Medical and administrative staff are increasingly overwhelmed with piles of paperwork they have to fill out every day.

Dozens, if not hundreds, of startups, are seeing opportunities to make those bureaucratic processes less burdensome with the help of generative AI. These companies are building AI medical scribes, platforms for pre-authorizing health insurance payments, and products for automatically extracting medical coding from patients’ electronic medical records (EMRs.)

But Pharos, a company that was a part of Y Combinator’s summer 2024 cohort, is applying AI to tackle another somewhat under-the-radar administrative function for hospitals: quality reporting to external clinical registries.  

Organizations like Centers for Medicare & Medicaid Services (CMS) and the American College of Surgeons aim to measure each healthcare centers’ record on delivering safe and effective care for patients. Although reporting to these registries is not always mandatory, it’s often in the best interest of hospitals. These external organizations play a crucial role in identifying quality issues (such as an increase in post-surgery infections), which can be addressed to improve patient care.

However, reporting to the registries is extremely time-consuming. Nurses and other staff must manually sift through each patient’s electronic health record to extract the precise data required for each registry. “A single case can take up to eight hours” to report, said Ryan Isono, a partner at Felicis, “It’s a big problem, but one that you only know about if you’re deep in the industry.”

Indeed, Pharos was co-founded by Felix Brann and Matthew Jones, who had some exposure to the challenges of reporting data to medical registries from their prior work at Vital, a startup that develops software for emergency rooms. They recognized that AI can take unstructured data from EMRs and automatically populate forms required by registries. As they went through YC earlier this year, they added another co-founder – Alex Clarke, a medical doctor who also holds a PhD in artificial intelligence from Imperial College London.

On Friday, Pharos announced that Felicis, with participation from General Catalyst, Moxxie and Y Combinator, led its $5 million seed round.

Pharos caught Felicis’ eye not only because the company could save hospitals money and free up nurses’ time for taking care of patients, but also because the area still doesn’t have other startups going after it, Isono said.

Brann (pictured center above) predicts that other quality reporting companies will emerge soon. “We have five years of experience selling and deploying into hospitals, and we have top-tier AI talent,” he said.” That Venn diagram doesn’t normally overlap. That’s why we think we’re going to win.”

For now, the entire Pharos team consists only of the three co-founders, but they will be using the capital to hire a team that will help the company sell the product and maintain relationships with hospitals.