Armaan Pai is a Vice President at General Atlantic, where he specializes in health care investments. Before joining General Atlantic in 2018, Armaan worked in investment banking at Centerview Partners, where his experience in health care M&A transactions sparked his interest in investing in disruptive companies that are transforming the health care sector. Armaan graduated from the University of Pennsylvania in 2015 with a dual degree – a BA in Biology and a BS in Economics.

Armaan Pai, VP at General Atlantic

The Pulse: What trends are you seeing in health care artificial intelligence (AI) or digital care, and how is General Atlantic investing in companies that solve problems in these spaces?

Armaan Pai: The health care industry has often been on the latter end of technological adoption compared to other industries, both because of the complexity of our health care system and because many industry participants are entrenched in certain ways of practicing medicine and workflows.

AI has huge potential in health care and there’s a lot of innovation and activity in the space. Broadly, there are two big categories of AI applications in the industry: clinical applications of AI and administrative AI. Clinical applications of AI revolve around using technology to diagnose and better treat, or to do so more efficiently than human beings. Administrative AI solutions focus on bringing more efficiency to a lot of the back-end processes that make health care delivery possible. Studies estimate that 30%+ of total health care costs are administrative in nature, and the potential for AI to help reduce these costs and streamline inefficient processes is tremendous.

Administrative applications of AI have fewer hurdles to becoming reality versus clinical applications given they undergo less scrutiny from regulators (e.g., the FDA) and likely don’t require novel reimbursement methodologies from payors. At least initially, I believe we may see quicker adoption of AI tools on the administrative front in areas such as revenue cycle management, supply chain optimization, and data ingestion and analytics.

The consumer AI tools that we all know and use (e.g., Chat GPT) are incredibly powerful and amazing in a lot of ways, but they are not perfect and have limitations. When using AI for clinical decision making and treatment, the bar will be very high to pass regulatory hurdles and achieve market adoption given the stakes. There could be some really incredible clinical AI applications in the future, but I suspect this part of the market will take more time to mature.

The Pulse: How do you think health care companies can implement AI and digital technologies sustainably?

AP: In the health care industry, return-on-investment (ROI) in terms of both dollars and patient outcomes really matters. We believe the digital technologies and AI tools that gain traction quickest and have lasting industry impact will show clear economic benefits and returns for all stakeholders. Hospitals, payors, and other stakeholders need to be convinced that spending money on AI tools will make sense for them financially and/or improve their patients’ outcomes and access to care.

The Pulse: What are the biggest hurdles you’ve seen in integrating digital technologies into traditional health care systems?

AP: Data ingestion, management, and analysis are some of the most consistent challenges I hear from companies in the industry as they try to adopt digital technologies. Health care data is stored in all different types of systems and formats, and being able to exchange timely, clean, normalized, and accurate data is often crucial for a lot of innovative companies in the health care space. The health care ecosystem is, in general, not set up well to easily do that, so this is a frequent pain point. When data is delayed, incorrect, messy or otherwise not usable, it often hampers innovation and scalability of digital technologies.

The Pulse: What emerging technologies do you believe will have the most significant impact on health care in the next decade, and how is General Atlantic positioning itself in these areas?

AP: We are in a golden age of biotechnology, and there are so many innovative drugs that are coming to market that have the potential to have profound impacts on health care in our country. GLP-1s are a great example; these are drugs that have incredible clinical outcomes and have the potential to reduce chronic disease burden in the country, which has a huge trickle-down impact on health care costs and also creates new categories of companion services (e.g., nutrition counseling). There are also numerous other exciting biotechnologies (e.g. mRNA) that have great promise to significantly impact health care and drive growth in adjacent businesses (e.g. hub services and specialty pharmacies).

Furthermore, one positive change coming out of the pandemic was that we fast-forwarded patients’ and clinicians’ comfort with virtual care. Adoption of virtual care, remote patient monitoring technologies, and remote diagnostics have already lowered barriers to accessing care and has the potential to lower overall costs of care delivery. A big portion of people in this country don’t have a primary care physician (PCP) relationship and don’t regularly engage in health care. These technologies make accessing high quality health care easier. Over the next decade, I expect to see continued adoption of these technologies which has the potential to improve health outcomes overall through getting more people the right care in the right setting.

The Pulse: What advice would you offer to new entrepreneurs looking to make a lasting impact in health care innovation, based on your experiences at General Atlantic?

AP: Our health care system is by no-means perfect, and there’s a lot of opportunity for entrepreneurs to improve the access, affordability, and health outcomes of our system. One of the most important differentiators we see is the quality of the management team, not just the CEO or the founder, but the whole team. More than perfecting your product or business model, which may inevitably be tweaked or adapt over time, I would encourage founders to prioritize surrounding themselves with dynamic, thoughtful, smart, and well-experienced people. A lot of a start-up’s success in health care will come down to strong execution and decision-making on the many small choices that will be made in scaling one’s product or service, and the more talented and aligned the people making them are, the better your outcome and impact will be.

Interviewed by Anna Marie Manning, December 26, 2024.