Artificial Intelligence (AI) Could Save U.S. Healthcare Industry USD 360 Billion Annually

The wider adoption of artificial intelligence (AI) in healthcare could save the U.S. up to USD 360 billion annually although its uptake in the industry is presently limited owing to the absence of trust among patients and doctors, heterogeneous data and misaligned incentives. Nevertheless, there is likely to be broader adoption of AI in healthcare in the near future, along with various non-financial benefits such as improved healthcare quality, greater care access and better patient and doctor satisfaction levels.

These are the latest findings by researchers at McKinsey & Company (New York City, NY, USA) and Harvard University (Cambridge, MA, USA).

Presently, the healthcare industry has low adoption of AI-based tools despite its benefits discovered by researchers. In the new paper, researchers estimate that the broader adoption of AI in the healthcare industry could lead to savings in the range of 5% to 10% in healthcare spending, or between approximately USD 200 billion and USD 360 billion per year. Their estimates are based on AI use cases utilizing current technologies that are achievable within the next five years, without compromising quality or access. Hospitals could see cost savings mainly through improved clinical operations, quality and safety – such as optimizing operating rooms, or identifying adverse events. Physician groups can experience similar benefits by leveraging AI for continuity of care, such as referral management.

Health insurers could experience savings from use cases that improve claims management, such as automating prior authorization, along with healthcare and provider relationship management, including preventing readmissions and provider directory management. Based on AI-driven use cases, private payers could save approximately 7% to 9% of their total costs, or between USD 80 billion and USD110 billion annually, within the next five years. Physician groups could save 3% to 8% of their costs, translating into savings of between USD 20 billion and USD 60 billion. Additionally, the report estimates that hospitals could register savings between 4% to 11%, or between USD 60 billion and USD 120 billion per year.

Related Links:
McKinsey & Company
Harvard University

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