Insurers say hospitals' AI use is driving up healthcare costs
A Blue Cross Blue Shield Association analysis found that hospitals' use of AI tools in insurance claims added nearly $1 billion in healthcare spending over two years. Insurers and AI industry figures are now disputing who bears responsibility for the rising costs.
An analysis by the Blue Cross Blue Shield Association (BCBSA) has found that hospitals' use of artificial intelligence tools when submitting insurance claims resulted in an extra $942 million in healthcare spending over a two-year period.
The analysis identified a sharp rise in patients being documented as having complex medical conditions, while finding no corresponding evidence that the actual care delivered to patients had changed. The BCBSA describes this as a clear disconnect between medical coding practices and real-world treatment.
The New York Times cited the findings as the latest indication that artificial intelligence is contributing to higher healthcare costs overall. Disputes between hospitals and insurers over treatment approval and payment are longstanding, but the newspaper suggested that AI adoption on both sides of the negotiating table may be intensifying the conflict rather than resolving it.
Industry reaction
Dr. Shiv Rao, founder of AI startup Abridge, acknowledged the technology could lead toward what he described as a dystopian scenario in which automated bots and agents effectively battle each other over claims. At the same time, he suggested AI could eventually help ease tensions and lower costs rather than raise them.
BCBSA senior vice president Luke Chalker pushed back against framing the dynamic as a two-sided war, instead describing it as a one-sided situation in which insurers are on the losing end.
