Tag: mckinsey

McKinsey Does the Math on AI-Powered Care

Posted on by Jason Barry

The fine folks over at McKinsey are as bullish as ever on AI, with their latest report estimating that it can already handle over a fifth of U.S. outpatient care.

McKinsey sees AI reshaping healthcare across three vectors. This chart lays them out nicely.

  • Discursive care – reasoning and dialogue but not hands-on treatment (ex. intake, triage). 
  • Personalized pathways – AI trained on individual history to tailor treatment.
  • Autonomous interventions – self explanatory.

The report centers on the first vector. McKinsey analyzed 2024 commercial, Medicare, and Medicaid claims to flag what discursive AI could already own today:

  • 16-22% of all outpatient claims (13-19% of outpatient spending), ~3B claims/yr.
  • Most of that is evaluation visits with no or low-complexity care, 11-15% of claims.
  • The rest is interpretation of diagnostic and imaging results, 5-7%.

Big numbers. McKinsey expects discursive care to fuel the segments where demand goes unmet because of access barriers. Primary care is a prime example, with 92M people living in shortage areas and a 31 day average wait for an appointment.

  • AI stands to make PCPs more efficient decision-makers while improving access for patients, without needing to hire more docs to do it. It also means more diagnostics and specialist referrals.
  • That runs the risk of low-value care cascades, but McKinsey thinks AI would give care teams the confidence to break those cascades and manage more complex conditions in a primary care setting.

Mileage may vary. AI-powered discursive care threatens low-acuity visit volume for fee-for-service orgs, which would need follow-up care, referrals, and procedures to offset the revenue hit.

  • VBC orgs would fare better, using AI to improve their underlying care management economics by catching disease earlier, closing care gaps, and keeping patients engaged.

Who comes out ahead? Payers. With AI becoming the new front door to care, the top of the funnel is shifting from PCPs to whoever can feed the most patient data to the shiniest AI model.

  • McKinsey sees that as payors’ chance to go from financing care to orchestrating it, and says a payor-deployed AI clinician could even become the primary interface patients use to access care.
  • Definitely a hot take, and a potentially brutal hit for fax machine manufacturers. 

The Takeaway

It’s never too surprising when AI consultants say AI can do everything. Then again, that’s turning into a pretty popular opinion.

AI Moves From Proof-of-Concept to Proof-of-Return

Posted on by Jason Barry

Healthcare can cover a lot of ground when it’s moving at the speed of AI, and a new report from McKinsey found that the AI conversation is quickly shifting from proof-of-concept to proof-of-return.

The analysis was based on a survey of U.S. healthcare execs spanning payors, providers, and health services/technology groups.

AI adoption is skyrocketing at all of them. For the first time since McKinsey began tracking the metric in 2023, the orgs that have already implemented GenAI outnumbered those that haven’t.

  • Half of respondents have deployed at least one GenAI use case at their organization, up from just 25% two years ago. Here’s a nice graphic on AI adoption by org type.
  • McKinsey found that leadership teams are no longer questioning whether and where GenAI is relevant, they’re focusing on how it can be used responsibly at scale.

Agents are also building momentum. Despite being the new kid on the AI block, 19% of orgs reported that they’ve deployed agentic AI capabilities.

  • That’s not a huge percentage considering all the new agents we’ve been covering, but another 51% of orgs are actively pursuing agentic AI proofs-of-concept.

Administrative efficiency is the priority. This chart breaks down the areas that respondents see the most potential for GenAI and multiagent systems.

  • 87% ranked administrative efficiency as their leading GenAI use case.
  • 76% said it was also their top priority for multiagent systems.
  • Software infrastructure and engagement trailed as distant contenders for both categories.

Adoption varies by org type. Here’s the overview.

  • Providers are leaning in on clinical productivity (54% are using GenAI to help).
  • Payers are prioritizing administrative efficiency (34%).
  • Health services and tech firms are using GenAI as software infrastructure (52%).

Adoption barriers had more overlap. Across all org types, the chief concerns with GenAI were difficulty integrating with existing workflows, risk/liability, and inaccuracies/bias.

The other shared belief? Nobody implements AI for fun. Everyone expects an ROI.

The Takeaway

AI has arrived in a big way, and McKinsey’s report confirmed that ROI is now the name of the game in every corner of the industry.

McKinsey Predicts More Home Healthcare

Posted on by Jason Barry

In an effort to understand healthcare’s shift from the hospital to the home, McKinsey conducted a survey of physicians who serve the Medicare population, finding that $265B of care services could switch from traditional facilities to the home by 2025.

That figure represents a nearly fourfold increase in the amount of care being delivered in the home, which McKinsey thinks could be attainable without a reduction in quality or access. This chart provides an overview of how it might be possible.

McKinsey categorizes the services that can be delivered at home into three groups:

  • Services with capabilities in place that may benefit from scaling, such as primary care, outpatient-specialist consults, hospice, and outpatient behavioral-health visits. 
  • Services where capabilities exist that could be stitched together into a comprehensive offering, such as dialysis, post-acute care, and long-term care, and infusions.
  • Services with some capabilities but others that could be further developed, which includes a single service, acute care.

All of these services offer potential for growth within the home, although the pros and cons of transferring care outside of a traditional setting depends on the stakeholder (here’s a breakdown). Payors and providers will each have their own reasons for shifting care into homes over the next few years, but McKinsey points out that there’s one main driver behind the expected growth: more home care is good for patients.

Get the top digital health stories right in your inbox