Healthcare Artificial Intelligence Projected to Surpass $34 Billion by 2025

Healthcare organizations are increasingly incorporating artificial intelligence (AI) technology into areas such as medical imaging, and Tractica, a Boulder, Colo.-based market intelligence firm, projects that the global market for AI solutions in the healthcare sector will increase from $1 billion in 2017 to more than $34 billion by 2025.

The healthcare industry has undergone a significant evolution over the past several years, moving from an antiquated, paper-based records system to a more efficient and integrated system that often incorporates physical, payer, and patient-generated health data. According to a Tractica report, AI is being increasingly used to improve the depth of data analytics capabilities, in addition to automating key healthcare-related tasks.

Tractica forecasts that global software revenue from 22 key healthcare AI use cases will grow from $511.7 million in 2018 to $8.6 billion annually by 2025. Including the hardware and services sales that will be driven by these software implementations, the market intelligence firm anticipates that the total revenue opportunity for the healthcare AI market will surpass $34 billion by 2025.

Tractica projects that the top three use cases for healthcare AI will be medical image analysis, healthcare VDAs, and computational drug discovery and drug effectiveness, each of which will reach 2025 revenue of more than $1.1 billion by 2025, according to the report.

The other seven use cases among the top 10 use cases for healthcare AI include medical treatment recommendation; patient data processing; medical diagnosis assistance and converting paperwork into digital data. Other potential use cases include automated report generation; hospital patient management system and biomarker discovery.

“It is no secret that healthcare is expensive,” Tractica principal analyst Keith Kirkpatrick said in a statement. “Cost reduction is a major driver of many healthcare initiatives and incorporating AI technology is no exception. AI applications are designed to address specific, real-world use cases that make the diagnosis, monitoring, and treatment of patients more efficient, accurate, and available to populations around the world.”

The AI market for healthcare applications is certainly bright, but not without challenges, according to the report. “Unlike the consumer market for AI, technology used in the delivery of healthcare will impact real lives, and significant care must be taken to ensure that any product used will show real benefits without exposing patients to unnecessary medical risk,” the report authors wrote, noting that data privacy and cybersecurity concerns, not to mention current and future regulation, may be speed bumps that hinder the fast adoption of AI technologies.

The report also notes that a key issue impacting the use of AI is the reticence of some providers to accept AI.” Physicians and other medical professionals spend years in training learning how to identify medical issues, and many are not comfortable with the idea that an algorithm, irrespective of how many cases or data points it analyzes, can incorporate both the experience and human judgement that is required to make important medical decisions. Furthermore, a variety of trials indicate that AI-based systems do not significantly outperform humans, particularly with respect to providing medical analysis and recommendations,” the report states.

Tractica’s report, “Artificial Intelligence for Healthcare Applications”, focuses on 22 healthcare-focused use cases for artificial intelligence, including an assessment of the market opportunity for AI software, hardware, and services in the healthcare market. The market analysis and forecasts within the study cover industry dynamics in five major world regions and are based on an in-depth assessment of major companies as well as startup-level activity in the healthcare AI space.

The report also contends that AI, which has made its way into many other fields, is especially pertinent to the growth of the healthcare market. Faced with extreme cost issues, as well as a general demand for improved care, AI may be the tool that helps align the interests of payers, physicians, and patients, as it likely to provide more transparency and accountability to the healthcare system.