The healthcare sector is projected to nearly double its spending on artificial intelligence (AI).
A recent report by Morgan Stanley says that the amount allocated to AI and machine learning (ML) in health company budgets is anticipated to be 10.5% next year, compared to 5.5% in 2022. The investment bank says that 94% of healthcare companies are using AI and/or ML in some capacity.
“But while the use of AI/ML is proliferating across the industry, it has yet to reach its full potential as a driver of new business opportunities and efficiencies,” says the report, noted Monday (Sept. 4) by Seeking Alpha.
“Specifically, investors should look for AI/ML to create significant opportunities in four areas,” the report said: biopharma, health care services and technology, life sciences tools and diagnostics, and medical technology.
For example, Morgan Stanley says that in 2021, more than 100 drug and biologic applications filed with the U.S. Food and Drug Administration contained AI/ML components, compared to 14 in 2020.
“Every 2.5% improvement in preclinical development success rates could lead to an additional 30-plus new drug approvals over 10 years,” said Terence Flynn, Morgan Stanley’s Head of U.S. Biopharma Research. “Doubling that could yield 60 new therapies approved, translating into an additional $70 billion in value for the biopharma industry.”
Among the recent examples of the health field’s ventures into the AI space is HCA Healthcare’s partnership with Google Cloud and Augmedix, a tech company dealing with ambient medical documentation, to use generative AI for emergency medicine.
Meanwhile, Anthem Blue Cross and Blue Shield plans to add more states to an AI-driven virtual-first health plan that employs technology to streamline health services starting next year.
While experts have warned that many commercially-available generative AI tools were not trained on healthcare data, which makes them inaccurate and unreliable, there’s still a wealth of opportunity for the technology to operate within the sector.
And some industry observers, as noted here in April, believe that integrating AI into healthcare could lead to breakthroughs in treatment and care. That’s because healthcare companies have collected mountains of information, including health records and images, population data, historical claims data, clinical trial data. Modern AI can use that information to create a better patient experience.
“As to how exactly that experience can be improved?” PYMNTS asked in a report last week.
“Observers and industry players believe that areas including healthcare system workflow automation and optimization, as well as the structuring and analysis of healthcare data and ambient monitoring of patient engagements, all represent priority areas where AI can have a right-now impact, as do the automation of administrative call centers and other customer service-focused efficiency captures.”