Show Notes
The real villain in American healthcare is not the insurance company. It is the hold music.
Funding stage: Series A Plus. $22.5M raised to date, anchored by a February 2026 oversubscribed $15M Series A led by Health Velocity Capital, on top of a 2023 pre-seed led by Apollo Medical Holdings. Real customers, real revenue, real scale (practices serving 5 million plus patients a year), so this sits cleanly past Seed.
The United States burns an estimated $350 billion a year on administrative waste, $266 billion of it from sheer complexity and $84 billion from fraud and abuse, and that sits inside a healthcare economy so large that if you sliced it off on its own it would rank as roughly the fourth biggest economy on earth. Patients lose their patience before they ever lose their health, and the industry has spent years selling a false binary: hire more humans who burn out, or unleash bots that collapse the moment a call actually matters.
Frederik Mueller, Timm Schneider, and their team built Third Way Health on a different premise. Pair AI agents with embedded human operators, let the machines crush the repetitive volume, and free real people for the conversations that need a heartbeat. The company started before ChatGPT made AI a dinner-table word, which is why the name carries a double meaning: there was always a third way between low-tech service vendors and high-friction software, and there is now a third way between full automation and full staffing. Jamie Reddick, COO of Graybill Medical Group, lived the payoff. Over a two-year partnership, North San Diego County's largest independent multi-specialty group cut front-office costs by roughly $3 million, about 50%, while making patients feel less like a ticket number and more like a person.
This episode is a clinic on building in a broken market without pretending the brokenness will disappear if you throw enough technology at it.
Named Frameworks
The Third Way Operating Model
The fusion that gives the company its name.
- →Pure service vendors bring people but little technology and bill per head.
- →Pure software vendors bring technology but demand a level of sophistication most practices do not have.
- →Third Way fuses both: a world-class platform plus embedded humans who implement it and then stay to run it on the client's behalf.
- →The customer keeps focusing on care. The operating partner absorbs the operational volatility.
The Autopilot Standard
The test for whether a front-office process is actually automated.
- →Any front-office process should “just happen” without the practice worrying about it.
- →Are calls getting answered? Are faxes landing in the chart before the visit? Did eligibility get checked so the patient is not turned away at the desk?
- →If a founder has to actively worry about a process, it is not yet automated, it is just monitored.
The Heartbeat Triage
How AI and humans split the incoming queue.
- →AI answers every incoming call and resolves the simple, repetitive 80%: appointment times, arrival windows, no-show follow-ups.
- →Complex moments, like a patient calling after a hospital discharge, get escalated to a human, with escalation rules customized per client.
- →The win is queue design. In a legacy call center, the person asking a one-line question and the person in crisis wait in the same line.
- →AI dissolves that queue so urgency gets a human, fast.
The Data Pipes Thesis
Why the long game is plumbing, not features.
- →Healthcare's deepest problem is that data does not flow freely. Integrating one tech platform with an EHR can take three months, and the next customer on the same system can take another three.
- →Beyond flow, there is consistency. The record in the EHR and the record in the health plan system often disagree, which is exactly where AI breaks and humans still earn their seat.
- →Third Way's long game is laying and maintaining those pipes over time because it has the resources and time to do it.
Founder Experiment
Map every customer touchpoint in your business and mark the moment someone "quietly hangs up the phone." Not the dramatic churn, the silent abandonment: the form they never finish, the reply they never send, the second login portal that makes them give up. Then sort those friction points into two buckets. Bucket one is repetitive and emotionally low-stakes, the work a machine should own. Bucket two is the moment that needs a heartbeat. Automate bucket one ruthlessly this quarter, and reassign the time you reclaim to bucket two. The goal is not fewer humans. It is humans pointed at the conversations that actually move the needle.
Glossary
Front office
The patient-facing operational layer of a practice: phones, scheduling, eligibility, referrals, prior authorizations, intake.
Prior authorization
Insurer approval required before a service or medication is delivered.
Eligibility verification
Confirming a patient's active insurance coverage before a visit.
Referral management
Routing and processing a patient handoff to a specialist.
EHR / EMR
Electronic health record / electronic medical record, the core clinical software systems.
Interoperability
The ability of separate health systems to exchange and use data with one another.
BPO
Business process outsourcing, traditional per-head service vendors.
FTE
Full-time equivalent, the unit legacy vendors bill against.
MSO
Management services organization, an entity that handles non-clinical operations for providers.
Ambient scribe
AI that listens during a visit and drafts the clinical note so the physician faces the patient, not the screen.
Dyno AI
Third Way's agent platform, named for a rock climbing move that skips a step. It is an umbrella for multiple agents (inbound and outbound telephony, prior auth, referrals) that work as a team.
Agent Assist
Third Way's tool that supports live human agents during calls.
Ascend
Third Way's EHR-integrated patient experience layer for scheduling, intake, reminders, and surveys.
Q&A: What Founders Ask After This Episode
What does Third Way Health do?
Third Way Health is an outsourced, AI-enabled front-office operations partner for medical practices, payers, and MSOs. It handles phone calls, scheduling, eligibility, referrals, prior authorizations, and faxes by combining its Dyno AI platform with embedded human teams.
Is AI replacing healthcare workers at Third Way Health?
No. The model uses AI for the repetitive high-volume work and routes complex or emotional interactions to humans. The stated goal is to let people do more, not to remove the human element.
How much can AI-enabled front-office operations save a practice?
Third Way reports reducing front-office administrative costs by up to 40%, increasing patient visits by 11% on average, and cutting phone wait times in half. Graybill Medical Group saw about $3 million, roughly 50%, in savings over a two-year partnership.
Why is healthcare so administratively expensive?
The US spends an estimated $350 billion a year on administrative waste, driven by fragmented systems, data that does not flow freely between EHRs, high post-COVID staff turnover, and complex regulatory paperwork.
Why is full AI automation risky in healthcare?
Pure bots fail at the moment a call actually matters, like a complex post-discharge situation, and data inconsistency between systems creates edge cases that require human judgment.
Five Founder Questions This Episode Answers
- →Where in my business are customers quietly giving up, and how do I find those silent abandonment points before they churn?
- →How do I decide which tasks to hand to AI and which ones still need a human in the loop?
- →How do I deploy AI responsibly in a high-trust industry without torching customer experience?
- →How do I sell into a market that is burned out on “drop the tool and walk away” vendors?
- →How do I build durable defensibility when the underlying technology resets every two months?
URLs Mentioned in the Episode
- Third Way Healthhttps://thirdway.health
- Frederik Mueller on LinkedInhttps://www.linkedin.com/in/frederik-mueller-53198a17/
- Jamie Reddick on LinkedInhttps://www.linkedin.com/in/jamie-reddick-586691249
- Healthcare Ops Wave (podcast)https://podcasts.apple.com/us/podcast/healthcare-ops-wave/id1774334723
- AI Native Studenthttps://ainativestudent.com
- Ryan Estes on LinkedInhttps://www.linkedin.com/in/estesryan/
- Inbox Alchemyhttps://inboxalchemy.co
- AI for Foundershttps://aiforfounders.co
