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The fax machine is the bottleneck in US healthcare, and VCs are starting to notice

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Why This Matters

The reliance on outdated fax systems for patient referrals in US healthcare creates significant delays and administrative burdens, impacting patient care and access. Venture capitalists are increasingly recognizing this inefficiency as a critical bottleneck, driving innovation and investment in digital solutions to streamline healthcare workflows.

Key Takeaways

A lot of the conversation around AI in healthcare focuses on diagnostics and drug discovery or on doctor-patient visits. But a less visible part of the system affects whether patients actually get seen at all, and it has less to do with the number of doctors in the world (too few) and more with the administrative work (too much) that happens between a primary care doctor writing a referral and a specialist’s office getting a patient on the schedule. That gap, it turns out, is huge, stubbornly manual, and increasingly attracting serious interest from venture capitalists.

Kaled Alhanafi, a former Lyft and Cruise executive, and Chetan Patel, who spent a decade building cardiac devices at Medtronic, co-founded Basata after each experienced the problem directly.

For Patel, the issue became personal when his wife fainted on a flight with their young children. Even with his deep knowledge of cardiology and the specific devices that could help her, he says navigating the administrative process to get her appropriate care took far longer than it should have. “We have the best doctors, we have some of the best medicines, but the care gap is just so wide,” he said.

Alhanafi describes a parallel experience with his own father, who was referred to three cardiology groups after a serious carotid artery diagnosis. According to Alhanafi, only one called back within a couple of weeks. Another responded after the surgery was already done. The third still hasn’t called.

These aren’t unusual outcomes, as nearly anyone who has tried to see a specialist in recent years can attest. Specialty practices that receive referrals are frequently processing hundreds or thousands of documents — most arriving by fax — with small administrative teams. Practices lose patients not because they don’t want to see them, the company argues, but because they can’t get through the intake backlog.

Basata, founded two years ago in Phoenix, is trying to fix this. When a referral comes in — still typically by fax, alas — Basata’s system reads and processes the document, extracts the relevant clinical information, and then an AI voice agent calls the patient directly to schedule the appointment.

Image Credits:Basata

Patients can also call the practice at any hour and reach an AI agent that can answer questions or handle common administrative needs like prescription renewals. Alhanafi says the company has recordings of patients audibly surprised by how quickly they’re contacted after a referral is sent. The goal, he says, is for a patient to have a scheduled appointment by the time they reach their car in the parking lot after seeing their primary care doctor.

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