Healthcare innovation through artificial intelligence (AI) is emerging rapidly, but does AI implementation increase the value of your business? In the highly regulated world of healthcare, innovation can offer more risk than reward from a business perspective. Though new medical advancements with AI could create endless opportunities for patient outcomes and care, they may also bring with them compliance, privacy, and data vulnerabilities.  

AI alleviates administrative burden, supports clinical decision-making, improves patient access and engagement, strengthens revenue integrity and compliance, and more.

Everything from patient charting and medical imaging analysis to providing a full diagnosis has already been improved with the use of AI. Full physical therapy appointments are now being guided by artificial intelligence, but if an appointment leads to injury both the medical professional, their employer, and the AI developers could all be liable. Not to mention, there are inherent risks in inputting protected health information (PHI) into a non-HIPAA compliant AI system. 

AI as an Asset 

When thinking about the business value of utilizing AI in your business, it is primarily considered an intangible asset. Like any other intangible asset, the business must factor in a few key metrics in deciding the worth of the intangible. First and foremost, the financial factors, such as new revenue streams, costs of research and development (R&D), costs to maintain your AI software, and regulatory expense burdens.

  • Income Approach: The discounted cash flow methodology considers AI’s impact on cost savings through labor cuts, error reduction, efficiency improvements, and any newly produced revenue streams. Those benefits, coupled with expenses to create and maintain usage of the AI system, are projected into the future and then discounted back to the present day to determine an income approach value. 
  • Market Approach: When considering the market approach for an intangible like AI, it is common to compare against high-growth, tech company–like multiples. The most common multiples to consider for AI this include Annual/Monthly Recurring Revenue (ARR/MRR) multiples and on Price to Earnings (P/E) ratios and compare them to similar public technology companies. Other valuation multiples like EV/Revenue or EV/EBITDA would be also reasonable, considering the growth potential of the effects of AI. Like most tech company valuations, these multiples result in an incredibly wide range of values, and are inherently riskier in market comparables than most industries.  
  • Cost Approach: The cost approach most simply considers the cost of developing or replicating the AI technology (R&D costs), the value of data the technology contains, and the physical assets included in operating the systems. 

Optimization & Investor Interest

AI’s role in improving operational business efficiency also contributes to the financial health of a  healthcare business. AI in the workplace could mean hours saved, error reduction, and optimized resource allocation. This all inherently carries value since improving efficiency can reduce workforce expenses and human error, which could result in more incentive payments or less regulatory risk factors. With AI optimization, healthcare organizations may even be able to use fewer medical supplies.  

Demonstrating thoughtful, strategic AI implementation can position a healthcare organization as forward-looking and operationally sophisticated. To investors, this often translates into higher confidence in scalability, resilience, and future growth potential. AI-driven scheduling optimization, virtual assistants, and clinical automation can increase patient access without proportional increases in staffing. Higher capacity and improved patient retention contribute to stronger revenue forecasts and more predictable future cash flows, both of which support higher valuations. 

The Peaks & Valleys of Compliance 

The largest AI implementation hurdle in healthcare are regulatory challenges. Patients today have  access to free online AI healthcare tools, such as using AI as an at-home diagnostic tool or  as a mental health provider. While this can be a great, free alternative that increases access to care across the country, healthcare professionals are concerned about the quality of care these patients are getting. Providers must already contest patients’ Google research with their medical expertise. When using AI, one of the biggest problems will be the quality of the data it provides. As much as AI will reduce administrative errors, it could conversely create errors if the business becomes reliant on AI with poor data, resulting in potential malpractice risk. 

However, AI that proactively identifies coding errors, documentation gaps, or billing anomalies reduces exposure to audits, penalties, and repayment risk. Lower regulatory risk supports more stable financial projections and preserves enterprise value. Reducing the likelihood of external audits, repayment demands, or penalties, organizations protects both revenue and reputation.

This stability directly influences valuation: When regulatory exposure is lower, financial projections become more reliable, future earnings appear less volatile, and investors place greater confidence in the organization’s long-term performance. 

Awareness, Governance & Data Security 

Some healthcare businesses are already using AI without even knowing. Software system vendors for patient charting and billing may already be using AI in their offerings with the promise of delivering results quicker and more reliably. What results is an increased risk of HIPAA noncompliance when patient PHI is involved. Ultimately, the business is losing full control of patient data and where it’s stored, which could cause violations in HIPAA compliance without the full knowledge of the covered entity.  

AI adoption often forces organizations to improve data governance, interoperability, and analytics. The resulting infrastructure becomes an enterprise asset: Better data increases the accuracy of forecasting, supports population health initiatives, and expands the runway for future digital innovations. 

Forward Momentum 

The use of artificial intelligence in healthcare has the potential to increase access to care, quality of care, and improve business metrics for all healthcare entities. However, businesses must be cautious in their complete reliance on these technologies, as they could cause major malpractice and HIPAA compliance risks—especially in the early adoption of these technologies. All in all, AI adoption will drive significant change across healthcare organizations nationwide, and reshape how the market values healthcare organizations. While operational efficiency and clinical outcomes still anchor valuation, AI introduces new levers that can influence both current performance and long-term enterprise value. 

As AI adoption accelerates, understanding its financial and operational implications is essential. Partner with VMG Health to evaluate how AI can enhance efficiency, strengthen compliance, and elevate organizational value.