Healthcare AI Is Booming. So Why Are Providers Still Losing Billions?

InnovationHealthcare AI Is Booming. So Why Are Providers Still Losing Billions?ByVenkata Ramya Ganti,Forbes Councils Member.for Forbes Technology CouncilCOUNCIL POSTExpertise from Forbes Councils members, operated under license. Opinions expressed are those of the author. | Membership (fee-based)Jun 04, 2026, 07:15am EDTRamya Ganti is the founder and CEO of Oprox, a VC-backed AI-native revenue intelligence platform for healthcare providers. getty​The healthcare AI market is booming. Across the industry, sophisticated platforms now automate prior authorizations, scrub claims before submission and appeal denials faster than any human team could. The technology works. The results are measurable. And yet the administrative crisis in American healthcare is getting worse, not better.The reason is not a lack of innovation. It is a matter of direction. The industry has been automating the wrong thing.The Reactive TrapHere is how the traditional revenue cycle works in most healthcare organizations today: A provider delivers care. A claim gets submitted. The payer denies it. The provider's team scrambles to appeal, rework and resubmit. Repeat, indefinitely.The numbers behind this loop are staggering. According to Optum's "2024 Revenue Cycle Denials Index", an analysis of more than 124 million hospital claims across 1,400 U.S. hospitals, the average claim denial rate has climbed to 12%, up from 9% in 2016, with 84% of those denials categorized as potentially avoidable. Meanwhile, the administrative burden on physicians has reached a breaking point. A 2024 American Medical Association survey of 1,000 practicing physicians found that the average practice completes 40 prior authorization requests per physician per week, consuming 13 hours of physician and staff time. Ninety-five percent of those physicians reported that prior authorization delays patient care, and 94% said it contributes to burnout.The first wave of healthcare AI addressed this by automating t...