By David Hamilton

After more than 20 years in healthcare, I’ve seen change. Lots of it.

But what we’re facing now is unprecedented, and the foundation of Medicaid—and possibly Medicare--is on shaky ground.

If you're a provider or payer, this isn't just noise. This is an alarm bell.

No, no one’s ending Medicaid or Medicare. However, given the current environment, significant reductions to government healthcare programs appear virtually assured.

As it now stands, the House’s draft budget includes $880 billion in proposed Medicaid cuts over the next decade. That number is already rattling markets. Shares in Centene, the largest manager of state Medicaid programs, dropped more than 7% when the news hit in February. Major hospital systems whose patient mix may be overweight with Medicaid, like HCA and Community Health Systems, also saw immediate drops as investors braced for impact.

In healthcare, where margins are already paper-thin, reimbursement delays—or cuts—can’t be shrugged off. They’re existential.

We’re already seeing the anxiety firsthand. Hospitals, physicians, and patients everywhere in the country—blue states and red states, big cities and small towns and everywhere from Ohio and Illinois to California and South Carolina–are anxious about what comes next. These aren’t political talking points. The prospect of cuts poses dramatic business risks with direct consequences for millions of patients.

There’s a way forward
Here’s the good news: we’re not out of options.

AI is here. Not in theory. In practice. And it’s ready to help. Now.

AI-powered health management platforms are already showing what’s possible. They’re eliminating inefficiencies. Streamlining care management. Predicting problems before they happen. And this isn’t about replacing humans. It’s about helping them and the systems they work for operate smarter and faster so that clinicians can operate “at the top of their license” – in other words, focus on the sophisticated work that requires their substantial expertise and judgment.

Take predictive analytics. Platforms can analyze population-level data and flag early warning signs of disease outbreaks. That gives payers and providers lead time to act, prevent the spread, and reduce costs. According to a 2024 New England Journal of Medicine study, AI-driven interventions have concretely (read: measurably) helped hospitals get ahead of risks and improve outcomes.

A study last year by McKinsey found that “using currently available technology, payers could see net savings of 13 percent to 25 percent in administrative costs and 5 percent to 11 percent in medical costs as well as 3 percent to 12 percent higher revenue.”

That’s more than a band-aid. That’s a survival strategy.

What to look for
Not all AI platforms are created equal. For hospitals, providers, and payers evaluating their options, there are a few must-have qualities to seek out:

Agentic AI workflows: From prior authorizations to claims management, a good platform should reduce manual labor and free up human staff for high-value care outcomes impact.

Real-time predictive analytics: Look for tools that don’t just analyze past performance but flag potential issues—like likely readmissions, appointment no-shows, coding errors, or, say a measles outbreak—before they happen.

Proactive patient engagement: Leverage platforms that connect directly to the individual member or patient. The best solutions include continuous patient engagement/communication and consolidated remote patient monitoring (RPM)--that is, a member’s devices, including homecare and wearables that can be aggregated and monitored on a single case manager’s dashboard.

Interoperability: A robust AI platform must connect seamlessly with your existing electronic health records (EHR), billing systems, and patient portals, as well as comply with current and upcoming federal and state interoperability regulations.

Scalability: Whether you're a rural hospital network or a statewide Medicaid plan, the platform should scale easily to meet your organization’s evolving needs.

Security and compliance: HIPAA-compliant infrastructure is non-negotiable. Make sure your vendor uses end-to-end encryption and offers audit trails.

At a time when budgets are shrinking and the stakes are rising, investing in a reliable AI-enabled health management system isn’t just strategic—it’s essential.

But we’re behind
If you think this advice is old news, that’s where you’d be wrong. Turns out that even though everyone in healthcare has been hearing about the benefits of AI nearly every day for a decade, the industry hasn’t actually embraced AI on a meaningful scale.

In fact, in the last three years, a plethora of academic, think-tank, and corporate research has found how woefully behind our industry is when it comes to AI.

In January, a healthcare-focused report from EY, which surveyed CIOs, found that while “49% see GenAI technology as enhancing organizational value and driving 2x return on investment (ROI), … only 13% have implementation plans established.”

A 2025 Amazon Web Services study found only 9% of healthcare workers report advanced AI fluency. That’s dead last among major industries.

Why has our industry been so behind the curve on AI adoption?

Brookings blames predictable roadblocks: regulations, siloed data, and limited training. But these are solvable.

What’s not solvable? Doing nothing.

This is our moment
Since I started working in this industry, I’ve never seen a clearer, more urgent choice. The politics might be uncertain. The economy might be jittery.

But AI? It’s certain. It’s stable. It’s tested. And it’s ready to go.

If you’re leading a payer or provider organization, now is the time to invest. Don’t wait for clarity out of Washington. Don’t wait for the next budget cycle. The tech exists. The opportunity is real.

This isn’t about chasing trends. It’s about protecting the future of care. AI won’t just help you survive. It can help you lead.

Medicaid and Medicare may be on shaky ground. But our response doesn’t have to be. Do it for your organization. Do it for your patients. Jobs depend on it. So do lives.

About the author: David Hamilton is the chief growth officer at Zyter|TruCare.