Healthcare Artificial Intelligence (AI) Market

Market Overview

The global healthcare artificial intelligence (AI) market size was valued at USD 6,558 million in 2021, growing at a CAGR of 47.20%, which is expected to reach USD 144,556 million during the forecast period. 

The Healthcare Artificial Intelligence (AI) market share can be credited to the growth of AI in significant areas of healthcare worldwide. Artificial intelligence (AI) is utilized in numerous industries around the globe. Artificial intelligence is making significant strides in the healthcare industry, particularly in the pharmaceutical sector, due to its diverse applications in drug discovery and innovation, clinical studies, and pharmaceutical performance. The steps involved in the drug discovery process are time-consuming. Technology has profoundly affected the healthcare industry, but there is still room for improvement before these AI-driven solutions reach their full potential. The future is bright for pharmaceutical, medical device, and life science companies that partner with technology.

AI can support diagnostic and therapeutic developments in healthcare. Due to stringent regulations, the risk associated with AI development poses a challenge, particularly in medical technological applications. Insufficient standardized regulations and guidelines exist for medical device manufacturers seeking approval. AI is also used to manage hospitals effectively by increasing efficiencies, reducing patient wait times, and simplifying the workflow of healthcare professionals. Artificial intelligence has the potential to achieve patient-centric care and commitment while reducing healthcare's astronomical costs. The healthcare AI market has witnessed top-line growth due to rising patient awareness of advanced treatment modalities for various diseases and the availability of an increasing number of effective modern healthcare solutions.

Market Dynamics

Global Healthcare Artificial Intelligence (AI) Market Drivers

The Growing Number of Patients and Complexity of Data

Numerous services are included in the healthcare industry. Before the introduction of AI into the health sector, there was no framework to access patient data due to the paper-based nature of the previous system. This results in the loss of a patient's historical records and improper care for the patient. Diagnostic and therapeutic activities, medical images, and medical reports generate a large amount of data in the healthcare industry, and AI is data-driven. There has been an upsurge in the complexity of diseases, and therefore, other technological advances must intervene to provide superior patient care. Patients are becoming more discerning and knowledgeable about available healthcare options. They attempt to find a superior treatment option and investigate the optimal remedy.

Moreover, since the pandemic, there has been a dramatic increase in the number of daily patients; therefore, it was essential to provide better treatment options, stay abreast of patient status, update vaccines on various digital platforms, and provide relevant data to life science companies to improve treatment options. If the number of patients increases and solution providers cannot sustain technological advancements, it will complicate matters for healthcare suppliers. Similarly, machine learning will aid in inventing new treatment pathways for chronic and complex diseases such as diabetes and cancer. Better solutions for a better and longer life are being provided by healthcare. Despite this, there is a high demand for these solutions across the globe, making it difficult for life science companies to meet this demand as costs have risen. 

AI can make healthcare more efficient and patient-centered, and it can efficiently process vast quantities of medical data. This drives the healthcare artificial intelligence market. AI also shares the effectiveness and competence of specialists. In developing countries, the scarcity of trained healthcare professionals, such as radiologists and ultrasound technicians, can severely restrict access to diagnostic and lifesaving care. This is primarily attributable to the increasing number of patients in developing and developed countries and the advent of multi-specialty healthcare facilities worldwide. As the healthcare industry generates a vast amount of data, the use of AI technology is anticipated to increase significantly over the next few years.

Global Healthcare Artificial Intelligence (AI) Market Restraints

High Installation and Implementation Cost of Artificial Intelligence

Before adopting AI technology, vendors must consider its high implementation cost. AI technology comprises numerous solution platforms/factors, and the cost of these platforms has become a concern for health IT vendors. The cost of adopting AI fluctuates in tandem with technological development. The company's expenditures will vary according to the platform it develops. Additionally, the cost structure is determined by the requirement for a high intelligence level. Some programs are intended to accomplish a specific task with minimal human intervention. Therefore, the intelligence level is high, and the cost of adopting such technologies is relatively high. Companies specializing in AI may provide customized or pre-priced solutions. Only multinational corporations such as Microsoft, IBM, and Google were interested in investing in AI solutions. Despite this, implementing ML and AI technologies is difficult due to their high cost. This may impede the healthcare artificial intelligence (AI) market growth.

Global Healthcare Artificial Intelligence (AI) Market Opportunities

The Growing Investments for Advanced Drug Discovery and Development Techniques

Artificial intelligence (AI) is utilized in numerous industries around the globe. Artificial intelligence is making significant strides in the healthcare industry, particularly in the pharmaceutical sector, due to its diverse applications in drug design, clinical studies, and pharmaceutical production efficiency. The steps involved in the drug discovery process are time-consuming. From the lab to the pharmacy, the life cycle of a new medication consists of a series of time-consuming, complex events. With the aid of AI, complex activities can be minimized, and the efficiency goal can be attained in a short amount of time. Pharmaceutical companies have made numerous advances, but their research and development investments have not paid off. 

Numerous pharmaceutical firms have adopted cutting-edge technologies, such as artificial intelligence and machine learning, to obtain quality results rapidly. Such endeavors can generate a vast amount of data, which can be sorted by artificial intelligence into accurate information regarding experiments. In recent years, AI has become increasingly prevalent in such cutting-edge experiments. Because AI can manage large volumes of data, there has been a significant shift in the digitalization of data. In pharmaceutical product development, AI can manage drug design, decision-making, and therapy determination for patients receiving personalized medications. Consequently, the pharmaceutical drug companies will have lucrative opportunities to expand their businesses in the coming years.

Regional Analysis

The region-wise segmentation of the global healthcare artificial intelligence (AI) market includes North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa.

North America and Europe Will Dominate the Regional Market

North America will command the market with the largest share growing at a CAGR of 47.17% during the forecast period. Its high market share is primarily attributable to a large patient group and the increased adoption of digital healthcare made possible by recent advances in artificial intelligence (AI). North America's high adoption rate of healthcare artificial intelligence (AI) market share is also attributed to the presence of primary healthcare IT players. During the forecast period, the growth of the healthcare AI market is anticipated to be driven by the increasing integration of AI technologies in drug discovery & development and patient-centric treatment procedures.

New artificial intelligence (AI) techniques can assist businesses in creating better significance for their patients and communities by transforming time-consuming, labor-intensive, and frequently ineffective tasks into actionable insights for improved outcomes. Advanced hospital and healthcare system administrators view AI as the most effective route to a more productive, efficient, and high-performing healthcare organization. In North America, enormous opportunities exist to adopt more productive technologies, which bolsters the potential for AI to increase the region's GDP. Profits are accelerating due to the availability of sophisticated technology and user readiness for AI.

Europe will hold the second-largest share of USD 23,644 million, growing at a CAGR of 44.11%. In the healthcare AI field, robotics plays a crucial role in developing and producing new coronavirus vaccines. In the next five years, the application of artificial intelligence to the global health industry may become apparent. The natural language processing application segment is anticipated to lead the market in the coming years. It creates significant growth opportunities for the European market for AI in healthcare. It is estimated that Germany will contribute the most, primarily due to the increasing importance of big data in the German healthcare industry and precision medication. The European region sought to resolve the challenges associated with the secure collection, use, reuse, interoperability, and international movement of high-quality health data.

Segmental Analysis

The global healthcare artificial intelligence (AI) market is classified based on component, application, technology, end-user, and region.

On the Basis of Components

Based on components, the segments include hardware and software & services.

The segment of software & services is most likely to dominate the market and grow at a CAGR of 47.25% during the forecast period. It is not surprising that the demand for software development in the healthcare industry is growing. In addition, since the pandemic outbreak, the demand for healthcare software has skyrocketed throughout the entire healthcare industry. The software industry provides numerous services to the healthcare industry. The introduction of medical software reduces administrative burdens and enables healthcare providers to devote more time to primary and patient care. Organizations are also developing health software that is tailored to their specific needs. This software allows clinical experts to manage their practice effectively. Currently, software-service providers use diverse data sources to automate systems, provide more efficient services, and address system inefficiencies. As a result, the software and services industry will expand even further.

The hardware segment will hold the second-largest share. Medical device companies and healthcare organizations are the best users of AI hardware. In healthcare, robotic surgery is among the most widely adopted sections. MedTech companies offer expertise in producing and distributing medical devices compatible with various healthcare systems. Medical device companies develop all health configuration technologies. Patients who need heart and brain monitoring are the primary recipients of recent technological advancements. Utilizing these technologies, medical device manufacturers are innovating and developing their products to serve healthcare providers better and improve patient care.

On the Basis of Application

Based on application, the segments include hospital workflow management, medical imaging & diagnosis, drug discovery & precision medicine, and patient management.

The segment of hospital workflow management is estimated to hold the largest market share during the forecast period and grow at a CAGR of 47.30%. Administrative tasks consume a substantial amount of time from health professionals. According to a study, they can consume up to 70% of a doctor's time, while nurses devote only about 40% of their time to patient care. This administrative burden can be alleviated by well-designed solutions, resulting in more time spent with patients and significantly greater job satisfaction. By gaining insights from data, AI solutions help physicians optimize their workflows. At the department and corporate levels, the ability to sift through massive quantities of data can aid hospital administrators in optimizing performance, boosting productivity, and maximizing the use of existing resources, thereby reducing costs and saving time. Therefore, increasing the segment's use of AI.

The patient management segment will hold the second-largest market share. For some time, surgeons have used robots for minimally invasive surgery, increasing accuracy and speeding up patient recovery. AI in-home care and healthy living solutions give people control over their health. AI platforms like Ada, Babylon, Mediator, and K Health can help patients find solutions for their symptoms and diseases. This reduces clinical workload, especially in primary and emergency care, and speeds up treatment for severely ill patients.

On the Basis of Technology

Based on technology, the segments include machine learning, querying methods, natural language processing, and others.

The machine learning segment will grow at a CAGR of 47.89% and hold the largest market share during the forecast period. Machine learning (ML) is a subset of artificial intelligence that facilitates software applications to predict results more accurately. Through algorithmic processes, machine learning can boost the precision of treatment options and health outcomes. Deep learning, for instance, is a complex type of machine learning that imitates how the human brain functions and is increasingly used for medical imaging and radiation detection. The capabilities of machine learning for enterprise transformation and digitalization make it one of the most crucial technologies. Integrating artificial intelligence and machine learning can automate most operational processes and provide data-driven business insights.

Natural language processing will hold the second-largest share. Natural Language Processing (NLP) exemplifies how AI guides, obtains and evaluates unstructured data from human language to obtain patterns, gain meaning, and provide feedback. This facilitates the healthcare industry's utilization of unstructured data. NLP applications are gradually replacing analog solutions, simplifying operations and improving productivity. Although NLP use cases achieve initial success by reducing expenses, the incremental insights generated by NLP will provide the potential to accelerate existing sales channels and establish new independent business areas.

On the Basis of End-Users

Based on end-users, the segments include healthcare providers, pharma-biotech & medical device companies, payers, and others.

The healthcare providers segment will hold the largest market share and grow at a CAGR of 47.35% during the forecast period. AI-powered medical instruments are indispensable and advantageous for physicians and patients and can be utilized in various medical assistance settings. AI can collect and store patient data on a single framework, and healthcare professionals can use this data to identify past and present health issues. This correlation of disease characteristics enables physicians to make a more accurate diagnosis. Integrating multiple data modes will become increasingly important for diagnostic and treatment decisions within the general health system if we consider patient-centered care. In this way, AI assists human experts in answering questions and making decisions based on their knowledge.

The pharma-biotech segment will hold the second-largest share. AI can be applied to nearly every aspect of the pharmaceuticals and biotechnology industries to improve data processing. The technology adoption will reveal the immense potential of the health sector, particularly in research and development. Huge industry advancements will be brought about by AI, automation, and continuous response and analysis of big data. AI can improve R&D and aid in the structure and identification of new molecules in the pharma-biotech industry.

Recent Developments

• In 2022, Scripps Health and UT Health San Antonio adopted Ancora Medical's advanced oncology patient care software technology to improve documentation efficiency.
• In 2022, Caption Health launched the first in-home ultrasound service for heart health, Caption Care.