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How Much Could Artificial Intelligence Save Healthcare Annually?

Feb. 1, 2023

Artificial intelligence (AI) could save the U.S. up to $360 billion annually if adopted more widely in healthcare, according to a new report from McKinsey and Harvard researchers, Rebecca Pifer reports in Healthcare Dive.

“In the new paper, researchers estimate that broader adoption of AI could lead to savings between 5 percent and 10 percent in healthcare spending, or roughly $200 billion to $360 billion a year. The estimates are based on AI use cases employing current technologies that are attainable within the next five years, without sacrificing quality or access,” Pifer writes.

She notes that there would be cost-savings benefits for both hospital and health insurers: “For hospitals, the cost savings come mostly from improved clinical operations, quality and safety — like optimizing operating rooms, or detecting adverse events. The benefits are similar for physician groups, which could leverage AI for continuity of care, like referral management,” she writes. “Health insurers would see savings from use cases that improve claims management, like automating prior authorization, along with healthcare and provider relationship management, including preventing readmissions and provider directory management.”

However, for individual doctors, the cost-savings benefits of AI is less clear. “Despite the potential benefits of AI in healthcare and rising funding in the space, the use of AI by doctors for clinical cases is still hit-or-miss. A recent study published in JAMA found a “paucity of robust evidence” to support claims that AI could enhance clinical outcomes,” Pifer writes. “Despite that, the Food and Drug Administration has been accelerating approvals of medical artificial intelligence tools, authorizing more than 520 devices as of November. And, experts believe 2023 could be an inflection point for adoption as more evidence around AI’s efficacy in real-world settings emerge.”

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