AI is without a doubt one of the most talked-about subjects at the moment. Though generative AI use cases have received a lot of attention lately, we believe that healthcare will ultimately be one of the industries where AI will have the biggest influence.

We are enthusiastic about what the future holds as we see indicators that the long sales cycles, siloed data, and regulatory concerns that have previously slowed the adoption of AI solutions for healthcare are starting to change.

STRIKE WHILE THE IRON IS HOT: 5 TRENDS HEALTHCARE-RELATED AI/ML CAN DO

In meeting with many AI/ML and healthcare startups, as well as enterprises in our network to better understand where opportunities for innovation exist and where the healthcare industry can benefit, five key trends have emerged as to why AI/ML may start to play a more meaningful role in healthcare going forward.

COVID challenges opened new doors for innovation

COVID proved that healthcare can be delivered virtually, and be equally as effective as in person care in many instances. Medicare visits conducted by telehealth were 63x higher in 2020 than they were in 2019, resulting in 64% of providers being more comfortable using telehealth. Furthermore, 21 states changed their laws entirely to make telehealth access and payment reimbursement more equitable.

The increased adoption of digital healthcare technologies during the pandemic has changed how medical professionals perceive technology within their field. Forced to adapt, doctors quickly changed their processes on the fly, while still delivering better patient care. As we’ve written about before, the pandemic has accelerated the adoption of digital technologies within healthcare in a way that is equivalent to years of traditional GTM sales and market education.

This new found popularity in telehealth is a big win for the future of AI/ML in the space. Case in point: 2021 was a peak year of health tech funding. Even though investment activity declined in 2022, we believe more investors are now spending time in the space, which means there will likely be more dollars available for innovative AI/ML companies.

Doing more with less: how tech addresses the labor shortage

Despite the layoffs in tech, the broader US economy continues to face a labor shortage. One area where this shortage is particularly acute is healthcare. Driven to burnout by the extraordinary pressures faced during the pandemic, nurses have quit their jobs in droves (one account suggests that ~20% of nurses quit their job during the pandemic). This leaves many hospitals understaffed, with some estimates of the nursing vacancy rate as high as 30%.

Much of this trend is driven by the amount of time spent on non-patient interactions. Nurses spend up to 25% of their time on documentation. Doctors, too, are constantly seeking ways to do more with less. A study found that 30% of doctors spend more than 20 hours a week on administrative tasks.

And in an environment where the supply and demand imbalance is only expected to increase as the population ages, healthcare workers will have to become more efficient than ever. AI promises to drive automation and increase efficiency through better care management and reductions in administrative burdens.

Efficiencies from Digital Healthcare Helping Curb Operational Costs

Another major challenge facing the healthcare industry is increasing costs–across both providers and patients. Data continues to show that Americans struggle to afford healthcare, while providers are operating with negative margins.

Medical costs have far outpaced overall inflation–the CPI for medical care is up, on average, 3.5% per year over the last 20 years, while the overall CPI has grown, on average, 2.1% per year. Despite this, providers are still struggling to operate profitably, as it is becoming increasingly expensive to treat patients over longer stays, in part due to sicker patients and increased prices for medical supplies.

While technology is not a cure-all for lowering expenses (particularly since some portion of cost increases are due to increased adoption of high-priced technologies), we do believe that improved outcomes and operational efficiencies driven by new technologies in digital healthcare will play a role in slowing the rise of healthcare costs.