How AI Could Transform Health Insurance

Artificial intelligence (AI) could transform the health system in the US, according to a report by the Government Accountability Office (GAO). AI-powered solutions could improve the customer experience with better patient care, reduce the burden on providers, and increase efficiency in health care facilities. AI tools have already shown promise in clinical and administrative settings. 

With the widespread use of health apps and personal health devices, it's now possible to collect detailed, continuous health data on a large scale. That data can be used to support the health of individuals and the population.

However, major legal and ethical challenges need to be ironed out for AI to be integrated into health care. 

One section of the GAO report looked at AI technology and the health insurance industry. Having health plans pay for AI tools is one step toward developing AI applications inside and outside of the hospital or clinic. There is a new billing code for an AI tool that involves detecting diabetic retinopathy. Still, it’s unclear how much this new code will pave the way for health insurance companies to pay for AI services in a fee-for-service payment structure. 

Most health plans cover telemedicine. But they don't usually reimburse providers for the actual telemedicine tools. For example, using remote sensing tools could be costly in personnel and computational time. 

The use of AI tools would not necessarily be paid for, as they would be seen as just part of conducting a medical visit. At the same time, diagnostic procedures like radiology have their own payment rates. 

A health insurance company could adjust capitation and value-based payments to reward using AI tools for better outcomes. Health insurance companies could increase capitation payments (per-patient, per-month payments) for providers who use high-quality AI tools. In many managed-care environments, health insurance companies have increasingly adopted capitation payments for routine health care delivery, but they have not yet made adjustments for the use of AI tools. 

Value-based payments may be an incentive to use AI tools if they improve clinical outcomes. So far, value-based payments have been limited to pilot programs or novel health care organization arrangements.