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Providers’ Contracts with AI Companies Should Share Risk, This Hospital Exec Says

March 13, 2025
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The dialog round healthcare AI is maturing, in keeping with one hospital govt.

Throughout an interview final month, Zafar Chaudry, chief digital officer and chief AI and knowledge officer at Seattle Kids’s, mentioned that there was much more discuss surrounding the governance and regulation of healthcare AI up to now yr or so.

“Keep in mind, it’s not nearly expertise. Folks and course of are a giant downside in all of this,” he declared.

Over the previous yr, Chaudry mentioned he has seen the healthcare business rising its concentrate on the moral and security concerns of AI, in addition to the transparency facet.

As an example, some lawmakers have sounded the alarm on payers that use AI to disclaim claims. And organizations just like the Coalition for Well being AI Protection (CHAI) and VALID AI are ramping up their efforts to develop standardized AI governance frameworks.

Because the business continues to get extra severe about AI, it has turn into clear that AI instruments very not often work as out-of-the field options, Chaudry added.

“I’ve not seen plenty of precise, tangible use instances that [AI companies] are literally fixing. There’s some, however many are very a lot ‘If you happen to inform us what the issue is, we’ll construct the answer for you,’” he defined. “I form of evaluate it to if you get your iPhone, you obtain a complete bunch of apps, after which you are able to do a complete bunch of issues.”

When hospitals enter into contracts with AI builders to construct instruments which are the best match, the 2 events ought to share danger, Chaudry remarked.

This kind of contract will not be common. He mentioned most AI builders need to be compensated for his or her time and supplies.

“The issue with the time and materials-type contract is, if I’ve an important thought, and also you conform to construct it for me, wouldn’t you like to construct it for an extended time frame as a result of then my invoice retains going up? It’s very arduous to cost-control that,” Chaudry defined.

Ideally, the hospital and AI firm would draw up a contract wherein the hospital pays on a milestone foundation — and provided that the product performs properly, he mentioned.

Because it stands now, hospitals’ contracts with tech distributors normally don’t assure that the product they’re investing in will ship the meant consequence, Chaudry declared.

“If you’d like a blue automobile they usually ship you a crimson automobile, would you simply settle for the crimson automobile? You’d say, ‘Hey, one thing’s incorrect right here.’ However with AI in healthcare, it appears to be ‘Effectively, we’ll sort of provide you with what you need, after which we’re completed,’” he acknowledged.

Picture: sinemaslow, Getty Photographs



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