In an era of tightening margins and rising complexity, some hospitals are looking to AI as a lifeline — but technology is a tool, not a silver bullet.
Many organizations hope AI will be a quick fix for their problems, but success often stems from the foundational work, such as organizational readiness assessments or strong change management practices, said Prashant Karamchandani, senior partner in financial transformation at consultancy Chartis. He said so last week during an interview at the HFMA Annual Conference in Denver.
“There’s great opportunities there — but you can’t just assume that you buy it, you implement it, and then great things happen. You have to make that investment — in time and resources — up front to really achieve that benefit,” Karamchandani explained.
AI success can also hinge on continuous improvement processes, he added.
In his view, performance improvement shouldn’t be a one-time fix. He recommended that health systems establish processes, governance and accountability structures to drive the ongoing optimization of their tools.
Karamchandani emphasized that a key to fruitful AI deployment is determining which tasks should be handled by humans versus automation. He pointed to revenue cycle management as a prime area for automation, with plenty of administrative tasks across the front, middle and back office that can be handled by AI tools.
These tasks include things like insurance eligibility verification, prior authorization requests, coding assistance, charge capture review and claims submission.
Karamchandani added that he sees momentum and interest in AI solutions for clinical denials and appeals because they deliver clear ROI and reduce administrative burden.
This strong interest in denials-specific AI comes during a time when rising denials rates are threatening hospitals’ financial footing. Nearly 15% of all medical claims submitted to private payers are initially denied, according to a research from Premier.
But denials aren’t the only thing affecting hospitals’ operating margins. Health systems are bracing for a slew of changes — including tariffs, potentially historic cuts to Medicaid, and an uncertain global economy.
To address these financial headwinds, many health systems are making efforts to redefine their operating model, Karamchandani said.
This could take a number of shapes — such as consolidating service lines, adopting automation to cut labor costs, and shifting more care to outpatient or virtual settings. Some providers are also forming strategic partnerships or exploring value-based care models.
AI may be part of the solution for providers seeking to weather today’s financial storms — but only if paired with thoughtful strategies and long-term operational change, Karamchandani remarked.
Photo: metamorworks, Getty Images
