As AI took center stage in 2023, there was no sector in which the stakes were higher than in healthcare.
While the industry is no stranger to AI, especially in drug development and medical imaging, there are many ways in which the mainstream awareness of OpenAI's ChatGPT has pushed the discussion further than ever.
A sector known for still relying on the fax machine is finding its way in the tech age as competition heats up. Companies like Microsoft (MSFT), Amazon (AMZN), and Google (GOOG, GOOGL) are angling for their share of next-generation tech that frees up doctors and medical staff from burdensome administrative tasks. In addition, health insurers have been experimenting with ways to automate the claims process.
Artificial intelligence could boost productivity, cut costs, and improve care, just as the industry faces an aging America. For investors, the effects of the technology will likely begin to show for insurers, pharma giants, hospital chains, software makers, and more.
While the healthcare sector has lagged the market — the S&P Health Care Equipment index is down 6% this year, compared to the broader index's 24% gain — that may soon change. Citi Global Wealth listed medical technology as one of its key investment themes for next year as health spending continues to grow.
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Yahoo Finance asked experts about what they expect to see from the intersection of AI and healthcare in 2024, including views from Big Tech, VCs, startups, cybersecurity, and more.
Google chief clinical officer Michael Howell
"2024 will be the year where healthcare enterprises start to see value out of generative AI. ... On the technical side, it's clear we're still in an exponential right now and it's very hard to predict your way out of an exponential. So I anticipate that we're going to see continued breakneck pace in technical innovations within the model ... that will continue to create opportunity for value. But the most important thing I'm looking for in 2024 is healthcare enterprises, doctors, nurses, and patients are going to see real value out of this — and not just early adopters."
Amit Khanna, Salesforce senior vice president and GM of health
Startups will seek to automate the process of getting approval from insurance, predicted Khanna.
"If you go to your doctor today, and they say that you need a hip replacement surgery, they can't just do it. They have to submit a request to your insurance company with a clear guideline as to why they're recommending the procedure. The health insurance company has to then come back with a yes. ... That path of getting prior approval today is very manual, very paper-based, but you're going to find a lot of startups doing AI-driven prior approval."
Kevin Zhang, Upfront Ventures partner
"It's very boring, but AI will do very well with things like contract management, specifically contracts between insurance companies and doctors. You'd think that was a core capability of insurance companies, yet all they have are documents and PDFs floating around everywhere. AI will help with reimbursement and payment."
Zhang anticipates the changes will come from Big Tech, as companies like Microsoft work to integrate AI into their clinical documentation and dictation tools.
Alexa Von Tobel, founder and managing partner of Inspired Capital
"I think it'll be a tale of two AIs. There are a lot of places where AI isn't suitable yet. In healthcare, we're just not at the point where a human mind won't be double or triple-checking work, in the same way with self-driving cars, no one is indiscriminately letting it drive on the road.
"But there will also be places of incredible abundance where AI is early and applicable when it comes to the infrastructure of bills, taking notes for doctors, helping you with claims, and helping you get access to your medicine faster."
Michael Shpigelmacher, CEO and founder of Bionaut Labs
Shpigelmacher believes that the AI boom will facilitate rapid innovation when it comes to how doctors and scientists interface with the human brain — a change that will be especially important when it comes to treating complicated neurodegenerative diseases, like Alzheimer's or Parkinson's.
"Today, when people want to reach a particular destination in the brain — to read a signal, for example — they do it in ways that are very invasive."
"Imagine being able to do that with a bidirectional communication stimulation device — a device that can receive commands from the outside, stimulate, and send electrical signals to the brain, while also being able to read electrical signals from the brain and communicate. So then you get that link in the right locations, in the right time, in a minimally invasive way, without having to go through healthy brain tissue."
Ben Lamm, CEO of Colossal Biosciences
"[By 2024-2025] we'll probably see a handful of the first drugs that are AI-discovered. There were some kinds of rumblings, precursors, and published papers out there right now, but I think that we will see drugs going into clinical trials that were not discovered by human-led experiments. They'll be 100% based on AI."
Lee Schwamm, associate dean for digital strategy and transformation at Yale School of Medicine
"People are going to start unleashing these models on large sets of clinical data, electronic health record data, and start asking things like: 'Who's going to be readmitted with heart failure in the next 30 days? Predict who's going to respond better to this medicine. Who will need extra vigilance while in the hospital to prevent them from ending up in intensive care. Predict how long someone is likely to stay in the hospital when they're admitted for a specific condition or a procedure.'"
Schwamm is also anticipating a shift in the healthcare workforce's day to day.
"I think you're also going to see a huge back office automation move, meaning that many of the things that are done by hand right now — reviewing and processing claims, reviewing denials, preparing prior authorizations for buying insurance companies ... A lot of that work is very predictable and very rote, and it's going to be automated."
Axel Wirth, chief security strategist at healthcare cybersecurity startup Medcrypt
"I predict that we will see AI algorithms into many more different decision-making scenarios. In healthcare diagnosis, therapy decisions, potentially also financial decisions — for example, denial or approval of care through health insurances and whatnot. And that proliferation of AI into different scenarios and use cases will bring with it the need to secure these applications of AI at the same time."
Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, care services, digital health, PBMs, and health policy and politics. Follow Anjalee on all social media platforms @AnjKhem.
