Artificial Intelligence in Healthcare: Insights from Investors
Investment firm AllianceBernstein has published a report delving into the financial implications of deploying artificial intelligence in today’s medical field.
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Technological advancements are prompting businesses to explore AI applications aimed at boosting patient interactions and healthcare system efficiency. As this sector frequently encounters unique challenges such as the coronavirus pandemic, a continuous push for innovation is imperative. Yet, for AI to be successfully integrated, there must also be a clear demonstration of its economic value, expressed in concrete figures.
Undeniably, automated processing of large data volumes can expedite drug development and inventory management of medical supplies, concurrently reducing organizational costs. While some investors harbor unwavering faith in this revolutionary technology, real-world outcomes often deviate from theoretical suppositions. Hence, Bernstein advises other firms to recalibrate their perspective on AI's future, focusing on four primary directions:
1. Research and Development: Utilizing AI can potentially enhance the success rates of clinical trials for drug testing. However, investors must realize that these alterations will span over the years. Moreover, the final results might not offer a competitive edge as similar enhancements will be implemented by other businesses. This level of optimization could allow competitors to dictate the pricing of the product due to their ability to cut down costs.
2. Clinical Trial Logistics: This is one of the most challenging areas for pharmaceutical companies due to the extensive time spent on locating testing centers and patients. In this scenario, AI could offer immediate results and significant changes by speeding up the search process, building relations with individuals, identifying inefficient centers, and proposing practical problem solutions.
3. Commercial Development: Contrary to the belief that developed drugs quickly enter the market, they undergo a lengthy approval journey involving regulators. These checks involve compliance verification and identification of suitable specialists for the new product. Some investors, mainly interested in scientific progress, often disregard this section. However, AI can bring significant economic benefits here by finding apt doctors, form completion, and determining the best promotional strategy.
4. Human Experience: While most people are indifferent to the application of AI in drug development, effective treatment is universally appreciated. Therefore, doctors should be employing AI to improve diagnosis accuracy and to find the best drug combinations. With heightened accuracy, patients might willingly agree to pay more, thereby enhancing the revenue for healthcare providers.
Additionally, Bernstein advises focusing investments solely on reputable companies with strategic planning for AI implementation, which can potentially lead to long-term profits. For example, Intuitive Surgical, an American corporation, creates robotic surgical systems and uses AI, based on millions of procedures, for training, anomaly detection, and complication prevention.
Such an approach can help entrepreneurs concentrate on business models with specific goals and avoid substantial losses if the new technology application fails. But the key for investors is to comprehend that many innovations have evolved over the years, experiencing both highs and lows. Hence, technological progress doesn't necessarily guarantee economic success.
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