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CMS shares details of its Medicare weight loss program		Read in browser

Thursday, 3 September 2026

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Go big or go home

Throughout the past year, funding in digital health has increasingly gone to megarounds. The latest example played out in August, when community health startup Cityblock raised $116 million.

Cityblock’s Series E raise was paired with news that it acquired fellow General Catalyst-backed startup Homeward Health to serve more patients on Medicare Advantage, a deal I first reported on in June.

“Unlike some of the earlier stages of health tech, where folks were making a lot of small bets, we're increasingly seeing folks make large, meaningful bets behind companies that they think have the ability and the capability to win the segment,” Cityblock CEO and co-founder Toyin Ajayi told me.

Ajayi has noticed the trend across the industry, especially for companies that provide healthcare services, as investors eye the huge market in healthcare and the chance to build large, lasting businesses.

It’s a thesis General Catalyst CEO Hemant Taneja talked about in a second-quarter review published this summer. Money and talent have been pooling into a shrinking number of players that hold outsized power across the economy, he wrote. He argued that in turn, General Catalyst would need to commit to big bets to stay relevant, too.

The Homeward deal is not the first time General Catalyst has combined two of its companies. Its flagship health tech startup, Commure, has bought a few other GC-backed startups including Athelas and is testing its product on Summa Health, a health system the venture firm purchased.

Focusing on a few big bets has also been on other investors’ minds. Median valuations for Series C and later stages so far this year have rocketed to historic highs, even as the median size of each deal remains roughly the same, according to a Silicon Valley Bank report. The number of mergers and acquisitions this year is also looking like it’ll hit a multi-year high, the report said.

Time will tell how sustainable this approach is.

- Ngai

Here’s what’s new

Trump administration shares a status update on the CMS Bridge program

CMS Administrator Mehmet Oz said at a drug-pricing event on Monday that 600,000 seniors on Medicare have signed up for the CMS Bridge program, which reduces the price of weight loss drugs to $50 per month for qualifying patients.

VC FOMO?

A chart shows the valuations of Series C and beyond funding rounds from 2020 to 2026.

Investors are paying a huge premium for late-stage companies. Median pre-money valuations for health tech startups at Series C and beyond have reached a record high of $870 million this year, according to a Silicon Valley Bank report, even as the median dollar raised per round has stayed around $85 million.

This week in health Тech

OpenAI announced that its enterprise tool ChatGPT for Healthcare is now integrated with Epic. It will also connect to data sources such as PubMed, DailyMed and CMS Coverage. This means that doctors can use ChatGPT to ask questions about patients without leaving the electronic health record. They can also bring patient information from the EHR into ChatGPT.

There were about a gazillion hot takes on this news, with many saying it’s a killer for other AI startups working on top of EHR data. We’re skeptical, given many health systems have already invested in relationships with Abridge, Doximity and others, and ChatGPT’s healthcare capabilities still seem limited.

Teladoc has a new chief financial officer, Michael Grasher, who has a background in financial services and insurance. Grasher succeeds Mala Murthy, who announced plans to step down from the role last fall.

A federal appeals court ruled against compounding pharmacies last week, Bloomberg Law reports. The Outsourcing Facilities Association sought to challenge the FDA’s decision to take GLP-1 medications off its shortage list. Compounders previously lost the case last summer in district court.

Sam Altman’s brain computer interface startup Merge Labs is the latest to partner with ultrasound device maker Butterfly Network. Butterfly, which is also working with AI imaging lab Midjourney, is aiming to make licensing its ultrasound chips a key part of the business.

European cancer care company Cureety acquired Reimagine Care, a startup that provides virtual support to cancer patients. Together, they will support 250 cancer centers and 100,000 patients in five countries, the companies said.

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