AI is surging as a catalyst for healthcare innovation, turning complex data into actionable insights that promise to transform how care is delivered and financed. This rapid rise has sparked interest among providers and investors hoping to harness its capabilities within their operations or portfolios. As healthcare leaders navigate this shift, understanding AI’s practical applications is critical to unlocking its potential.
At McGuireWoods’ 21st Annual Healthcare Private Equity and Finance Conference, held May 14-15, 2025, in Chicago, the LevinPro HC team attended a panel titled “Artificial Intelligence: Investment Trends, Opportunities and Predictions.”
The session brought together industry leaders to explore AI’s impact on healthcare, from diagnostics to practice management. Panelists included professionals experienced in AI-driven oncology solutions, tech-enabled healthcare investment and specialty practice operations, each highlighting AI’s role in addressing inefficiencies and reshaping market dynamics.
The LevinPro HC team also had the opportunity to sit down with panelist Jeff Freedman, Private Equity Engagement Director at ModMed. Freedman shared how AI can improve specialty practices and drive M&A activity by creating valuable assets.
Freedman highlighted AI’s ability to streamline operations in specialty practices. Unlike traditional systems, ModMed’s approach leverages proprietary data to enhance workflow efficiency. This echoes the panel’s emphasis on AI as a tool to address operational pain points in healthcare.
“We’re building our own AI ambient listening solution natively into our EHR, ModMed Scribe, and training it on millions of structured parameters from years of patient encounters to ease the process of clinical documentation,” said Freedman. “It helps the physician have a greater degree of confidence that their conversation and treatment of the patient gets accurately documented in medical notes. Also, unlike other AI products, the seamless integration with our EHR enables the AI model to work alongside the EHR to pre-populate downstream workflows, including suggesting bill codes and managing prescriptions and orders. We’re also deploying other AI-powered processes within practices, including fax categorization, denials management, and patient engagement to streamline administration throughout the business.”
Freedman addressed behavioral barriers to AI adoption, noting that practices may resist tools that disrupt established routines. Embedding AI within existing systems helps staff view it as an enhancement, which may reduce training time and skepticism. This approach reflects the growing need for intuitive technology in high-pressure healthcare settings.
“Buy-in happens when AI tools are integrated… if the AI tool is embedded within your existing system and you aren’t coming out of one system to go to another, I think you find that there’s much greater adoption,” said Freedman.
Freedman also emphasized the need for patient engagement. ModMed’s Klara platform, which can be tied to its electronic health record and practice management system, is designed to simplify scheduling, bill paying, and communication, aligning with the healthcare industry’s continuous push for better access.
Deals captured in the LevinPro HC database also underscore this shift toward tools that prioritize care over paperwork. During the first four months of 2025, 22 patient engagement transactions were announced, making it the most active eHealth subsector, beating out telehealth and medical practice management software, which have held that position in past years.
According to Freedman, these patient engagement advancements, enabled by AI, can improve care and enhance a practice’s financial appeal, setting the stage for M&A opportunities. By streamlining operations and patient access, AI enables efficiencies that may make practices more attractive to investors. This aligns with Freedman’s view on transforming practices into valuable assets.
“If you bring AI in and do it effectively – you have it integrated, you’ve trained on it, you’ve got buy-in from the practice – it can make your business a quality asset,” said Freedman. “I have seen a direct correlation between effectively implementing cost-saving AI tools that can increase the time the physician spends with the patient and the transition to becoming a quality asset that is attractive for M&A activity.”
Although conference attendees buzzed about a sluggish M&A market slowed by high interest rates and fewer quality assets, Freedman sees AI creating an opportunity to flip this by making practices more appealing through tighter revenue cycle management, more patient visits, and less physician burnout. Additionally, the panel’s talk of AI-native firms disrupting health tech suggests a coming wave of deals.
“The market is seeing really tangible workflow improvements that can take an average asset and make it a quality asset, and quality assets are what investors want, leading to the right aggregation of practices,” said Freedman.
Freedman’s insights show AI’s growing impact in the current healthcare market, a market that is poised to revolutionize in the next 5-10 years as AI’s power only grows.
“The AI buzz is like five Michelin three-star restaurants moving into your neighborhood, and you don’t know which one to go to first—they’re all great, and they’re all somewhat specializing in something different. Very exciting times in healthcare,” said Freedman.
The industry is poised to see AI tools like ModMed Scribe and Klara driving more innovative practices and stronger M&A in 2025 and beyond, delivering value for doctors, patients, and investors. As practices adopt these tools, AI’s role in reshaping healthcare delivery and investment will only deepen. We’ll cover all those changes and their impact on the Healthcare M&A market on the LevinPro HC platform.
