ARTIFICIAL INTELLIGENCE IN HEALTHCARE MARKET ANALYSIS
Global artificial intelligence in healthcare market is estimated to be valued at USD 20.81 Bn in 2024 and is expected to reach USD 205.12 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 38.7% from 2024 to 2031.
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Increasing investments from healthcare organizations and startups in developing AI-powered medical solutions along with growing volumes of healthcare data can drive the artificial intelligence in healthcare market growth.
Rising demand for virtual assistants in healthcare
Healthcare industry around the globe has witnessed huge adoption of artificial intelligence based virtual assistants in the recent years. Driven primarily by increasing workload on physicians and nurses as well as the need for improved patient experience, healthcare organizations have started leveraging AI technologies that can automate routine tasks and provide answers to common medical queries without human intervention.
Virtual healthcare assistants powered by conversational AI are capable of answering basic questions about symptoms, providers, prescription refills and also scheduling routine appointments. This allows clinical staff to focus their time and expertise on more complex cases and procedures. As these AI systems continue to learn from each patient interaction, these are getting better at understanding medical terms as well as the context of the questions. This has made virtual assistance a cost effective first point of contact for many patients.
The trend is especially prominent in outpatient and after-hours care. When access to doctors and nurses is limited due to non-working hours or locations far from hospitals, a virtual presence that patients can reach out to with questions has provided much needed support. This has helped address issues of overburdened emergency rooms as well. For healthcare providers, virtual assistants reduce menial tasks allowing clinicians to spend more one-on-one time with patients who truly need their expertise, leading to higher job satisfaction levels.
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Rising adoption of precision medicine
Precision medicine, which involves tailoring medical treatment to the individual characteristics of each patient, holds immense promise for delivering the right treatment to the right patient at the right time. However, implementing precision medicine approaches requires compiling and analyzing huge amounts of patient genetic and molecular data. Healthcare systems have found it challenging to gather and process this volume of complex data through manual means. Thus, artificial intelligence play a key role in unlocking the potential of precision medicine.
Advanced machine learning tools and computational capabilities of AI are helping researchers analyze disparate data sets and identify subtle patterns and correlations that otherwise would be difficult to detect. Genomic and molecular profiling of tumors can now be supplemented with clinical, lifestyle and environmental factors of individual patients. AI's ability to evaluate huge genomic and health records data sets means that with each new record available, the systems become more effective in finding precision treatment matches. Healthcare providers are thus able to move away from a trial-and-error approach to a more predictive, pre-emptive model of treatment.
As the value of AI in precision medicine becomes clearer through its success stories, more hospitals, pharmaceutical companies as well as research organizations are actively pursuing AI-driven precision healthcare initiatives with the aim of delivering customized treatment protocols and improving clinical outcomes. While challenges around data volumes, computing infrastructure and integration within existing healthcare systems remain, there has been huge adoption of AI for precision care.
Key Takeaways from Analyst:
Global artificial intelligence in healthcare market growth is driven by rising need to analyze vast amounts of patient data to improve outcomes and streamline clinical workflows. As data volumes and computing power continue increasing, AI can help providers to develop more personalized care plans and precision medicine approaches.
North America currently dominates the market, due to extensive R&D spending and a favorable regulatory environment. However, Asia Pacific is poised to be the fastest growing region as countries seek to expand access to care. Within Asia Pacific, China's large population size and government backing of healthcare AI cements its leadership in the region.
Budgets and AI talent can hamper the wider adoption. Security of patient data can also slow integration of these new technologies into clinical settings. Lack of explainability for some complex AI models presents a separate barrier to clinician acceptance.
Interoperability between healthcare systems and with AI vendors can pose challenges for the market growth. However, partnerships between tech giants, payers, providers, and life science firms can overcome these hurdles through shared roadmaps and guidelines.
Market Challenge - Lack of skilled workforce
Global artificial intelligence in healthcare market growth can be hampered due to lack of skilled workforce that can boost adoption and implementation of AI technologies. While there has been immense potential for AI to revolutionize how healthcare is delivered, the dearth of data scientists and AI experts who understand both clinical and technological aspects can hamper the market growth. Most healthcare organizations do not have the required number of employees who are well-versed with latest AI algorithms and can accordingly develop robust and tailored AI solutions. This skills gap is leading to delays in projects and many initiatives are not scaling up as per expectations. Unless the talent pool is consistently improved through focused training and educational programs, it will be difficult for the AI in healthcare market to reach its true potential.
Market Opportunity -Personalized Medicine and Patient Experience
Leveraging AI to drive personalized medicine and improve overall patient experience can offer market growth opportunities. With the help of AI tools that can analyze huge amounts of patient data, it is now possible to develop highly customized treatment plans for individuals based on their genetic profile, medical history, lifestyle factors and more. This will lead to more targeted disease prevention, early diagnosis and superior treatment outcomes. AI also help in virtually engaging with patients through chatbots and virtual assistants. Such AI assistants can answer patient queries, provide reminders, monitor vitals remotely and help manage chronic conditions better. This elevated experience through personalized and AI-enabled care can boost customer satisfaction with the whole healthcare system.
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By Component- Hardware Adoption Fuels Growth
In terms of component, hardware segment is estimated to contribute the highest market share of 40% in 2024, owing to increasing investments in developing versatile AI hardware platforms and devices. Healthcare providers have been actively investing in hardware infrastructure like computer systems, networking devices, computer peripherals and accessories that can efficiently run complex AI algorithms and predictive models. Top industry players have rolled out high-performance servers, data storage systems and GPU enabled computers specifically designed for training deep learning models on large healthcare datasets. Advancements in high bandwidth internet connectivity have further aided real-time data transmission between different AI hardware endpoints.
Growing focus on miniaturizing AI hardware has led to development of portable medical devices integrated with AI capabilities. Players are incorporating sophisticated AI processors and sensory interfaces in portable devices like smart wearables, therapeutic robots, patient monitors and surgical tools. This allows continuous health monitoring and delivery of personalized care outside hospitals. Neuro prosthetics powered by AI hardware are also gaining popularity for restoring motor functions in patients. Furthermore, heavy R&D investments by industry players have reduced hardware costs, thus, making advanced AI systems affordable for healthcare providers.
By Technology - Speech Recognition Leads Technological Adoption
In terms of technology, speech recognition segment is estimated to contribute the highest market share of 36% in 2024, owing to its wide applicability across healthcare activities. AI-based speech recognition systems are minimally invasive and user friendly, thus, making them ideal for clinical documentation, decision support and patient communication. Healthcare professionals have switched to using voice enabled digital assistants and interactive voice response systems for accessing patient records, reviewing test reports and receiving diagnostic advice. Natural language proficiency of these systems enhances user experience while gaining clinical insights from vast unstructured speech data.
Speech recognition in combination with computer vision enhances capabilities of robotic surgical assistants and rehabilitation robots. AI systems can comprehend vocal instructions of surgeons and therapists during complex procedures or therapies, while automating documentation of the session. Pharmaceutical companies are also testing speech-based conversational agents for health monitoring and compliance of patients on long term medication. Advancements in deep learning algorithms have significantly boosted speech recognition accuracy on medical terminology and slangs used in clinical conversations. This has amplified adoption across healthcare workflow touchpoints involving patient-doctor interactions.
By Application - Imaging & Diagnostics Drives Adoption in Application
In terms of application, imaging & diagnostics segment is estimated to contribute the highest market share of 43% in 2024, owing to increasing implementation of AI in medical imaging sciences. Advanced algorithms are helping radiologists and image analysts in diagnostic labs to process high volumes of visual medical data and detect subtle anomalies. Deep learning models are trained on thousands of labeled images to recognize tissue patterns and abnormalities linked to diseases. AI applications have demonstrated high accuracy in detecting signs of cancer, neurological disorders and cardiovascular issues from medical images well before symptoms arise.
Leveraging computer vision and deep learning techniques, AI-powered imaging systems provide automated quantitative analysis and assist physicians in generating precise diagnostic reports. This significantly reduces workload of radiologists and pathology technicians. Players are also developing AI-driven robotic imaging devices and imaging analytics suites integrated with EHR systems. Such solutions empower near real-time exchange of scan reports between labs and consulting doctors. This fosters collaborative diagnostics practices. AI imaging tools have also proven effective in medical education and research by supporting data-driven investigations. Continued improvements in algorithm performance can integrate advanced diagnostics at the point-of-care.
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North America dominates the global artificial intelligence in healthcare market with an estimated market share of 40.3% in 2024. With the presence of major tech giants and healthcare companies investing heavily in AI-focused research and development, the region is home to massive AI expertise that is constantly working towards improving patient outcomes. Several universities and research institutions are also leading the way in cutting-edge AI and machine learning applications for healthcare. This investment and infrastructure leadership provides North American companies and hospitals a head start in incorporating next-gen AI tools in personalized care, treatment decisions, drug discovery and precision diagnosis. Provided the increasing consumerism in healthcare as well as huge pools of available medical data due to centralized systems, AI is extremely well-positioned to transform the regional healthcare industry for the better.
Asia Pacific has emerged as the fastest growing regional market for artificial intelligence in healthcare. Countries like China, Japan, South Korea and India offer a unique combination of large populations, growing healthcare needs, increasing consumer spending on wellness technologies as well as government initiatives to promote digital healthcare. This presents a massive opportunity for AI to make quality care more affordable and accessible for all. Presence of a vibrant AI startup ecosystem and low-cost hubs for insourcing AI product development and testing helps global companies to establish Asia Pacific as their development and deployment center. Rapid advancements in infrastructure along with rising medical standards point towards Asia becoming the global leader in innovative AI technologies that can achieve healthcare for all.
Artificial Intelligence in Healthcare Market Report Coverage
| Report Coverage | Details | ||
|---|---|---|---|
| Base Year: | 2023 | Market Size in 2024: | US$ 20.81 Bn |
| Historical Data for: | 2019 to 2023 | Forecast Period: | 2024 to 2031 |
| Forecast Period 2024 to 2031 CAGR: | 38.7% | 2031 Value Projection: | US$ 205.12 Bn |
| Geographies covered: |
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| Segments covered: |
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| Companies covered: |
GE Healthcare, Siemens Healthineers, Philips Healthcare, NVIDIA, Intel, Babylon Health, Komodo Health, Aidoc, Google Health, Exscientia, Butterfly Network, Relay Therapeutics, PathAI, Viz.ai, Canon Medical Systems, Microsoft, Oncora Medical, Biosymetrics, Arterys, Ada Health |
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| Restraints & Challenges: |
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*Definition: Global artificial intelligence in healthcare market uses AI technologies like machine learning, natural language processing, robotic automation, and vision analytics across various healthcare sectors, including drug discovery, precision medicine, clinical trials, medical diagnosis, and personal health tracking. AI systems enhance physicians' ability to diagnose diseases accurately, offer personalized treatment options, and contribute to the development of next-generation decision support tools, ultimately improving the quality and accessibility of healthcare worldwide.
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About Author
Komal Dighe is a Management Consultant with over 8 years of experience in market research and consulting. She excels in managing and delivering high-quality insights and solutions in Health-tech Consulting reports. Her expertise encompasses conducting both primary and secondary research, effectively addressing client requirements, and excelling in market estimation and forecast. Her comprehensive approach ensures that clients receive thorough and accurate analyses, enabling them to make informed decisions and capitalize on market opportunities.
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