The traditional and conservative realm of healthcare has experienced significant and swift technological upheaval in the last ten years. The surge of generative AI and Large Language Models (LLMs) has outpaced any previous innovation wave, revolutionizing the landscape.
While lauded as potential remedies for numerous healthcare challenges, these innovations confront the digital health industry with a stark reality check. The once-booming sector now grapples with market corrections, witnessing the closure of highly valued startups and raising doubts about its future trajectory.
How will this situation unfold? Where will the adjustments in the market cease? Here’s my anticipation for the forthcoming year at the crossroads of technology and healthcare:
1. The Focus Is Entirely On AI
Let’s pause to recognize how generative AI has stealthily embedded itself into our everyday lives. From predictive text suggestions to voice-activated assistants, these models seamlessly engage with us regularly, becoming an integral part of our routines. It’s a testament to the successful integration of technology into our lives, bridging the gap between science fiction and our tangible reality.
In healthcare, the incorporation of LLM and LMMs (Large Medical Models) carries significant potential, yet safety concerns stand as a substantial barrier. Unlike regulatory bodies such as the FDA, FCC, or FTC overseeing AI implementation, there’s a lack of specific oversight for these powerful tools in a sector where privacy holds utmost importance. Existing guidelines fall short in providing enforceable safeguards for patients and consumers. Moreover, experts in the field speculate that the rapid pace of AI advancement renders regulation nearly impossible, potentially hindering the technology’s benefits in healthcare or even preventing its successful integration.
Within healthcare plans, the reimbursement adjudication process is primed for disruption, having already experienced improvements through digital tool adoption. For instance, AI could automate administrative aspects of the extensive manual claims evaluation process. Over time, the use of generative AI in payer applications might lead to cost reductions by deriving insights from data analysis.
The trajectory seems certain for increased AI adoption in healthcare in 2024. While some are optimistic about AI-powered predictive clinical models emerging soon, a more pragmatic outlook suggests that initial inroads into this cautious sector will likely involve non-clinical applications, such as documentation and education.
2. Merging and Vertical Incorporation
Amidst a complex financial environment, mergers and consolidations have evolved into survival tactics for healthcare entities. Payers transition into providers, health systems broaden their functions, and employers enter the healthcare realm. Even venture capitalists are engaging, fostering the formation of extensive, fully integrated healthcare systems.
With the emergence of these healthcare titans, digital health firms confront the need to reassess their strategies and endeavor to establish their positions within a select group of healthcare giants in this new and transformative landscape.
3. The Convergence of Macro and Micro Aspects
With AI dominating the spotlight, it becomes challenging to address the deep-seated financial and structural issues plaguing the American healthcare system—such as reimbursement intricacies, alternative payment models, and the overarching economic strain within healthcare. Being the largest sector of the economy and heavily service-oriented, healthcare is entangled in the broader economic concerns felt by Americans. Unlike Big Tech, which can leverage the AI surge for rapid growth, healthcare transformation is anticipated to navigate a slow and intricate path.
Compounding this journey are the cessation of government aid for COVID-related expenses, the halting of Medicaid expansion in several states, and an unpredictable economy that shows no signs of stabilization, particularly in an election year. Consequently, financial barriers to adoption will prominently feature in the considerations of innovators in 2024.
Anticipate a sustained emphasis on cost-effectiveness and the demonstration of return on investment, prompting the industry to streamline vendor engagements. While value-based care remains a focal point for discussion as providers strive to optimize financial models, its practicality remains dubious unless there are significant alterations in reimbursement structures.
4. Keep Your Eyes Open for the Potential of AR/VR
In the shadow of AI’s dominance throughout 2023, augmented and virtual reality technologies have quietly but rapidly penetrated the healthcare industry. Meta recently unveiled its Oculus III, a more accessible and budget-friendly iteration of its groundbreaking AR/VR headset, while Apple introduced Apple Vision Pro, a similar product with a higher entry threshold.
Both these tech giants have actively highlighted healthcare applications for these innovations. Leveraging their extensive user bases and established infrastructure, they possess the potential to profoundly transform medical training, potentially extending into clinical and surgical care. Despite being in its early stages and encountering similar privacy and safety concerns associated with AI adoption, AR/VR technology could emerge as the unexpected success story of 2024, surpassing the transient buzz surrounding volatile technologies like generative AI.
The overarching theme of 2024 is anticipated to revolve around tension: a clash between the expansive innovations of the tech sphere and the practical challenges posed by intricate reimbursement structures, evolving infrastructure, and safety apprehensions within healthcare, posing potential hindrances to progress. How these tensions reconcile might be a journey requiring more than a year to unfold and reveal its resolution.