But Challenges are Unlike Other Industries’, and Adoption May be Slow; Telemedicine, Accelerated by COVID-19, Could Drive Uptake, Says L.E.K. Consulting

BOSTON, MA (September 9, 2020) – Artificial intelligence (AI) is poised to disrupt the hospital industry, according to a new report from global management consulting firm L.E.K. Consulting.

Machine-learning and decision-support systems may soon play a central role in diagnosis, disease monitoring, treatment and prevention, and patient self-management and compliance, as well as the day-to-day operations of hospitals, clinics and practices.

The novel coronavirus pandemic, and the resulting upsurge in telemedicine, will increase the pace of AI adoption as hospitals and practitioners work to streamline and integrate clinical information and reduce operating costs.

But AI faces bigger hurdles in healthcare than in other industries as a result of privacy restrictions and the challenge of integrating multiple IT systems.

Those are among the key findings of Artificial Intelligence and Hospitals: Separating Myth from Reality, a collaborative special report between L.E.K. Consulting and Ruchin Kansal, founder and Managing Director of Kansal & Company. The report details the contributions hospital AI is likely to make and the hospital-industry-specific barriers it will have to overcome.

“AI applications will support, not replace, healthcare professionals,” said Jonas Funk, L.E.K. Managing Director and an author of the report. “But we are beginning to see both clinical and nonclinical advancements in AI technology that indicate that healthcare is rapidly approaching an inflection point for substantial change.”

Privacy concerns may limit hospital AI – but cost pressures, the need for outcomes data and the demands of COVID may drive adoption

The term “AI” refers to a range of technologies that automate and streamline processes, learn from experience and can arrive at decisions and recommendations. They include machine learning, process automation and natural language processing. 

Adoption of AI is likely to be more challenging in healthcare than in other industries, according to the report. Among the healthcare-specific barriers are privacy restrictions like HIPAA that limit data access and make it hard to “train” AI; complex legacy IT systems that are difficult to integrate and limited buy-in from staff that see AI as a threat to their jobs.

But there are also industry-specific factors that are likely to drive adoption, among them cost pressures, provider shortages that demand more efficiency, healthcare consumerism that drives demand for more data and the shift to value-based care – healthcare delivery and reimbursement programs that are focused on and driven by clinical results. 

Indeed, the pandemic will probably accelerate healthcare AI programs as it intensifies existing demands and speeds trends. “The shift to telemedicine, an increased focus on ambulatory care and the need for large-scale data analysis were already major features of the healthcare landscape before the pandemic,” said Monish Rajpal, an L.E.K. Managing Director and a report co-author. “But the pandemic has escalated those needs, and AI can make all of them more effective and efficient.”

The first hospital AI solutions will support clinical decisions, patient outreach and the streamlining of day-to-day operations

What form will healthcare AI take? According to the report, initial applications will be somewhat subtle, in the same way that automotive AI currently supports driver safety features but does not yet deliver self-driving cars. Early healthcare applications will have three areas of focus:

  • Providers: AI tools will assist in diagnosis and help clinicians and healthcare professionals make choices about care. AI solutions can help enable “precision medicine” therapies tailored to individual patients. AI will also support community health programs, prevention initiatives and health monitoring.
  • Patients: AI embedded in smart devices will help patients keep up with treatment regimens after discharge. More broadly, AI will become more embedded in fitness and wellness devices such as personalized health trackers. If patients consent, this data can be shared with hospitals’ databases to improve the treatment experience.
  • Operations: AI will support a range of non-clinical needs including workforce management, revenue management and procurement, helping hospitals and health systems drive efficiency and cost savings.

“While most AI-enabled healthcare solutions are still in their infancy, we expect rapid growth in the market over the next three years,” said Rajpal. 

Administrators should focus AI initiatives on maximum strategic impact

Hospital administrators planning AI initiatives should treat them as they would any other major investment, the report advises. “It’s essential to evaluate each AI project for its strategic value,” said Ruchin Kansal, founder and Managing Director of Kansal & Company and a report co-author. “The highest strategic impact results from initiatives that allow the health system to expand into an opportunity that is adjacent to its core business model, for example expanding its ambulatory services or enhancing its patient outreach. The highest financial impact will result from new revenue opportunities rather than just cost reductions. Finally, it’s important to consider the organization’s readiness to adopt the solution – in terms of both technology and willingness to implement AI into workflow.“ 

About L.E.K. Consulting
L.E.K. Consulting is a global management consulting firm that uses deep industry expertise and rigorous analysis to help business leaders achieve practical results with real impact. We are uncompromising in our approach to helping clients consistently make better decisions, deliver improved business performance and create greater shareholder returns. The firm advises and supports global companies that are leaders in their industries — including the largest private- and public-sector organizations, private equity firms, and emerging entrepreneurial businesses. Founded in 1983, L.E.K. employs more than 1,600 professionals across the Americas, Asia-Pacific and Europe. For more information, go to www.lek.com.