Accelerating the Transformation of Healthcare Through AI-Powered Automation
Healthcare in the United States is at a critical inflection point. It has the highest spend in the world (and rising), yet >70% of Americans feel failed by their health system[1] and about half of providers report burnout[2].
Across healthcare, providers want to be high-performing with personalized, efficient and value-oriented care, but information blind spots and administrative burdens make it incredibly difficult.
At Generation, we think that better visibility, coordination and automation can fundamentally address these challenges and unlock better patient outcomes.
Our recent investment in Innovaccer is a testament to this vision, as we believe its comprehensive suite of AI-powered solutions helps establish a new normal.
Six of the top-10 US health systems are Innovaccer customers, and the company has been rated #1 by KLAS Research in three separate areas over the years: data & analytics, population health, and CRM. To date, Innovaccer has saved >$1.5 billion of costs and delivered real patient outcomes (like one health system reducing readmission rates by 22%).
Why Visibility, Coordination & Automation Are Critical to Healthcare’s Future
Healthcare’s future hinges on modernizing infrastructure (‘making the invisible, visible’ as the saying goes) and maximizing efficiencies through AI-driven applications:
· Even though healthcare data is plentiful and growing exponentially at >30% year-on-year[3], the vast majority remains siloed and untapped[4]. Hospitals alone generate 50 petabytes of data annually[4]. With thousands of live data connections, Innovaccer is the ‘connective tissue’ of healthcare data, enabling better decision-making.
· Beyond this data platform, Innovaccer also has an application ecosystem that can streamline complex workflows for providers, payers, pharmacy, government and life sciences. This is critical because healthcare providers are bogged down by paperwork. Innovaccer’s copilot tools, agents and scribes illustrate how providers can reduce administrative burdens and refocus their efforts on delivering exceptional patient care.
Ultimately, the most impactful way to bend the cost curve in US healthcare is by finding ways to change human behavior. Without freeing up resources from the current system, we cannot afford to build a preventative system.
Different patients require different interventions — for one person the most effective path might be changing medication (lower cost, or more efficacious, or both); while for another it is addressing food insecurity, poor diet or their mental health. Such behavior change almost always takes extra engagement, be that digital check-ins or physical appointments, to build trust.
The Broader Potential of Automation in Healthcare
Administrative costs are nearly ~25% of all healthcare costs[5], and nearly $1 trillion of spend is considered “wasteful”[6].
Our hope for automation is that it not only reduces system costs, but fundamentally enhances care delivery (pathways, time, errors) and restores the joy of care. For every patient journey, there are typically six touchpoints[7], and conservatively two of these could be automated[8].
Some representative areas of transformation include:
· Documentation: Research indicates that physicians spend nearly two hours on administrative tasks for every hour of patient care[9]. This imbalance contributes to provider burnout and detracts from the quality of care delivered. As tools like scribes become ubiquitous, will they be able to streamline more of the workflow and relegate legacy electronic medical records (EMRs)?
· Coding/Revenue Cycle: Instead of a contentious battle between payer/provider bots, is there a more collaborative option (e.g., auto-adjudication) that reduces iterations on both sides of the fax machine?
· Custom Software + Services: Healthcare is riddled with custom software and robotic process automation (RPA) tools that are failure-prone, difficult to scale and expensive. A Deloitte survey revealed that only 3% of companies were able to scale their RPA initiatives[10]. How can consulting firms reposition themselves and their customers with more scalable technology?
· Clinical Decision Support: AI-powered tools can now analyze vast datasets and quite accurately enhance decision-making. How can vendors build and maintain sufficient trust with providers?
· Patient Engagement: Agentic communication can unlock deeper, more personalized and more efficient engagement. This can fill staffing gaps and help systems stay afloat, while meaningfully enhancing patient experiences and health outcomes. Hospital call centres typically operate with >30% annual churn[11], and >20% point-in-time vacancy levels[12]. Now that AI can operate most phone calls and texts, how can we refocus on empathetic engagements and ensure care is delivered at the right time, place and cost?
· Scaling Care Delivery: Automation bridges gaps in underserved areas and enables virtual care. In a post-Covid world, how can we continue to expand access to care?
Our interest in automation builds on investments in companies like Elation Health and AlayaCare, which focus on primary and home-based care, respectively. When integrated with platforms like those of Innovaccer, these innovations create a comprehensive, patient-centric healthcare ecosystem.
Generative AI: A Game-Changer for Healthcare
With an aging population, the healthcare system will come under increased strain. AI’s biggest promise? Freeing caregivers from repetitive tasks so they can focus on human connections and more complex care.
It is increasingly obvious that technical advancements make AI an incredible match for healthcare. Critically, generative AI now has C-suite mindshare — McKinsey reports that 70%+ of hospital administrators have tried AI applications[13] and early deployments are showing real promise.
AI goes beyond incremental improvements, enabling healthcare systems to do more with their existing resources. By automating repetitive tasks, providing actionable insights and enhancing decision-making capabilities, these tools reduce redundancies and improve operational coordination.
This ripple effect creates a more resilient and adaptive healthcare infrastructure, positioning systems and the rest of the ecosystem to effectively navigate evolving challenges.
Partnering with Visionary Founders
Generation backs visionary management teams who we believe are using business innovation to move us towards a more sustainable economy. Healthcare is in desperate need of such transformation. If you are building AI-driven or patient-centric solutions, we want to connect. Together, we can shape a future where healthcare is more effective and more equitable.
This article was published by Generation Investment Management, which is focused on accelerating the transition to a sustainable economy.
[1] Most Americans Say the Health Care System Fails Them | TIME
[2] Medscape Physician Burnout & Depression Report 2024: ‘We Have Much Work to Do’
[3] Healthcare data projected to grow at 36% CAGR by 2025 | Healthcare Asia Magazine
[4] How to harness the power of health data to improve patient outcomes
[5] Cutler.pdf
[7] Table — PMC
[8] Automation-at-scale-The-benefits-for-payers.pdf
[9] Health care administrative burdens: Centering patient experiences — PMC
[10] us-cons-global-rpa-survey.pdf
[11] 11 New Call Center Statistics, Including Turnover Rates of 30–45%
[12] How Clinical AI Solves Healthcare Contact Center Staffing Shortages
