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The Regulatory Catalyst: Defining the "Medical-Grade" LaneOn January 6, 2026, the FDA released its revised "General Wellness Policy for Low-Risk Devices," a document Commissioner Marty Makary framed as the agency "getting out of the way" of consumer innovation. The policy allows wearables and apps that estimate physiological parameters — such as blood pressure, glucose trends, and heart rate variability — to operate without premarket review, provided they avoid specific disease-related claims.However, the guidance introduces a critical "Validation Tension." While wellness products are now permitted to display values that "mimic those used clinically," the FDA explicitly prohibits them from claiming "clinical accuracy," "clinical equivalence," or "medical-grade" status unless they undergo formal regulatory scrutiny. For the digital health industry, this creates a bifurcated market: a low-margin consumer wellness tier and a high-margin, regulated clinical tier.The Evidence Gap: The Limits of Descriptive DataThis regulatory boundary creates a significant "Measurement-to-Management Gap." Most consumer health tools are limited to "descriptive" outputs — tracking patterns or trends without providing a clinical conclusion. As soon as a device prompts a specific clinical action or references a diagnostic threshold (e.g., "abnormal" vs. "normal"), it is reclassified as a medical device subject to full FDA oversight.For companies seeking to enter the lucrative clinical market—where their technology is used by physicians to manage chronic disease or titrate medication — the lack of Verified Clinical Veracity is a terminal barrier. "Data Exhaust" from unvalidated sensors is insufficient to support the medical-grade claims required for physician trust, payer reimbursement, and premium pricing.The Circle Solution: The Infrastructure of Clinical ValidationThe Circles platform provides the bridge for digital health companies to move from "wellness" to "medical-grade" status through Outcome Engineering. By embedding Regulatory-Grade Governance into the data collection process, Circles provide the evidence necessary to satisfy the FDA’s highest standards.Verified Clinical Veracity: Circles capture the "Human Ground Truth" required to validate sensor-based outputs against gold-standard clinical benchmarks. This allows developers to move beyond "descriptive trends" to "evaluative insights" backed by an audit-ready dataset.Human-in-the-Loop Governance: The new guidance emphasizes that Clinical Decision Support (CDS) tools must allow healthcare professionals to "independently review" the basis for recommendations. Circles’ architecture is designed for this transparency, ensuring that the clinician remains the primary decision-maker while the data remains Audit-Ready.Insurable Integrity: For a digital health asset to be "prescribable," it must possess Insurable Integrity. Circles provide the longitudinal tracking of outcomes that proves to payers and providers that a technology is a reliable medical instrument rather than a consumer curiosity.Strategic Outcome: Reclassifying Digital Health AssetsThe 2026 guidance has fundamentally changed the valuation logic for health technology. A wellness tool that remains in the "low-risk" category is valued as a consumer subscription business, subject to high churn and price sensitivity.By utilizing Circles to provide Verified Clinical Veracity, an organization can reclassify its technology as a Tech-Enabled Asset. This transition from "Wellness" to "Medical-Grade" is a primary driver of Multiple Expansion, moving an entity from a consumer-tech multiple to a 12–15x clinical-asset multiple. In the new regulatory era, the value of the platform is defined by the Insurable Integrity of its data, not just the features of its hardware.

The Regulatory Catalyst: Site-Neutrality and Machine-Readable TruthThe CMS 2026 Final Rule has introduced two simultaneous pressures that effectively commoditize traditional fee-for-service healthcare. First, the expansion of site-neutral payments — specifically a 60% reduction in reimbursement for drug administration services at off-campus hospital departments—signals the end of the "facility-fee premium". Second, the April 1, 2026, Price Transparency deadline mandates that hospitals and insurers move beyond "estimated" amounts to post actual, machine-readable dollar amounts (including median, 10th, and 90th percentile negotiated rates).For the first time, these files require a formal CEO attestation regarding the accuracy of the data. This isn't just a disclosure rule; it is a federal mandate for data veracity that exposes every pricing inefficiency in the market.The Evidence Gap: The Commoditization of the Service BusinessAs site-neutrality spreads to musculoskeletal and imaging services, the traditional MSO strategy of "geographic arbitrage" (billing at higher hospital-based rates) is collapsing. Simultaneously, price transparency allows payers and patients to see that the "Administrative Proxies" used for billing often bear no relation to actual clinical quality.In this environment, an MSO that operates as a pure "Service Business" faces a valuation ceiling. If your only product is a procedure that is being transparently priced and neutrally reimbursed, your multiple is trapped at 6–8x EBITDA. To break this ceiling, you must move from selling a "service" to selling Verified Clinical Veracity.The Circle Solution:Engineering the Integrity PremiumThe Circles platform provides the infrastructure to escape the fee-for-service race to the bottom. By implementing Regulatory-Grade Governance at the point of care, Circles transform the clinical encounter from a commodity into an Audit-Ready "Ground Truth" asset.Surgical-Delay Proofing: As CMS eliminates the Inpatient-Only (IPO) list and moves 285 procedures to the outpatient setting in 2026, the demand for outcome proof is surging. Circles capture the Standardized Longitudinal Scores (e.g., functional recovery, pain reduction) that prove a procedure was both necessary and successful.Beyond the Machine-Readable File: While the law mandates price transparency, Circles provide Outcome Transparency. This allows an MSO to justify its rates not by "negotiating power," but through Outcome Engineering that proves its services are more efficient and lower-risk than the competition.Insurable Integrity: The platform’s Observational Protocols (OPs) ensure that every documentation point is verified and timestamped. This provides the "Insurable Integrity" that protects the MSO’s board from the new federal attestations regarding data accuracy.Strategic Outcome: MultipleExpansion to 12–15xThe convergence of 2026 CMS mandates provide a unique opportunity for Multiple Expansion. By utilizing Circles, an MSO reclassifies itself as a Tech-Enabled Asset.The value of the enterprise is no longer tied to the volatile "site" of the service, but to the Insurable Integrity of the data generated. In a site-neutral world, the data is the only thing that cannot be commoditized. This shift moves the MSO from a 6–8x service multiple to a 12–15x tech-enabled asset multiple, fundamentally decoupling the organization’s value from the downward pressure of federal rate-setting.

The Regulatory Catalyst: Research at The FrontlinesIn late 2025 and early 2026, the National Institutes of Health (NIH) accelerated the deployment of the Communities Advancing Research Equity (CARE) for Health initiative. This program represents a fundamental departure from the traditional "ivory tower" research model. Instead of requiring patients to travel to major academic medical centers, the NIH is investing in a national network that integrates clinical research directly into routine primary care, with an immediate focus on rural and historically underserved communities.Under the 2026 federal budget, the NIH has prioritized this "Learning Health System" where research informs physician work in real-time and clinical data informs national research priorities. This decentralization is designed to address the "reproducibility crisis" by capturing evidence from the actual populations who will use the treatments, rather than idealized study cohorts.The Evidence Gap: The "Primary Care Friction"While the vision of CARE for Health is expansive, it faces a significant structural barrier: The Primary Care Friction. Most community clinics are optimized for high-volume patient throughput and billing — not for the rigorous documentation required by the NIH or FDA.When these clinics attempt to participate in research, they often generate "Data Exhaust" — fragmented notes and inconsistent billing codes that lack the integrity needed for federal validation. Without a standardized way to capture outcomes without slowing down the clinic, the NIH’s goal of "research-integrated care" remains a theoretical ambition rather than a clinical reality.The Circle Solution: Regulatory-Grade Governance for The Local ClinicThe Circles platform provides the "plug-and-play" infrastructure that allows a local clinic to function as a high-veracity research node without the administrative overhead of a traditional clinical trial site.Observational Protocols (OPs): Circles define the data architecture before the patient visit, creating "guardrails" that make protocol deviations technically impossible. This ensures that a rural primary care site produces the same Verified Clinical Veracity as a top-tier research university.Audit-Ready "Ground Truth": By capturing Standardized Longitudinal Scores at the point of care, Circles provide the permanent, timestamped audit trail that federal agencies now demand for community-based evidence.Minimizing Burden: Circles solve the "Measurement-to-Management Gap" by automating the collection of high-fidelity data during the routine clinical encounter, fulfilling the NIH’s mandate to "minimize the burden of research on providers and patients".Strategic Outcome: The Valuation of The NetworkFor Management Services Organizations (MSOs) and clinical networks, the NIH’s shift to decentralized research is a valuation catalyst. Traditionally, these clinics were valued as low-margin service businesses (6–8x multiples). However, by adopting Circles and becoming part of the national "human-relevant" data infrastructure, these entities reclassify as Tech-Enabled Assets.‍The value of the network is no longer just in the number of primary care visits, but in the Insurable Integrity of the data it generates for the NIH and the pharmaceutical industry. This transition drives Multiple Expansion to 12–15x, as the clinic becomes a critical node in the new federal research architecture.

The Regulatory Catalyst: The Administration for A Healthy America (AHA)In 2025, the federal government initiated a dramatic restructuring of its health apparatus, consolidating 28 disparate divisions into 15 streamlined units. At the center of this reorganization is the Administration for a Healthy America (AHA). This new agency absorbs functions from the CDC, HRSA, and SAMHSA with a singular, high-stakes objective: reversing the chronic disease epidemic by addressing its "root causes".Under the leadership of Secretary Robert F. Kennedy Jr. and Commissioner Marty Makary, the AHA is moving away from the "medical dogma" of the last half-century. The agency’s focus has shifted toward metabolic health, environmental exposures, and nutrition. For the first time, federal policy is not just aimed at "treating" conditions like Type 2 diabetes or hypertension, but at providing the regulatory and financial incentives necessary to "reverse" them.The Evidence Gap: The Failure of Administrative ProxiesThis shift creates a fundamental problem for the current healthcare infrastructure. For decades, the industry has relied on Administrative Proxies — billing codes and claims data — to measure success. However, a billing code for "diabetes management" only proves that a service was rendered; it does not prove that the disease was reversed or that the "root cause" was addressed.As the AHA and CMS move toward Value-Based Contracting that rewards actual disease reversal, the lack of clinical depth in legacy systems has become a "Measurement-toManagement Gap. "To secure reimbursement in this new era, providers must move beyond "Data Exhaust" and provide Verified Clinical Veracity.The Circle Solution: Engineering Outcomes at The NodeThe Circles platform provides the Regulatory-Grade Governance required to meet the AHA’s mandate. By defining clinical protocols before the patient encounter, Circles ensure that every data point captured is a reflection of actual clinical change rather than administrative convenience.Standardized Longitudinal Scores (SLS): Circles capture objective markers — such as metabolic panels, functional movement scores, and patient-reported outcomes — over time. This allows a clinical node to prove "reversal" with an Audit-Ready "Ground Truth" that federal reviewers can verify.Outcome Engineering: By moving the focus from "sick care" to "root-cause reversal, "Circles enable clinicians to track the efficacy of interventions like the new 2026 dietary guidelines. This transforms a standard clinic into a high-veracity research node capable of proving that "food as medicine" actually works.Surgical-Delay Proof: For surgeons and specialists, this data provides the "Insurable Integrity" needed to justify procedures in an environment where payers are increasingly focused on conservative, root-cause alternatives.Strategic Outcome: Reclassifying The EnterpriseThe AHA reorganization has turned "outcome data" into the most valuable currency in healthcare. Clinical organizations that continue to rely on fragmented EHR notes will face increasing downward pressure on reimbursement and valuation.In contrast, organizations that utilize Circles to provide Verified Clinical Veracity are reclassified as Tech-Enabled Assets. This shift is the primary driver of Multiple Expansion, moving an entity from a 6–8x service multiple to a 12–15x asset multiple. The valuation of the MSO is no longer tied to the number of patients seen, but to the Insurable Integrity of the reversals it can prove.

The Regulatory Catalyst: The 60-day ReviewIn 2025, FDA Commissioner Marty Makary introduced the Commissioner’s National Priority Voucher (CNPV), a pilot program that reduces the standard 10–12 month review clock to a mere 30–60 days. Designed to fast-track treatments that align with "U.S. National Interests"— such as onshoring manufacturing, increasing affordability, or tackling the chronic disease crisis — the NPV replaces the traditional, sequential review process with a multidisciplinary, "tumor board style" evaluation.By January 2026, the first wave of approvals has proven that the "red tape" of the past century can be bypassed. However, this acceleration has created a "Scientific Reputational Risk". Career scientists and outside experts have expressed concerns that ultracompressed windows may sacrifice the rigor required to identify long-term safety signals. For the manufacturer, the prize of early market entry now comes with a significant tail of legal and clinical liability.The Evidence Gap: The "Speed-to-Payer" BarrierThe true bottleneck is no longer the FDA; it is the payer. Public and private insurers have historically been skeptical of products that bypass traditional evaluation pathways, often delaying coverage until "sufficient" real-world safety and efficacy data emerges.This creates a "Measurement-to-Management Gap. " A drug or device may be legally approved in 60 days, but if the manufacturer cannot provide Verified Clinical Veracity of its performance in the real world, it will languish in "reimbursement limbo". Legacy "Data Exhaust"— static snapshots from billing and claims — is too slow and too imprecise to satisfy insurers who are now assessing the adequacy of the FDA’s truncated review.The Circle Solution: Insurable Risk ModelingThe Circles platform provides the infrastructure to bridge this gap through Insurable Risk Modeling. By establishing Regulatory-Grade Governance at the clinical node, Circles allow manufacturers and providers to monitor performance in real-time, effectively extending the "clinical trial" into the "real-world" without loss of data integrity.Verified Clinical Veracity: Circles capture Standardized Longitudinal Scores directly from the patient and provider, creating an Audit-Ready "Ground Truth" that can be shared with payers to accelerate coverage decisions.Safety-in-Motion: Because Circles operate with pre-structured Observational Protocols (OPs), it can identify safety or efficacy signals months faster than traditional post-market surveillance. This "Safety-in-Motion" is the only viable defense against the liability risks inherent in accelerated approvals.Surgical-Delay Proof: For clinical organizations, this data architecture ensures that ValueBased Care transitions are not stalled by insurer skepticism. You aren't just performing a procedure; you are generating the Insurable Integrity that justifies the payment.Strategic Outcome: Capturing The "Integrity Premium"In a 60-day review environment, the "Insurable Integrity Premium" becomes the primary driver of enterprise value. Organizations that rely on administrative proxies will be seen as high-risk liabilities. Organizations that utilize Circles to provide transparent, verifiable outcomes will be viewed as Tech-Enabled Assets.For the healthcare executive, this is the path to Multiple Expansion. By owning the veracity of the data, the clinical entity moves from a 6–8x service multiple to a 12–15x asset multiple, fundamentally decoupled from the volatility of the new regulatory speed.