In the past three years, few sectors have undergone a more rapid transformation than health care IT.
When the pandemic hit, the technology backbone supporting health systems strained under unprecedented demands. Health care IT companies were pushed into a new frontier — needing to facilitate a vastly different operating environment for their customers, dealing with surges in claims, billing, staffing, video appointments, vaccine scheduling and many more dynamics.
Health tech companies are now in a unique position to leverage these pandemic-fueled innovation gains to solve the industry’s most intractable problems. Amid shrinking profits, providers and health systems are grappling with staff burnout and a worsening talent crunch.
Payers are contending with an ever-more-complex reimbursement landscape. Employers and consumers are facing rapidly escalating cost burdens. Health care is at a breaking point, but technology — in many cases enriched by AI — may finally be robust enough to provide workable solutions to what’s ailing the sector.
Here are four predictions for where the health care IT industry is headed this year.
AI will take some of the pain out of RCM
RCM, or revenue cycle management, is how providers get paid — and in 2024 we expect to see big improvements in the RCM software market.
The RCM cycle begins when a patient makes an appointment and ends when the provider has collected full payment. Seems relatively simple, but the reality is far more complex with many layers of administrative and clinical tasks, medical coding, claims processing, billing, network authorization, reimbursement rules, payment collection and accounting — across many different stakeholders and different care settings.
This means providers don’t always get paid, or they only collect a portion of their invoices.
With AI, we are already seeing massive improvements in RCM systems, especially around coding and claims processing. With 航星 eyeing the public markets, and fast-growing companies like 英寻 deploying AI to radically change facets of RCM (in its case, coding), we expect to see several RCM startups raise significant funds to scale next year.
Health tech will blur the line between employers and insurers
In the United States, more than two-thirds of people receive health insurance through their employers, and 80% of large employers are self-insured. Simply put, this means employers are risk-bearing entities, directly shouldering the cost of health care expenditures.
This year, companies that empower employers to manage the entire end-to-end insurance process — and thus manage the risks — will gain traction. We could even see platforms that enable employers to manage their own provider networks.
These tools will allow employers to keep surging insurance costs in check without sacrificing the benefits employees love.
Value-based payments will get operationalized
For several years, health insurers have been shifting toward value-based payments. Providers are receiving higher payouts for positive patient outcomes instead of only collecting fee-for-service payments. This incentivizes health groups and practices to provide excellent care rather than simply profiting from many return visits and procedures that might not all be necessary.
In 2024, we will see startups leverage AI to provide both payers and providers with tools to set and measure patient objectives, and to be fairly compensated for positive outcomes.
AI can analyze millions of patient records, diagnoses, treatment plans and outcomes — comparing these data points against procedure costs — to aid in the payment coordination between payers and providers. And startups could also emerge to manage the value-based revenue cycle, paying out agreed-upon sums when patient milestones are met.
AI-assisted clinical decisioning will become the norm
Overworked doctors and nurses were early-adopters of AI, using it for everything from taking notes to image-reading to diagnosis recommendations. In 2024, we will see far more AI-assisted applications enter the health care realm.
The next wave of AI adoption will move into clinical decision-making, such as enhancing remote patient-monitoring.
AI applications will emerge that meet stringent privacy requirements. In health care, more than any other sector, today’s black-box AI will instead make way for transparent and auditable systems.
In 2024, health tech companies have the potential to accelerate innovation gains born during the pandemic to enact lasting change. With AI at their backs, health care IT companies may finally be able to fix some of the fragmentation and frustration so prevalent in the health care industry.
亚历克斯·梅森 是合伙人 FTV资本, where he leads investments in health care and enterprise technology. His current investments and board seats include 6 Degrees Health, Agiloft, 云工厂 和 亮度健康. Prior to joining FTV, Mason was a managing director at 卡里克资本合伙人.
贾斯汀·莱文 is a senior associate at FTV with investment responsibilities in health care and enterprise technology and services. Prior to joining FTV, Levine was an investment banking analyst at 古根海姆合伙人 in the technology, media and telecommunications group.
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