Bridging the Administrative Gap in Healthcare with AI: Basata’s Approach
Many conversations about AI in healthcare focus on diagnostics and drug development or doctor-patient visits. But a less visible part of the system affects whether patients get treated at all, and it has less to do with the number of doctors in the world (too few) and more to do with the administrative work (too much) that falls between a family doctor issuing a referral and a patient being admitted by a specialist practice on the schedule. As it turns out, this gap is huge, stubbornly manual, and increasingly attracting serious interest from venture capitalists.
Understanding the Problem: Personal Experiences Drive Innovation
Kaled Alhanafi, a former Lyft and Cruise executive, and Chetan Patel, who spent a decade building cardiac devices at Medtronic, co-founded Basata after they both experienced the problem firsthand.
For Patel, the problem became personal when his wife fainted on a flight with their young children. Despite his extensive knowledge of cardiology and the specific equipment that could help her, it took much longer than it should have to navigate the administrative process to provide her with appropriate care. “We have the best doctors, we have some of the best medications, but the gap in care is just so big,” 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 person called back within a few weeks. Another replied after the operation was already completed. The third party still hasn’t called.
Addressing the Challenge: Basata’s AI-Powered Solution
Basata, founded two years ago in Phoenix, is trying to fix that problem. When a referral comes in – unfortunately still usually via fax – 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.
Patients can also call the practice at any time and reach an AI agent who can answer questions or handle general administrative matters such as renewing prescriptions. Alhanafi said the company has records of patients audibly surprised at how quickly they were contacted after a referral was sent. The goal, he says, is for the patient to have a scheduled appointment when they reach their car in the parking lot after visiting their family doctor.
Strategic Growth and Market Impact
The company integrates with the electronic medical record systems actually used in certain specialties, which is why it says it has moved cautiously – cardiology first, then urology – rather than trying to serve all areas of the market at once. The founders say they recently turned down a large contract in an area of expertise that they hadn’t yet mapped thoroughly enough to be sure they were doing well.
The revenue model is usage-based: Practices pay per document processed and per call processed, rather than per seat. The company says it has processed referrals for around 500,000 patients so far, with around 100,000 arriving in the last month alone.
Investments and Competitive Landscape
Basata says it has raised a total of $24.5 million, including a new $21 million Series A round led by Basis Set Ventures’ Lan Xuezhao, who began her career modeling the human brain as a graduate student before moving into corporate strategy at McKinsey and Dropbox and eventually investing. Cowboy Ventures, founded by Aileen Lee, also participated, as did Victoria Treyger, a former general partner at Felicis Ventures who recently founded her own venture firm Sofeon (this is her first investment).
The room is becoming more and more crowded. Tennr, a New York-based startup founded in 2021, has raised over $160 million to date – including from Andreessen Horowitz, IVP, Lightspeed and Google Ventures – and is now valued at $605 million. Tennr has a strong focus on document intelligence and says it has developed proprietary language models trained on tens of millions of medical documents. Assort Health, backed by Lightspeed, focuses on automating patient phone communications for specialty practices and was valued at $750 million last year.
The Future of AI in Healthcare Administration
Lee said the founders’ years of experience are an asset in a market where there are many well-funded competitors. “There are many [VCs] I chase high school dropouts and college dropouts, but when you’re selling to doctor’s offices, trust is a really big thing,” she said. “These doctors want to look you in the eye and know they can count on you.”
Basata’s founders, meanwhile, argue that their differentiation lies in combining both functions into a single end-to-end workflow tailored to specific areas of expertise, rather than building a tool that only handles part of the process. This may be more difficult to maintain as more capitalized competitors expand, but there is clearly a market signal here.
Of course, like many AI companies currently automating human labor, Basata will eventually face the more difficult question of where the line is between augmenting workers and displacing them. The founders say the administrators they work with aren’t worried about it for now; They are more afraid of drowning. In fact, Alhanafi notes that administrative staff in specialty practices have often been in their roles for decades and know the work intimately; Furthermore, they are buried in a volume that no adequate number of new hires could fully absorb.
Whether AI simply expands the capabilities of these workers or gradually renders many of their functions obsolete is a question that goes well beyond healthcare. For now, Basata is concerned with the former: freeing administrators from the most repetitive parts of the job makes them better at the rest. Judging by a statistic shared by Alhanafi that 70% of the company’s new business now comes from word of mouth, the people closest to the problem seem to find this argument compelling.
Pictured above, left to right: Chetan Patel, co-founder and president of Basata; Kaled Alhanafi, the company’s CEO; and Vivin Paliath, the company’s third co-founder and CTO.
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