Why Healthcare Providers Should Share Risk in AI Contracts

AI and Healthcare: A Shared Journey into Risk Management

The integration of Artificial Intelligence (AI) in healthcare is more than just a technological shift; it's a transformation that demands new models of collaboration between hospitals and tech providers. Zafar Chaudry, Chief Digital Officer and Chief AI and Information Officer at Seattle Children’s, emphasizes that the conversations surrounding healthcare AI are evolving, particularly concerning how contracts should be structured. Hospitals, he argues, ought to enter into agreements that allow for shared risk.

Why Risk Sharing Matters in AI Contracts

Contracts that are solely focused on compensating for time and resources often result in growing expenses without guaranteeing outcomes. Chaudry points out that healthcare could benefit significantly from a milestone-based payment system where suppliers are rewarded based on product performance. This approach not only aligns the interests of both parties but also mitigates the financial burden on healthcare providers.

Navigating the Governance of AI in Healthcare

The landscape of healthcare AI governance is rapidly changing. Over the past year, heightened concern has arisen regarding ethical implications and the transparency of AI applications used in patient care. Various organizations, such as the Coalition for Health AI Coverage (CHAI) and VALID AI, are working on developing standardized governance frameworks, a crucial step in ensuring the technology is applied responsibly and effectively.

The Case for Collaborative Development

Developing AI solutions is inherently complex, and Chaudry's analogy comparing it to selecting and using mobile applications underscores this point. Just as users must adapt apps to fit their needs, hospitals must collaborate closely with AI developers to ensure tailored solutions that genuinely address specific operational challenges. Without this partnership, projects risk falling short of expectations.

Future Trends: Accountability in Value-Based Care

As the healthcare sector shifts toward a value-based care model, it becomes increasingly clear that accountability is integral to success. This model holds providers responsible for care outcomes and costs, aligning with the risk-sharing principles that Chaudry advocates for. Implementing collaborative arrangements not only enhances the quality of care but also fosters an environment where both care teams and patients can share in the rewards of resilience and innovation.

For healthcare IT professionals and digital health innovators, the time is ripe to foster these conversations about risk-sharing in contracts with AI developers. Such alliances could lead to breakthrough advancements in technology that not only meet the needs of today but also pave the way for a more efficient and effective healthcare system in the future.