IT spending continues to increase, health care AI adoption growing, reports say

The health care provider world is increasing its investment in information technology (IT) and although AI adoption is still at an early stage, more health systems and providers are planning for some form of AI use in the future.

These findings are part of the “2023 Healthcare Provider IT Report”, from Bain & Company and KLAS Research, the new report outlines increases in spending on IT, as labor shortages and cost pressures make new technology solutions more attractive to health care providers such as clinics, hospitals, and health systems.

The report, which surveyed more than 200 US health care executives, found that almost 80% of respondents say they increased spending materially on IT and software in the past year. In addition, nearly 75% said they were expecting growth in software and IT spending to continue over the next year”

“As AI moves out from the silos of the IT department and into the C-suite agenda, providers are accelerating their investments in IT and tech solutions and looking to streamline their vendor lists,” said Eric Berger, a partner in Bain’s Healthcare & Life Sciences practice. “AI has the power to transform many processes and workflows. However, this shift hinges on the technology’s ability to demonstrate productivity gains in real-world applications without increasing clinical risk. The best vendors will offer AI and other technologies that create clear returns to providers and help mitigate structural challenges facing the US health care industry.”

A top priority for more than half of execs

The survey showed that health care organizations are spending heavily on IT. According to the report, 56% of respondents cited software and technology as one of their top three strategic priorities, compared with 34% in 2022. The responses also showed that around 75% of respondents expected additional growth in software and technology spending over the next 12 months.

Provider groups are also showing caution: with the current financial challenges and shrinking margins in the industry, the report noted that executives favored investments that show clear, near-term returns on investment (ROI)—such as revenue management and workflow optimization software.

In addition, the report found that hospitals and physician groups are catching up on other areas of technology, including electronic health records (EHR) and IT infrastructure.

Still some hesitancy around AI

Generative AI is widely seen as a powerful tool to bring together data and knowledge, allowing automation of tasks and more efficient systems. At the moment, health care organizations are just beginning to use the technology: the Bain study found that only 6% of respondents said they have a generative AI strategy in place. However, 50% of respondents said they were actively developing a strategy or planning to do so in the near-term, and approximately 70% of health system respondents said they believe AI will have a greater impact on their organization this year than last.

“While attitudes toward AI are mixed, providers with more advanced AI strategies, especially academic medical centers, have slightly more positive sentiments overall,” the report said. “The potential for greater efficiency, improved patient outcomes, and cost savings underlies that enthusiasm. Concerns around security, privacy, cost, and ethics, as well as ongoing issues around accuracy and reliability, are cited by providers that are less positive.”

New AI approaches are being tested

Even though the provider world is cautious about AI, health systems efforts to incorporate more AI technology into health care are well underway: one of the nation’s largest health systems, HCA Healthcare, recently announced a collaboration with Google Cloud that is bringing AI to emergency rooms (ERs) across the country.

As part of a pilot program, approximately 75 ER physicians in four HCA hospitals have begun using AI technology to document key medical information from conversations during patient visits.

Read more: Health care technology that combines clinical expertise with real-time data

In addition, HCA and Google are working on a new system using Google Cloud’s large language models (LLMs) to help automatically generate handoff reports between nurses at shift changes. “The system is designed to promote continuity, consistency, patient safety, and clinical quality – while saving nurses significant time and maintaining human oversight,” a statement from HCA said. “After seeing the prototype, nurses were pleased with the speed, accuracy, and relevance of the draft reports the tool is generating and expressed high interest in putting the tool into practice.”