Few industries stand to gain more from AI than healthcare. Provider shortages, crushing administrative overhead and fragmented data have made the healthcare system expensive, inefficient and frustrating for both patients and clinicians. A new wave of startups is showing that AI can bend this cost curve and expand access in ways the sector has never experienced. For these reasons, we believe this is the start of a generational reset in how healthcare operates.

At Sapphire, we expect the largest impact from AI across three core areas:

• Activating healthcare data at scale
  Healthcare generates massive volumes of unstructured data–clinical notes, images, audio files, claims, etc.–that sit trapped in silos. Historically, this data has been too fragmented to use systematically, limiting care quality and scalability. AI can now ingest, structure and surface these datasets in real time, transforming them into an asset that drives faster workflows, more coordinated care and better patient outcomes.
• Automating repetitive administrative workflows
  The number of healthcare administrators has grown more than 3,000% since the 1970s, compared with just a 150% growth in physicians, underscoring the mounting burden of critical administrative workflows like scheduling, billing and documentation. AI can automate these highly repetitive processes end-to-end, freeing up clinicians and other staff capacity to focus on providing the highest quality of patient care, while stripping away unnecessary costs.
• Unlocking the 10x provider
  An aging U.S. population with growing care needs is colliding with a severe shortage in the clinician workforce, creating an unprecedented supply-demand gap in the healthcare system. Agentic AI can augment and take on routine clerical functions, such as front desk call centers, becoming one of the most promising solutions to the staff and provider shortage problem in America.

We’re seeing a fast-growing ecosystem of AI startups materialize across each of these fronts and beginning to drive real impact in healthcare. The market map below highlights the innovators we believe are shaping the future of healthcare AI.

AI in Healthcare: Top Trends We’re Watching

AI is no longer a futuristic promise, but an operational force reshaping how care is delivered, paid for and experienced. From the exam room to the billing office, AI is tackling long-standing pain points and reimagining care delivery at unprecedented speed. Here are a few healthcare AI themes we’re excited about and closely tracking:

1. Automating Documentation & Clinical Decision Support for Providers
   Rising patient demand, a worsening shortage of providers and mountains of administrative work are leaving physicians stretched thin and increasingly burned out. Much of their time is spent not with patients, but on paperwork.
   AI tools like Abridge, which automates clinical documentation, Verse Medical (a Sapphire portfolio company), which leverages AI to streamline the process of ordering durable medical equipment, and OpenEvidence, which accelerates evidence-based decision-making by surfacing medical research in seconds, are reshaping how providers work day-to-day. By offloading tedious clerical tasks and improving clinical decision-making, AI is reducing the strain on physicians while amplifying their impact.
   The provider experience of tomorrow is getting a full makeover with AI at the core, and the early results are promising. Dramatic reductions in late-night “pajama time” spent on charts, faster and more accurate decision-making, and most importantly, better healthcare experiences and outcomes for patients.
2. Voice AI for Patient Access & Front-Office Operations
   Healthcare front offices juggle scheduling, insurance checks, referrals and follow-ups–tasks that consume significant labor yet still leave gaps in patient access. Voice AI platforms like EliseAI (a Sapphire portfolio company) and Hippocratic are already running these conversations comprehensively, letting providers handle more volume while holding or even cutting call center spend.
   We expect voice AI to become the default patient engagement channel within 12 to 18 months, shifting from pilot tech to core infrastructure, fundamentally transforming how patients interact with healthcare providers.
3. AI for Revenue Cycle Management (RCM): Prior Auth, Chart Reviews & Claims
   Roughly five cents of every U.S. healthcare dollar (nearly 1% of GDP) is spent just collecting payment. Fragmented data and legacy processes drive errors, denials and heavy labor costs.
   AI is starting to change that. New entrants are attacking critical nodes of the revenue cycle–intake and prior authorization (Tandem, Mandolin, Latent), chart review (Charta), claims submission (Candid) and collections (Collectly, a Sapphire portfolio company)–and are already delivering ROI through fewer denials, faster reimbursement and less manual rework. We expect to see consolidation as winners expand toward full-stack AI RCM platforms, either through incumbent acquisitions or AI-native vendors extending across the value chain.

Healthcare is still in the early innings of an AI-driven transformation that promises to redefine its cost structure, operating models and the patient experience. Startups leading this wave are not just building large businesses but laying the groundwork for a more scalable, efficient and patient-centric system. 

The stakes are high. Those who prove durable ROI will shape the future of healthcare delivery. If you are a builder or investor working at this frontier, we’d love to connect–reach out to Cathy, Aditya, Misty, or Callum.