Overarching thesis: AI and technology will not fix healthcare until leaders redesign the work it touches and align incentives so savings come from substitution, not addition. The path is to target routine administrative volume, remove low value tasks, redeploy people to patient-facing or other productive roles in other industries, and return verified savings to bedside capacity and purchasers.
Here’s an interesting thought experiment: If we mapped our administrative work from intake to payment, which tasks persist only because our processes, individual behaviors, and incentives have not kept up with the tools now available?
The current trajectory of our healthcare system requires the implementation of new technology to sustain current trends in utilization, chronic disease, and labor supply, ultimately to enhance productivity. But to date, we haven’t seen those productivity gains.
Instead, the administrative state has steadily grown as advances in technology and therapeutics gets washed away by local market politics, general industry conservatism, and job displacement fear at hospitals and health systems across the country.
A line I hear often in healthcare is…ha, another new technology. Who’s going to pay for that?
That sentiment is toxic and anti-progress. The truth is, those people are afraid to innovate; afraid to change. And the feeling makes sense in an industry marked conservatism (due to lives being at stake), heavy regulatory burden, and political pressure. To take actual chances means putting organizational goals at risk or going against the fray of a political leaning. And so for those reasons, healthcare stakeholders keep buying speed and are expectedly getting drag. New software lands, a new committee forms, and the headcount stays the same. There’s no sense of urgency. The charts look up and to the right, the invoices look prettier, and the jobs & menial work does not leave the building. What’s the definition of insanity again? It’s NOT doing the same thing over and over and expecting different results. No - insanity is doing the same thing over and over, knowing the result is going to be the same, and then doing it anyway.
Today, we’re in a period of insanity. We are not seeing transformation. Rather, we’re seeing a tax on innovation in the form of job sustenance and administrative bloat. The industry’s last gasp to protect and preserve an archaic system and the old guard that clings to it at the top.
The problem is not the existence of the tools. The problem is the way healthcare adopts them. Leaders layer technology on top of legacy process, promise no staff will be harmed in the making of this movie, and then we all wonder why the cost curve never gets bent. Financial incentives stay the same and headcount doesn’t shrink. Across many systems, new software increased licenses and meetings but left unit cost and cycle time unchanged. That is not a technology failure. It is a sequencing failure: tools were added before roles and incentives were redesigned.
With solutions like ambient scribing, revenue cycle and documentation, or analytics and supply chain, folks in these roles are either afraid for their livelihoods in the first place, or afraid to use AI-enabled tools or analytics for fear their role will be displaced. So what actually ends up happening is…suboptimal deployment and adoption of promising technology, and leaders think these solutions aren’t making an impact when all along it’s a human-centric, psychological problem rooted in survivalism. Status quo bias, loss aversion, career risk.
Take that supply chain or analytics example, for instance. With payor price transparency data, teams can compare reimbursement rates by code and modifier and walk into negotiation or strategy talks with hard evidence and rate data in their markets. On the procurement side, supply chain personnel have the ability to work with firms who can give them real-time cost information for needed supplies or purchased services for their hospital or provider organization. But the problem is that these dashboards or analytics files sit next to the old playbook, and the old way of doing things, where relationships and incumbent strategies carry the day, and behavior change is required to materially impact results given new processes.
Those involved see the bright shiny object at their disposal and the capabilities of this new tech in their day to day roles. They see their old workflows, pointless committee meetings, burdensome compliance tasks that can be automated away, and they see their lives flashing before their eyes - the drastically fewer calls needed, or word documents to keep track of. And so they panic…and shut down.
If you see evidence of this phenomenon at your organization, put incentives in place to encourage innovation and adoption of new tools. But I would also welcome broader thoughts on how to solve for this paradox. Do we just wait it out? Will it eventually self-correct over time? I hope so.
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