Downward angle icon Downward angle icon. While startups are looking to bring AI to the healthcare industry, many health systems lack clear policies in place to govern the technology. Getty Images Investors and startups are eager to bring AI to the healthcare industry. But despite the booming innovation of AI in healthcare, the sector is completely unregulated. A new survey finds that the majority of healthcare systems have no policies in place to govern the use of AI.
While healthcare startups are hard at work developing artificial intelligence products to sell to hospitals, a new report finds that many health systems still lack policies to support the technology.
In a survey of 34 U.S. health system leaders, only 16% said they have a system-wide policy on AI use and data access, and while some leaders said they have broader guidelines that apply to AI, the majority (65%) said they have no policy regarding AI at all.
The survey, conducted in October and November by UPMC’s Center for Connected Medicine and KLAS Research among health systems of all sizes, highlights the obstacles healthcare faces as a growing number of companies develop and sell AI-enabled software.
Healthcare has historically lagged behind other sectors in adopting new technology, though events like the COVID-19 pandemic have sometimes forced the industry to adapt. But investors and physicians alike are excited about AI’s potential to make healthcare delivery more efficient, reduce medical worker burnout and improve patient outcomes.
Still, many healthcare leaders are not jumping on the AI bandwagon yet. Some health system leaders say they haven’t developed policies because the industry is so early in its adoption. Others say they’re waiting for federal regulations on AI before issuing their own guidelines.
The Food and Drug Administration has developed AI guidelines for medical device makers, but it doesn’t offer a broader framework for deploying or evaluating AI in healthcare, and it’s unlikely to do so anytime soon: FDA Commissioner Robert Califf said in January that the agency doesn’t have the resources to monitor the ever-changing technology.
The future outlook for healthcare AI startups
While public authorities are exploring how to regulate AI in healthcare, many startups are hoping to use the technology to solve some of the industry’s biggest problems, and venture capitalists are bullish on the market.
As labor shortages and rising burnout drive healthcare workers out of the industry, many hospitals are feeling pressure on profit margins. Medical transcription startups that use AI to record patient-doctor conversations and leave notes in patients’ electronic medical records have garnered a lot of attention from investors and health systems. These startups have the potential to speed up administrative tasks and reduce burnout.
Abridge, which sells AI-powered software that makes clinical documentation easier and has partnerships with the University of Pittsburgh Medical Center and the University of Kansas Health Center, is in talks to raise at least $50 million in venture funding, Business Insider reported in February. The startup is competing with medical transcription startups such as Ambience Healthcare and Nabla, which have already raised funding this year, and is looking to take market share from Microsoft’s Nuance.
Meanwhile, Nuance is a major player in the field, claiming to provide AI-powered software to 77% of US hospitals.
Many health system leaders surveyed by KLAS are excited about AI software for clinical documentation. A major limiting factor appears to be the depth of integration between startups and electronic health record systems. Microsoft has an advantage in this area thanks to its longstanding collaboration with Epic. Seventy percent of health system leaders surveyed by KLAS said their organizations plan to adopt AI software integrated with their EHRs.
Industry watchers say AI in health care is reaching a critical juncture that will reveal which startups will succeed and which will fail.“All the big health systems are piloting one or two of these, and the next 18 months or so will be a time to sift through these companies,” said Brian Roberts, a partner at venture capital firm Venrock.