Thinking about the Impact of Artificial Intelligence on U.S. Health Care Costs and Spending Growth

This article critically examines the potential impacts of artificial intelligence (AI) on prices, total spending, and the rate of spending growth in the areas of prescription drug innovation and expanded patient access to care - including developments in remote patient monitoring, chronic care management, direct-to-consumer health care, clinical decision support, and nonclinical administrative labor. Based on observed industry practices, economics, and public policy, the article presents a thought exercise on the most likely effects for patients, providers, payers, and the broader health care system. The authors argue that under the still-dominant fee-for-service payment model, as well as the highly consolidated hospital and insurance markets, AI is more likely to increase total costs and spending growth in the short to medium term rather than slow them, even as it delivers substantial access and clinical quality improvements for patients. The cost-bending potential of AI varies distinctly by fee-for-service versus value-based payment. Regulators need to introduce policy and reimbursement levers for AI to slow cost growth. The authors conclude that, without significant changes in the health care system's financial incentives and market structures, AI will not slow cost growth.