Redesign Health and ARC Global tie health system innovation to a $2 billion platform
Redesign Health is moving far beyond its venture studio roots. The company is merging with Sheba Medical Center’s ARC Global to build an end-to-end platform aimed at turning ideas from clinicians and operators into products, companies and system-wide workflows that can spread across a multinational hospital network.
The combined company is valued at about $2 billion, and the structure is designed to pull innovation closer to the bedside rather than leaving it stranded in pilot programs. In practice, that means engineering talent, capital, AI tooling and hospital workflow expertise will sit much closer to the people who notice the bottlenecks first: discharge delays, administrative friction, and the patchwork of software that often fails to fit real-world care delivery.
Health systems are being positioned as builders, not just buyers
The transaction reflects a growing shift in healthcare technology. For years, many health systems have been asked to purchase outside products, absorb them into overloaded IT stacks and hope they improve efficiency without disrupting care. This model often leaves frontline clinicians with limited influence over design, even when they understand the problem better than any vendor.
Redesign and ARC are trying to invert that sequence. Their stated aim is to embed engineers and technologists inside health systems so that frontline pain points can be translated into working tools, validated in live clinical environments and, if successful, scaled beyond a single institution. The logic is straightforward: innovation developed inside the delivery system is more likely to match the actual contours of clinical work, from staffing constraints to documentation burden to patient throughput.
The company also agreed to acquire AVIA, a digital health advisory and intelligence firm that helps health systems select and implement technology. AVIA brings a large evaluation infrastructure of its own, including a platform used by more than 90,000 health system leaders and staff to assess over 7,000 digital solutions. Together, the three organizations say they work with more than 100 health systems across five continents, and products developed across their networks have reached more than 100 million patients.
Embedded engineering is the new operating theory
Redesign’s leadership is arguing that AI in healthcare will only scale if it is built from inside healthcare itself. That position matters because health systems are confronting rising costs, workforce shortages and growing demand for care at the same time they are being inundated with digital products that promise efficiency but rarely deliver adoption at scale.
Aron Szanto, Redesign Health’s head of technology, framed the opportunity around a familiar hospital problem: a nurse manager recognizes avoidable discharge delays, but the IT team is already juggling competing requests, and off-the-shelf software may not fit the workflow. In that setting, embedded builders can move faster than the standard procurement cycle, while still working with hospital IT teams to test and integrate the result. The model depends on operational proximity, not distant product speculation.
One sentence captures the shift plainly. The innovation problem is no longer just finding ideas; it is building them where care actually happens.
That approach carries practical implications for the future of health system innovation. If successful, the network can identify tools with broader commercial potential, license them, form partnerships or launch new companies. Health systems could hold equity in those ventures and reinvest any returns into additional innovation, creating a feedback loop between care delivery and economic value. Zimlichman said that framework is meant to turn hospitals from cost centers into economic engines for their communities.
AVIA adds scale, validation and implementation muscle
AVIA’s role gives the merged business another layer of utility. Beyond company formation, health systems need help separating durable tools from attractive but underperforming software. The intelligence platform and advisory work AVIA brings are meant to support that selection process, validating products before they are rolled out and helping translate technology into workflow rather than adding another layer of digital clutter.
That distinction matters in hospitals, where every new product can create downstream consequences for documentation, staffing and patient flow. A technology that works in isolation can still fail when it collides with existing clinical routines or fragmented data systems. By pairing venture formation with implementation support, the new organization is trying to address the full path from concept to adoption.
The merger also deepens a strategy Redesign has been building for years. Founded in 2018, the company has launched more than 60 companies and raised more than $1.5 billion from institutional, sovereign and strategic investors. Its prior partnerships with Mayo Clinic, UPMC Enterprises and Cedars-Sinai already pulled health systems into the company-building process. Recent international expansion into Saudi Arabia and India suggests the firm has been preparing for a broader network model rather than a single-market play.
Founders, networks and equity stakes could reshape the economics of innovation
The ARC model brings a different cultural and structural premise: clinicians and health systems should not only contribute ideas, they should also share in the upside when those ideas become companies. Zimlichman said the ARC framework gives hospitals equity in the ventures they help create, a structure meant to align innovation with institutional benefit rather than treating the hospital as a mere customer.
Brett Shaheen will lead the combined company as CEO, while Stephen Klasko will serve as chairman of the board and Zimlichman will become vice chairman. Founding health systems have not yet been named, but executives said they will play a central role in shaping the combined business and its long-term activities.
The leadership team is betting that repeatability will matter as much as invention. If one hospital develops an AI tool, redesigns a workflow or creates a new operational capability, the next hospital in the network should be able to adapt it without starting from zero. In theory, that lowers duplication, accelerates diffusion and makes innovation less dependent on one-off champions.
There are still unanswered operational questions. The acquisition of AVIA has yet to receive final approvals, and the model will need to prove that embedded builders can move quickly without compromising clinical safety, data governance or workflow integrity. Health systems also remain highly variable in governance, appetite for change and digital maturity, which means scale will depend on more than capital and software.
Even so, the merger reflects a more assertive bet on how healthcare technology should be made. The hospital is not just the end user anymore. It is becoming the place where the product begins.