Healthcare startups are eagerly delving into the development of artificial intelligence (AI) products for hospitals, but a recent survey indicates that many healthcare systems lack the necessary policies to support this technology effectively.

A survey conducted by the Center for Connected Medicine at UPMC and KLAS Research revealed that out of 34 US health system leaders, only 16% reported having established systemwide policies for AI usage and data access. Moreover, a significant majority, comprising 65% of respondents, admitted to having no policies in place specifically tailored for AI.

The findings underscore the challenges healthcare faces as it navigates the burgeoning landscape of AI-powered software. While other industries have embraced new technologies more readily, healthcare has been slower to adapt, despite the potential benefits AI offers in terms of efficiency, reduced burnout among medical professionals, and enhanced patient outcomes. Nevertheless, there is growing enthusiasm among investors and medical practitioners regarding AI's transformative potential in healthcare delivery.

Despite this optimism, many healthcare leaders remain cautious about embracing AI. Some cited the early stage of AI adoption in the industry as a reason for not yet formulating policies, while others expressed a preference to wait for federal regulations before establishing guidelines. However, the lack of comprehensive regulatory frameworks from agencies like the Food and Drug Administration (FDA) has left the industry in a state of uncertainty. While the FDA has issued guidelines for medical device manufacturers incorporating AI, broader regulations for AI adoption and evaluation in healthcare are still lacking.

For healthcare AI startups, navigating this uncertain regulatory landscape poses challenges. Nevertheless, many startups see AI as a solution to the industry's pressing issues, such as labor shortages and burnout among medical professionals. Medical-scribe startups, which utilize AI to streamline administrative tasks and alleviate burnout, have attracted significant attention from investors and healthcare systems alike.

One such startup, Abridge, which specializes in AI-powered clinical documentation software, is in talks to raise substantial venture funding. However, competition in this space is fierce, with established players like Nuance dominating the market. Despite the enthusiasm among healthcare leaders for AI software, the integration of these solutions with electronic health records (EHRs) remains a key consideration for adoption.

As the healthcare industry navigates this critical phase of AI adoption, the next 18 months are expected to be pivotal in determining which startups emerge as leaders in the field. With healthcare systems increasingly piloting AI solutions, the coming months will likely see a sorting out of the various players vying for market share.