AI is transforming healthcare by enabling more efficient, scalable and personalized care. However, building an AI strategy isn’t always easy for healthcare organizations due to regulatory constraints and data quality challenges.
In a recent survey, venture capital firm Define Ventures asked C-suite leaders and senior executives at 63 payers and providers about their AI strategies. Here are four key findings:
1. Payers and providers are both enthusiastic and pragmatic about AI:
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About 53% of leaders said that AI is an urgent or immediate priority and 22% said that their AI budget is growing significantly. In addition, 73% have created governance committees for AI, which “play a critical role in aligning AI initiatives with organizational values and fostering trust,” according to the report. These committees can help identify use cases for AI, establish ethics and safety guidelines and form data policies.
At the same time, payers and providers are proceeding cautiously and have three phases in their AI adoption process. The first is laying the groundwork, which includes establishing an AI governance body and conducting initial pilots with external partners. After that is the “test and iterate” phase, in which payers and providers expand use cases and create initial ROI metrics. Last is the “all in” phase, which includes creating longer-term priorities and a dedicated AI budget.
2. Priorities, ROI and use cases for payers and providers:
About 54% of respondents believe that AI will have the biggest impact on the patient and clinician experience, while 33% think it will decrease healthcare costs. The leaders also noted that defining ROI for AI is difficult at this early stage and “are instead focused on building long-term organizational confidence,” according to Define Ventures. One leader stated that financial ROI is not currently a focus and that today, “it’s all about learning.”
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In addition, payers’ main use cases for AI include communication and engagement, case planning and care planning, and prior authorization. Providers’ main use cases, meanwhile, include clinical documentation, finance management and disease screening.
“Many leaders are adopting a portfolio approach, recognizing that at this stage it’s incredibly difficult to measure ‘hard’ ROI. Instead, they’re identifying near-term, low-risk wins to help establish value and build a solid foundation for more transformational opportunities,” said Lynne Chou O’Keefe, founder and managing partner at Define Ventures, in an email. “For example, this helps explain why 83% of providers said AI scribing tools and clinical documentation were their top use case priority.”
3. Build vs. buy:
Healthcare leaders are trying to decide what AI components they should build and what they should buy. They have to consider factors like the organization’s “internal expertise, the need for customization, and compatibility with existing workflows, data, and tools,” Define Ventures stated.
“One leader estimated that up to 30-40% of use cases might theoretically be developed in-house if the right infrastructure were in place,” the report said. “For many leaders, the decision to build or buy isn’t merely a question of capability; it’s a balancing act between what they could build versus what they should build.”
For example, with LLMs, 69% of payers and providers are using external vendors because building LLMs isn’t easy or necessary for most healthcare organizations. Meanwhile, almost all healthcare organizations recognize the importance of managing and curating their data, with many making significant investments in internal solutions for data aggregation.
4. Forming “enduring” partnerships:
The integration process for AI is difficult, with 64% of leaders saying that creating a clear ROI is one of the biggest integration challenges. In addition, 40% said their technical teams are stretched thin.
“For founders, they have an incredible opportunity to partner closely with these large healthcare organizations and influence their strategy, priorities, and how they define success,” Chou O’Keefe said. “This space is moving so quickly that leaders are looking for external partners that extend beyond a transactional, vendor-client dynamic. Even more so, technical expertise is only part of the story. Leaders are also prioritizing finding partners who embody alignment, trustworthiness, and transparency.”
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