Could artificial intelligence be so transformative that it could solve one of the U.S. economy’s biggest problems: the soaring fiscal deficit? Three economists at the Brookings Institution believe the answer is yes—artificial intelligence could have a positive “serious impact” on the country’s fiscal health.
one Working paper published last month The Center for Regulation and Markets at the Brookings Institution predicts that, under the most optimistic scenario, artificial intelligence could reduce the U.S. annual budget deficit by as much as 1.5% of gross domestic product, or about $900 billion in nominal terms, by 2044. Lowering the annual budget deficit by about a fifth by the end of 20 years.
“The use of artificial intelligence provides rare and potentially unique capabilities,” wrote the paper’s authors, Ben Harris, Neil Mehotra and Eric So. Opportunities to expand access to health care information and services while reducing the burden on traditional health care systems.
While the authors cite various ways in which AI can improve productivity, they highlight AI’s potential to significantly improve health care delivery and public health.
Artificial intelligence can not only make U.S. health care more efficient, it can also “democratize” access to the system by giving people more options for preventive health care — “changing the ‘who’ and ‘where’ of health care,” the economist wrote.
Artificial intelligence can ease deficit pressure
The economic impact of a more efficient healthcare system and giving individuals more ways to manage their own health can reduce pressure on governments Fiscal deficit continues to expandFor the fiscal year ended September 30, the figure topped $1.8 trillion. National debt reaches $36 trillion.
But the adoption of artificial intelligence in health care delivery is not a sure thing. There are many barriers to widespread implementation of artificial intelligence, mostly related to regulation and incentives.
Ajay Agrawal, a professor at the University of Toronto’s Rotman School of Management who studies the economics of artificial intelligence, said economists are “both enthusiastic and desperate” about artificial intelligence and health care.
“The enthusiasm is because there is probably no industry that benefits more from artificial intelligence than health care… But there are frictions because of regulation, because of incentives — because of the way things are structured and how people pay — and because of the associated risks and Responsibility,” Agrawal said.
“So, yes, there are a lot of implementation challenges, but at the same time, the rewards of successfully achieving this are huge,” Agrawal said.
health care and deficits
According to statistics, by 2023, the federal government’s expenditure on health insurance is estimated to be US$1.8 trillion, accounting for approximately 7% of GDP. Congressional Budget Office. CBO predicts that from 2024 to 2033, federal health care subsidies will total $25 trillion, accounting for 8.3% of GDP.
The problem is that a lot of health care spending in the United States has nothing to do with treatment or patient outcomes. Instead, it is estimated that about a quarter of all public and private spending will be on administrative functions.
A report by McKinsey analysts said, “Over the past 50 years, productivity has improved significantly in nearly every industry in the United States, with one major exception: health care.”
Economists at the Brookings Institution say this is one area where artificial intelligence can improve operations. Basic tasks such as appointment scheduling can be automated, while tasks such as patient flow management and preliminary data analysis can also be completed by artificial intelligence programs.
While the three economists acknowledge that AI’s impact on federal spending remains “highly uncertain,” the co-authors believe it could ultimately be more transformative for the economy than past technological leaps, such as the introduction of personal computers in the 1990s. sex. Harris told CNBC that the current artificial intelligence shock “feels different. This is not a typical technology shock.”
Harris said artificial intelligence is affecting “how people receive health care,” how the pharmaceutical industry discovers new products and how researchers make medicine more precise.
disease and mortality
Harris highlighted the impact of AI not only on productivity, but also its potential to transform the cost of care and disease and mortality.
“Such changes could have profound consequences for spending on Social Security and public health programs,” he and his co-authors wrote.
To be sure, if average life expectancy increases due to technology, advances in artificial intelligence also have the potential to counterintuitively increase federal spending. Advances in technology may not only prompt people to seek more medical services, but longer lifespans may also lead to a larger population of people retiring.
But the Brookings paper takes a more optimistic approach, predicting that one of the biggest benefits of artificial intelligence will come from accelerating preventive care and disease detection. This would create a healthier population that requires fewer medical interventions and may also increase labor force participation rates if a healthier workforce is employed for longer, the authors write.
“AI’s ability to improve diagnostic accuracy could not only improve patient outcomes but also reduce the waste of inappropriate treatments,” the economists said. “On a more optimistic note, existing AI systems may reduce All health care spending, including health insurance, and reducing costs through multiple channels, personalized medicine is a prominent example.”
Agrawal said assessing whether AI ultimately translates into a positive or negative impact on fiscal policy will depend on where in the age distribution it affects. Agrawal said whether artificial intelligence “will have a greater impact on retirees or workers” will answer the outcome of those numbers.
Artificial intelligence has proliferated
Diagnostics has so far shown the most advanced and greatest potential for the application of artificial intelligence in healthcare. Agrawal cited the influence of artificial intelligence in nearly every step of diagnostic care, from receiving input data, medical images such as X-rays and MRIs, to physician notes and charts.
“In almost every diagnostic field, artificial intelligence has demonstrated what they call ‘superhuman performance’ in some cases—better than most doctors,” Agrawal said.
Artificial intelligence also shows “significant promise” in better optimizing patient treatment plans through data analysis. The paper’s authors say machine intelligence could lead to more effective and less expensive plans for individual patients.
Agrawal believes it’s too early to tell whether public or private healthcare systems will make better use of artificial intelligence. He said that in the United States, private insurance companies are generally more enthusiastic about artificial intelligence technology related to preventive treatments. There is less interest in using artificial intelligence in diagnostic applications, which could lead to more cases and more treatments, he said.
“There is no clear financial incentive for the private sector to (implement) this,” Agrawal said. “In the public sector, despite the incentives, there is still a lot of privacy-related friction when it comes to data.”
He believes that public-private sector cooperation will be key to promoting the promotion of artificial intelligence in health care.
Agrawal said the public health sector “needs very strong incentives to drive change because otherwise, everyone is going to be on the same page. There’s a lot of resistance to change.”
“So to overcome that resistance you need a very strong incentive, and the private sector often provides a stronger incentive, either because users are trying to reduce costs or the creators of the technology are trying to generate profits,” he continued.
Big tech companies are already driving the development of large-scale language models specifically targeted at healthcare services. Google’s artificial intelligence system Articulate Medical Intelligence Explore (AMIE) can mimic diagnostic conversations. it is with Gemini The platform uses artificial intelligence to assist diagnosis, treatment planning and clinical decision support. Amazon and Microsoft Their own projects are underway to expand the use of artificial intelligence programs in medical services.
Prospects under Trump
A second term for President-elect Trump could change the spread of artificial intelligence in health care and ultimately its economic impact. Trump has vowed to reduce government spending and created an outside group called the Department of Government Effectiveness to “Eliminate government bureaucracy, cut redundant regulations, cut wasteful spending, and reorganize federal agencies.“Public health funding is one of the areas where funding could be reduced, hampering the rollout of AI applications.
“Now, if you do see a decline in the role of the federal government in providing health care to people, more efficient artificial intelligence may help offset the costs of that decline,” Harris said. “If artificial intelligence That means every dollar goes further, so I think we’ve arranged everything in a lucky way.”
Deregulation under the second Trump administration is also likely to accelerate the implementation of artificial intelligence in health care.
“A lot of people are worried about reducing regulation because they don’t want immature technologies to enter the health care system and harm people,” Agrawal said. “That’s a very valid concern. But too often they don’t put the blame on us for not introducing new technologies.” The harm caused to people is taken into account,” he added.
“There are areas where more technology development is needed, but there are areas in diagnostics that are ready, it’s just regulation that’s getting in the way of their use,” Agrawal said.
