Flagler Health raises $50M Series B to build the AI operating system for $400 billion musculoskeletal care market

Flagler Health has raised $50 million in Series B funding to tackle one of healthcare’s expensive but less visible problems: doctors spending much of their day doing work that has little to do with treating patients.

The New York-based startup says its AI platform is already producing an average of $164,000 in additional annual revenue per provider, a figure that helps explain why investors are putting more money behind the company less than three years into its growth.

Bessemer Venture Partners led the Series B, with SignalFire, Alumni Ventures, Streamlined, 186 Ventures, Proof VC, Tribeca Ventures, and Offscript participating. The round brings Flagler’s total funding to $63 million.

Flagler is targeting musculoskeletal care, or MSK, a huge segment covering conditions affecting bones, joints, muscles, tendons, and related parts of the body. More than half of U.S. adults experience musculoskeletal conditions, according to the company, with annual healthcare spending tied to the category exceeding $400 billion.

Yet Flagler’s pitch isn’t centered on replacing physicians with AI. It is going after the costly administrative machinery surrounding them.

Physicians can spend nearly 75% of their time on documentation and other non-revenue-producing work, Flagler said. The company wants AI handling more of that burden behind the scenes.

Building an AI operating system around the doctor

Flagler was founded by physicians and healthcare operators who had run MSK clinics themselves. CEO Albert Katz previously operated an MSK clinic, giving the founding team direct exposure to the economics and administrative headaches it is trying to address.

Its software plugs into providers’ existing electronic medical record systems rather than requiring clinics to move their operations onto a separate system. From there, Flagler coordinates tasks across triage, care management, billing, patient communication, and outcome tracking.

“MSK is where the healthcare system’s dysfunction is most visible,” Katz said. “Shrinking reimbursements, administrative overload, inefficient triage – I watched it destroy clinician morale and clinic margins at the same time. This isn’t a workflow problem. It’s structural. The cost of running these clinics keeps climbing, and that cost is a major reason American healthcare is so expensive. It’s unsustainable, and we’re the only platform built to fix it at the root.”

That integration strategy matters. Healthcare software has a long history of asking doctors and staff to adopt yet another dashboard, login, or workflow. Flagler is betting that AI becomes more useful when much of it disappears into the infrastructure clinicians already use.

Dr. Christopher Netzel, an interventional pain physician at Coastal Health in North Florida, described that approach in practical terms.

“Flagler tracks patient outcomes remotely — zero workflow change: no new logins, no training, no extra clicks. Fully hands-free, turnkey, runs in the background,” Netzel said.

Flagler says it now works with thousands of providers across more than 36 states. Beyond the reported revenue gains, the company says 87% of patients using its system report improvements in pain, mood, sleep, or mobility.

Those numbers helped attract Bessemer, whose partner Steve Kraus pointed to Flagler’s mix of clinical experience, healthcare operations knowledge, and AI expertise.

“What drew us to Flagler was rare: a founding team with exactly the right combination of healthcare operations experience, clinical authority, and AI expertise, all applied to one of the largest and most underserved markets in healthcare,” Kraus said.

The bigger question is whether Flagler can translate its early results across a fragmented U.S. healthcare system filled with different practice types, reimbursement models, and EMR environments.

The $50 million Series B gives it considerably more capital to try. Flagler plans to use the funding to extend its reach across MSK practices nationwide.

If the company can keep producing measurable revenue gains for physicians without adding more screens, clicks, and administrative work, Flagler may have found one of the more compelling applications for healthcare AI: making the infrastructure around doctors work better so doctors can spend more time practicing medicine.