Walaliyadde is a former partner at a16z, where he helped build the firm's health investment team
Steven Loeb and Bambi Francisco speak with Malinka Walaliyadde, co-founder and CEO of AKASA, a company using AI to automate revenue cycle management in healthcare. The company's platform, called Unified Automation, combines machine-learning and human judgment to allow health systems to get paid faster and submit more accurate claims, allowing them to decrease their costs so they can invest more in patient care.
Founded in 2018, the company has raised $85 million in venture funding, including a $60 million Series B round in March from Andreessen Horowitz and Costanoa Ventures.
Our overall goal with these podcasts is to understand how technology is radically changing healthcare: the way we screen, treat and measure progress and outcomes. How we’re empowering the consumer. Whether we’re creating productivity that drives economic costs down? And how tech advancements change the role of the doctor.
Highlights from the interview:
- AKASA started when Walaliyadde was at a16z, and he saw that the biggest blocker to innovation in healthcare was not additional innovation on the care side, but more innovation on the back end, meaning the operational infrastructure of healthcare, which was largely under served.
- Revenue cycle management (RCM) is the industry term for medical billing, and in some health systems it can start as early as scheduling an appointment, all the way until they are paid. AKASA has developed technology that can automate all of these activities from start to finish, meaning it can process claims faster and make sure systems are paid on time, creating a better experience for the health systems and their patients.
- The primary challenge for AKASA is that payers and providers don't trust each other, which causes friction in the system and unnecessary spend, some of which is passed down to the patient. Even more than the cost, the biggest impact is on the experience for the patient, leading to an erosion of trust that the healthcare system will serve them well. AKASA's technology can automate the process so that the work is done correctly, and faster, so patients are not surprised by crazy bills.
- The name AKASA comes from a time when there four elements that people used when trying to explain scientific phenomena; everything that didn't fall into those was part of a fifth element, called akasa. In today's healthcare world, there are also four "Ps": patients, providers, payers and pharma. The company believes that it's operating in the fifth element, the core infrastructure that combines all of those together. Akasa also means space in Sanskrit, and the company has a lot of space themed photos and poster on its walls at its headquarters.
- The company pulls two main types of data to automate medical billing. The first is claims data, which is sent from a hospital to an insurance company and vice versa, and the other comes from observing what the staff is doing in real-time. Part of AKASA's solution is called WorkLogger, and it captures what the staff is doing on their computers, which is then included in the machine learning model, and matched to the end claim that was sent out.
- One of the holy grails in the healthcare industry is preventing a denied claim from ever being sent out, and the best way to do that is to look at what's been denied in the past. AKASA's model was built on millions of claims to see if it could predict if it's going to be denied and why, and now it's able to predict 70% of denials before the claim was sent.
- Part of AKASA's solution is to combine machines and humans. Much like how self driving cars are taught by having a human intervene and explain things when obstacles show up, the company observes people doing billing work, and builds AI that can automate it; however, when there's going to be outlier or an edge cases, the AI can pull in a human expert as necessary to help it along. The human will always be necessary because the payment ecosystem is always changing, and AKASA's recognition of that fact has allowed it to resonate in the market.
- AKASA's customer base now represents over $100 billion in net patient revenue, which is almost 10% of all spend in US health systems.
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Steven Loeb