Medical AI has great potential, from managing dialysis to optimizing patient-dosing to early disease detection. However, much depends on the power and design of the AI itself. “The timelines for adoption of AI-enabled MedTech will likely be determined by the tangible economic benefits produced by the product and the ease of usability and integration into existing workflows,” Jungling says.
We’re still in the early stages. With relatively modest deployments of AI, such as assistive intelligence, which helps reduce manual processes and simple, but repetitive tasks, such as appointment scheduling, leaving skilled medical staff with more time for specialized and revenue-generating work.
More advanced forms of AI could help medical professionals with their decision-making, by evaluating diagnostic images and creating treatment plans. This form of AI, known as unsupervised machine learning, can assess raw unstructured data and search for patterns. “Such functionality could lead to dramatic improvements in productivity, especially in clinical settings where the supply of highly skilled professionals is limited,” says Jungling.
AI could eventually perform tasks like diagnostics without user input, but such scenarios remain far down the road.
As a class, MedTech covers a broad range, including hearing aids, in-vitro fertilization and dentistry. AI applications may make sense for some specialties, based on user-friendliness and cost efficiency, but they won’t be a cure-all.
Which areas show the best promise for AI? Diagnostic imaging, radiation therapy and hospital capital equipment may offer the greatest prospects for fueling industry growth and profitability, according to the Morgan Stanley report. Deploying AI in these areas could lower costs and improve productivity for hospitals and would be easy to use, with little training necessary.
To be sure, AI won’t be adaptable to all MedTech needs. Specialties, such as corrective lenses, chronic care or orthopedics, are more difficult fits, the report says. Some fields may not offer sufficient profitability or cost savings. Other potential barriers include the plausibility of the technology and regulatory approval for use in medical settings, as well as anonymizing patient data to ensure individual privacy within large data pools.
Which players are best positioned to benefit from AI in the MedTech space? Traditional medical-equipment providers have an advantage in the quest to enable MedTech AI, simply because they are already in hospitals everywhere.
But they still need to determine how to charge for AI integration. Options include bundling AI tech with existing offerings, selling licenses, charging per use or offering subscription models.
The possibility of disruption from tech-industry giants also looms. In some specialties, traditional providers could face competition from tech companies that could use AI to deliver healthcare services using new or nontraditional methods, like monitoring equipment and smartphone apps.
For Morgan Stanley Research on MedTech AI, ask your Morgan Stanley representative or Financial Advisor for the full report, “Medical Devices: Artificial Intelligence” (Nov 30, 2018). Plus, more Ideas from Morgan Stanley’s thought leaders.