Gen AI Transforming the Healthcare Industry

Gen AI is rapidly transforming the healthcare industry. To understand the changing landscape, McKinsey has surveyed healthcare leaders since 2023 about their perspectives and approaches to gen AI (see sidebar, “Research methodology”).

The latest survey, conducted in the fourth quarter of 2024, found that 85 percent of respondents—healthcare leaders from payers, health systems, and healthcare services and technology (HST) groups—were exploring or had already adopted gen AI capabilities.

This survey targeted 150 US healthcare leaders across subsectors and builds on similar samples of 100 leaders from the first and second quarters of 2024 and the fourth quarter of 2023. From the responses, four distinct themes emerged.

Stakeholders in the healthcare industry are seeking ways to create value and reduce costs across domains, providing ample opportunity for the use of gen AI. Despite the complexities of evolving regulation, risk compliance, and internal capability gaps, responses from this recent survey suggest that more payers, health systems, and HST organizations are progressing to implement use cases across functions. What’s more, many healthcare leaders are looking to fill the gaps in their capabilities by pursuing partnerships that allow them to bring in outside talent while maintaining flexibility and customization in AI solutions. Partnerships with hyperscalers that have data capabilities could help ensure successful implementations.

Respondents’ early use cases with gen AI have focused on improving administrative efficiency, addressing IT and infrastructure gaps, and increasing clinical productivity. As competencies mature, more use cases could become worthwhile, including external engagements with patients or members and quality-of-care use cases, which could further improve patient and member experiences overall. Leaders agree that risk management in implementing AI is important, and considering an AI governance approach will be important to advance these efforts safely.

So far, organizations that have developed their capabilities and appropriately targeted their gen AI efforts have had the most success achieving at-scale implementation. The development of gen AI remains important to success in the healthcare space, and leaders can consider how to position their organizations for the future. Successful implementations will require a value-driven strategy, strong delivery capabilities, and robust organizational management.

Key Recommendations for Healthcare Leaders

• Invest in developing gen AI capabilities to stay competitive in the evolving healthcare landscape.
• Form strategic partnerships with hyperscalers to leverage their data capabilities for successful gen AI implementations.
• Focus on use cases that drive value and improve patient/member experiences, such as quality-of-care initiatives.
• Implement an AI governance framework to manage risks associated with gen AI adoption.
• Prioritize organizational readiness and development of strong delivery capabilities to support at-scale implementation.

Market Trends in Gen AI Adoption

The healthcare industry is witnessing a rapid uptake of gen AI technologies, with a focus on improving operational efficiency, enhancing clinical outcomes, and personalizing patient care. As organizations continue to explore the potential of gen AI, key market trends are emerging:

1. Increased collaboration between healthcare providers, payers, and technology companies to drive innovation in gen AI applications.
2. Rising investment in gen AI research and development to address specific healthcare challenges, such as disease diagnosis and treatment optimization.
3. Growing emphasis on data privacy and security measures to protect sensitive patient information in gen AI systems.
4. Shift towards value-based care models that prioritize outcomes and patient satisfaction, driving demand for gen AI solutions that support these objectives.

FAQs

Q: What are the primary use cases for gen AI in healthcare?

A: Primary use cases for gen AI in healthcare include administrative efficiency improvements, IT infrastructure optimization, clinical productivity enhancements, and quality-of-care initiatives.

Q: How can healthcare organizations mitigate risks associated with gen AI adoption?

A: Healthcare organizations can mitigate risks by implementing an AI governance framework, conducting thorough risk assessments, and ensuring data privacy and security measures are in place.

Q: What role do partnerships play in successful gen AI implementations?

A: Partnerships with hyperscalers and technology companies can provide healthcare organizations with access to data capabilities and expertise needed for successful gen AI implementations.

Conclusion

The rapid transformation of the healthcare industry through gen AI presents both opportunities and challenges for healthcare leaders. By investing in developing gen AI capabilities, forming strategic partnerships, and focusing on value-driven use cases, organizations can position themselves for success in the evolving healthcare landscape. It is crucial for healthcare leaders to prioritize organizational readiness, data privacy, and AI governance to ensure safe and effective gen AI adoption. With the right strategies and execution, gen AI has the potential to revolutionize healthcare delivery and improve patient outcomes.