The Potential Impact of Artificial Intelligence on Healthcare Spending

35 Pages Posted: 23 Jan 2023 Last revised: 15 Jun 2023

See all articles by Nikhil Sahni

Nikhil Sahni

McKinsey & Company

George Stein

McKinsey & Company

Rodney Zemmel

McKinsey & Company

David M. Cutler

Harvard University

Date Written: January 2023

Abstract

The potential of artificial intelligence (AI) to simplify existing healthcare processes and create new, more efficient ones is a major topic of discussion in the industry. Yet healthcare lags other industries in AI adoption. In this paper, we estimate that wider adoption of AI could lead to savings of 5 to 10 percent in US healthcare spending—roughly $200 billion to $360 billion annually in 2019 dollars. These estimates are based on specific AI-enabled use cases that employ today’s technologies, are attainable within the next five years, and would not sacrifice quality or access. These opportunities could also lead to nonfinancial benefits such as improved healthcare quality, increased access, better patient experience, and greater clinician satisfaction. We further present case studies and discuss how to overcome the challenges to AI deployments. We conclude with a review of recent market trends that may shift the AI adoption trajectory toward a more rapid pace.

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Suggested Citation

Sahni, Nikhil and Stein, George and Zemmel, Rodney and Cutler, David M., The Potential Impact of Artificial Intelligence on Healthcare Spending (January 2023). NBER Working Paper No. w30857, Available at SSRN: https://ssrn.com/abstract=4334926

Nikhil Sahni (Contact Author)

McKinsey & Company ( email )

Piazza Duomo 31
Milan, 20122
Italy

George Stein

McKinsey & Company ( email )

Piazza Duomo 31
Milan, 20122
Italy

Rodney Zemmel

McKinsey & Company ( email )

Piazza Duomo 31
Milan, 20122
Italy

David M. Cutler

Harvard University

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