As Consolidators Automate the Back Office, What Should You Build?

STAT ran a piece on a seven-billion-dollar startup racing to automate the business of healthcare, and the numbers are a strategy memo in disguise. The company automates billing, scheduling, and clinical documentation, and already reaches more than 500 organizations, including 130 of the nation's largest health systems. When a single, well-capitalized consolidator is automating the administrative core at that scale, every healthcare product leader should feel the ground move under their roadmap.

Here is what it means for build versus buy. The generic back-office automation, the billing, the scheduling, the documentation plumbing, is being commoditized by whoever has the most capital and the most reach, and that is not going to be you. So your moat cannot live there. It has to live where a consolidator cannot easily copy you: the clinical logic, the regulated core, the outcomes, and the trust. Build there. Buy the commodity. Partner for the rest.

The back office is being commoditized

When a consolidator can automate a capability cheaper and everywhere, that capability stops being a differentiator, no matter how proud of it you are. I sort every capability on two axes: how much it actually differentiates me, and how easily a well-funded consolidator can commoditize it. The generic automation, however clever, sits in the easy-to-commoditize column, which means building it is renting a lead you will lose. The durable moat is the opposite corner: things that differentiate you and that are genuinely hard to copy, because they are regulated, specific to your clinical context, or earned through trust over time. That corner is where I want my team's effort, and the consolidators moving in should push you toward it, not away.

So what should you build

The answer is not build everything or buy everything. It is build the moat, buy the commodity, and partner for what you lack, decided capability by capability. I apply the same rule I use in the agent era. Buy the generic automation the consolidators are commoditizing, because you cannot out-spend them and it is not your edge. Build the clinical logic and safety, because it is regulated, specific, and yours. Build the trust and the outcomes, because those are earned, not purchased, and they are the real moat. And partner where you need data or reach you do not have, as long as the terms protect you. The table is the whole strategy on one page.

It is tempting, watching a seven-billion-dollar company automate the administrative core, to either try to match it or to freeze. Do neither. Let them commoditize the plumbing, and take the gift of not having to build it. Put your team on the regulated, clinical, trust-shaped core they cannot copy, and measure your progress in outcomes, not features. That is how a smaller, sharper product team stays defensible while the giants automate everything that was never your moat to begin with.