Achieving AI's True ROI in Healthcare Means Breaking Down Old Playbooks

Healthcare is among the most change‑resistant industries. And for good reasons: patient safety, heavy regulation, complex workflows, fragmented incentives, and entrenched legacy systems all slow adoption. Hospital systems are managing thin margins, staffing shortages, and rising payer denials while operating within long budgeting, compliance, and procurement cycles. In this context, interest in AI is high, but implementation is challenging. Data is siloed and inconsistent; integration with EHRs and existing tools is costly; privacy, security, and liability require strong governance; and clinicians expect clear evidence, transparency, and fit within daily workflows. Training, change management, and ongoing monitoring add further load to already stretched teams, and many initiatives stall in pilots, or fail to reach scale. Organizations that make progress start with process redesign and operating-model changes, set measurable outcomes, and integrate AI into end-to-end workflows rather than layering tools on top of legacy systems.

We spoke with Andrew Ray, the Chief Innovation Officer at Ensemble. Ray is explicitly focused on process redesign and operating-model changes to support healthcare organizations struggling with solving the challenge of AI integration and implementation. Given his position within Ensemble, the intersection of technology and operations, he understands how each traditional silo approaches the challenge areas illustrated above and how they impact patient care. Drawing on his experience in financial transformation at McKinsey & Company and leading revenue cycle operations at Stanford Children's Health, Ray argued that the path to real AI results requires a fundamental shift in the relationship between culture, mindset, and technology.

• Trash the transformation playbook: Ray is clear that technology alone doesn’t drive transformation; process redesign does. "It’s not enough to bolt new tools onto legacy systems and call it innovation," he said. Ray's philosophy for change centers on using technology as a catalyst for re-engineering workflows and empowering people to work smarter. “We view technology as a way to reinvent processes and elevate teams, not just patch over what’s already there, even if those systems once worked well,” he added.

For Ray, the push for AI-driven transformation isn't a theoretical exercise; it's a direct response to a crisis. The financial and operational pressures on healthcare providers have created an environment where standing still means falling behind, fast. The core mission is to use technology to fight back against forces that are eroding provider stability.

• The unsustainable crisis: "Historically, initial denial rates from insurance companies were like 8%, then they went to 10%, now they're up to 12% to 15%," Ray explained, "That's unsustainable." Rising initial denials mean that roughly one in seven claims is rejected on first pass. Even when many are ultimately overturned, each denial delays cash by weeks or months, increases the cost to collect, and ties up working capital. For a hospital with $1B in net patient revenue, moving from 8% to 12–15% initial denials can place an additional $40–$70M into rework at any moment; a small portion that never gets recovered can wipe out already thin margins.

• Beyond financial impact: The consequences of increased denial rates extend beyond finance, forcing clinicians to spend more time on documentation and appeals. As a result, patients face delayed scheduling or unexpected bills, and community hospitals with limited reserves face service cuts or consolidation. From Ray's perspective, any AI strategy that doesn’t measurably reduce initial denials, accelerate clean-claim submission, and shorten days in A/R will struggle to demonstrate real impact.

• Leveling the playing field: These financial and social pressures are compounded by a technology imbalance. "Insurance companies are well ahead of providers in deploying AI and technology. And so the pain of denials is overwhelming providers," Ray said, "So we're seeing it as a means of how do we kind of level the playing field back to where we were a couple years ago and then hopefully we start to get ahead of that."