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GenAI is already transforming the healthcare industry
Generative AI (genAI) is quickly transforming healthcare, according to a survey by consultancy McKinsey & Co. released today. The survey of 150 healthcare industry organizations found 85% are exploring or had already adopted genAI.
The organizations, which included insurers, health systems, and health services and technology (HST) groups, found that 40% or more from each group had already implemented genAI. Not surprisingly, HST organizations have the highest rate of genAI implementations at 57%. The least? Healthcare providers with a 40% implementation rate.
GenAI has already been proven in studies using historical patient data to be more accurate at diagnosing illnesses and other conditions. For example, OpenAI’s GPT-4 Turbo model not only outperformed physicians, but also outdid every single AI system developed for healthcare over the last 50 years, according to the lead doctor in one study at Beth Israel Medical Center in Boston. And it did so without any medical training.
Healthcare stakeholders are also using genAI to explore ways to create value and reduce costs, despite ongoing challenges such as evolving regulations and capability gaps.
Of the respondents that have already implemented genAI tools, 64% reported that they anticipated or had already quantified positive ROI, “suggesting high expectations for genAI technology,” McKinsey said.
Many organizations are also forming partnerships to access external talent while customizing AI solutions, and partnerships with hyperscalers could ensure successful implementations, McKinsey said.
“According to our survey, risk concerns was the top cited barrier to implementing Gen AI among respondents. Within risk concerns, survey respondents ranked security, inaccuracies and biases, and regulatory compliance as their top concerns,” said Drew Ungerman, a senior partner with McKinsey.
Healthcare is still slightly behind most other industries when it comes to Gen AI adoption, though the gap could be closing, Ungerman continued.
In another recent McKinsey survey, 63% of healthcare respondents stated their organizations were using AI in at least one function, compared to 68% of respondents in consumer goods and retail. Compared to financial services organizations, however, the difference was far less — only 2% higher use in financial services, he said.
Early genAI use cases have focused on improving administrative efficiency, dealing with IT gaps, and boosting clinical productivity. As capabilities grow, other uses could expand to patient engagement and quality-of-care improvements. Leaders recognize the importance of AI risk management and governance for safe implementation.
Organizations that have developed their genAI capabilities are seeing success with large-scale implementations, b ut future success will depend on a value-driven strategy, strong execution, and effective management, McKinsey said.
Most respondents reported their organizations had implemented or were developing genAI use cases, with more in the implementation phase than the proof-of-concept stage. However, 15% had not started proof-of-concept work.
Other prominent findings include:
- Nearly half (47%) of payers, health systems and HST groups have already rolled out genAI tools.
- About three-quarters of healthcare leaders believe the technology could help most with administrative efficiencies and clinical productivity — and more than half (55%) believe it has value for patient/member engagement and IT/infrastructure.
- Sixty-one percent of payers and providers expect to collaborate with partners on building out their genAI capabilities; 20% said they’d build their own; 19% said they’d buy a program.
GenAI may create “tremendous value” in areas that could fundamentally improve patient experience and streamline operations to generate cost savings, the report said.
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Trump launches new office to oversee CHIPS Act, boost semiconductor investments
US President Donald J. Trump signed an executive order this week creating the US Investment Accelerator office to oversee the CHIPS and Science Act, a Biden-era program to re-shore semiconductor production.
According to a White House statement, the new entity’s mission will be to speed up corporate investments domestically by reducing government regulations and coordinating with federal agencies.
Trump has criticized the bipartisan CHIPS Act, signed by President Joseph R. Biden Jr. in 2022, and said he wants to negotiate better deals. The office will also work to make it easier for companies to invest in US semiconductor manufacturing.
In a speech before Congress last month, Trump called the CHIPS Act “horrible” and said he wanted to defund it: “We don’t have to give them money; we just want to protect our businesses and our people, and they will come because they won’t have to pay tariffs if they build in America.”
The White House did not immediately respond to a request for comment regarding the status of CHIPS Act funding.
In February, reports emerged that the National Institute of Standards and Technology (NIST) planned to cut 497 jobs as part of Trump’s federal government downsizing. NIST, a non-regulatory agency within the US Department of Commerce (DoC), helps drive innovation and industrial competitiveness and oversees the CHIPS for America program. The personnel cuts were widely criticized as damaging to the rollout of the CHIPS Act.
In a letter today, nearly two-dozen lawmakers bemoaned the firings of 70 probationary employees at NIST and the ongoing reduction-in-force efforts by the Trump Administration that could target additional probationary scientists, postdoctoral researchers, and other staff authorized by the CHIPS Act.
The letter from 22 members of the US House of Representatives to US Secretary of Commerce Howard Lutnick said the potential changes come on the heels of the deferred resignation program, which already is affecting the capacity of the NIST to fulfill its statutory obligations. “Removing national and international leaders from the nonpartisan and professional civil service at NIST would hamper the development of critical standards, threaten industrial and consumer safety, and weaken American leadership around the world,” the letter said.
In 2021, the years-long decline in domestic chip production was exposed by a worldwide supply-chain crisis that led to calls for re-shoring manufacturing to the US. After more than a year of work from the Biden Administration to respond to acute semiconductor shortages, Congress in August 2022 passed the measure.
The Commerce Department, which is administering the CHIPS Act, spent months negotiating with semiconductor designers and fabricators to gain commitments from them and to achieve specific milestones in their projects before getting government payouts.
With the CHIPS Act spurring them on, semiconductor makers including Intel, Samsung, Micron, TSMC, and Texas Instruments unveiled plans for a number of new plants on US soil. (Qualcomm, in partnership with GlobalFoundries, also said it would invest $4.2 billion to double chip production in its Malta, NY facility.)
The Department of Commerce has been divvying up $52 billion in the hopes of spurring on-shore chip manufacturing. While about $32 billion of CHIPS Act money has been allocated, the funds have not yet been dispersed. It was not immediately clear whether Trump’s action this week could delay disbursement of the monies.
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