AI health start-up NexusMD lands $6.3m to save Aussie hospitals

A Melbourne start-up is launching AI across our hospitals, promising to cut costs, boost efficiency, and get doctors back to the bedside. But can it save our healthcare system and protect your privacy?

NexusMD is harnessing artificial intelligence to transform Australia’s healthcare system.

Artificial intelligence presents an opportunity to help ease Australia’s private hospital funding crisis, automating expensive administrative tasks so doctors, nurses and other health professionals can spend more time caring for patients.

That’s the diagnosis from Australian venture capital outfit Square Peg, which has led a $6.3m seed run for NexusMD – a Melbourne-based AI start-up that has created a suite of customised agents for hospitals.

Square Peg – the investment firm, co-founded by veteran tech entrepreneur Paul Bassat – was one of the early backers in Canva, Rokt and Airwallex, and is confident that NexusMD shows similar potential.

AI is transforming healthcare, with doctors adopting the technology to transcribe and begin drafting notes, eliminating so-called pajama time – time spent after hours on administrative duties. Overall, it’s a global addressable market worth an estimated $US40bn ($62.26bn).

NexusMD's leadership team (from left): Neo Nie, Kevin Sun, Mike Zhu and Andrew Wilson.

But NexusMD promises to perform more than just transcription – a market that other Australian start-ups, including Heidi Health and Lyrebird Medical, have seized.

Nexus’ agents can also assist with compliance and documentation, with Australia’s biggest private hospital operator Ramsay Health Care signing up to the platform.

Square Peg partner James Tynan said NexusMD’s platform has been “battle tested in the hardest hospital environment”: the emergency department, and has lifted ED efficiency at Peninsula Private in Frankston by 30 per cent.

“When we saw that happening, we got very excited to lead the first round,” Mr Tynan said.

“Healthcare has for many years gone in one direction, which is rising costs, more challenging work environments, more and more workforce stress and technology has not really lived up to the promise to alleviate that stress and bring those costs down.

“What is different this time around is that AI technology can actually do a lot of the administrative tasks that previously you required humans to do. So that’s the difference. The AI technology that Nexus is developing can help clinicians get back to the bedside in a way that wasn’t really possible with previous iterations of technology.”

Square Peg partner James Tynan.

But the use of AI in hospital and health settings has raised concerns around privacy, given it draws its insights on copious amounts of data – patient data – which can become irresistible to criminals. Just look at the cyber attack inflicted on Australia’s biggest health insurer Medibank in late 2022, which involved Russian hackers stealing millions of Australians’ medical data and publishing it on the dark web.

Then there is the question of what data is being used to train AI platforms.

NexusMD founder Mike Zhu – who “grew up in a family of doctors” = said it doesn’t use any of its client data to train its models and all data is hosted within Australia and deleted from its servers in 24 hours.

“Lots of people think AI is learning when using it,” Mr Zhu said.

“That is not true. The models we call large language models is never stealing any data from users. Data security is the top priority for every hospital. We don’t use it for any purpose, because it’s not allowed, and some hospitals say please keep this data for us for like a year. We can do that, but we still cannot touch the data.”

Mr Zhu previously founded online medical information platform Baikemy Net, which Mr Tynan likened to the “WebMD of China” and which ByteDance acquired for 500 million yuan ($108m) in 2020.

“We are building an AI healthcare company to transform care in Australia, and then we plan to expand globally. Our technology empowers doctors to confidently use AI to become the best clinicians they can be, while helping patients access faster, higher-quality care. Together, these advances will also drive meaningful, long-term economic benefits for hospitals.”

Peninsula Private Warwick Dobson said as well as increasing efficiency, the platform “simultaneously increased our physician workplace satisfaction”.

“Administratively, NexusMD also provides us with more comprehensive and accurate ED medical notes, which reduces legal risk,” Dr Dobson said.

Originally published as AI health start-up NexusMD lands $6.3m to save Aussie hospitals