Payers who fully embrace artificial intelligence can expect to see significant returns on their investment in administrative and medical cost savings, experts said during a panel hosted by Healthcare Dive last week.
Extensively deploying the latest technology would be “quite transformational for the industry,” according to Jessica Lamb, a partner at consultancy McKinsey and Company. Lamb estimated an insurer that adopts AI across their entire business could lower administrative spending by at least 20% and medical costs by at least 10%.
Payers have a multitude of use cases for AI, ranging from optimizing utilization management to improving claims reviews to streamlining corporate functions, Lamb said.
When it comes to utilization management, insurers could leverage AI to expedite processes like prior authorization, Lamb said. Facilitating faster care will help insurers save medical costs in the long term by helping people get the care they need earlier, Lamb said.
Aashima Gupta, global director of healthcare at Google Cloud, agreed that AI saves valuable time during the Nov. 19 event.
“It’s all manual,” Gupta said of historic claim review processes. “Now you’re saving time for a clinician or nurses. We all know these are scarce resources. These are also costly resources.”
Major insurers have been utilizing AI in some capacity for years. However, adoption of generative AI — tools that uses training data to create new content — is still ramping up, particularly among nonprofit plans and smaller payers.
For example, while 90% of health insurers surveyed last December said they were planning to increase their AI investment this year, only about 25% of respondents planned to explore generative AI. The majority of respondents were focused on using AI tools for predictive tasks, such as underwriting and claims management.
From the sidelines, some lawmakers and providers have expressed concern about payers’ plans to increase their investment in AI.
Patients have alleged in lawsuits that companies use the technology to deny access to necessary medical care. Lawmakers have likewise accused payers of using AI to deny care in Medicare Advantage plans in a bid to cut costs.
Lamb and Gupta suggested that keeping a human in the loop, or having a person sign off on decisions made by AI, could help protect from the technology making improper care decisions.
However, it’s not clear having a human in the loop will solve higher denial rates. Investigations from Congress and media outlets have accused some insurers of high denials, even when a human reviews claims decisions.
Providers have especially been sounding the alarm about rising rates of denials. In an interview last month, Providence CFO Greg Hoffman blamed payers’ use of AI for the surge, noting his system had been forced to adopt its own AI to keep up with increased denials.
Editor’s note: Register here to watch a replay of the virtual event hosted by Healthcare Dive on Nov. 19.
