As U.S. healthcare payers face persistent economic headwinds, rising medical costs, and the accelerating pace of technology change, the pressure to evolve has become critical. Artificial intelligence (AI), and more specifically generative AI (GenAI), are emerging as vital ways to streamline operations, reduce administrative costs, and enhance member and provider experiences.
The latest Gartner® Predicts 2025: AI Reshapes How U.S. Healthcare Payer CIOs Do Business report shares their strategic planning assumptions, key findings, market implications and recommendations on how AI is set to reduce administrative costs and why industry cloud platforms will be essential for future success.
Healthcare’s Cost & Complexity Crisis
According to the Gartner® Predicts report, “U.S. health insurance costs are projected to rise 5.8% in 2025.” At the same time, medical loss ratios (MLRs) will continue to increase due to overutilization and ongoing workforce shortages. These pressures will force healthcare payers to reevaluate how they operate.
In fact, one of the key findings in the Gartner® Predicts report’ states:
“In the face of these challenges, artificial intelligence (AI) and automation present untapped and significant opportunities to help payers reduce total cost of care (TCoC) and improve the medical loss ratio (MLR).”
As CIOs start to look into this, the Gartner® Predicts report shares this strategic planning assumption, “By 2027, Gartner predicts GenAI will reduce administrative costs by 30% for most health insurers with over one million members.”
Where CIO Should Focus Their AI Investments
- Generative AI and Natural Language Processing (NLP)
GenAI is already being applied across high-impact administrative areas such as prior authorization, claims adjudication, care management, and provider communications. Enhanced with large language models (LLMs), NLP capabilities enable faster, more accurate data intake and processing across payer workflows.
In the 2024 Gartner Business Outcomes of Technology Survey, “80% of payer respondents reported that they have integrated or are planning to integrate the use of GenAI technology into some areas of the enterprise.”
Top use cases include AI-enabled member and provider chat solutions to reduce time spent within service teams, as well as solutions that reduce labor-intensive processes and workflows within provider contracting, product configuration, utilization management and legacy code generation.
-
Industry Cloud Platforms (ICPs)
AI adoption is closely linked to the rise of industry-specific cloud platforms. While less than half of healthcare payers have deployed ICPs to date, that number is climbing as CIOs seek to modernize legacy applications and provide business users with more control through no/low-code tools.
According to the Gartner® Predicts report, “By 2027, 25% of payer organizations’ legacy applications will be replaced, stemming from an increased reliance on industry cloud platforms spurred by rapid adoption of AI.”
ICPs also support cross-functional collaboration and data standardization, which are critical as payer organizations work to break down internal silos and streamline decision-making.
-
Employee Experience and Culture
AI transformation isn’t just about technology, it’s also about people. The most successful payer organizations are those investing in employee experience and change management.
According to the Gartner® Predicts report, “Culture is critical to an organization’s ability to execute on its strategy — and changing a culture is often needed to deliver on transformation initiatives.”
Improving employee experience not only supports technology adoption but also drives better outcomes for members and providers by reducing burnout, increasing engagement, and enhancing productivity.
Download the Full Report
The healthcare payer landscape is shifting fast. To stay ahead, CIOs and business leaders need to understand where AI is heading and how to deploy it effectively across their organizations.
Get your complimentary copy of the Gartner® Predicts 2025: AI Reshapes How U.S. Healthcare Payer CIOs Do Business report.
Gartner, Predicts 2025: AI Reshapes How U.S. Healthcare Payer CIOs Do Business, Faith Adams, et al., 16 January 2025. GARTNER is a registered trademark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.
