The incentives in healthcare are definitely messed up. IMO, the only orgs that can really take advantage of healthcare AI (and are also willing to pay for it) are fully integrated health systems (like Kaiser).
Side note: EHR vendors are also willing to partner with or pay for healthcare AI to make their product offering better too, but like you said, this is a hard and relatively small market to play in.
For most industry verticals, AI means "faster, more accurate, less expensive".. and while Healthcare Execs talk about this, the industry doesn't reward those who create improvements and savings. For every dollar saved by AI in healthcare delivery, there's a Payer looking for lower fees. For every fee that's lowered, there's a policy holder looking for lower premiums. If CMS Reimbursement rates weren't dropping, no one would do anything.
Cost should not theoretically be a barrier to AI adoption in one industry vs another. However, health systems are so bloated with regulation, administrators, and legacy tech hurdles that getting any product through clinical trials and seven layers of bureaucracy means the few who pass through this gauntlet can charge outrageous unjustified fees. There is no “market speaks” in healthcare just bureaucrats bumbling around JPM every January hyping the next big thing while they eat mini bagels at the Marriott. Meanwhile the country drowns in premiums and antibiotic-resistant strains of bacteria continue to spread and gain virulence.
AI will be interesting in the deeptech and hardtech spaces as new tools enable the development of increasingly sophisticated methods to cure disease. However the problems in delivery and payment are mostly political and economic, not technical.
H Morgan, NEJM AI just came out with how I see it
https://x.com/MichaelAbramoff/status/1778859008943612266
The incentives in healthcare are definitely messed up. IMO, the only orgs that can really take advantage of healthcare AI (and are also willing to pay for it) are fully integrated health systems (like Kaiser).
Side note: EHR vendors are also willing to partner with or pay for healthcare AI to make their product offering better too, but like you said, this is a hard and relatively small market to play in.
Thanks for writing this Morgan.
For most industry verticals, AI means "faster, more accurate, less expensive".. and while Healthcare Execs talk about this, the industry doesn't reward those who create improvements and savings. For every dollar saved by AI in healthcare delivery, there's a Payer looking for lower fees. For every fee that's lowered, there's a policy holder looking for lower premiums. If CMS Reimbursement rates weren't dropping, no one would do anything.
Cost should not theoretically be a barrier to AI adoption in one industry vs another. However, health systems are so bloated with regulation, administrators, and legacy tech hurdles that getting any product through clinical trials and seven layers of bureaucracy means the few who pass through this gauntlet can charge outrageous unjustified fees. There is no “market speaks” in healthcare just bureaucrats bumbling around JPM every January hyping the next big thing while they eat mini bagels at the Marriott. Meanwhile the country drowns in premiums and antibiotic-resistant strains of bacteria continue to spread and gain virulence.
AI will be interesting in the deeptech and hardtech spaces as new tools enable the development of increasingly sophisticated methods to cure disease. However the problems in delivery and payment are mostly political and economic, not technical.