Earlier this week, Dr. Toby Cosgrove, a veteran, a Cardiothoracic surgeon, and the former chief executive of the Cleveland Clinic, sat down with Fox Business to discuss the future of AI and healthcare.
He made some pretty interesting claims that you as a healthcare business owner should definitely be aware of.
So let’s break them down:
1. AI will save over $200 billion in annual healthcare spending
Dr. Cosgrove cited Goldman Sachs’ prediction that AI will end up saving the U.S. over $200 billion annually in healthcare spending.
Part of the reason is because 60% of a hospital’s overhead expenses go towards human labor.
But AI has the potential to significantly drive down costs by reducing the number of people needed to staff hospitals.
Whether it’s through non-clinical workflow management, like coordinating tests and labs, or helping physicians with documentation through ambient listening technology.
And let’s not forget that the US has an aging population, which means cost savings are amplified by the increasing number of people who need to receive medical care in a hospital.
So why should you as a business owner care?
Well, if you haven’t adopted AI in some way already, you’ll soon be outcompeted by others who are embracing change.
It’s the direction the world is heading in, and in order to stay relevant we all need to begin seriously using it within our businesses and the way we approach work.
That means prioritizing long-term partnerships, solutions that scale with your business, and applications that integrate across the entire enterprise.
The last thing you want is a fragmented set of solutions that fall apart as your business grows and your needs change.
2. Consolidation will continue due to security reasons
Dr. Cosgrove cited the fact that 200 American hospitals were hacked in the past year alone.
Cybersecurity has always been a major concern in healthcare given the sensitivity of patients’ information.
And now with AI assisting in clinical decision-making and diagnostics, it will continue to have access to more and more sensitive data.
Hence, making cybersecurity that much more important as we head into the future.
And unfortunately, smaller hospitals, groups, and of course solo clinics, often lack the resources needed for adequate cyber safety.
But when groups consolidate, they can pool the resources necessary to ensure a safe infrastructure to store and manage data.
That’s why you see CISO’s for large health systems, but you’ll have a hard time finding one for your local Dermatology group.
Again, why should you as a business owner care?
Well, depending on your goals, you might want to consider merging with another group.
Most business owners go into business partially with the goal of having autonomy. But, if you’re willing to let go of some, or you’re just an investor, then consolidation may be the move.
If you don’t want to do that, then going in the opposite direction, like a boutique clinic that primarily services premium clients, could be something to consider.
Either way, this trend is unlikely to stop any time soon, so there will probably come a point where you’ll be forced to choose between the two routes.
Who knows? Maybe you’ll figure out a completely different direction. If you do, awesome! 🙂
But assuming you don’t, it’s probably better to get ahead on this so that you can position your business accordingly.
And as a side note, if you’re considering the consolidation route by joining a larger group, you can take advantage of your smaller size to invest in AI infrastructure that tech-enables your business.
The smaller you are the cheaper and easier it is to do.
Virtually all clinics are service-based, which are often less valuable than product-based businesses.
So if there’s a clear ROI, consider developing custom applications to increase the valuation of your business (which will get you a better price upon merging).
3. Dermatology will see changes sooner than other specialities
Dermatology is one of the most “visual” specialities in medicine, arguably only second to Radiology.
During his interview, Dr. Cosgrove explicitly stated that AI can already make better diagnoses than many physicians, and then specifically talked about how much of an impact it’s going to have on Dermatology.
With advancements in computer-vision, soon you’ll be able to take a picture of a spot on your forearm and an AI model will determine whether it’s something to worry about (eg. Melanoma), or if it’s just a mole.
And with the unprecedented rate that AI technologies are progressing, this is going to happen sooner than you think.
So for the 3rd time, why should you as a business owner care?
Well, if you’re an investor you’ve probably dabbled in aesthetic practices, or are planning to.
And it’s seen all the time with providers in private practice – everyone tries to get some slice of the “aesthetics pie” because it’s so lucrative.
Whether it’s the Ophthalmologist who offers cosmetic eye enhancements or the Dentist who offers veneers – the business prospect of being able to go cash-based for high-profile clients who want aesthetic enhancements is pretty rewarding.
That being said, if you are a Dermatologist, own a medspa, or offer any kind of skin-related enhancements, it may be worth establishing a partnership with companies innovating in this space.
You could approach such a company and offer your expertise to help them improve the accuracy of their technology, ideally in-exchange for equity.
Furthermore, you can leverage their distribution by having them send their users to your practice for the actual treatment if it’s a procedure, or for a telemedicine consult to prescribe the appropriate medication.
You could even “flex” the fact that you’re advising such companies to bolster your reputation and authority, which will likely earn you more business as well.
Overall, it’s probably a good bet for long-term financial diversification, and for helping you increase revenue short-term.
TL;DR
- AI is the future, so if you’re not on the AI train yet you probably want to catch a ride sooner rather than later!
- Consolidation will likely continue, especially with the need for more resources to protect data with the adoption of AI.
- Dermatology will be among the first specialities to be impacted by AI, but you can get ahead of the curve by helping companies in this space innovate.
That’s all for this week.
See you next Saturday 🙂
Whenever you’re ready, here’s how we can help you:
- Newsletters: Our newsletters provide tactical information that innovative entrepreneurs, investors, and other forward-thinking people can use to scale their impact.
- Community: Coming soon! You’ll automatically be added to the waitlist by joining any of our newsletters.
