AI in Healthcare – news picked by GLI /09

The beginning of the new year is always a time to reflect on the past and make predictions about the future. There are a number of reports and articles that offer their insights into the future of AI in healthcare in 2024. In this post, we will introduce a few of those outlooks so that you don’t have to take the time google searching.

AI in healthcare 2024 predictions and predicted funding levels

According to McKinsey’s 2024 healthcare services outlook: Challenges and opportunities report [1] there are three main areas that stand out:

  • Data analytics and artificial intelligence (AI) are gaining traction in healthcare, but true adoption is still nascent. Future focus should be on near-term operational benefits, such as AI-driven imaging throughput optimization. (Check what opportunities ML and GAN models can offer in terms of medical imaging applications).
  • Outsourcing is becoming more attractive for strategic players, especially not-for-profit health systems and payers, due to financial pressures. Legacy systems and critical business functions are increasingly outsourced for scale, automation, and talent acquisition. (Check our post on legacy systems).
  • Programmatic M&A presents an opportunity for strategic and PE investors to acquire healthcare services and technology companies at favorable terms. This is due to substantial valuation reductions and operational difficulties faced by many such companies. Advantageous refinancing options for not-for-profit health systems through 2021 may enable them to diversify their portfolios.

The investments and M&A are mentioned also by other experts as a great potential for 2024. Digital health funding boomed in 2021, but then hit the brakes in 2023. This slowdown was caused by rising interest rates, lower company valuations, and a weak market for companies to go public. However, experts believe this slowdown is a natural correction rather than a collapse, and they predict funding levels will remain relatively stable in 2024, with a potential uptick towards the end of the year [2].

Also Boston Consulting Group experts believe that, while there are still uncertainties, there are signs that the market is poised for a rebound in transaction volumes in 2024 [3]. BCG’s investor survey reveals an encouraging outlook among investors, with 65% expressing optimism for the next three years. This optimism is poised to strengthen if macroeconomic conditions take a favorable turn. Moreover, the record-high dry powder held by US private equity investors ($1 trillion) underscores the ample capital available to fuel deals as confidence grows.

private equity in healthcare

Do you need a Chief AI Officer?

In the mentioned article by Emily Olsen, you might find another interesting point. The hype surrounding the potential of AI in healthcare reached a crescendo in 2023, particularly for generative AI, capable of producing novel content like text or images. However, the industry remains in its exploration phase, seeking the most effective applications of this technology. Despite its promise, establishing the underlying infrastructure for AI in healthcare is crucial. This includes seamless integration, rigorous safety standards, and data transparency.

Forbes goes even further and predicts [4] that a number of Fortune 500 companies will establish a new C-suite position in 2024: Chief AI Officer. This move mirrors the trend observed during the rise of cloud computing a decade ago, when organizations appointed “Chief Cloud Officers” to guide their cloud-based initiatives. Similarly, appointing a “Chief AI Officer” will serve as a visible signal to the market that a company is committed to leveraging AI strategically. Whether these roles will ultimately prove their worth in the long run remains to be seen.

Will generative AI in healthcare take center stage in 2024?

Generative AI was huge in 2023 and it frequently featured in this series of posts [5]. The Signify Research Team [6] has compiled its top five predictions for the generative AI in healthcare market in 2024. Let’s dive into them:

  1. Grounded applications: generative AI in healthcare will initially focus on more practical applications, such as clinical workflow optimization and patient engagement.
  2. Physician empowerment: gen AI has the potential to streamline administrative tasks, freeing up physicians to focus on their core competency of providing patient care.
  3. Data as a differentiator: healthcare providers who own, control, or facilitate the use of high-quality data will gain a competitive edge in this emerging market.
  4. A race for market dominance: we may expect intense battles among vendors, particularly in areas with relatively low barriers to entry.
  5. Regulatory roadblocks: the novelty and complexity of this technology will require careful regulatory oversight, which could delay the deployment of generative AI for diagnosis and detection.

What are your thoughts? Can generative AI i healthcare cause us ripples of excitement in 2024 (again)?

The future is uncertain, but never say never

Healthcare is a multifaceted field that demands a blend of scientific expertise, compassionate care, and economic prudence. Balancing these elements is a unique and rewarding challenge. We’re fortunate to collaborate with many who share this goal. AI’s potential to deepen our understanding across healthcare positions it as a valuable tool for future innovation.