Generative artificial intelligence (AI) technology may transform healthcare delivery and life sciences productivity by improving patient outcomes and increasing clinical and medical research efficiency, according to a recent analysis of 145 generative AI healthcare startups by GSR Ventures and Maverick Ventures. The analysis highlights the innovations of the companies working with generative AI , as well as their challenges and market potential. The report aims to familiarize founders, operators, and investors with potential generative AI opportunities in healthcare and foster ideas for creating a better healthcare system.
The startups in our analysis collectively have earned more than $20 billion in funding and have 47,000 employees. The report profiles the following healthcare sectors in order of the amount invested in generative AI:
- Life sciences ($6.5 billion, 22 companies)
- Clinician-facing ($6.0 billion, 49 companies)
- Administrative ($2.7 billion, 43 companies)
- Analytics and IT ($2.5 billion, 19 companies)
- Patient-facing ($2.3 billion, 12 companies)
Startups flock to utilize generative AI in healthcare because generative AI can equal if not exceed human performance for many tasks and applications. Given the impact of clinician burnout and staff shortages across healthcare, generative AI’s capabilities can reduce a healthcare organizations’ technology and administrative burden. Generative AI built on large language models can automate time-consuming non-patient care tasks while accelerating time to decision and discovery through faster analysis and content generation.
The most prominent example of Generative AI is OpenAI’s ChatGPT, which has become the fastest growing app ever since its launch in November 2022. In healthcare, generative AI demonstrates a host of capabilities that promote greater efficiency and superior patient care. The technology automates physician notes, summarizes clinical journeys, writes patient education materials, conducts semantic searches, writes prior authorization letters, and powers triage chatbots. By enabling the conversion of unstructured to structured data, refining medical text summarization, aiding synthetic data creation, enhancing image processing, streamlining transcription services, and writing medical texts, generative AI can become the catalyst for greater efficiency and superior patient care.
Challenges & Opportunities
Unfortunately, the healthcare industry has a history of resisting technology adoption. Generative AI startups must navigate a slow sales cycle and stay ahead of competitors in an increasingly crowded sector, while addressing concerns about generative AI’s documented problems with inaccuracies and invented facts and the risk these flaws pose to patients.
Nonetheless, current advancements in data interoperability among health enterprise platforms present an opportune moment for the healthcare sector to capitalize on generative AI. The authors note promise for generative AI startups in three areas:
- New markets: Agile and innovative startups willing to delve into new markets often outperform incumbent players in capturing new market share. As nascent markets evolve and healthcare laws continue to change, startups should be prepared to move quickly.
- 10x opportunities: Startups are well-equipped to handle technological changes that allow for 10x improvements in existing products and solutions. Startups in the healthcare generative AI space should focus on areas that allow for massive improvements over the status quo that will attract customers to switch products and abandon incumbents.
- Strategic partnerships: Startups often scale and break out through strategic partnerships. As generative AI is an exciting technology advancement, large companies are now more open to partner with newer startups.
It is rare for technological advancement to engage so many of the stakeholders in the healthcare ecosystem as fast as generative AI. Health systems, life sciences companies, and payors are examining generative AI companies. This technology may bring meaningful and lasting technological progress to an industry where it is long overdue.
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