Insurers say AI added $942 million to healthcare spending
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The briefing
America's health insurers say artificial intelligence is already making healthcare more expensive. A new analysis from the Blue Cross Blue Shield Association concludes that hospitals using AI to prepare insurance claims added $942 million to the country's healthcare bill across two years.
The mechanism is paperwork. AI tools that help write up claims are recording far more patients as seriously ill, which supports bigger payments. The association says it found 'a clear disconnect between medical coding and treatment,' with 'no evidence of a corresponding change in the care delivered.' Richer documentation, same treatment, larger bills.
Dr. Shiv Rao, who founded the AI startup Abridge, did not argue with the numbers. He warned of 'a horrible dystopic future nobody wants to live in,' one of 'bots fighting bots, agents fighting agents' as providers and insurers automate opposite sides of each claim. Luke Chalker, the association's senior vice president for clinical innovation, was blunter about the scoreboard: this is not a war at all, he said, just a one sided bloodbath with the insurers taking the beating.
Why it matters
The promise of AI in healthcare administration was lower costs through automation. The reality, at least in claims, is an arms race. Providers use AI to document more billable complexity; insurers use AI to deny more claims. Both sides spend on better models, and the cost of the fight lands on premiums.
The $942 million figure matters because it is one of the first hard numbers on what AI is costing healthcare, and it undercuts the industry's favorite talking point. Rao thinks the same tools could one day smooth the process and bring costs down, and he may be right eventually. For now, though, the rewards go to whoever documents best, not whoever cares best.
Key details
- BCBSA analysis: AI assisted claims coding added $942 million to the healthcare bill across two years.
- Far more patients recorded as seriously ill, with no matching change in the care delivered.
- NYT: latest sign AI is contributing to rising healthcare costs.
- Abridge founder Shiv Rao warned of 'bots fighting bots, agents fighting agents.'
- BCBSA's Luke Chalker: not a war at all, just a one sided bloodbath with insurers losing.
Original reporting by TechCrunch. Read the full story at the source.
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