The noise around AI is deafening. Every week there’s a new headline, a new capability, a new reason to feel like you’re already behind. The pressure has hit every industry, and healthcare is no different. While two of the big players, United Healthcare and Elevance, have announced billion-dollar AI investments, most health plans don’t have that kind of cash. The pressure to act is real, but moving too fast without a plan can lead to a very expensive mistake.
I’ve had the privilege of speaking with health plan executives across the country, and here’s what I keep hearing: everyone wants to talk about AI, but almost no one knows where to start. One leader put it perfectly when she told me that every time she hears the word “AI,” it gives her anxiety. She feels like the train is leaving the station and she’s still trying to find her ticket.
So how does a small or mid-sized health plan get started and set the foundation for AI to deliver maximum ROI? It starts with a simple mindset shift, realizing that a successful AI journey begins with identifying a business problem, not with technology. The plans that make real progress embrace this mindset first then follow these five steps.
1. Start with what’s broken. Before you think about any AI tool, vendor, or investment, look closely at your operation to see what’s working and what’s not. Find the gaps between what your processes look like on paper and what’s actually happening. Those gaps are almost always bigger than you think.
Once you’ve identified your pain points, you’ll be surprised how many AI solutions already exist to address them without an IT overhaul. We tend to think of AI as a massive IT project, but it’s business enablement. If you look at it this way, you’ll be surprised how much you can accomplish without a nine-figure budget or a five-year roadmap.
2. Define the strategic opportunity. Don’t just scratch the surface and go for the quick win, ask the hard questions:
- Where is the real strategic opportunity for your organization?
- What barriers are keeping you from getting there?
- Can AI help you reimagine how you operate (not just automate what you’re already doing)?
At a recent roundtable, I asked a group of health plan leaders if money, time, and technology were no obstacle, how would they grow? One leader said she had a large Afghan community in her territory she’d never been able to reach because of the language barrier. She wasn’t even sure it was an “AI question.” I told her not to think about AI but rather think about the business problem she’s trying to solve. Someone else at the table immediately jumped in with a similar situation with a Russian-speaking population. In both cases, the business problem was the same: untapped membership growth in communities they couldn’t reach. Once the problem is defined that way, the AI solution follows naturally. Voice agents that communicate fluently in any language exist today.
The point isn’t the technology but rather linking a clear outcome to what AI can actually deliver.
3. Ditch the big budget mentality. AI shouldn’t be a question of whether you can afford to act but whether you can afford to stay still. This matters especially for smaller plans that look at what the large players are spending and mistakenly assume they can’t compete. What makes this moment different from every previous wave of healthcare transformation is that AI is the great equalizer. Capabilities that once required enormous capital investment are now accessible to organizations of any size.
The smartest move is to start where you can get traction, not where the technology is most impressive. Off-the-shelf solutions exist across claims, member services, care management, and more. You don’t need to solve every problem at once; instead, determine the right problem and solve it well.
4. Govern at the enterprise level. Every health plan leader needs to ask, “Are we using AI opportunistically or strategically?” Many leaders chase opportunities when they should pause to make sure every AI initiative connects back to a clear organizational goal and that the entire enterprise is moving in the same direction.
That kind of alignment comes from the top. The C-suite needs to understand AI deeply enough to actually guide it, not just approve a budget line. The health plans that are succeeding have executives who can speak fluently about where AI creates value in their organizations and where it doesn’t. This insight requires deliberate investment in education and the willingness to ask hard questions before committing resources.
Once that foundation is in place, the “build vs. buy” question is easy to answer. Not everything needs to be built internally, so figure out where your genuine differentiation lies, focus your energy there, and find partners who have already solved the rest.
5. Redefine what ROI actually means. We have a habit in this industry of measuring the return on transformation initiatives only through cost reduction. While that denominator matters, it’s only half the picture.
Done right, AI also moves the numerator, which includes revenue, membership growth, and health outcomes. I’ve seen plans grow at extraordinary rates by fundamentally reframing their business models. The logic is simple: healthier members cost less to serve, stay longer, and turn medical loss ratio into a competitive advantage.
AI also opens doors to interventions we’ve historically underfunded such as addressing loneliness in elderly members before it becomes a chronic condition, screening populations before problems become crises, and reaching communities that have long been unreachable. An AI application can check in with isolated elderly individuals the way a concerned neighbor might. That’s preventive care with real implications for both health outcomes and plan costs.
To determine real ROI, don’t just look at what you saved this quarter, but consider whether you’re reaching members you couldn’t reach before, improving outcomes in populations that have historically been underserved, and building the kind of membership loyalty that compounds over time. That’s where the value truly lies.
The leaders who act now will define the industry
The healthcare industry has operated for too long on a “sick-care” model in which we treat the symptoms instead of causes and chase short-term margins instead of long-term health. Each year, costs increase because we keep doing the same thing and expecting a different result.
AI gives us a genuine chance to break that cycle by reimagining what’s possible. The health plans that move first and move smart will define this industry for the next decade. The ones that wait, whether paralyzed by the noise or convinced they need a billion-dollar budget to get started, risk being left behind.
The playbook isn’t complicated: know your business, define the real problem, start where you can get traction, govern thoughtfully, and measure success by something bigger than a single quarter’s cost savings. The first step is the hardest one, but one you need to take right now.
Photo: Blue Planet Studio, Getty Images
Sas Mukherjee is CEO of Catalyst Solutions, where he leads strategy and innovation initiatives focused on helping healthcare organizations improve operational performance, member experience, and cost efficiency through technology and AI-enabled solutions. He brings more than 25 years of leadership experience across healthcare payer, technology, consulting, and services organizations, including executive roles at Kaiser Permanente, Gainwell Technologies, and global advisory and outsourcing firms. Sas has led large-scale transformation initiatives spanning health plan operations, digital modernization, business process optimization, and AI strategy. His expertise includes aligning technology, operations, and business strategy to help healthcare organizations navigate change and drive measurable outcomes.
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