AI in healthcare: 2024 stats explained
Is your health or wellness business on the verge of AI adoption, or are you just curious if AI is all hype or a game-changer? At Vention, we've gathered all essential statistics to help you understand AI's transformative power and impact in the healthcare industry.
Table of contents:
What’s Vention, and why do we care about artificial intelligence in healthcare landscape?
Vention is a software development company with a wealth of AI and healthtech experience. For over 20 years, we've been crafting custom AI solutions like computer vision-based medical imaging, speech recognition, medical chatbots, virtual assistants, and machine learning-powered predictive analytics.
We've teamed up with hundreds of healthcare giants, including Thirty Madison and K Health, so we always stay on top of the latest trends in the healthcare industry to offer extra value to our clients and readers. Use these AI statistics to make smarter strategic decisions, uncover innovation opportunities, and get ahead of the competition.
Healthcare AI fundamentals: market size and CAGR
First, let's dive into the current healthcare AI market and its future trends to set the stage for effective strategic decisions on market entry and investments.
Various sources offer slightly differing estimates of the current and projected market size for artificial intelligence in healthcare, but they all agree on one thing — the numbers are staggering.
Healthcare AI market size (in billion USD)
2024
2029
Sources: [1], [2], [3]
Investment trends
AI-based digital health startups brought in 40 percent of Q1 2024's funding total, or $1.1 billion across 45 deals, rising from 33 percent of 2023 digital health funding and 29 percent of 2022’s funding pot. [34]
In 2023, 39 percent of surveyed healthcare leaders planned to invest in AI to predict outcomes and support clinical decisions, 37 percent aimed to optimize operational efficiency, and 32 percent intended to integrate diagnostics. [5]
Currently, 29 percent of healthcare leaders are investing in generative AI technology, with 56 percent planning to invest within the next three years. [5]
A deeper look at AI adoption and application scenarios
Interested to know which field is the most promising in the healthcare market? Here are the facts:
AI in drug discovery
Of all AI application scenarios, drug discovery dominated the healthcare market in 2023 with a share of 28.1 percent. The market size was estimated at $0.9 billion, and it is expected to reach $4.9 billion by 2028, growing at a CAGR of 40.2 percent during the forecast period. [6] [7]
As of January 2024, approximately 80 percent of pharmaceutical and life sciences professionals use AI in drug discovery. [2]
AI technology can significantly reduce the time (from five or six years to just one year) pharmaceutical companies require to discover new drugs. Also, AI promises a potential cost reduction of up to 70 percent and an economic value of $60 billion to $110 billion a year for the pharma and medical-product industries.
The latter is mainly possible because AI can accelerate the identification of compounds for potential new drugs, speed their development and approval, and improve how they are marketed. [2] [8] [9]
Medical devices
As of May 2024, the FDA approved 882 devices powered by artificial intelligence and machine learning. The top five application areas are radiology (671 devices), cardiovascular (90), neurology (32), hematology (17), and gastroenterology-urology (13). [10]
Number of AI/ML-enabled medical devices approved by the FDA
before 2010
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Other AI applications
- In 2023, 53 percent of global AI drug discovery companies were based in the US.
- Half of the 50 largest pharmaceutical companies have partnered with or licensed agreements with AI companies (think Novartis and Microsoft, Sanofi and Aqemia).
- The healthcare chatbots market was valued at $116.9 million in 2018 and is projected to reach $345.3 million by 2026, at a CAGR of 14.5 percent.
- The virtual assistants market segment is expected to grow at a 44.2 percent CAGR from 2024 to 2030.
- The AI in the healthcare market is split into two segments: software (81.25 percent, valued at $11.7 billion) and services (18.75 percent, valued at $2.7 billion).
- The virtual nursing assistant AI application market is estimated to reach $20 billion by 2026.
Sources: [6], [11], [12], [13], [14], [15]
AI through the eyes of healthcare providers: experiences and expectations
94 percent of healthcare companies report using artificial intelligence/machine learning in some capacity.
However, about 70 percent of health system respondents believe AI will have a greater impact on their organization, shifting AI strategies from the IT department to the C-suite. This aligns with the fact that 80 percent of US healthcare providers are accelerating spending on IT and software, with AI being a top priority. [16], [17]
The 201 US healthcare provider executives surveyed in June 2023 have mixed feelings toward AI — from fear, concern, and caution to neutral, optimism, and excitement. The highest percentage of positive sentiment (53 percent) among this broad spectrum of emotions is attributed to academic medical centers, followed by health systems and hospitals (40 percent). Freestanding hospitals show the lowest percentage of positive sentiment (24 percent). [17]
Percentage of positive sentiment (neutral, optimism, excitement)
Percentage of negative sentiment (fear, concern, caution)
Health systems and hospitals
Percentage of positive sentiment (neutral, optimism, excitement)
40 percent
Percentage of positive sentiment (neutral, optimism, excitement)
60 percent
Academic medical centers
Percentage of negative sentiment (fear, concern, caution)
53 percent
Percentage of negative sentiment (fear, concern, caution)
47 percent
Other national and regulated health systems
36 percent
64 percent
Freestanding hospitals
24 percent
76 percent
Key barriers to AI adoption identified by respondents include unclear benefits, regulatory and legal considerations, clinical risk, and lack of technical experience.
Voices of patients: The impact of AI in healthcare
The Outbreak Near Me survey of 3,317 US adults conducted in May 2023 reports that nearly one-third (32 percent) of people are comfortable with artificial intelligence leading a primary care appointment, although fewer (25 percent) would be comfortable with AI-led therapy. [18]
Twelve percent of adults in the US say their healthcare providers currently use AI to help diagnose, treat, or communicate with patients, but 66 percent expect AI to play a bigger role in healthcare in the next five years. [18]
Another survey of 1,000 respondents conducted in June 2023 shows that eight in 10 Americans believe that AI has the potential to improve the quality of healthcare, reduce healthcare costs, and increase accessibility to healthcare.
The top three positive effects named are increased efficiency (63 percent), cost savings by automating tasks (56 percent), and improved diagnosis and treatment (53 percent). [19]
The same survey reports that 25 percent of Americans would not visit a healthcare provider who refuses to embrace AI technology. They believe that AI brings faster medical care (52 percent), reduces risks of human error in medical decision-making (47 percent), enables remote access to healthcare (42 percent) and more accurate diagnoses (42 percent).
Interestingly, the Pew Research Center survey conducted in December 2022 with a panel of 11,000 respondents showed that 60 percent of Americans would feel uncomfortable if their healthcare provider relied on AI in their medical care to diagnose diseases and recommend treatments. [20]
What’s more, the public was unconvinced that the use of AI in healthcare would improve health outcomes: only 38 percent expected better results, while 33 percent expected worse results and 27 percent thought it wouldn't make any difference. [20]
Are we seeing a shift from negative to mixed (and even positive) feelings about AI solutions for healthcare? It's too soon to tell, but if a change is happening, we're just at the starting line.
Benefits of AI in healthcare
Potential for reducing emergency room visits and hospitalizations by 79.2 percent and healthcare workers’ errors by 86 percent. [21] [22]
Increased share of physicians' time spent on treating patients: from 50 percent before AI implementation to 67 percent after AI implementation. [23]
Potential to save 250,000 lives by 2030 — a forecast based on the expectations that AI solutions for healthcare can eliminate 86 percent of errors made by healthcare workers. [21]
A study involving 80,000 women found that AI helped healthcare workers detect 20 percent more cases of breast cancer, while also avoiding an increase in false positives and reducing doctor workloads by 44 percent. [24]
Financial impact
Wider adoption of AI could lead to five to ten percent savings in US healthcare spending. [25]
AI applications could cut annual US healthcare costs by $150 billion in 2026.
Other forecasts suggest that wider AI adoption could generate savings of up to $360 billion annually — approximately 10 percent of the country’s healthcare spending. [8] [26]
Utilizing AI to diagnose could save up to 50 percent on treatment costs while improving health outcomes by up to 40 percent. [27]
AI can potentially reduce drug production costs by $70+ billion by 2028. [21]
Market drivers for AI adoption
AI in healthcare is booming due to four key factors: a critical shortage of medical staff, widespread burnout among healthcare professionals, an aging population, and the explosive increase in health data.
Lack of medical staff
In 2020, the global shortage of health workers was estimated at 15 million. In 2024, 77 percent of health leaders report care delays, even in emergency departments, due to staff shortages. The World Health Organization projects a shortfall of 10 million health workers by 2030. [28] [29] [30]
This global trend is mirrored regionally with grim forecasts [4]:
- US: 87 percent of healthcare providers list staffing shortages as their biggest challenge. Over 5 million medical workers left their jobs during the COVID-19 pandemic. By 2026, more than 6.5 million are expected to leave, with only 1.9 million replacements, creating a deficit of over 4 million health workers.
- EU: The region will need an additional 1.6 million care workers by 2050.
- Britain: The National Health Service is understaffed by 154,000 full-time workers, and if current trends continue, that figure could rise to 571,000 by 2036.
- Japan: The Land of the Rising Sun needs 960,000 health and welfare workers by 2040.
How can AI help mitigate the medical staff shortage, you ask?
By automating routine tasks like data entry and documentation, facilitating diagnostics, enabling remote patient monitoring, and assisting in clinical decision-making, such as medication dosage calculations.
Medical staff burnout
The shortage of medical workers and rising workload are closely linked, leading to higher burnout rates.
Burnout rates are soaring: 53 percent of physicians showed signs of burnout when assessed in 2023, up from 47 percent in 2021 and a jump of 26 percent since 2018. Bureaucratic tasks and administrative burdens are by far the main drivers of burnout. [28]
In 2024, nearly two-thirds (66 percent) of healthcare leaders report increased burnout, stress, and mental health issues in their workforce, along with deteriorating work-life balance and reduced morale and engagement. [29]
The growing amount of medical data
The global healthcare sector generated more than 2.3 zettabytes (2.3 trillion gigabytes!) of data worldwide in 2020, and this healthcare data explosion is expected to exceed 10 zettabytes by 2025. [4] [31]
The US market for interoperable clinical data alone is expected to almost double by 2026, growing from $3.4 billion in 2022 to $6.2 billion. [4]
Handling even the current data volume becomes impossible without powerful technology, AI is exceptionally useful in tackling this challenge. AI helps process vast amounts of data and extract insights humans usually cannot see. It can recognize patterns in data from wearables, lab results, and EHR records and even process X-rays and other medical images with computer vision to spot anomalies.
Volume of healthcare data
Volume of healthcare data
Volume of healthcare data
Volume of healthcare data
Population aging
The 65+ population is skyrocketing. Globally, their percentage is expected to jump from 10 percent in 2022 to 16 percent by 2050.
By 2030, one in six people worldwide will be aged 60 or over, with the number of people aged 60 and above increasing from 1 billion in 2020 to 1.4 billion. [32] [33]
65+ population share
65+ population share
Expected 65+ population share
Expected 65+ population share
Eighty years is the average life expectancy in Belgium, Denmark, and Finland. The number of people aged 80 or older is projected to triple between 2020 and 2050, reaching 426 million. [4] [33]
As the population ages, the need for enhanced healthcare to boost quality of life and manage chronic diseases intensifies, compounded by a shortage of medical staff.
Check back often — we’ll be updating this page regularly.
List of sources
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