Vitalize has raised $31 million in Series A funding to expand its artificial intelligence platform for managing hospital labor and capacity in real time. Oak HC/FT led the financing, with participation from Norwest, .406 Ventures, Constellation Ventures, Y Combinator, Rock Health Capital and MemorialCare Innovation Fund.
Vitalize plans to use the capital to expand its growth and deployment organizations and further develop AI models focused on patient throughput optimization.
The company’s platform coordinates staffing, scheduling and hospital capacity in an effort to replace fragmented manual processes used by clinical leaders.
Vitalize estimates that labor accounts for 50% to 60% of U.S. hospital operating expenses and approaches $1 trillion of annual spending nationally.
The company argues that inefficient staffing and capacity management contribute significantly to those costs.
Clinical leaders can spend as much as half their workday building schedules, handling compliance issues and responding to changes in staffing and patient demand.
Large health systems can also spend more than $100 million annually on premium overtime and agency labor when staffing does not match demand, according to Vitalize.
The platform operates as an always-on “air traffic control” system connecting workforce and capacity planning.
Its AI automates scheduling tasks, forecasts patient demand and coordinates staff across thousands of hospital beds.
Vitalize integrates with electronic medical record systems and time-and-payroll platforms and is intended to replace more than 10 separate tools that clinical teams may otherwise use.
The company currently manages millions of shifts each week across dozens of enterprise health systems.
Vitalize said its platform saves clinical leaders more than 2,000 hours per day.
Rochester Regional Health reported a 50% reduction in time spent on manual staffing and scheduling within weeks of deployment.
St. Luke’s Health reported a 54% reduction in premium labor spending across overtime and agency costs after 12 weeks.
KEY QUOTES:
“With financial pressure mounting, operations still running on paper and Excel, and frontline leaders burning out, addressing labor and capacity challenges isn’t a nice-to-have – it’s essential to keeping our healthcare systems running.”
Brant Heise, Managing Partner of MemorialCare Innovation Fund
“Health systems are still running their single largest cost center on spreadsheets and group texts. That drains the budget, burns out frontline teams, and hurts patients. We built Vitalize to move labor and capacity from manual and reactive to automated and predictive. We’re helping leading health systems save tens of millions of dollars on labor while fixing the No. 1 pain point for their frontline staff.”
Veeraj Shah, CEO and Co-Founder of Vitalize
“Within weeks of deploying Vitalize, our clinical leaders were spending 50% less time on manual staffing and scheduling. This partnership will build a stronger workforce, drive improved finances and better outcomes for the patients and communities we serve.”
Dan Ireland, EVP and Chief Nurse Executive at Rochester Regional Health
“Vitalize’s ROI exceeded our expectations. In just 12 weeks, we saw a 54% reduction in premium labor spend across overtime and agency costs, and we’re moving quickly to roll it out across the system.”
David Pereles, Chief Information Officer at St. Luke’s Health
“Labor is a nearly trillion-dollar line item for U.S. health systems, making it one of the largest and most underpenetrated software markets in healthcare. What sets Vitalize apart is that it doesn’t just surface insight – it drives action, and the ROI shows up fast. We’re thrilled to back co-founders Veeraj Shah and Sanketh Andhavarapu, and a founding team with the clinical, operational, and technical depth to capture a market this size.”
Vig Chandramouli, Partner at Oak HC/FT
