AI is accelerating trading volumes without increasing efficiency, the report says.
While AI is reducing administrative burden for hospitals and healthcare providers, it is not necessarily leading to cost savings.
That’s the conclusion of a report from the Peterson Institute for Health Technology (PHTI), based on a survey of health system executives, insurance companies, federal agencies and technology companies.
This report examines how AI is being deployed and finds that costs can increase.
This is because AI is accelerating trading volumes without increasing efficiency.
why is this important
AI tools enable providers and payers to process more transactions.
Prior authorization requests, billing activities, and interactions between providers and payers are increasing without addressing the underlying structural inefficiencies.
AI-powered billing is already increasing healthcare costs. This is because more complete documentation and coding drives higher reimbursement levels and contributes to health care cost inflation.
bigger trends
According to the report, the healthcare industry faces a $350 billion annual administrative waste problem that executives are looking to AI to solve. Of this amount, $266 billion can be attributed to administrative complexity, and between $59 billion and $84 billion can be attributed to fraud and fraud.
According to the report, billing and transaction costs are a major driver of administrative complexity, and the cost per medical bill in the United States far exceeds that of its peers. This is the result of unique payment rules, documentation requirements, and compliance standards that vary from health plan to health plan.
For pre-approvals, providers use AI tools to automate submissions, while plans use AI to evaluate pre-approval requests. In medical billing, providers use ambient scribing and AI-assisted coding tools to understand increasing clinical complexity and automate billing. Meanwhile, health plans use AI to help review and process claims.
This report adds to findings from executives at the HIMSS26 global conference and trade show in March. While AI may not deliver a rigorous ROI, it is invaluable in reducing clinical burden and burnout.
“We’re facing a lot of new costs of doing business,” said panelist Joe Longo, Parkland Health’s senior vice president and chief digital information officer. Longo said there’s a lot of skepticism about drawing a clear line when it comes to ROI. But thanks to ambient AI, doctors can be freed from pajama time.
“This is a huge ROI deviation,” Longo says. “But is it worth it? Yes.”
