By The Epoch Times | Created at 2026-09-29 00:01:55 | Updated at 2026-09-29 03:08:03
3 hours ago
Artificial intelligence (AI) will inflate healthcare costs in the short term but produce long-term savings, Dr. Mehmet Oz, administrator at the Centers for Medicare and Medicaid Services, said at the Oracle Health and Life Sciences Summit on Sept. 23.
“Short term, AI is going to be inflationary because it’s going to turbocharge the ability of the current billing systems to work more effectively,” Oz said.
Providers can take care of more patients, capture more diagnoses, and generate more procedure codes thanks to AI, he said.
The Blue Cross Blue Shield Association estimated that its insurance companies added $942 million in healthcare spending between 2023 and 2025 due to a sharp increase in patients with complex conditions.
Roughly 70 percent of the added cost was tied to secondary diagnoses, conditions other than the patient’s primary reason for receiving care, according to the Blue Cross Blue Shield Association’s Sept. 24 report.
The insurer expressed concern that AI tools widely adopted by hospitals—to scan lab results and electronic records—contributed to the growth in complex coding.
Doctors Using AI
Two-thirds (67 percent) of physicians use AI in their daily work, according to a January survey from Offcall, a financial platform for doctors. Nearly half of physicians who use AI tools do so for evaluating possible diagnoses.
One reason doctors now rely on AI to support their decision-making is that they are aware of the possibility of missing a diagnosis, Oz said.
Between 2012 and 2014, the diagnosis error rate was 11.1 percent among three major diseases—blood vessel issues (6 million), infections (6.2 million), and cancers (1.5 million), causing serious harm to one out of every 23 patients, according to a 2023 British Medical Journal study.
“AI can be a force for good in healthcare,” Oz said.
Commenting on speculation that AI may be a destructive force in society, Oz added, “It is possible that AI destroys humanity, but I guarantee you we will lose lives if we don’t use AI in the day-to-day trench warfare of fighting disease in America.”
Accountable Care
Amid the increase in secondary diagnoses, the Centers for Medicare and Medicaid Services is “rushing toward the accountable care element of this game” in order to reduce repeating medical tests or providing unnecessary services for patients, Oz noted. He added that such efforts would eventually flatten the cost curve.
“Long-term super intelligence should be deflationary,” Oz said.
Accountable care is a healthcare model where doctors, nurses, and hospitals take responsibility for improving care quality, coordination, and outcomes. In these systems, healthcare professionals consider patients’ entire health history when developing treatment under accountable care relationships.
“Right now we’re sort of stagnant on accountable care organization growth,” Dr. Oz said.
CMS Paying for AI
The Centers for Medicare and Medicaid Services is integrating the private sector technology industry into the public healthcare program through the Advancing Chronic Care with Effective, Scalable Solutions (ACCES) model and industry pledges.
The ACCES model created outcome-aligned payments to reimburse technology-supported care, such as fall detection, medication management, and tele-health monitoring.
Tech vendors signed pledges committing to align with the federal healthcare frameworks, including data sharing and eliminating the clipboard to make it easy for patients to access their own medical records.
Oz said that “the biggest breakthrough was in killing the clipboard,” as paper tools are susceptible to fraud and are less effective.
In the next few months, patients can submit electronic medical records to Medicare.gov and find the right drug plan, according to Oz. “We now have 800 tech companies who have signed to join the ecosystem, and then we started creating financial models for them to get paid.”
