Artificial Intelligence (AI) in Healthcare Market - Focused Insights 2024-2029

The Artificial Intelligence (AI) in Healthcare Market was valued at USD 14.33 billion in 2023, and is expected to reach USD 153.61 billion by 2029, rising at a CAGR of 48.49%.

MARKET TRENDS & DRIVERS

Emergence of New AI Startups for Healthcare

AI in healthcare is an emerging trend that has led to an increased number of new startups across the global market. The emergence of new startups in the healthcare industry offers innovations, new tools, and new technologies, revolutionizing the healthcare industry landscape. Every year, many new AI startups are registered for healthcare solutions. These startups' increasing ability to treat patients remotely has become a significant factor in areas lacking medical facilities. This decade is expected to be more startups in AI healthcare. In the last decade, 12 to 15 startups were recorded annually, increasing to more than 70 to 110 new AI healthcare startups worldwide. Thus, this increasing number of new startups is expected to deliver lucrative market growth opportunities. There has been a huge increase in healthcare investor funding over the past 10 to 13 years, with over $20 billion invested in 2021 alone. It attracts many startup companies to develop new AI healthcare platforms. According to the AI Index Report 2023 by Standford University, in 2022 alone, the AI focus with the highest investment was healthcare ($6.1 billion) registered worldwide. In 2019, the total investment in healthcare AI startups was $4 billion, with over 350 deals. This sudden increase in investment in AI healthcare startups witnessed this investment, and the number of new startups will continuously increase. Furthermore, the increasing digitalization, government support, and advancement in the healthcare industry are attracting huge opportunities for AI in healthcare startups and are expected to deliver huge market growth opportunities. Most new startups come from the US, Israel, India, and Europe.

Rising Automation & Robotics in Clinical Surgeries

There is growing automation and robotics in the clinical field specifically targeted to surgical procedures. Continues entrance of surgical robots and associated automated procedures, reducing human errors and delivering high efficacy after the procedures. With this revolutionary factor in surgical care, surgical robots are becoming a perfect place for AI model integration to improve surgical capabilities further and reduce health workers' burden. The increasing use of AI models to automate surgical tasks has been clinically proven to increase intraoperative safety. In addition, artificial intelligence is used to enhance the field of robotics surgeries through education, automated skills assessment tools, and intraoperative feedback delivery. It led to a rapid expansion of AI in robotics surgery and is expected to hold lucrative opportunities. Across the US, robotics surgeries are growing rapidly. In 2018, the total number of robotics surgeries was 753,000, which increased to 900,000 in 2021, and by 2030, this number is expected to reach over 1.1 million. In robotics surgeries, surgical robots work based on data capture through sensors and analysis of images to operate. This process of data capture and image analysis is the key factor behind AI innovations and integration in robotics surgeries. In 2023, Intuitive Surgical launched the first digital tool that harnesses AI power to enable surgeons to study their procedures. Furthermore, the company is looking into expanding its capabilities to run segmentation algorithms on a set of anatomical structures from CT scans for robotic surgeries. In 2023, Smith+Nephew introduced 2 new robotics and digital surgery solutions. It unveiled its personalized planning, powered by an AI and data visualization platform. In 2023, the US Medical Innovation and Jerome Canady Research Institute announced the launch of new Canady Robotic AI surgical systems. These factors indicate attention towards AI in surgical robots, expected to deliver lucrative market growth opportunities.

Shortage of Healthcare Workers and Emergence of AI

The global healthcare industry is currently facing a huge shortage of health workers. In addition, this situation was exacerbated due to the COVID-19 pandemic. Healthcare settings face two major issues: a dwindling workforce and a high patient population. The World Health Organization stated there will be a shortage of more than 10 million people in the healthcare workforce by 2030. furthermore, the retirement of the aging healthcare workforce, rising demand for field professionals and specialists and their shortage, emergency cases, and associated challenges created a huge demand for advancement in healthcare infrastructure that rescued the burden. According to some studies, in 2024, around 48% of health systems will be using AI solutions to tackle health workforce challenges, as revealed by TechTarget & Health IT blogs 2023. The emergence of AI in healthcare settings is leveraging new ways to monitor the shortage of the health workforce while enhancing processes and efficiencies, backlog management, replacement of repetitive tasks, and managing unpredictable capacity demands. The increasingly widespread use of AI in healthcare settings can reduce healthcare costs by $200 billion to $300 billion. Furthermore, it can increase report analysis procedures by around 150 times compared to traditional methods. These factors significantly drive the demand for AI in healthcare. Around 55% of healthcare workers experience a huge burden. Of these, the highest burden experienced by health workers is experienced by nurses (56%) and clinical staff (55%). Based on that, these healthcare workforces stated that leveraging AI in healthcare services reduces their burnout by 70% to 90%. Moreover, AI helps to reduce administrative burden, automate documentation, increase diagnosis accuracy, augment decision support, and enhance preventive care for patient purposes. It indicates that AI is emerging as a promising tool and is expected to achieve significant growth in the healthcare industry.

INDUSTRY RESTRAINTS

High Installation & Integration Cost

The adoption of AI technology is dramatically increasing - however, the cost of AI implementation is relatively high. AI technology comprises many solution platforms/factors, and these platforms influence cost, which has become a challenge for healthcare IT vendors. This challenging factor is mostly impacting in developing markets. With changing technological advancements, the cost of implementing AI fluctuates. The incurred expenses will vary depending on the platform the company builds. The need for a high intelligence level also decides the cost structure. Some programs are designed to perform a particular task with less human interruption. So, the level of intelligence is high, and adopting such technologies is quite expensive. Additionally, to perform operations, AI needs some data in the system, but it is more complex and costly to work on unstructured data than structured data. On the other side, some factors responsible for the high development cost of AI are data quantity, data storage capacity and format, and structured and unstructured data; furthermore, the customized demand again induced high costs, challenging the adoption of AI in healthcare sectors.

SEGMENT INSIGHTS

INSIGHT BY COMPONENT

Artificial Intelligence in the healthcare market by component type is segmented into software & services and hardware. The software & services segment accounted for the largest market share. The continued development of AI is creating a significant demand for advanced and powerful software tools and services. AI healthcare software is rapidly transforming the health industry, offering clinical professionals and biopharma companies new, advanced, and innovative AI tools to improve patient care, diagnosis, treatment, and drug discovery. Based on machine learning and data analytics, AI healthcare software helps to analyze patient data, predict clinical outcomes, and help deliver more personalized treatment plans that reduce hospital burden. Furthermore, software is also helping to reduce medical and dosage errors, increase efficiency, and help save millions of lives daily. Several companies offer high-class software and services that feature different activities in healthcare management and have proven to save time, cost, and balance between human activities.

By Component

• Software & Services
• Hardware

INSIGHT BY APPLICATION

AI in healthcare market by application type is categorized into hospital workflow management, patient management, medical imaging & diagnosis, and drug discovery & precision medicine. The hospital workflow management segment shows significant growth, with the fastest-growing CAGR during the forecast. AI is transforming the challenges of the traditional method of healthcare data management. There is an exponential increase in patient data storage in EHRs, which is susceptible to incompleteness, inconsistency, redundancy, and noise. In addition, online data generation increased almost two times every five years globally, overwhelming manual processing capabilities and increasing demand for AI in hospital workflow management. One of the leading trends in AI in hospital workflow management is predictive analytics for better decision-making. It is one of the most transformative factors in the field, and it can predict patient conditions and analyze patients' requirements with the help of sophisticated algorithms.

By Application

• Hospital Workflow Management
• Patient Management
• Medical Imaging and Diagnosis
• Drug Discovery and Precision Medicine

INSIGHT BY TECHNOLOGY

The machine learning technology segment holds the largest global AI in healthcare market share based on technology type. Machine learning (ML) is a subset of AI that enables software applications to predict results more accurately. Machine learning algorithms use historical data as input to predict new outputs. It can give insight into trends in customer behavior and speed up business processes for new product development, being at the core of many leading companies today. Investing in AI and machine learning has many benefits for the healthcare industry. AI learning can automate most daily tasks and reduce stress on health workers. Nowadays, data analysis is considered the driving force of healthcare settings and biopharma companies, and machine learning makes this analysis easy. Globally, significant data is generated daily in healthcare sectors, and its storage, process, and analysis are becoming a major challenge. Where AI machine learning algorithms quickly manage significant data, which helps reduce the healthcare sector's burden and significant cost of these activities. Many hospitals, biopharma companies, clinical studies, and research organizations use machine learning applications.

By Technology

• Machine Learning
• Deep Learning
• Natural Language Processing
• Vision AI
• Other Technologies

INSIGHT BY END-USER

Based on end-users, the pharma & biotech, and medical device companies' segment's highest growth during the forecast period. AI can be applied to almost all aspects of the pharmaceuticals and biotech sector to improve data processing. The adoption of technology will reveal the incredible potential of the health sector, especially in R&D, thus helping the segment's growth. AI can create opportunities to improve production processes that have already been implemented. Ai positively impacts quality control, reduced drug design time, predictive maintenance, reduction of waste, and several other factors. In recent years, AI has greatly grown the biotech industry, allowing companies to speed up drug discovery and making it more cost-effective. The COVID-19 pandemic increased the adoption of AI as an essential tool in helping to find diagnoses, treatments, and vaccines with greater precision and speed. Since the pandemic, there have been several drug discovery breakthroughs for AI within biopharma companies, helping rapidly and efficiently.

By End-user

• Healthcare Providers
• Pharma & Biotech and Medical Device Companies
• Payers
• Other End-users

GEOGRAPHICAL ANALYSIS

North America accounted for the largest market share and the fastest-growing region of global AI in healthcare. The U.S. dominates the regional market landscape due to the high advancement in healthcare infrastructure, digitalization and IoT adoption in health facilities, increasing surge of telemedicine and telehealth, and wide acceptance of technologies in healthcare management. Over 35% of North American healthcare professionals look forward to AI in healthcare services. In the US, over 38% of health professionals and patients think integrating AI in medicine and health can lead to better patient healthcare outcomes. The shift from hospital to home care delivery is increasing the adoption of telehealth/telemedicine services, accelerating AI's integration rate. The majority of healthcare professionals show a positive thumb for using AI. The use of AI by healthcare professionals has rapidly increased after the COVID-19 pandemic.

• North America
• Europe
• APAC
• Latin America
• Middle East & Africa

VENDOR LANDSCAPE

The global AI in healthcare market report contains exclusive data on 40 vendors. The market is highly fragmented. Large corporations dominate the market. However, there are significant growth opportunities for new entrants. Though the market is dominated by major players, many investigational and small companies are coming into existence with innovative AI health solutions. Google Health, Amazon Web Services, Microsoft Corporation, Medtronic, NVIDIA Corporation, Siemens Healthineers, Intel Corporation, Merative, and Augmedix are some of the leading companies accounting for major market share in the global AI in the healthcare market. These vendors continuously develop and invest in AI-based health tools and are expected to dominate the market with continued engagement.

Key Vendors

• Google Health
• Intel Corporation
• Medtronic
• Microsoft
• NVIDIA Corporation
• Siemens Healthineers
• Amazon Web Services
• Merative
• Augmedix

Other Prominent Vendors

• CloudMedx Health
• BioSymetrics
• Corti
• Butterfly Network, Inc.
• Enlitic
• TEMPUS
• Behold.ai
• oxipit.ai
• Clarius
• General Vision
• Koninklijke Philips N.V.
• Stryker
• Shimadzu Recursion Pharmaceuticals
• GE Healthcare
• Subtle Medical
• Sensely
• InformAI
• Clario
• Owkin
• Binah.AI
• Oncora Medical
• Qure.ai
• Lunit
• Caresyntax
• Anju Software
• DEEP GENOMICS
• MDLIVE
• Qventus
• WorkFusion
• Salesforce
• LeenTaaS

KEY QUESTIONS ANSWERED:

1. How big is the global AI in the healthcare market?
2. Which region dominates the global AI in the healthcare market?
3. What is the growth rate of the global AI in the healthcare market?
4. What are the opportunities in the global AI healthcare market?
5. Who are the major global AI players in healthcare?