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The Potential Impact of Artificial Intelligence on Healthcare Spending

Author

Listed:
  • Nikhil Sahni
  • George Stein
  • Rodney Zemmel
  • David M. Cutler

Abstract

The potential of artificial intelligence (AI) to simplify existing healthcare processes and create new, more efficient ones is a major topic of discussion in the industry. Yet healthcare lags other industries in AI adoption. In this paper, we estimate that wider adoption of AI could lead to savings of 5 to 10 percent in US healthcare spending—roughly $200 billion to $360 billion annually in 2019 dollars. These estimates are based on specific AI-enabled use cases that employ today’s technologies, are attainable within the next five years, and would not sacrifice quality or access. These opportunities could also lead to nonfinancial benefits such as improved healthcare quality, increased access, better patient experience, and greater clinician satisfaction. We further present case studies and discuss how to overcome the challenges to AI deployments. We conclude with a review of recent market trends that may shift the AI adoption trajectory toward a more rapid pace.

Suggested Citation

  • Nikhil Sahni & George Stein & Rodney Zemmel & David M. Cutler, 2023. "The Potential Impact of Artificial Intelligence on Healthcare Spending," NBER Working Papers 30857, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:30857
    Note: AG EH PR
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    Cited by:

    1. Zahlan, Ahmed & Ranjan, Ravi Prakash & Hayes, David, 2023. "Artificial intelligence innovation in healthcare: Literature review, exploratory analysis, and future research," Technology in Society, Elsevier, vol. 74(C).

    More about this item

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • M15 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - IT Management

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