Healthcare orgs deploy AI at twice the rate of rest of economy, report finds 

One in five healthcare organizations implemented artificial intelligence in 2025, spending $1.4 billion on the technology – nearly triple the amount from 2024, according to Menlo Ventures’ research. 

AI advancements have the potential to automate the massive administrative load in healthcare as the industry anticipates staffing shortages in the future. 

According to the study, the number of healthcare organizations using AI is up seven-fold since 2024 and ten-fold since 2023. Within the sector, health system companies are the biggest user of AI (27%) followed by outpatient providers (18%) and insurance payers (14%).  

Compared to the U.S. economy as a whole, which uses AI for 9% of its total work, healthcare organizations – representing 12% of the total economy – deploy AI at more than twice that rate, the report says. 

The majority (85%) of AI implementation occurred in healthcare startups, the research also found. The three most prominent areas were ambient clinical documentation ($600 million in AI), coding and billing automation ($450 million) and patient engagement and prior authorization, Forbes reports. 

In terms of total health care spend in the economy, however, AI is still less than 0.1% of the $5 trillion sector. 

Companies say the new technology helps cut costs, increase efficiency and improve care. 

Advocate Health, for example, aims to reduce “documentation time by more than 50%,” according to the study. Mayo Clinic is targeting diagnostic and patient care through more than $1 billion in investment in more than 200 AI-related projects.

For every five hours of patient care, physicians spend one hour on documentation, according to the study.  

“Ambient Scribe” is an AI platform that will listen to patient-doctor conversations, record clinical notes and update patient records automatically, potentially saving hours.

For the study, Menlo Ventures partnered with Morning Consult to survey more than 700 healthcare executives between August and September 2025. These executives were technology decision-makers (410), senior insurance and benefits personnel (120) and pharmaceutical and biotechnology executives (170). 

The Bureau of Labor Statistics estimates American healthcare will lose significant staff over the next decade, leading to a shortage of more than 200,000 nurses and 100,000 physicians, Forbes reports. With rapid AI adoption, healthcare can prioritize hiring individuals for medical practice, rather than filling data analysis and patient engagement positions, Forbes explains.