Last week, panelists at the World Medical Innovation Forum in Boston were unanimous in their assessment that AI will be instrumental in bending the cost curve.
But they also believe that lowering costs and improving access without compromising healthcare quality will be a tough transition. What’s required is the correct type of incentives to bend the cost curve and improve access and that is more feasible in a value-based healthcare system than the current fee-for-service system.
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That was the message from Dr. Timothy Ferris, CEO of the Massachusetts General Physicians Group, a Harvard Medical School faculty physician group, who moderated the panel, which included Panelists Peter Orszag, Vice Chairman of Investment Banking and Managing Director at investment banking firm Lazard Freres, Leonard D’Avolio, CEO of the Boston-based healthcare analytics company Cyft, and Dr. Roy Beveridge, SVP and CMO of health insurance company Humana, was the other panel member.
The current US healthcare system incentivizes volume and complexity, D’Avolio said: add AI on top of that and the AI will simply serve to increase volume and complexity instead of increasing efficiency and savings.
Cyft, like other companies trying to use AI to reduce costs and improving access, is focusing on Medicare Advantage and Medicaid for a reason. D’avolio said that’s because these are closer to a value-based system.
Dr. Roy Beveridge, SVP and CMO of health insurance company Humana, agreed that AI-assisted cost reduction will be easier in a value-based healthcare system than a fee-for-service one. Physicians are now living in both the fee-for-service world and the value world, which makes things hard for them, said Dr. Beveridge.
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“In 10-15 years I think it’ll be great, but I think the transition is going to be very painful.”
D’Avolio argued that healthcare is so huge as to be really a number of sub-industries. To apply AI to healthcare, he said, requires being more specific and attacking a specific problem or issue within healthcare. Cyft focuses on geriatrics and behavioral health patients.
To apply AI to reducing healthcare costs, it would be ideal to have multiple data streams that could be easily shared and integrated with one another, Beveridge said. Humana does work with multiple data streams, such as claims data and social determinants of health (including location, transportation issues, food insecurity, and community support). But current data streams are fragmented. For example, the transfer of a patient’s data from hospital to ER to the patient’s primary care provider isn’t seamless, so that one provider may not know what just happened with the provider before.
In 10-15 years, Dr. Beveridge predicts, “We’ll all be under value-based care, where entities will be reimbursed for outcomes, as opposed to this segmented, fragmented, fee-for-service world.”
Orszag pointed out several spaces where AI has an opportunity to reduce costs. Variation in healthcare costs is somewhat inexplicable: current models can only explain 15 percent of the variation. Orszag believes that using AI and adding more data could increase this understanding of variability to 50 percent or 60 percent.
AI could also streamline claims processing. Claims could be automatically generated from electronic health records, eliminating adjudication. This would be more efficient and also eliminate redundant claims.
“I would hope within 5-10 years payment works this way,” Orszag said. D’Avolio also sees opportunities for AI to predict patient retention, which will allow proactive customer service in healthcare, similar to the way Amazon and Netflix try to predict and improve customer retention.
Orzag also thinks that a risk-sharing healthcare environment will favor AI because it will jostle the provider system, forcing people to change, which may make them more open to new tools like AI.
Many healthcare entities are trying to get bigger and vertically integrate. This is not easy and requires a lot of investment in analytics, but once done, the marginal costs of adding each new patient are close to zero. They may even be negative, Orszag said, because by adding each new patient, the system gains analytical power.
“The quality of healthcare ten years from now will be significantly better than it is today, in no small part because…of data and analytics,” said Orszag.
