JOURNAL OF MEDICAL ECONOMICS

2023, VOL. 26, NO. 1, 1566–1569

https://doi.org/10.1080/13696998.2023.2285186
Article 0201-RT/2285186

EDITORIAL

Beyond implementation: the long-term economic impact of AI in healthcare

Introduction Innovation and Research, and External Economic Factors and

Strategic Transformation, with each dimension further
Artificial Intelligence (AI) in healthcare, initially described in
delineated into subcategories. Our discussion spans a spec­
1950, took a leap in the early 2000s with the advent of deep
trum of economic considerations tied to AI in healthcare,
learning, aiming to emulate human cognitive functions and
ranging from direct cost savings and revenue enhancement
fuelled by the growing availability of healthcare data1.
to strategic and external factors. Through this methodical
Common AI tools encompass machine learning for data cat­
evaluation, using a comprehensive multi-criteria framework,
egorization, natural language processing, predictive analytics,
we aim to furnish a holistic view of how AI might economic­
and speech recognition technology to enhance provider–
ally shape healthcare in the future.
patient dialogue1,2. These instruments empower healthcare
providers to predict future health paths, recommend treat­
ments, and discover new genetic connections1,2. Cost savings
However, economic challenges related to AI in healthcare
can be formidable, potentially affecting investment choices3. AI-enabled healthcare promises significant savings to health­
Health Economic Evaluations (HEEs) offer critical insights to care systems and patients, stemming from enhanced diag­
gauge the financial implications of AI integration. nostic, operational, and treatment efficiencies, as well as
Regrettably, many current HEEs have methodological limita­ preventive care facilitated by AI. These savings, primarily
tions, necessitating thorough evaluations to guide well-con­ benefiting healthcare providers and patients, suggest a
sidered decisions4. Obstacles include external factors related remarkable economic return over time, with enduring posi­
to the healthcare system, the ability to manage strategic tive implications for the entire healthcare ecosystem. One
change, and the evolution of healthcare professions and study employed a deterministic model to evaluate various
practices – all of which could entail substantial costs5. testing strategies for first-line metastatic colorectal carcinoma
Financial constraints, significant initial expenses, and rigorous treatment. It found that an AI approach complemented by
economic assessments are among the chief barriers hinder­ high-specificity panels resulted in substantial savings – $400
ing the progression of AI in healthcare. million or a 12.9% reduction compared to using next-gener­
Conversely, AI promises considerable cost savings. ation sequencing alone7. Moreover, projections indicate that
Estimates suggest potential savings between $200 billion to AI integration might lead to annual healthcare savings rang­
$360 billion solely within the US when applied across various ing between $200 billion and $360 billion, underscoring its
healthcare sectors6. enduring fiscal benefits8. The transformative potential of AI
The long-term economic implications of AI in healthcare in healthcare is further exemplified by its ability to tailor
warrant crucial discussions, yet these topics remain under- patient care. This is highlighted by a 25% reduction in hos­
represented in the academic works. This editorial aims to pital stays and a staggering 91% decrease in nursing facility
bridge this gap by examining the current studies in the lit­ discharges, which translates to both economic savings and
erature. Grasping the long-term economic impact of AI in enhanced patient outcomes9. Preventive healthcare aug­
healthcare can furnish stakeholders with priceless knowledge, mented by AI has a profound positive impact on medical
paving the way for more informed strategic planning and expenses, promoting early disease identification and timely
judicious investment choices. Identifying areas where AI can interventions, which in turn diminish the need for hospital­
maximize cost-effectiveness and elevate patient care will izations and expensive procedures. For instance, innovative
enable more precise resource allocation. Moreover, delving AI technologies can pinpoint diseases early on, ensuring swift
into its extended financial consequences can unveil potential and effective treatments that result in fewer hospital stays
returns on AI healthcare investments, presenting a more and overall reduced costs. An analysis on the cost-effective­
transparent financial overview for stakeholders contemplat­ ness of early Parkinson’s Disease (PD) detection via avant-
ing such ventures. garde technology posited that such early diagnosis not only
elevates patient quality-of-life but also curtails treatment
expenditures10.
Discussion
However, the current research exhibits limitations, includ­
This editorial presents a comprehensive exploration of the ing potential biases, limited sample sizes, and a predominant
long-term economic implications of AI in healthcare, system­ emphasis on immediate outcomes, often overlooking long-
atically and unravelling these effects from various perspec­ term economic ramifications. Additionally, variations across
tives. The analysis is organized around eight key dimensions: healthcare systems can yield divergent outcomes, complicat­
Cost Savings, Cost Avoidance, Long-term Health Outcomes, ing broad generalizations.
 JOURNAL OF MEDICAL ECONOMICS 1567

Table 1. Potential long-term economic impacts of AI in healthcare

Categories Subcategories Example
Cost Savings Diagnostic efficiency AI-powered imaging tools that instantly analyse and interpret X-rays, MRIs, or CT scans,
reducing the need for multiple radiologists to review images and thus reducing costs.
Operational efficiency AI-driven appointment scheduling systems that optimize patient flow and reduce waiting
times. Such systems can predict no-shows and overbook accordingly, resulting in fewer
wasted slots and maximizing revenue for clinics.
Treatment efficiency Personalized treatment plans generated by AI, based on a patient's genetics, medical
history, and other relevant data. This can lead to more effective treatments that have a
higher likelihood of success, reducing the need for prolonged or multiple treatments.
Preventive care Wearable devices integrated with AI algorithms that monitor vital signs and predict
potential health issues before they become serious.
Cost avoidance Compliance and Litigation AI-powered systems that ensure medical practices and procedures strictly adhere to
established guidelines, decreasing the chances of non-compliance. This not only avoids
financial penalties but also reduces the likelihood of malpractice incidents.
Readmission Penalties AI-driven clinical pathways, such as Clinical Decision Support Systems (CDSSs), can be
implemented to monitor and manage chronic ailments.
Waste Reduction AI systems can be utilized to analyse vast amounts of patient and procedural data to
recommend or de-prioritize certain tests and procedures based on their anticipated
value for a specific patient.
Resource Optimization AI can aid in refining resource utilization, ensuring that equipment and human resources
are used to their utmost potential and avoiding unnecessary expenditures.
Long-term Health Outcomes Quality of Life AI-powered remote monitoring tools allow patients with chronic conditions like diabetes
to continuously monitor their glucose levels without frequent hospital visits.
Population Health Management A decrease in healthcare expenses due to proactive management, and a reduction in
economic downturns which often accompany large-scale disease outbreaks because of
decreased productivity and increased healthcare costs.
Longevity AI can analyse molecular structures and predict their potential impact on human
longevity, leading to the faster discovery of anti-aging compounds. The economic
impact of increased longevity means a longer productive life for citizens, potentially
extending their time in the workforce and their contributions to the economy.
Innovation and Research Technological Breakthroughs AI-driven laboratories that can automate and expedite drug discovery processes, leading
to faster introduction of new therapeutic agents., which leads to cost savings
Spin-off Innovations AI innovations initially designed for healthcare, such as wearable health monitors, can find
applications in other industries, like sports or fitness.
Economic Ripple Effects The development and commercialization of AI-driven healthcare tools can stimulate local
economies by creating jobs in tech, manufacturing, and distribution sectors.
Market Competition Dynamics Differentiated Services Hospitals using AI-driven diagnostic tools can offer more precise treatment plans,
differentiating themselves from competitors.
Enhanced Patient Choice AI can provide personalized treatment options, giving patients the ability to choose the
best fit for their needs.
Cost-effective Healthcare Models AI-driven telemedicine platforms can provide expert consultations at a fraction of
traditional costs, making healthcare more affordable.

Cost avoidance renowned for its efficacy in eradicating waste and refining
resource utilization13. Through these channels, AI not only
The application of AI in healthcare serves as a cornerstone
alleviates financial pressures but also steers healthcare
for cost avoidance, primarily aiding healthcare providers and
toward more streamlined, compliant, and resource-wise prac­
insurance companies, significantly mitigating financial bur­ tices, highlighting its invaluable position in contemporary
dens. This cost avoidance, particularly beneficial to health­ healthcare cost management.
care providers and insurance agencies, reflects a reduction in
unnecessary expenses and legal costs, different from direct
savings achieved through operational efficiencies. Artificial Long-term health outcomes
Intelligence aids in compliance measures and reduces mal­ The potential of AI in healthcare offers immense promise for
practice incidents, thus dramatically lowering litigation enhancing patient quality-of-life. AI’s capability to analyze
expenses. Tools such as Google DeepMind exhibit excep­ patient data rapidly and with greater accuracy than humans
tional accuracy in disease diagnosis, thereby reducing diag­ promises precise diagnoses, individualized treatment plans,
nostic errors that frequently lead to malpractice lawsuits. AI swifter recovery periods, and fewer complications. Such
also plays a pivotal role in reducing readmission penalties; advancements also bring economic benefits by minimizing
research illustrates that AI-driven clinical pathways, including resources squandered on misdiagnoses or ineffective
Clinical Decision Support Systems (CDSSs) for chronic ail­ treatments.
ments like COPD, can markedly decrease readmission rates, In population health management, AI stands out by both
thus lessening penalties and related expenses11,12. Another forecasting health trajectories and optimizing community
prime advantage of AI is waste reduction; it fine-tunes health results, simultaneously easing strains on healthcare
resource distribution and curbs unnecessary tests and proce­ infrastructures. BlueDot, a Canadian firm, uses AI to assess
dures, leading to considerable cost avoidance. AI comple­ varied data points, including news headlines, airline ticket
ments systems like the Lean/Toyota Production System (TPS), sales trends, and animal disease outbreaks, aiming to predict
1568 A. Z. AL MESLAMANI

potential outbreaks14. Notably, this company alerted users to delivery paradigms. The potential for streamlined operations,
COVID-19 risks even before the WHO made its public elevated patient care, and novel revenue channels under­
announcement. scores AI’s revolutionary capacity, extending the economic
Moreover, AI is poised to be instrumental in our pursuit conversation beyond the confines of the healthcare domain.
of extended life spans. It can bolster endeavors to prolong In economic discussions centered on healthcare, AI
healthy life expectancies, allowing people to stay economic­ emerges as both a primary actor and a facilitator. The inter­
ally active for longer durations. Innovations powered by AI in play between AI, innovation, market competition, and regula­
areas like genetics, drug discovery, and personalized medi­ tory frameworks weaves a complex story, emphasizing AI’s
cine harbor immense potential to devise treatments that can long-term economic implications in healthcare. This narrative
lengthen the healthful stages of human existence. Atomwise, is embedded within broader dialogues on technology, eco­
a company focused on AI-driven drug discovery, has pio­ nomics, and healthcare delivery, spotlighting the intricate
neered technology aimed at predicting how effective specific opportunities and challenges AI presents within healthcare
molecules might be against particular diseases15. Ideally, this environments. This layered narrative underscores the neces­
approach could diminish both the time and costs tied to sity for further exploration of the vast potentials AI holds for
conventional drug discovery, potentially hastening the avail­ the healthcare industry at large.
ability of groundbreaking treatments.
AI has become a vital tool in drug discovery, offering a
promising approach to rapidly identify new candidates and Conclusion
accelerate the drug development process. Previously, drug
development was fraught with uncertainty, with only 10% of AI offers the potential for significant cost reductions through
candidates advancing beyond the first stage of clinical trials improved diagnostic accuracy and optimized resource alloca­
and a timeline of 10–15 years for commercialization16. AI tion, while also elevating patient care quality via personal­
presents a solution that could reduce these timeframes and ized treatment models. In this editorial, we delved into the
costs significantly16. Economically, AI has been crucial in potential savings attributable to AI solutions. However, regu­
drug discovery. AI-first biotech companies have experienced latory challenges and variations in healthcare systems across
significant growth in their drug pipelines through this regions may hinder the seamless integration of AI and its
method. Currently, over 150 small molecule drugs are in dis­ economic benefits. Additionally, the strategic transformation
covery and 15 clinical trials using AI technologies are in pro­ spurred by AI indicates that its economic impact extends
gress, with this number increasing by nearly 40% annually17. beyond just healthcare. AI’s intricate interplay with market
AI offers value by accessing new biology, enhancing chemis­ dynamics and regulatory frameworks gives rise to a nuanced
try, increasing success rates, speeding up discovery proc­ economic discussion that warrants further exploration. Such
esses, and reducing discovery costs (BCG, n.d.). Investment in an in-depth analysis will guide stakeholders in strategic plan­
AI-enabled drug discovery has surged, with third-party ning, investment decisions, and provide a clearer under­
investment exceeding $5.2 billion by the end of 202117. standing of the economic opportunities and challenges
inherent in an AI-driven healthcare landscape.
Other areas
AI’s involvement in innovation and research, especially within Transparency
healthcare, is multifaceted. It has the potential to drive
Declaration of funding
technological breakthroughs, resulting in spin-off innovations
that give rise to new healthcare products and services. The The paper was not funded.
ripple effects of these innovations might transcend medical
contexts, influencing broader economic landscapes. Declaration of financial/other interests
The prospective impact of AI on market competition
The author has no relevant affiliations or financial involvement with any
dynamics within healthcare is compelling. Its ability to create organization or entity with a financial interest in or financial conflict
differentiated services can both enhance patient choice and with the subject matter or materials discussed in the manuscript. This
pave the way for cost-effective healthcare models. While AI includes employment, consultancies, honoraria, stock ownership or
has the potential to nudge healthcare organizations toward options, expert testimony, grants or patents received or pending, or
patient-centric innovations, emerging regulatory challenges royalties.
present obstacles. These challenges may stymie innovation
or stifle market competition. However, well-designed regula­
Author contributions
tory frameworks can balance market risks and foster sustain­
able economic models in healthcare. AZA developed the study design, performed data extraction, manuscript
Considering strategic positioning and digital transform­ drafting, and reviewing.
ation, AI’s long-term economic contributions might be pro­
found. By leveraging AI, healthcare entities can refine their
strategic stance while simultaneously undertaking digital
Acknowledgements
transformations that challenge traditional healthcare service None stated.
 JOURNAL OF MEDICAL ECONOMICS 1569

References [11] Romero-Brufau S, Wyatt KD, Boyum P, et al. Implementation of

artificial Intelligence-Based clinical decision support to reduce
0[1] Kaul V, Enslin S, Gross SA. History of artificial intelligence in medi­ hospital readmissions at a regional hospital. Appl Clin Inform.
cine. Gastrointest Endosc. 2020;92(4):807–812. doi: 10.1016/j.gie. 2020;11(4):570–577. doi: 10.1055/s-0040-1715827.
2020.06.040. [12] Wang L, Li G, Ezeana CF, et al. An AI-driven clinical care pathway
0[2] Jiang F, Jiang Y, Zhi H, et al. Artificial intelligence in healthcare: to reduce 30-day readmission for chronic obstructive pulmonary
past, present and future. Stroke Vasc Neurol. 2017;2(4):230–243. disease (COPD) patients. Sci Rep. 2022;12(1):20633. doi: 10.1038/
doi: 10.1136/svn-2017-000101. s41598-022-22434-3.
0[3] Wolff J, Pauling J, Keck A, et al. The economic impact of artificial [13] AHRQ. Reducing waste and inefficiency in health care through
intelligence in health care: systematic review. J Med Internet Res. lean process redesign: literature review. 2018. https://www.ahrq.
2020;22(2):e16866. doi: 10.2196/16866. gov/research/findings/final-reports/leanprocess/leanprocess.
0[4] Voets MM, Veltman J, Slump CH, et al. Systematic review of html#:�:text=Lean/Toyota
health economic evaluations focused on artificial intelligence in [14] Borda A, Molnar A, Neesham C, et al. Ethical issues in AI-enabled
healthcare: the tortoise and the cheetah. Value Health. 2022; disease surveillance: perspectives from global health. Appl. Sci.
25(3):340–349. doi: 10.1016/j.jval.2021.11.1362. 2022;12(8):3890. doi: 10.3390/app12083890.
0[5] Petersson L, Larsson I, Nygren JM, et al. Challenges to implement­ [15] Atomwise. Artificial intelligence for drug discovery. 2023. https://
www.atomwise.com/
ing artificial intelligence in healthcare: a qualitative interview
[16] Yu KH, Beam AL, Kohane IS. Artificial intelligence in healthcare. Nat
study with healthcare leaders in Sweden. BMC Health Serv Res.
Biomed Eng. 2018;2(10):719–731. doi: 10.1038/S41551-018-0305-Z.
2022;22(1):850. doi: 10.1186/s12913-022-08215-8.
[17] Chun M. How artificial intelligence is revolutionizing drug discov­
0[6] McKendrick J. Healthcare may be the ultimate proving ground
ery. Harvard Law School. 2023. https://blog.petrieflom.law.har­
for artificial intelligence. Forbes. 2023. https://www.forbes.com/
vard.edu/2023/03/20/how-artificial-intelligence-is-revolutionizing-
sites/joemckendrick/2023/02/22/healthcare-may-be-the-ultimate- drug-discovery/
proving-ground-for-artificial-intelligence/?sh=39cea43c2b55
0[7] Kacew AJ, Strohbehn GW, Saulsberry L, et al. Artificial intelligence
can cut costs while maintaining accuracy in colorectal cancer Ahmad Z. Al Meslamani
genotyping. Front Oncol. 2021;11:630953. doi: 10.3389/fonc.2021. College of Pharmacy, Al Ain University, Abu Dhabi, UAE
630953. AAU Health and Biomedical Research Center, Al Ain University,
0[8] Pifer R. Artificial intelligence could save healthcare industry Abu Dhabi, UAE
$360B a year. 2023. https://www.healthcaredive.com/news/artifi­ [email protected]
cial-intelligence-healthcare-savings-harvard-mckinsey-report/
641163/#:�:text=In the new paper%2C researchers estimate that Received 11 October 2023; revised 14 November 2023; accepted 15
broader,next five years%2C without sacrificing quality or access.% November 2023
23:�:text=In the new pap
0[9] Lagasse J. How artificial intelligence can be used to reduce costs � 2023 The Author(s). Published by Informa UK Limited, trading as
and improve outcomes in total joint replacement surgery. Taylor & Francis Group.
Healthcare Finance. 2023. https://www.healthcarefinancenews. This is an Open Access article distributed under the terms of the Creative
com/news/how-artificial-intelligence-can-be-used-reduce-costs- Commons Attribution-NonCommercial-NoDerivatives License (http://
and-improve-outcomes-total-joint#:�:text¼ Use of AI led to, creativecommons.org/licenses/by-nc-nd/4.0/), which permits non-
experimenting with to reduce expenses commercial re-use, distribution, and reproduction in any medium,
[10] Munoz DA, Kilinc MS, Nembhard HB, et al. Evaluating the cost- provided the original work is properly cited, and is not altered,
effectiveness of an early detection of parkinson’s disease through transformed, or built upon in any way. The terms on which this article has
innovative technology. Eng Econ. 2017;62(2):180–196. doi: 10. been published allow the posting of the Accepted Manuscript in a
1080/0013791X.2017.1294718. repository by the author(s) or with their consent.