From breakthrough to billable

Why breakthrough AI diagnostics don't guarantee reimbursement. Or adoption.


Evidence is necessary, but it is rarely sufficient. What happens next is ultimately a commercial decision.

Jan Bordon, Partner

Medical technology is becoming more advanced, but reimbursement pathways are still catching up. In AI diagnostics, commercial success depends not only on proving clinical value, but also on proving value to the people who decide what gets paid for.

Consider what it now takes to detect early-stage lung cancer: a CT scan and, increasingly, an algorithm that can flag suspicious findings before the radiologist has even reviewed the images.

This is no longer a niche use case.  

More than 1,000 AI/ML-enabled medical devices have now received FDA clearance, with applications spanning radiology, oncology, cardiology, neurology, and beyond¹. Across healthcare, AI is helping clinicians diagnose faster, reduce errors, and identify diseases earlier.

The momentum behind this technology is hard to ignore. Regulators have embraced it, clinicians are incorporating it into practice, and investors continue to back its potential.

Yet healthcare also illustrates a broader challenge emerging across the AI economy. Innovation is advancing faster than many commercial systems can adapt. New capabilities are reaching the market at unprecedented speed, but commercial success still depends on a familiar question:

Who benefits from the innovation, and who is willing to pay for it?

In AI diagnostics, one critical stakeholder remains unconvinced: the payer.

Despite growing evidence of clinical value, many AI-enabled diagnostic tools still lack broad national reimbursement. In most markets, there is no clear consensus on what these technologies are worth, how that value should be measured, or who should ultimately pay for them.

As a result, the most pressing commercial question in AI diagnostics today has less to do with accuracy and more to do with ownership, reimbursement, and value.

Payers are not anti-AI. They are anti-uncertainty

It would be easy to interpret payer hesitancy as resistance to innovation. In reality, the issue is less about the technology itself and more about the questions that remain unanswered.

Most AI diagnostic tools reach the market before long-term outcomes data is available.  

The most pressing commercial question in AI diagnostics today has less to do with accuracy and more to do with ownership, reimbursement, and value.

Companies are incentivized to move quickly and generate evidence over time. Payers operate differently. Before committing to coverage, they typically require robust evidence demonstrating both clinical efficacy and cost-effectiveness at scale. The gap between those timelines is where reimbursement decisions often stall.

Assessment frameworks are still catching up as well.  

Health Technology Assessment bodies across many markets continue to refine how AI-enabled tools should be evaluated. While initiatives such as the EU AI Act and national digital health assessment programs represent progress, the playbook is still evolving.

Clinical recognition creates another hurdle.  

Payers are far more likely to reimburse AI-based medical devices when they are incorporated into clinical guidelines and recognized as part of the standard of care. Without that endorsement, even a well-evidenced tool can struggle to achieve meaningful uptake.

Evidence is not the same as adoption

This is where many AI diagnostic companies quietly go wrong. Reimbursement is often treated as a clinical challenge: generate enough evidence, demonstrate sufficient accuracy, and coverage will follow.

In practice, it rarely works that way.

Evidence is necessary, but it is rarely sufficient.  

The organizations that have successfully broken through have done more than accumulate data. The introduction of a permanent CPT code for AI-based diabetic retinopathy screening in the US, the national reimbursement for an AI brain MRI tool in South Korea, and HeartFlow's inclusion in the NHS MedTech Funding Mandate were not simply the natural outcome of strong science.

They were commercial and market-access achievements, built on compelling evidence but also on strategic engagement with policymakers, payers, and other decision-makers.

The same principle applies to clinical guideline inclusion.  

NICE in the UK recommends AI technologies for fracture detection in urgent care, while Germany's national lung cancer screening program requires the use of CE-marked AI diagnostic software.

Neither development was a passive reward for scientific progress. Both required sustained advocacy and a clear articulation of value to the people responsible for shaping policy and clinical practice.

Value does not speak for itself. It must be translated into terms decision makers can understand, evaluate, and support.

Evidence may open the door, but what happens next is ultimately a commercial decision.

Funding as a commercial bridge

National reimbursement is not the only route to market. Healthcare providers can often be persuaded to invest in AI-enabled diagnostic tools directly, even without a dedicated reimbursement code.

The value proposition is typically operational rather than reimbursement driven. AI can streamline diagnostic workflows, improve resource allocation, reduce clinician workload, and support service differentiation.

Some companies are also beginning to experiment with patient co-pay models for AI-assisted screening and diagnostic services.

These approaches can be effective, particularly in the early stages of market development.  

However, they are best viewed as a bridge rather than a destination.

Without a path to broader reimbursement, companies risk becoming trapped in a commercial model that generates revenue but fails to build the evidence base, policy support, and stakeholder alignment needed for sustainable national coverage.

The real test

Payers are likely to come around. The momentum behind AI-enabled diagnostics is real; policy signals are increasingly supportive, and early reimbursement successes are beginning to establish a roadmap for the wider market.

But the companies that succeed in turning breakthrough diagnostics into reimbursed, scalable solutions will not get there on clinical merit alone.

They will be the ones that understand early what their technology is worth, who captures the value it creates, and how to articulate that value in terms that payers, policymakers, and healthcare systems can act on.

Over time, payer skepticism can be overcome with stronger evidence, clearer outcomes, and a compelling commercial case.  

The challenge is that none of those things happen automatically.

For many AI diagnostics companies, the harder challenge is no longer building the algorithm. It is proving value in a way healthcare systems can trust, adopt, and sustain.

In that sense, AI diagnostics are not unique. They are simply one of the clearest examples of a broader reality emerging across industries.

Innovation creates potential.

Value is only realized when others recognize it.