Artificial intelligence could solve the healthcare sector’s $500 billion administrative problem

Artificial intelligence (AI), if used correctly and responsibly, has the potential to transform industries.

After all, wherever routine and repetitive administrative tasks exist, there is the opportunity to apply algorithmic rigor to unlock new efficiencies.

AND In the complex world of healthcare, where hospital systems face the constant challenge of maintaining revenue integrity while ensuring the highest quality of patient care, artificial intelligence can help streamline and overcome long-term bottlenecks – especially in hospital billing processes, where the increasing complexity of medical services and corresponding administrative tasks require innovative solutions.

“Ultimately, the hospital is responsible for generating the bill for the care provided… and in health care, as you might expect, this is an extremely complex process.” Dr. Michael Gaoco-founder and CEO of the company SmarterDxhe told PYMNTS for “AI effect” Series.

This complexity translates into significant administrative costs, estimated at $500 billion annually in the United States alone, Gao said.

This is because traditional The billing process in hospital systems involves countless medical personnel, including nurses and medical coders whose sole job is to verify and convert clinical notes into billing codes.

But by using artificial intelligence, hospitals can “make sure that their bills are accurate, that they have everything they should have, and that they don’t have anything they shouldn’t have,” Gao said, noting that A.I. they are capable of collect clinical care data and compare it to financial data to ensure that hospitals “achieve 100% accuracy on 100% of charts.”

Using artificial intelligence to transform hospitals

The hospital billing process is extremely complicated and expensive and takes years.

The potential of artificial intelligence in healthcare administration goes beyond mere efficiency. The technology’s ability to process and analyze massive amounts of data can detect discrepancies that might otherwise go unnoticed, ensuring hospitals are properly compensated for the services they provide.

This, in turn, can significantly improve the financial condition of hospitals that operate on small margins. Gao stated that the average hospital’s operating margin is 1.6%, which means that even minor billing inaccuracies can lead to significant financial burdens and prevent hospitals from reinvesting in their operations.

Gao’s own experiences at New York Presbyterian highlighted the inefficiencies of current hospital billing processes, while emphasizing how much time the doctor spent dealing with administrative and financial issues.

“Everyone knows that when they go to the doctor, there’s a pretty good chance the doctor is spending the entire time staring at a computer screen rather than talking to the patient. And they find that they often do this by taking notes not only about the care they provide and how they feel about it, but also by writing down administrative details that are important to this purpose. the financial aspect later,” he said, noting that a single patient can generate up to 30,000 data points.

“We realized that we could take away a lot of the work that these people were doing, which was looking at data from charts, medications, labs, orders, vital signs, So etc., and create a tool that would help hospital staff do this work more accurately and faster,” Gao added.

Management at the clinical level

However, despite the transformative potential of artificial intelligence, its applications in healthcare must be approached responsibly and carefully.

As Gao explained, current AI models are non-deterministic, which means their results are not always predictable. This unpredictability requires human supervision, especially in patient care. SmarterDx has worked to mitigate this risk by focusing its AI on administrative tasks where errors can be corrected and by ensuring that supervisors review the AI-generated recommendations.

Looking ahead, Gao envisions a future in which physicians will be freed from administrative burdens, allowing them to focus on patient care.

“You want physicians to do what they were called to do — provide care — and let the administrative aspects be handled by technology,” he said. This paradigm shift not only improves the quality of care, but also improves job satisfaction for healthcare providers.

AND last $50 million funding round enables SmarterDx to scale its business and meet growing demand for its solutions by facilitating implementation their clinical AI tools in more healthcare systems, while enabling further progress in the field their technology.

As artificial intelligence continues to evolve, the healthcare industry must remain agile and ready to embrace new technologies. As Gao emphasized, rapid advances in artificial intelligence can bring improvements in efficiency and accuracy, which will ultimately lead to better patient outcomes and more financially sustainable healthcare institutions.

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