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Healthcare, Already a Big AI Adopter, To Boost Investments in 2024: Report
The healthcare sector will be a major beneficiary of higher spending in AI and machine learning technologies next year, according to financial firm Morgan Stanley.
In a recent research note, analysts from the firm noted that the vast majority of healthcare organizations (94 percent) already use some form of AI and machine learning, but their use "has yet to reach its full potential as a driver of new business opportunities and efficiencies."
That could change in 2024, when healthcare organizations are projected to earmark 10.5 percent of their total budgets to AI and machine learning technologies, up from just 5.7 percent in 2022.
That spending increase will most benefit research and development in the areas of diagnostics, healthcare service delivery and technology, medical devices, and biopharma -- with diagnostics especially being "a top area for AI/ML investment."
"Tools that help parse minute biological components and diagnose diseases, conditions and injuries remain at the forefront of applying AI/ML to drive better care and create new business opportunities," the analysts wrote.
AI-powered advances in diagnostics tools, they explained, can help medical providers quickly analyze reams of patient data -- both structured and, as is often the case in healthcare, unstructured -- to spot causes of disease, early warning signs and "subtle correlations that can't be parsed through traditional methods of analysis." The result, theoretically, would be more timely, proactive and personalized treatment for patients.
"AI/ML approaches will become increasingly necessary and highly desirable for companies looking to leverage these complex data sets to build competitive advantage, develop new products and ultimately shift health care toward personalized medicine and improved patient care," according to the analysts. "[C]ompanies with products and services focused on later-stage, more invasive procedures may experience reduced demand as AI tools identify and treat illness earlier."
About the other three areas that would benefit from increased AI investment in healthcare, Morgan Stanley wrote:
Healthcare Services: "AI/ML offers an opportunity to drive change and efficiency where health care services and technology meet. The tools' predictive capabilities make it easier for doctors and other health care providers to detect and diagnose disease more quickly. This gives them more time with patients, which could improve patients' satisfaction as well as their health outcomes."
Medical Devices: "AI could analyze patients' vital signs and results from preventative screenings to detect, recommend treatments, and continuously monitor glucose levels, or cardiac and neurological health. ... Medical devices that come into play in the earlier stages of patient interactions, such as continuous glucose monitoring, cardiac monitoring, and neuromonitoring; and diagnostics and robotics are key markets for leveraging AI, analysts believe."
Biopharma: "The biopharma industry is moving to unlock the potential of AI/ML across a range of areas, including drug discovery, clinical development, manufacturing and physician-patient engagement. ... AI/ML could help to shorten development timelines for drugs, reduce spending on R&D, and increase patients' probability of success."