Companies in the four traditional sectors of health care risk ceding much of the value created by AI tools to technology players and consumers, according to a new publication by Boston Consulting Group (BCG). Although AI will create significant efficiencies for biopharma companies, providers, payers, and medtech companies, those traditional players may not retain a sizable portion of the value created. The article, titled Chasing Value as AI Transforms Health Care, is being released today.
The article assesses two possible scenarios for the value pool shifts created by AI. Under the first scenario, players in all four traditional sectors retain the value unlocked by improvements in their own efficiency. At the same time, medtech, providers, payers, and non-traditional health care companies from the technology sector capture much of the additional value created by AI—while the impact on biopharma is likely neutral. Under the second scenario, consumers benefit significantly. AI helps drive what is known as value-based health care (VBHC)—improved outcomes at lower cost—and the value unlocked passes to consumers in the form of lower premiums or out-of-pocket expenses. Technology and medtech companies also benefit significantly, while biopharma risks losing value because of shifts such as enhanced detection, prevention, and earlier treatment. The article outlines a series of smart, low-risk moves that companies in all four traditional health care sectors can make today to maximize the benefits of AI—and avoid the loss in value they may otherwise suffer.
“Artificial intelligence is to some degree already being deployed across all incumbent sectors of health care today and will play an exponentially larger role in the years ahead,” says BCG Partner Alexander Aboshiha, coauthor of the article. “Companies need to move quickly to harness this rapidly developing technology—including by ensuring they have access to the right data and the right talent to succeed.”
Health Care Players Are Making Major AI Investments
The article also outlines areas within health care for which AI spending will total $8 billion by 2022. These include:
Remote Prevention and Care. AI can be used to serve patients outside their doctor’s office or the local hospital. Virtual agents, for example, can conduct an initial consultation with a patient, screening out those who do not need to see a doctor and providing important information to physicians about those who do need treatment. Wearables or other devices can trigger alerts and interventions based on data such as anomalies in patient vital signs.
Diagnostics Support. AI applications in medical imaging and other clinical tests can help doctors identify conditions such as breast cancer, brain injury, or heart disease earlier and more accurately. Such tools can not only improve patient outcomes but also save money. Earlier diagnosis and treatment of many cancers, for example, can cut treatment costs by more than 50%.
Treatment Pathways and Support. Health care professionals can use AI tools to create individualized treatment plans that support VBHC by reducing risk, improving outcomes, and cutting costs.
Drug Discovery and Development. AI can improve biopharma R&D productivity, leveraging past screening results and clinical data to help companies identify and develop promising drugs, while also accelerating trial design and recruitment.
“Artificial Intelligence will drive major advances in realizing the vision of value-based health care. It has the potential to detect connections and correlations between medical treatment and patient outcomes in a way that hasn’t been possible before,” says Ryan Gallagher, BCG project leader and coauthor of the article. “That will not only save lives but also potentially help control rapidly rising health care costs.”
About Boston Consulting Group
Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with offices in more than 90 cities in 50 countries. For more information, please visit bcg.com.