don't really understand health care and and that's why the the core thesis of Atholis is that we build tools for providers, and we make the the jobs of a provider easier and that leads to better health care outcomes and dollars saved, throughout the the ecosystem.

Why is it so hard to sell to providers? Well, it's the same story across any other late adopter industry. There's a lot of old software that just doesn't work, and it is entrenched as enterprise software.

There's a whole host of tools that a clinician has to learn to use today before they can even think about billing for a claim. They're using software to credential. They're accessing different portals with Medicare. There's like the Meridian portal.

They're accessing you know remittances and claims on on a tool called Ability or or Availity and they use something, called Waystar to make sure that their patients are eligible. And you have this disparate set of tools spread across, know, many decades of software building, most of which have now been.

picked up by private equity and are no longer actively maintained. That's the crazy thing to think about. The future is already here, but not evenly distributed.

We spend a crazy percentage of our GDP on health care, and yet we're stuck with some of the worst tools in the world. Also trying to schedule patients, trying to see those patients, get them into the doctor and I think our core thesis was well there has to be a better way.

You can use software to automate a lot of these pieces, provide insights into the into the day to day operations of the practice while also helping those patients get better care.

And I think what we've done is we've taken we've integrated a lot of tools across the health care stack and made them uniquely accessible and also built a lot of our own tools on the clinical and financial stack that fully automate and fully reinvent the way a doctor interacts with a patient. This is the magic of Aethelis.

They figured out a way to sell. Keep watching and you'll learn the secret on how it came together. Athelis didn't just start as rippling for healthcare, they actually started as a blood testing diagnostic.

happening sort of at the same time as Theranos out there. When Athelis started, we we looked entirely like a diagnostics company. When we met you, during YC, we were building one device, our first device called the Othellus one, which which then became the Othellus home.

And it used a lot of the work that I had done, previously in in research and Deepika's, my co founder's research, mine being in computer vision, hers being in microfluidics.

I remember when Tanay and Deepika had just won the YC hackathon that I was judging, and they were high school students at the time. They were working on blood test diagnostics.

To automatically analyze a small volume of blood and generate a series of blood counts, part of a test called the CBC or the complete blood count. And the first few years of Athelis were entirely focused on building the manufacturing skills, the clinical skills, running the trials, working with the FDA, making this device a reality and bringing it into the home.

Later, after dropping out of Stanford, they were commercializing something at a time when it was relatively out of favor to do so. One drop of blood testing.

for blood counts. This is a good lesson for any founder. Even though the headlines might be saying one thing, the real builders know they should pursue that which is true that is in front of them. The founders knew to keep going, find a line of revenue from pharma, and keep pushing. This ended up earning them tens of millions of dollars per year in real gross margin to the business.

It's still a major revenue line for the business today,.

but I think what naturally happened is is a team of engineers both from the software world and the hardware world. We wanted to attack a broader set of problems in the practices, and the device led us to a lot of these back office problems that doctors have with billing, doctors have with credentialing, doctors have with, eligibility, other forms of insurance issues.

The device led us into building a whole suite of tools, software and hardware,.

that become the operating system for running a health care In the past, many founders might consider a line of business throwing off tens of millions of dollars in revenue enough, but it was just the beginning of Athelis' path to becoming the defining health care compound startup, just like Rippling.

There are literally thousands of specific things that are broken about health care, and the interesting thing I found is that Athelis is in the weeds solving them all. Anything you wanna do in health care, you know, we we walked in into an old health system and they were giving out blood pressure devices.

Six people needed to sign off on a clipboard before one blood pressure device got to a patient. That's all work tax. And I think the the beauty of of large language models and artificial intelligence.

is that we can take all of that work tax and we can compress it and we can automate it. Work tax is everywhere and it's one of the reasons why the ongoing revolution in AI and software has big outsized benefits.

to health care. And so at Athelas, we started as a as a company building complex convolutional neural networks, and maintaining them for diagnostics. And now we're able to take the advances in large language models and take a lot of these workflows that we're so deeply involved in for revenue cycle, for eligibility, claims verification, and instantly deploy them.

Some people think AI is just for chat, but when you apply it to the clerical work of health care, you get a massive step up in productivity. We have a tool called Scribe, which is now doing tens of thousands of appointments that, you know, a doctor simply talks to their patient. There's a regular conversation. We have a little mic that's running the whole appointment.

It automatically generates all the text, transcribes it, and then generates all the notes as well as the CPT codes and the claim to then submit.

For the private practices that use Athel Ascribe today, they've eliminated hours of work every day because there's nothing to write down, there's nothing to you know, at best, you're you're most you're you're reviewing the work now as opposed to actually writing and filling this form out yourself. Researchers say administrative spending.

for health care is 15 to 30% of all of it. This is a crazy powerful idea. Let's reduce that to as close to zero as we can. Zooming even one step further out,.

when you look at American society today, I I primarily see three big problem areas. You have healthcare, you have real estate or or or land, and you have education. And these three industries today are black holes for wealth. Any net incremental dollar that's earned by an American will somehow seep into one of these categories.

and somehow they just keep growing at a rate that's both faster than inflation and not actually improving in in any way shape or form over the last ten, twenty, thirty years. Our modern societies are drowning in paperwork and every single one of those dollars could have been put towards something that actually improved the standard of care instead.

For me, what Athelis' end state is and the reason that we work as hard as we do is we fundamentally believe that health care with technology can actually one have reduced costs with improved outcomes. Today, $4,000,000,000,000 or just 20% of US GDP is spent in health care.

Fifteen to 20% of all labor in America is health care, and that's highly inefficient, especially when you look at the outcomes that we have versus a lot of other countries spending less dollars, and and spending less people on the health care problem.

And so, know, our my belief is that with sensors and software, we can actually make health care and make American health care the best health care in the world. Remember, this is trillions of dollars that could be redirected.

What's the outcome? Potentially massive.

Increased lifespans, reduced dollars. The way to think about it is if you can actually take that $4,000,000,000,000, reduce the amount we spend to 2,000,000,000,000 over the next twenty years, but improve outcomes because of these software automations and these sensor tools, you've created $2,000,000,000,000 non inflationary stimulus in the American economy every year.

And over ten years that's $20,000,000,000,000. And so healthcare is actually one of the highest leverage points to deploy software and to deploy tooling if you want to improve American society. And our belief is that Athelis is the company to come in and and do that.

I can't think of a more important company than Aethelis, and it was great to get a chance to hear about how they turned it from a diagnostic.

into a full technology platform. I think it's gonna fully grow into the next rippling or stripe, pointed at one of the biggest industries.

that desperately needs what they build. We're we're in a unique place where we've raised capital and not really spent much of it. We're close to cash flow positive.

Our revenue continues to grow very quickly and you know as as a company right now we are in full on aggressive wartime mode which means the best operators, the best engineers, the best designers, best product people, we're hiring them all. A question I often get is, if I haven't worked in healthcare before, can I actually, know, contribute?

And when you look at Stripe or you look at Palantir or Rippling, you know, none of their engineers or vast majority of their engineers were not experts in in in defense or experts in you know banking APIs or you know banking infrastructure.

They were just really sharp smart learners and the best people at Athelos, the best engineers at Athelos are those who are able to take you know concepts around abstraction and concepts around you know how to automate workflows and apply them to healthcare and we'll teach you the healthcare piece very very quickly.

I would recommend if you're an engineer at any stage in your career, you should definitely reach out to us, Dhruv,.

Hirsch, me, we we all review Deepika. We all review the applications ourself. We're we're we're hiring a ton right now, and we're really excited. Link in the description to apply to Athelis. It's a great place to work and a great place to learn. As always, I'm glad to share the stories of some of the best founders I've ever met. I'll see you next time.