Why digital solutions and AI in healthcare fail to scale

Healthcare systems globally face mounting pressure from rising demand and limited supply, driven by ageing populations, a projected 10 million-worker shortfall by 2030 and costs that are outpacing gross domestic product growth, highlighting the urgent need for transformative change.

Digitalization and artificial intelligence (AI) could help balance the scales by enabling more accurate diagnoses, supporting informed decision-making, enhancing remote patient monitoring and streamlining administrative processes.

However, while over $100 billion of venture funding has been invested in digital health companies in the United States since 2010, digital and AI solutions fail to achieve scalability.

Most healthcare initiatives are still in their early stages of development. For instance, over 70% of AI-related approvals by the US Food and Drug Administration focus on imaging applications, many of which have yet to be widely adopted.

Healthcare systems are fundamentally complex, involving various stakeholders, including payers, providers, patients, private companies and regulators, all subject to diverse regulations across different countries.

This complexity causes typical tech models to fall short, with industry players struggling to scale digital solutions effectively, even when they are initially successful. Several key barriers stand out:

Crucially, clinical entrepreneurship – often overlooked by healthcare systems and institutions is a unique and powerful driver of innovation and digital transformation.

Tapping into this source requires a robust hospital ecosystem alignment to fully unleash its potential.

Unfortunately, standing in the way are time constraints from clinical workload, misaligned incentives (doctors are rewarded for seeing patients, not sustainability) and underestimating the value of innovation within work cultures.

Although healthcare systems vary globally, hospitals face similar challenges.

Unlocking the full potential of digital solutions and AI in healthcare requires coordinated stakeholder action, starting with empowering the workforce to innovate and connecting them with private partners and global networks that support knowledge-sharing and scalable solutions

These innovative systems could surround the following key pillars, facilitating the transition from effective local solutions to global reach:

Founded in 2019, the Accelerate, Redesign, Collaborate (ARC) Global Platform, based at Sheba Medical Centre in Israel, has followed these principles.

ARC is a global network comprising healthcare systems, industry partners and over 100 startup companies. Its focus is on supporting large-scale transformation efforts and linking innovation with economic development.

Around 160 members work together on projects addressing key healthcare challenges such as financial sustainability, workforce shortages and burnout, system inefficiencies and regulatory barriers. This collaboration helps ARC stay engaged with ongoing healthcare developments.

By fostering curiosity, openness to new ideas and a willingness to take calculated risks, organizations can dismantle hierarchical barriers that stifle creativity, promote cross-disciplinary collaboration and champion inclusivity for better problem-solving.

Transparent leadership plays a crucial role in communicating clearly and providing incentives that empower teams to adopt change and drive innovation.

Entrepreneurship training complements this transformation by equipping employees at all levels with skills to identify challenges, think critically and develop practical solutions.

Through targeted workshops, mentorship programmes and design thinking tools, institutions can align individual capacities with organizational goals, enabling teams to transform ideas into impactful projects that support sustainable innovation.

Together, cultural change and entrepreneurship training enable healthcare institutions to transition from passive adopters of external innovation to active creators of transformative solutions, strengthening their leadership role within their ecosystems.

The success of the ARC Global Platform depends on building an integrated ecosystem that connects stakeholders across healthcare systems into a global network. The focus is on creating a dynamic and inclusive environment that fosters innovation across multiple areas rather than honing in on narrow domains or partnerships.

The model also aligns activities to maximize the collective impact of individual efforts.

This holistic and globally interconnected approach means that ARC sites operate as interdependent nodes within a unified network. They drive synergistic outcomes that no single entity or isolated collaboration could achieve on its own.

The model accelerates technological advancements and ensures innovations translate into real-world improvements, advancing healthcare systems on a global scale.

A concerted global effort is, therefore, imperative to maximize the impact of digital and AI in healthcare.

Platforms such as the World Economic Forum’s Digital Healthcare Transformation Initiative play a crucial role in disseminating these models globally, adapting them to meet specific local needs while maintaining a cohesive strategy.

To support this transformative wave, governments must enact policies that encourage innovation, health systems need to adopt a progressive mindset and innovators and financial institutions should prioritize investments in scalable, efficient ecosystems.

Together, these efforts will catalyze a global movement towards a more integrated, technologically advanced healthcare system.

This article was developed with the contributions of Angela W. Rabinovich, Chief Business Officer, ARC Global Platform; Jan Van Acker, Chief of Strategy, ARC Global Platform; and Antonio Spina, Global Lead for Digital and AI in Health, World Economic Forum.