Blue Cross Blue Shield’s $942M AI Costs

Jaeden (0:00)

If you want to get access to this episode and my next 30 episodes all ad free, so there'll be no ads on them, go check out my podcast AI Chat. You can go search for that on Spotify or Apple, it's AI Chat. I'm gonna post all of these news episodes, and I'm also posting interviews, like I just interviewed the CEO of Cohere. They've raised over a billion dollars for their AI model, talking about what they're gonna be spending the money on and the direction of the AI industry, along with all of this new stuff. So if you wanna go check it out with no ads for free, it is AI Chat. Welcome to the podcast today. Today, you guys, we wanna talk about a big headline that got Jamie and I thinking about some of the implications for entrepreneurs and businesses. But apparently Blue Cross Blue Shield, the insurance company, says that AI hospital coding added about $942 million in costs to them. When I first saw that headline, I was like, oh, this means that people, AI is making mistakes or something? No, guys, what this is saying is that hospitals are using AI tools to help them with their coding, to help them with their insurance claims. And I mean, this is all stuff that they're legally entitled to from the insurance companies. They were able to extract, just out of Blue Cross Blue Shield, there's probably tons of others, an extra billion dollars a year from their claims. And so it got me and Jamie talking about how there's so many of these types of opportunities with businesses in using AI. So we're gonna jump into all of that. But before we do, I wanted to mention that if you haven't already, we would love to have you as a member of our AI Hustle School community. It's only $19 a month, so we try to make this really affordable for everyone. But we share every single week an exclusive video where we're breaking down how we're using AI to grow and scale our businesses. It's information, all the insider information of the tools, the revenue, the numbers, the costs associated with everything, all of the stuff that we recommend, and a ton of just different tutorials. We have over 1,300 members in the school community. It's an amazing place where people are building things and they're sharing what they're building. So if you haven't already, we would love for you to go check out the school community and see how we recommend making money, whether that's being a consultant or building software products. Our goal is for people to join the community and to be able to make $10,000 a month in passive income or in side hustles in addition to whatever their work or their job is. So if that sounds interesting to you, go check out the AI Hustle School Community. We will leave it linked in the description. Okay, Jamie, talking about this Blue Cross Blue Shield story, did anything stick out to you?

I mean, this a billion extra dollars for hospitals just from AI tools, that is an insane amount of money.

Jamie (2:31)

Yeah, I mean, I actually love this story. I think it's awesome because I'm not a fan of insurance companies personally, especially because I'm going through a house flood situation right now. But that's a story for another day. What I think is so interesting about this is that hospitals are using AI now in their insurance claims and writing up their documentation. And if we think about what an insurance claim is, you're basically itemizing each different service, time spent, dollars spent on this individual. And the more deliverables or more line items you can come up with, the more money you're going to get from insurance.

And my guess as to why maybe this is happening in the insurance industry is that if you are providing care to a patient, you have to then think up after the appointment, all the different services you provided, you have to take notes and all this stuff based on memory from the appointment, where you maybe, I would suppose, maybe they, like, what if you put a band-aid on someone and missed it, and like, or missed logging it, I mean, into your notes, or, you know, where AI would remember that, or AI would think of that, where maybe you wouldn't, and add it to the itemized list. That would be my guess of how this is happening, but what are your thoughts, Jaeden?

Jaeden (3:47)

Well, okay, so the first thing is, there's a bunch of articles about this, and most of them are coming from people that are interviewing the insur... It's like this is coming from the insurance company's perspective, so I love it because they're kind of mad about it, about how it's happening, but it's all legal, so it's just really kind of funny to me. But it's BCBSA, and they said that... It's actually over two years, I thought it was one year period. So it's over two years, so probably about $500 million a year that they've had due to all of this. So they said basically what they've seen is a really big jump in patience and the patient code, so their requests for what got delivered to them. Basically having complex conditions, but the hospital didn't actually do anything, like the care that the hospital was giving the patient wasn't different, but the way that they were billing it was making them have, showing up as having more complex conditions. Now, if I'm being honest, I don't think that there's anything necessarily bad with that, because if someone has a complex condition and you treat them the same way someone with a simple condition, I mean, that's just what you do in a lot of these different cases. I also think that probably there was a lot of doctors that were coding things in simpler ways because it was easier, whereas if you have an AI that can spend all the time doing all the research and getting into the really nitty granular details of what conditions a patient might have, it can go and do all the extra work. So maybe a doctor trying to save themselves some time and simplify things and simplify the coding process was costing the hospital money. So anyways, I thought that was really interesting, but Albridge, the founder of Albridge is Dr. Shiv Rayo. And he, talking about this, warned that basically what this is gonna turn into is a whole bunch of bots fighting bots.