Faisal Zain brings a wealth of experience from the high-stakes world of medical device manufacturing and healthcare innovation. Having spent years at the intersection of clinical hardware and diagnostic software, he has seen firsthand how the right technology can streamline a physician’s workflow or, if poorly implemented, become a source of profound frustration. As the healthcare industry grapples with the massive gravitational pull of electronic health record giants, Faisal’s perspective offers a unique look at how emerging technologies are integrated into the complex machinery of modern medicine. In this conversation, we explore the shifting dynamics of the health tech market, where one major player holds nearly half the market share, yet nimble startups are finding essential cracks in the armor through speed, specialized expertise, and a focus on the patient experience.
With a significant portion of health systems adopting an “Epic-first” strategy, how do you see the massive market share of this EHR giant influencing the current pace of innovation for AI-driven clinical tools?
The sheer gravity of a company commanding 43.7% of the acute-care EHR market cannot be overstated; it creates a centralized ecosystem that dictates the rhythm of technological adoption across more than 3,700 hospitals. When you realize that over 325 million patients have their medical records housed within this single infrastructure, it becomes clear why 71% of health system leaders now describe their organizations as “Epic-first.” This dominance allows the company to weave generative AI directly into the fabric of daily clinical work, such as their AI Charting feature which ambiently listens to patient visits to draft notes. While this could be seen as a bottleneck for outside developers, it actually sets a high bar for what “integrated” technology should look like. For clinicians, the convenience of having tools like the “Art for Clinicians” scribe or the “Penny” revenue cycle copilot within their existing screens is a powerful incentive that startups must now find ways to match or exceed.
Despite the lean toward a single-platform philosophy, nearly a third of executives still evaluate external vendors on a “best-in-breed” basis. What specific gaps or “paradoxes” are these leaders finding in the current EHR offerings that keep the door open for startups?
There is a fascinating paradox at play where, despite the 80% of executives who expect the bias toward a single platform to intensify, there is a lingering 29% who refuse to put all their eggs in one basket. These leaders are looking for specialized functionality that a generalist platform, no matter how large, may struggle to perfect, such as deep-dive imaging analytics or complex computer vision tasks. We see that while 85% of customers are already live with some form of generative AI through the incumbent’s native tools, there is a hunger for solutions that solve problems the giant is less equipped to handle. This includes things like interaction with outside healthcare organizations or managing new, massive data types that don’t fit neatly into a standard medical record. Startups that can deliver a “faster time to value” rather than just a lower price point are the ones finding a seat at the table, as executives are still willing to spend about $4 of every $10 on external administrative and clinical solutions.
You mentioned that ease of integration was cited by 74% of respondents as a primary driver for their purchasing decisions. How can a small startup realistically compete with the seamless interoperability that a native EHR solution provides?
Competing on integration requires a startup to be almost invisible within the existing clinician workflow, which is a tall order when you are fighting against a native system. The survey data is quite telling here: 74% of all respondents pointed to ease of integration and interoperability as the absolute make-or-break factor for any external vendor. To win, a startup must prove that its tool doesn’t just work well in a vacuum but talks to the EHR with zero friction, potentially leveraging medical foundation models like the one formerly known as Cosmos to bridge the gap. We are seeing that 91% of executives have significant confidence that the incumbent will eventually match best-in-class external solutions, so a startup’s only real defense is to be significantly faster and measurably superior in a very narrow niche. It isn’t just about the technology; it’s about the technical and resource-wise “lightness” of the deployment, showing a health system that they can see a return on investment in weeks rather than the months or years a major system upgrade might take.
The data suggests that non-profit community systems are more heavily skewed toward the incumbent platform compared to for-profit systems. What do you believe accounts for this difference in risk appetite or technical strategy?
The disparity is quite sharp when you look at the numbers: non-profit community systems allocate about 61% of their budget to the primary EHR, compared to 54% for for-profit systems. This likely stems from the limited internal resources available to community hospitals, where 42% of leaders cite those very resources as a reason to prefer standardization over a complex web of different vendors. For-profit systems often have more robust IT departments that can handle the “best-in-breed” approach, whereas a community hospital needs a “good enough” solution that is already baked into their existing costs. Interestingly, though, these same non-profit systems are actually more open to net-new startups—47% say they are very likely to purchase from one, compared to only 24% of for-profit leaders. This suggests that if a startup can solve a specific, painful problem for a community hospital without requiring a massive IT overhaul, they have a very receptive audience that is desperate for efficiency.
We are seeing a shift in how AI is budgeted, with 43% of solutions hitting department-level or service-line budgets first. How does this change the “sales pitch” for medical technology companies moving forward?
This shift to department-level budgeting is a massive opportunity for startups because it bypasses the “black hole” of central IT procurement where many innovative ideas go to die. When 33% of executives say AI will stay in department budgets permanently, it means the head of oncology or the director of the imaging department has the autonomy to buy tools that solve their specific clinical headaches right now. Instead of pitching to a Chief Information Officer who is worried about a 10-year roadmap, a company can pitch to a service-line leader who is worried about clinician burnout or a 20% denial rate on claims. These buyers are looking for “speed to ROI” and immediate relief for their staff, which is why we see such high interest in things like ambient scribes or patient-facing assistants. If you can show a department head that your AI agent can handle scheduling or prior authorizations across multiple systems more effectively than the EHR’s current “good enough” feature, you’ve got a sale.
The recent leadership shakeup at the top of the EHR market—including the departure of the long-tenured President and several AI heads—has been a major topic of discussion. Why do you think health system leaders remain so confident in the face of such significant internal turnover?
It is certainly a striking moment when you see the President step down after 28 years, followed by the departures of the VP of Nebula Cloud and the heads of AI and product. Yet, the 91% “complete” or “significant” confidence rating from health system leaders suggests that the brand has become more than just its people; it is a structural pillar of the American healthcare system. Executives seem to view these departures as a “mid-career break” or a natural evolution rather than a sign of instability, largely because the company has been so aggressive in releasing features faster than ever before. Even with the reshuffling of the R&D leadership among four senior VPs, the momentum of the 2025 and 2026 User Group Meetings keeps the market’s eyes focused on the roadmap rather than the exit door. The “Epic-first” mindset is so deeply ingrained that most leaders believe the platform’s data advantage and application-builder reputation will outlast any individual executive’s tenure.
What is your forecast for the evolution of AI agents in healthcare, particularly as they begin to move beyond simple record-keeping into more complex tasks like claims appeals and care navigation?
I believe we are entering a phase where the EHR will eventually transition from being the “all-in-one” solution to acting more as a “system of record” that a fleet of specialized AI agents interact with. As regulation moves toward greater accessibility—driven by frameworks like TEFCA—the data advantage currently held by the giants will begin to level out, allowing agentic solutions to flourish in areas like discharge planning and transitions of care. We will see a shift where 52% of leaders interested in native ambient scribing today will soon demand agents that can actually “think” across multiple systems to handle prior authorizations and scheduling without human intervention. The winners in this next era will be the companies that provide deep clinical expertise in computer vision or smart intake, effectively creating a layer of intelligence that sits on top of the medical record. Ultimately, the future isn’t about which platform you use, but how effectively your AI agents can navigate the friction-filled spaces between those platforms to improve patient outcomes.
