Home Healthcare IT Artificial Intelligence (AI) in Healthcare Market Size, Trends and Growth Analysis 2031

Artificial Intelligence (AI) in Healthcare Market

Artificial Intelligence (AI) in Healthcare Market Size, Share & Trends Analysis Report By Component (Software Solutions, AI Platforms, Services), By Applications (Robot-Assisted Surgery Virtual Assistants, Administrative Workflow Assistants, Connected Machines, Diagnosis, Clinical Trials, Fraud Detection, Cybersecurity, Dosage Error Reduction) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Report Code: SRHI54168DR
Study Period 2019-2031 CAGR 41.6%
Historical Period 2019-2021 Forecast Period 2023-2031
Base Year 2022 Base Year Market Size USD 13.41 Billion
Forecast Year 2031 Forecast Year Market Size USD 306.68 Billion
Largest Market North America Fastest Growing Market Asia-Pacific
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Market Overview

The global artificial intelligence (AI) in healthcare market size was valued at USD 13.41 billion in 2022. It is estimated to reach USD 306.68 billion by 2031, growing at a CAGR of 41.6% during the forecast period (2023–2031). Factors such as big data and information explosion in healthcare sector, significantly drives the artificial intelligence (AI) in healthcare market demand by 2031.

Artificial intelligence (AI) is a branch of engineering and science used to design intelligent machines, particularly intelligent computer programs. An innovative system that uses numerous human intelligence-based capabilities, such as thinking, learning, and problem-solving abilities, in fields including biology, computer science, mathematics, linguistics, psychology, and engineering is said to have artificial intelligence. AI in healthcare is " the application of machine learning to medical information through the analysis of complex algorithms and software to enable data-driven solutions."

In the healthcare industry, artificial intelligence studies the relationship between patient outcomes and treatment methods. In the areas of medication management, therapeutic strategies, and drug development, AI has several uses. It is employed in medical procedures such as diagnostic procedures, individualized medication, drug development, and patient monitoring care. In order to analyze, understand, and comprehend complex medical and healthcare data, artificial intelligence (AI) in healthcare refers to the employment of sophisticated algorithms and software that mimic human perception.

Highlights

  • Software solutions dominate the component segment
  • Clinical trials dominate the application segment
  • North America is the highest shareholder in the global market

Market Dynamics

Global Artificial Intelligence (AI) in Healthcare Market Drivers

Big Data and Information Explosion in Healthcare Sector

A large volume of complex data is being generated owing to increasing digitalization. The data could be in various forms, including human language, videos, and pictures. Moreover, the use of the internet across all business platforms and delivery models for personal data mining and research work has led to high global internet traffic. With the help of cognitive computing systems, unstructured data can be analyzed to deduce valuable insights. In addition, different government agencies in the U.S. use big data analytics to improve their operational efficiency and gain new insights. Some favorable initiatives are the Health Data Repository, Veterans Affairs Million Veteran Program, the Cancer Imaging Archive (TCIA), and The Cancer Genome Atlas (TCGA) project.

Additionally, the amount of healthcare information generated daily is tremendous, and it is crucial to capture, store, and analyze the data to improve healthcare delivery. Different disease patterns, population demographics, and region-specific healthcare issues can be analyzed using big data analytics. However, the system's computing speed is insufficient to solve complex medical problems; hence, the adoption of cognitive computing using supercomputers is expected to increase considerably in the next few years, fueling the market's growth.

Shortage of Public Health Workforce

The public health workforce shortage has become a significant concern in many countries worldwide. This can mainly be attributed to the growing demand for physicians, which is higher than the supply of physicians. According to WHO, in 2019, there was a shortage of approximately 4.3 million nurses, doctors, and other healthcare professionals globally. In addition, implementing AI can help address the physician shortage issue. For instance, in an emergency, telemedicine chatbots can help providers diagnose, treat, and provide clinical services to patients remotely until help arrives. This is likely to reduce the burden on individual physicians, thus allowing a physician to attend to multiple patients in a lesser turnaround time, driving the market growth. For example, NLP-enabled chatbots help reduce the turnaround time for physicians.

Global Artificial Intelligence (AI) in Healthcare Market Restraint

High Implementation Cost

Procurement of AI systems and utilizing them commercially requires high investment. The cost of these systems is high due to the use of advanced technology and infrastructure needed to support these systems. For instance, the price of the first IBM Watson system showcased in the 2011 Jeopardy show was estimated to be nearly USD 3 million, accounting only for the cost of hardware components. The overall cost of the system, including cloud storage and other infrastructure, is expected to be much higher than USD 3 million. Currently, these systems are less affordable, which may impede artificial intelligence (AI) in healthcare market growth; however, an increase in adoption is expected to lower their cost.

Global Artificial Intelligence (AI) in Healthcare Market Opportunities

Data Privacy and Theft Issues

Capturing patient-generated health data is one of the vital parts of patient records. Life science analytics is expected to involve the mass participation of end-users, which may increase the risk of data breaches and security issues. Therefore, the security and confidentiality of the data collected are of utmost importance. In addition, the growing incidence of data theft and security issues is one of the key factors boosting the adoption of AI technology in healthcare to overcome data security challenges. According to the Office for Civil Rights in HHS, in 2013, there were approximately 199 Protected Health Information (PHI) breaches, affecting over 7 million patient records in the U.S.

For instance, in February 2015, Anthem, Inc. detected a data breach that compromised the PHI of over 80 million patients. There are various companies with solid portfolios of AI solutions for the healthcare industry, such as IBM Security and Enterprise Immune System. The introduction of AI technologies in cyber healthcare security is expected to help mitigate the risk of cybercrime and protect from the healthcare data breach. Further, the growing demand for ensuring continuity and availability of analytics services without any operational failures and interruptions and the presence of designed information security, privacy, and data protection authority are among the factors that create growth opportunities for AI in the healthcare market.

Regional Analysis

Based on region, the global artificial intelligence (AI) in healthcare market share is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

North America Dominates the Global Market

North America is the most significant global artificial intelligence (AI) in healthcare market shareholder and is anticipated to exhibit a CAGR of 40.6% during the forecast period. Significant factors contributing to the development of the North American region include the local presence of major market players, the rising geriatric population, the increasing incidence of health-related disorders, the rising number of government initiatives, and growing awareness about the use of AI in healthcare. For instance, in March 2019, the U.S. government launched a new website called AI.gov, dedicated to presenting ideas regarding the development, regulation, and application of AI in the U.S. The website was used after U.S. President Donald Trump signed an official order describing AI policy.

Additionally, the North American region comprises the U.S. and Canada. The U.S. leads AI in the healthcare market in the North American region. This dominance can be attributed to a surge in demand for AI to transform the world of medicine and assist healthcare professionals in reshaping the diagnosis and treatment of cancer. Increased demand for AI in medical imaging is also boosting market growth. In contrast, Growing investments in AI in healthcare by the Canadian government is fueling the market growth in Canada. According to Canadian Healthcare Technology, in June 2018, the Canadian government invested USD 24.9 million to launch a research program in AI and healthcare.

Asia-Pacific is projected to exhibit a CAGR of 44.8% over the forecast period. The increasing patient pool and growing acceptance of cloud computing are the factors primarily driving the market growth. A rise in government initiatives for AI technology in this region is also expected to support growth. For instance, in March 2019, in South Korea, the Ministry of Science and ICT announced that it would initiate a trial service of an AI-based precision medicine service named Dr. Answer in December 2019. In addition, many biopharmaceutical firms are applying AI to modernize the drug discovery process, and AI application is found in diagnostics. For instance, in 2017, China'sChina's Tencent introduced an AI-driven diagnostic medical imaging facility called AI Medical Innovation System (AIMIS). The technology has exhibited 90% and 95% accuracy for initial esophageal and lung cancer diagnoses, respectively. However, the need for more skilled IT professionals and researchers and the lack of set reimbursement regulations behaviors in healthcare centers are estimated to hinder the Asia-Pacific ai in healthcare market growth.

Europe is expected to grow significantly over the forecast period. Healthcare systems in Europe are overburdened due to increasing costs, rising incidence of chronic conditions, sizeable elderly population, and growing demand for healthcare facilities. In addition, increasing investments in AI in healthcare drive market growth. For instance, in October 2019, the UK government announced an investment of USD 300 million in AI, which is expected to be utilized by the public healthcare system to improve the quality of care. Collaboration among manufacturers and innovators for product advancements also drives the region's artificial intelligence (AI) in healthcare industry growth. Furthermore, the UK is leading in AI-based healthcare technologies. Factors such as equal adoption of AI technology by NHS and healthcare practitioners to improve diagnosis have contributed to the high market growth.

Latin America is expected to be a potential market for AI in healthcare due to government readiness for adopting newer technology. According to a survey by International Development Research Centre (IDRC) and Oxford Insights, Uruguay, Mexico, and Brazil's governments were ranked first 50 among the countries ' governments for readiness to adopt AI.

Increasing chronic ailments, such as respiratory disorders and heart diseases, and the growing geriatric population is boosting the demand for healthcare facilities in the Middle East and Africa. In addition, the incidence of chronic illnesses, such as obesity, cardiovascular diseases, and diabetes, is increasing owing to various factors such as a sedentary lifestyle, hypertension, poor eating habits, physical inactivity, and lack of sleep. Rapid advancements in digital technology due to partnerships between the government, industry players, and other investors in the healthcare ecosystem are boosting the market growth in the Middle East and Africa.

Report Scope

Report Metric Details
Segmentations
By Component
  1. Software Solutions
  2. AI Platforms
  3. Services
By Applications
  1. Robot-Assisted Surgery Virtual Assistants
  2. Administrative Workflow Assistants
  3. Connected Machines
  4. Diagnosis
  5. Clinical Trials
  6. Fraud Detection
  7. Cybersecurity
  8. Dosage Error Reduction
Company Profiles AntIBM Corporation Medtronic GENERAL ELECTRONIC COMPANY Stryker Koninklijke Philips N.V. Intel Corporation Microsoft NVIDIA Corporation Nuance Communications, Inc
Geographies Covered
North America U.S. Canada
Europe U.K. Germany France Spain Italy Russia Nordic Benelux Rest of Europe
APAC China Korea Japan India Australia Taiwan South East Asia Rest of Asia-Pacific
Middle East and Africa UAE Turkey Saudi Arabia South Africa Egypt Nigeria Rest of MEA
LATAM Brazil Mexico Argentina Chile Colombia Rest of LATAM
Report Coverage Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends
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Segmental Analysis

The global artificial intelligence (AI) in healthcare market is segmented by component and application.

Based on components, the global AI in the healthcare market is divided into software solutions, AI platforms, and services. 

The software solutions segment is responsible for the largest market share and is anticipated to grow at a CAGR of 40.8% over the forecast period. The increase in the adoption of AI software solutions among healthcare payers and providers is one of the key factors driving the AI software segment. In February 2018, John Snow Labs announced the launch of a Natural Language Processing (NLP) library with healthcare-specific deep learning models for helping developers create software applications that understand medical texts. This allows healthcare professionals to analyze and determine which patients are at risk, match patients to clinical trials, alert caregivers about patient safety, automate clinical coding and billing, and make clinical recommendations that contribute to the growth of AI software used in healthcare. Moreover, a growing number of strategic initiatives in terms of M&A, partnerships for new product development, and seed investments are vital indicators that depict AI's growth potential in the healthcare market.

Demand for software as a service is increasing as the number of IT professionals decreases at the same rate as technological advancements. Therefore, there need to be more IT resources in healthcare institutes and the life sciences industry, driving demand for AI as a service. For instance, Olive'sOlive's AI-as-a-Service by Olive, an Ohio-based company, automates the administrative work that enables healthcare staff to focus on providing better patient care. In addition, AI is used in the healthcare industry in several other applications, such as automated radiology reporting. Teleradiology companies like MEDICONNECTION use AI technology to reduce turnaround time and enhance patient safety. Some significant players operating in the market are Agent Health, Olive, HiTechNectar, and SGInnovate.

Based on application, the global AI in healthcare market is segmented into robot-assisted surgery, virtual assistants, administrative workflow assistants, connected machines, diagnosis, clinical trials, fraud detection, cybersecurity, and dosage error reduction. 

The clinical trials segment owns the highest artificial intelligence (AI) in healthcare market share and is expected to exhibit a CAGR of 41.5% during the forecast period. In the past few years, many blockbuster drugs have lost exclusivity. For instance, Alimta, Crestor, and Vfend were all released in 2016 in the United States and Europe, respectively. With the number of patent expirations, demand for faster clinical trials has grown rapidly to cater to the need for new drug development. Although AI has not yet made a significant impact on clinical trials; however, AI-based models are aiding in trial designing. Further, AI-based monitoring systems focus on improving study adherence by decreasing dropout rates, whereas AI-based techniques are employed for patient recruitment. One such AI monitoring system is Deep6AI, specifically designed to find more patients for clinical trials in minutes rather than months, providing life-saving cures to people more quickly.

An increase in the number of healthcare AI diagnostic startups coupled with huge investments by venture capitalist firms to develop innovative technologies that allow fast and effective diagnostic procedures due to a continuous increase in several patients suffering from chronic diseases supports the growth of the diagnostic AI market. In addition, around 33.3% of all healthcare AI SaaS companies are engaged in developing diagnostics, making it the most significant focus area for startups. In 2016, the U.S.-based startup, PathAI, secured USD 75.2 million in investment for developing machine learning technology that assists pathologists in making a more precise diagnosis. Rising investments in AI diagnosis-based startups are a crucial indicator of upcoming opportunities.

Market Size By Component

Recent Developments

  • November 2022- A team of Capgemini experts, in collaboration with University Hospital Bonn and Amazon Web Services, developed an artificial intelligence (AI) model to expedite clinical trials to develop new treatments for River Blindness. This neglected tropical disease affects over 20 million people worldwide.
  • February 2023- Experian® Health, a leading provider of revenue cycle technologies, announced the launch of AI AdvantageTM to reduce the growing number of healthcare insurance claim denials. As the most streamlined and comprehensive claims management system in the healthcare business, the solutions employ artificial intelligence (AI).

Top Key Players

AntIBM Corporation Medtronic GENERAL ELECTRONIC COMPANY Stryker Koninklijke Philips N.V. Intel Corporation Microsoft NVIDIA Corporation Nuance Communications, Inc Others

Frequently Asked Questions (FAQs)

How big is global artificial intelligence (AI) in healthcare market?
The global artificial intelligence (AI) in healthcare market size was valued at USD 13.41 billion in 2022. It is estimated to reach USD 306.68 billion by 2031, growing at a CAGR of 41.6% during the forecast period (2023–2031).
Key verticals adopting market include: - AntIBM Corporation, Medtronic, GENERAL ELECTRONIC COMPANY, Stryker, Koninklijke Philips N.V., Intel Corporation, Microsoft, NVIDIA Corporation, and Nuance Communications, Inc.
Asia-Pacific region has the highest growth rate in the market.
Big data and information explosion in healthcare sector and shortage of public health workforce are the key drivers for the growth of the industry.
Data privacy and theft issues are the key opportunities in market.


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