Artificial Intelligence in Diagnostics Market Trends [2031]

Report Description

Artificial Intelligence in Diagnostics Market Outlook 2031

The global Artificial Intelligence in Diagnostics Market size was USD 1 Billion in 2022 and is likely to reach USD 7.2 Billion by 2031, expanding at a CAGR of 24.5% during 2023–2031. The market growth is attributed to the rapid adoption of AI-powered software and devices in the healthcare sector.

Growing acceptance of advanced digital solutions in the healthcare sector is boosting the market. Healthcare needs are growing worldwide, with rising population and prevalence of various diseases. Providing quick and efficient diagnostics, in a short span of time, is a major focus in the healthcare sector. This is being achieved through the latest technology integration, including AI, machine learning (ML), and internet of things (IoT) devices. The global expansion and growing modernization of healthcare facilities are expected to boost the opportunities for the players in the market during the assessment period.

• According to the observations published by the American Hospital Association (AHA) in March 2023, extensive AI adoption can save the US economy 5% to 10% of healthcare spending, which roughly amounts to USD 200 billion to USD 360 billion (2019-dollar valuation). These predictions are derived from specific AI-enabled usage cases that employ the latest technologies, are possible within the next 5 years, and do not compromise quality or access.

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The research report finds that the COVID-19 pandemic fueled the artificial intelligence in diagnostics market. During the pandemic, the dependence on AI-enabled medical tools that are contactless or require less manual handling grew significantly in the healthcare industry. AI software and services benefited the diagnostics services providers, as they accelerated diagnostics procedures and lowered the burdens of complex and repetitive administrative tasks.

The development and launch of medical devices and kits that delivered quick diagnosis through less intervention increased during this period. The market is witnessing steady growth post the normalization of the pandemic, with advancements in AI and the rising introduction of innovative diagnostics solutions.

• In September 2023, BT, in strategic partnership with deepc and AXON Diagnostics, launched artificial intelligence and digital services in medical diagnostics to support NHS. It is intended to cut the waiting time and speed up the diagnostics procedures for patients. This tool is being developed to become a digital aggregator of new AI healthcare services.

Artificial Intelligence in Diagnostics Market Dynamics

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Major Drivers

Increasing adoption of AI-powered software and hardware to reduce the workload on healthcare staff is expected to propel the market during the forecast period. Healthcare needs are rising worldwide, with changes in lifestyle and the prevalence of chronic illnesses and infectious diseases.

The patient load is significantly higher in healthcare institutions, which necessitates the adoption of advanced tools such as AI-powered medical devices and software to facilitate fast diagnosis and treatments. These solutions are expected to reduce errors occurring during diagnosis, which allows to beginning of early treatments and recovery.

• A survey published in September 2023 reveals that in 2021, 42% of healthcare establishments in the European Union (EU) were utilizing AI solutions for disease diagnosis. An additional 19% of organizations planned to adopt this technology in the span of three years. While 33% of surveyed healthcare institutions were planning to employ AI-enabled patient monitoring tools in the coming three years.

Growing cross-industrial partnership & collaboration among healthcare and IT firms is projected to boost the market. As healthcare is a major industry, there is consistent demand for innovative and improved solutions to provide better services and manage complex data. The joint effort by healthcare and technology providers is enabling the rapid development of new medical solutions such as superior medical imaging solutions and advanced sensors. This, in turn, is projected to fuel the market during the forecast period.

Existing Restraints

High costs and a lack of willingness to adopt AI-led healthcare solutions are expected to restrain the market. To get reliable results, medical technology needs to be of the best quality. However, to procure and maintain such advanced tools, the expenses are significantly high. This can restrain healthcare establishments with limited budgets from acquiring these solutions. Additionally, their adoption is likely to decline due to a lack of trust from some patients and healthcare professionals in technology-driven diagnostics.

Emerging Opportunities

Need for accurate and efficient medical diagnosis is likely to fuel the market. The data generated at healthcare facilities including imaging, medical records, genetic data, and test results has huge potential to improve healthcare procedures. AI technology can make use of the smallest data points, patterns, and other insights from large data volumes to generate precise diagnoses and improve decision-making. Furthermore, the growing demand for medical technologies in developing economies is expected to boost opportunities in the market.

Scope of the Artificial Intelligence in Diagnostics Market Report

The global market research report includes an assessment of the market trends, market segments, and regional markets. Overview and dynamics have also been included in the report.

Artificial Intelligence in Diagnostics Market Segment Insights

Component Analysis

Based on component, the artificial intelligence in diagnostics market is divided into hardware, software, and services. The software segment is anticipated to expand at a major growth rate during the projection period, owing to the rising adoption of AI-enabled software solutions to make effective use of patient data for rapid diagnostics. The software solutions can reduce incorrect diagnoses, as they efficiently capture the tiniest data points in medical samples and image data, to derive the diagnosis.

AI diagnostics solutions allow timely and accurate diagnosis of various diseases, which is essential for initiating early treatments and adoption of precautionary measures. The software can facilitate quick analysis of patient data such as medical 2D & 3D imaging, biological signals (ECG, EHR, EEG, and EMG), and vital signs, including pulse rate, body temperature, blood pressure, and respiration rates.

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Diagnosis Type Analysis

On the basis of diagnosis type, the global market is segregated into oncology, chest & lungs, cardiology, pathology, radiology, neurology, and others. The neurology segment is projected to register a considerable CAGR during the forecast period, owing to an increasing preference for value-based care solutions to diagnose and treat neurological disorders. Advances in medical imaging with AI are rising.

Growing development of efficient neurology diagnostics solutions that are capable of speedily and accurately identifying common and rare neurological diseases.

• According to a study published by the Pan American Health Organization (PAHO), the burden of mortality and disability, as a result of neurological disorders, is a major health challenge globally. These conditions are expected to worsen in the coming years with the rise of the aging population.

End-User Analysis

Based on end-user, the artificial intelligence in diagnostics market is segmented into hospitals, diagnostics laboratories, diagnostics imaging centers, and others. The hospitals segment is anticipated to register a robust growth rate during the forecast period, owing to the growing adoption of digital healthcare technologies, to reduce the burden on hospital facilities. Growing number of individuals opting for diagnostics services at hospitals, for early disease detection, is further fueling the segment.

With the emergence of the COVID-19 pandemic, patient footfalls have increased at hospitals, due to the prevalence of infectious and chronic disorders. However, health technology has advanced significantly and is being increasingly implemented in various procedures at hospitals. AI diagnostics have the potential to benefit patients and healthcare staff, by saving time, reducing errors, and cutting unnecessary expenses of repetitive visits. These factors are likely to boost the adoption of AI in diagnostics services at hospitals.

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Regional Outlook

In terms of region, the global artificial intelligence in diagnostics market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America is expected to dominate the market during the projection period, owing to increasing digitization in the healthcare sector, and high prevalence of chronic disorders.

This region is leading in terms of AI adoption, with the significant presence of the technology industry and the implementation of standards & regulations for the ethical use of AI. Additionally, private and government funding is growing to develop and launch various AI-enabled healthcare solutions, which is expected to propel the regional market in the coming years.

• As per the analysis by Crunchbase, in the US, investment toward AI in diagnostics surged from USD 348 million to surpass USD 1 billion between 2020 – 2021. In 2022, the funding dipped to USD 883 million, but it still remained the second major year in terms of investments in AI in diagnostics.

The market in Asia Pacific is anticipated to witness rapid growth in the coming years, owing to increasing healthcare needs in the region, due to the presence of a large population and the prevalence of various illnesses. The healthcare sector in this region’s developing economies such as India and China, is advancing with the acceptance of next-generation software technologies and medical devices.

In the recent years, innovation and the launch of AI-driven rapid medical diagnostics kits have increased in this region, with the growing threats of various health disorders. Additionally, rise in the number of startups in the health tech sector and supportive government policies for the expansion and advancement of healthcare facilities are driving the opportunities in the market.

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