AI could save the healthcare industry up to $360B a year
The ChatGPT AI model is generating a buzz in healthcare as it has passed the U.S. medical licensing exam, authored scientific papers, and is being used to appeal insurance denials. However, despite research indicating the benefits of AI in healthcare, actual adoption of AI-based tools remains low.
In a new paper, researchers estimate that broader adoption of AI in healthcare could result in savings of between 5% and 10%, or roughly $200 billion to $360 billion a year. These savings could be achieved by using AI for use cases that employ current technologies attainable within the next five years, without sacrificing quality or access.
For hospitals, AI could bring cost savings by improving clinical operations, quality, and safety, such as optimising operating rooms or detecting adverse events. Physician groups could use AI for continuity of care, like referral management. Health insurers would see savings from use cases that improve claims management, like automating prior authorisation, along with healthcare and provider relationship management, including preventing readmissions and provider directory management.
Based on AI-driven use cases, private payers could save around 7% to 9% of their total costs, amounting to $80 billion to $110 billion in annual savings within the next five years. Physician groups could save 3% to 8% of costs, amounting to between $20 billion and $60 billion in savings. Hospitals could see savings between 4% to 11%, or between $60 billion and $120 billion each year, according to the report’s estimates.
While the potential benefits of AI in healthcare are significant, and the Food and Drug Administration has accelerated approvals of medical AI tools, actual adoption remains hit-or-miss. A recent study published in JAMA found a “paucity of robust evidence” to support claims that AI could enhance clinical outcomes. However, experts believe 2023 could be a turning point for adoption as more evidence around AI’s efficacy in real-world settings emerges.
