AI is everywhere right now—from your inbox to your imaging studies.

But in healthcare, the real promise of artificial intelligence isn’t the ChatGPT-style diagnoses.

It’s smarter utilization.

AI has the potential to cut hundreds of billions in waste by automating the worst parts of our system: waitlists, scheduling, documentation, claims, billing, and more. It’s not a silver bullet—but it’s the first real tool we’ve had in a while that can target the root inefficiencies clogging up care delivery.

So how exactly is AI being used to improve utilization and quality in healthcare—and is it actually working?

In this article, I’ll walk through the biggest pain points AI is tackling today, what the research and ROI show so far, and what it’ll take for these tools to move from early adopters to the mainstream.

National healthcare expenditures are approaching $5 trillion—up from $1 trillion when I was born and just $50 billion when my parents were born. For two decades, everyone has talked about "bending the cost curve," which has proven far easier said than done.

This $5 trillion spans across healthcare domains from payers to providers to pharmaceuticals. Yet one area that often escapes precise measurement is administrative costs.

Studies estimate that 15-30% of all healthcare dollars go toward administrative work. Put simply, when you pay $100 for medical services, up to $30 funds administrative tasks like revenue cycle management, prior authorization, and back office operations. More troubling still, researchers estimate half of these administrative costs are pure waste—that's 7.5-15% of national healthcare expenditures wasted!

On a per capita basis, the U.S. spends about $1,000 per person on healthcare administration. For comparison, Germany—the second-highest spender—allocates just $300 per capita for administration. The U.S. spends over three times more per person on paperwork than any other advanced nation!

Artificial intelligence offers a promising solution to reduce administrative costs by streamlining existing systems or creating entirely new ones.

AI comes in two main forms that you're likely familiar with (or you can watch my class on generative AI here):

When combined, these technologies create powerful tools that automate workflows and significantly reduce administrative burden.

To understand how AI is transforming healthcare utilization, consider the levels of automation we see in cars…