The dark side of AI for hospitals

Artificial intelligence can streamline operational efficiencies, elevate precision medicine and boost overall clinical care. But it has a dark side for hospitals as well.

Cybercriminals are leveraging AI to hit healthcare organizations in search of valuable patient data, and hospitals are preparing for the worst.

"Health systems will need to manage increased vulnerability to cyberattacks and patient data breaches, in addition to meeting the heightened regulatory and compliance challenges that AI use will present," said Moody's in a new report released Nov. 19.

The report goes on to note health systems are spending more on security measures and cyber insurance to cover losses from future breaches. Ransomware attacks disrupt operations and clinical care, leading to months of claims backlogs and lost revenue. The hospital's reputation in the community also takes a hit if patients have a bad experience or find their data exposed on the dark web.

"We view healthcare as very high risk in our cybersecurity heat map, given the fact that patient lives are at stake, the high degree of integration with technology and the frequency of cyberattacks," said the report.

The federal and state governments may also ramp up policies and regulations around data security. The Digital Health Advisory Committee will further guide using digital technologies and AI. Health systems with the ability to acquire sophisticated digital technology platforms and cyberdefenses will have the advantage over smaller systems and hospitals without adequate resources.

"AI's adoption could significantly alter the competitive dynamics within healthcare, potentially widening the gap between leaders and laggards and enabling startups to challenge established players," according to the report. "However, the deployment of AI in clinical settings requires careful human oversight to address issues like incorrect responses and the risk of perpetuating biases present in the data, leading to potential legal and equity concerns."

The other trend hospital executives are keeping a close eye on is payers using AI to approve or deny claims. The technology has led to more claims denials, according to Moody's, and health systems need more focused revenue cycle processes to ensure clean claims and accurate data.

"The use of AI by payers has increased the denial rates for reimbursement, as technology will automatically deny late claims or claims that do not adhere to stringent coding standards, presenting additional operating challenges on top of inflationary labor and supply pressures," Moody's notes in the report. "The use of AI in this space will require issuers to invest more time and resources in revenue cycle management and efficiencies to make up for the revenue lost due to AI-related payor denials."

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