In an era of tightening profits and rising complexity, some hospitals see AI as a lifeline—but technology is a tool, not a silver bullet.
Prashant Karamchandani, senior partner in Financial Transformation at Consultancy Chartis, said many organizations want AI to solve their problems quickly, but success often stems from fundamental work, such as organizational preparation assessments or strong change management practices. He said in an interview at the annual HFMA conference in Denver last week.
“There are a lot of opportunities out there – but you can't just assume you buy it yourself, implement it, and then great things happen. You have to invest in time and resources to really make that happen.”
He added that AI success can also depend on the process of continuous improvement.
He believes that performance improvement should not be a one-time solution. He advises health systems to establish processes, governance and accountability structures to drive the continuous optimization of their tools.
Karamchandani stressed that the key to fruitful AI deployment is to determine which tasks humans and automation should handle. He noted that revenue cycle management is a major area of automation, with many administrative tasks performed in frontal, middle and backend offices that can be handled through AI tools.
These tasks include things like insurance qualification verification, prior authorization requests, coding assistance, fee capture reviews, and filing claims.
Karamchandani added that he believes the momentum and interest in AI solutions for clinical denials and appeals is because they provide a significant ROI and reduce administrative burden.
This intense interest in denying a particular AI is at a time when rising denial rates threaten the financial foundation of the hospital. Nearly 15% of all medical claims filed to private payers were initially denied, according to a Premier study.
But rejection is not the only thing that affects hospital operating margins. The health system is preparing for changes, including tariffs, potentially historic Medicaid and an uncertain global economy.
To address these financial headwinds, Karamchandani said many health systems are working to redefine their operating models.
This may require multiple shapes, such as merging service lines, adopting automation to cut labor costs, and transferring more care to outpatient or virtual settings. Some providers are also building strategic partnerships or exploring value-based care models.
Karamchandani said AI could be part of the solution for providers seeking to survive today’s financial storm, but only if paired with thoughtful strategies and long-term operational change.
Photos: metorworks, Getty Images
