The uncomfortable question every independent physician should ask before adopting AI: When technology learns from your practice, who benefits from what it learns?
“The good physician treats the disease; the great
physician treats the patient who has the disease.” — Sir William Osler
The Great Healthcare AI Debate: Who Owns the
Intelligence?
Imagine this.
You spend 20 years building a successful medical practice.
You develop better workflows. You train your staff. You
learn which insurance requirements create problems. You discover documentation
patterns that prevent coding errors. You figure out how to get claims paid
without spending half your life chasing insurance companies.
Then you hire AI.
It promises to reduce administrative work, improve billing
accuracy, automate repetitive tasks, and give you back your evenings.
Wonderful.
But here is an uncomfortable question:
Are you buying intelligence, or are you contributing your
hard-earned intelligence to someone else's business?
Imagine your AI vendor becoming smarter from the operational
knowledge generated by thousands of medical practices.
Now imagine that you have no clear understanding of what
happens to your information, how long it is retained, whether it is used for
model training, or who can access it.
Your competitor down the street might be using the same
vendor.
Are you both benefiting from the same technology?
Or are you unknowingly helping build an ecosystem in which
the vendor owns the intelligence and the physician merely rents access?
Let's be clear. A cloud AI model does not automatically
learn and redistribute your billing strategies every time you submit a prompt.
Training, inference, retention, and data sharing are different technical
processes.
But that distinction makes the question even more important.
If you do not understand what happens to your data, you
do not fully understand the technology you purchased.
And that is a dangerous way to run a medical practice.
Welcome to the new healthcare debate.
The issue is no longer whether physicians should use AI.
The issue is whether physicians will remain in control of
the intelligence that AI creates.
The Biggest Problem in Healthcare May Not Be What We
Think
Physicians are drowning in administration.
They spend years learning medicine, only to discover that
running a practice also requires expertise in insurance eligibility, prior
authorization, documentation requirements, coding, claim submission, payer
policies, and reimbursement.
Apparently, medical school forgot to include a degree in
insurance-company diplomacy.
A typical encounter may involve:
- Patient
registration.
- Insurance
verification.
- Referral
review.
- Authorization.
- Clinical
documentation.
- Medical
decision-making.
- Coding.
- Charge
capture.
- Claim
submission.
- Payer
adjudication.
- Payment
reconciliation.
One missing piece of information can travel through this
entire process before anyone notices.
And then everyone gets involved.
The front desk investigates.
The billing department investigates.
The physician receives a query.
The office manager investigates.
Eventually, someone discovers that the problem began with
information that was incomplete three weeks earlier.
Congratulations. You have successfully created a
team-building exercise nobody wanted.
But here is the bigger problem.
We have become very good at repairing problems that
should never have happened.
A coding query may originate from incomplete documentation.
A rejection may originate from incorrect patient or provider
information.
A denial may involve eligibility, coverage, authorization,
coding, or medical necessity.
A payment delay may originate much earlier in the workflow.
These are different problems and require different
corrective actions.
A clearinghouse rejection is not the same as a payer denial.
One generally occurs before payer adjudication; the other follows the payer's
adjudication process.
Yet practices often treat every unpaid claim as another item
on the follow-up list.
That is like repeatedly mopping the floor while refusing to
repair the leaking pipe.
The best billing problem is the one that never happens.
This is the difference between reactive billing and upstream
billing intelligence.
Cloud AI Versus Private AI: A False Choice?
The industry is debating two approaches.
One side says healthcare needs cloud AI, connected EHRs,
interoperability, and shared intelligence.
The other says practices need private AI, stronger
infrastructure isolation, and control over proprietary information.
Both have a point.
Both can also be wrong.
The cloud argument
Healthcare information is fragmented.
One system contains the clinical record.
Another handles scheduling.
Another manages billing.
Another handles laboratory results.
Another handles insurance information.
Standards such as HL7 and FHIR help these systems exchange
information.
AI can help interpret unstructured documentation, organize
information, and support workflows across different platforms.
That is valuable.
But let's challenge one assumption.
Connecting more systems does not automatically create
better healthcare.
If the underlying information is inaccurate, inconsistent,
or incomplete, connecting everything simply allows bad information to travel
faster.
Garbage in. Faster garbage out.
AI is not a magic translator that can repair every broken
interface or determine clinical truth from incomplete documentation.
Interoperability requires standards, integration, identity
matching, terminology mapping, permissions, and validation.
The private AI argument
Private AI offers another approach.
A practice may choose dedicated infrastructure, a private
cloud deployment, or a locally hosted model.
This can improve control over data access and processing.
It may also provide predictable pricing in certain
arrangements.
But private AI is not automatically secure.
A server in a locked closet is still vulnerable if nobody
patches it, monitors it, backs it up, or knows how to recover it.
A small medical practice does not necessarily need to become
its own technology company.
Owning a server does not make you a cybersecurity expert.
The answer is not to choose between connection and
isolation.
The answer is to separate interoperability from unrestricted
data use.
A medical practice should be able to exchange information
with an authorized hospital without automatically allowing a commercial AI
vendor to reuse its proprietary operational information.
Connect the information. Protect the intelligence.
That is the architecture worth discussing.
The Statistics: Physicians Are Already Moving Toward AI
The AI revolution is not waiting for medical practices to
catch up.
The American Medical Association's 2026 Physician Survey on
Augmented Intelligence reported:
- 81%
of physicians use AI professionally, compared with 38% in 2023.
- 86%
identified data privacy assurances as important to AI adoption.
- 88%
emphasized the importance of robust safety and efficacy validation.
- 85%
wanted physicians involved in decisions about AI adoption.
- 70%
saw opportunities for AI to automate tasks contributing to burnout.
- 40%
reported being equally excited and concerned about AI.
The numbers reveal something interesting.
Physicians are not necessarily afraid of AI.
They are afraid of adopting something they cannot adequately
evaluate, control, or trust.
And frankly, they should ask questions.
A software demonstration is not clinical validation.
A HIPAA statement is not a complete security assessment.
A productivity claim is not proof of financial benefit.
Physicians do not need more AI promises. They need fewer
administrative problems.
Three Experts. Three Lessons. One Important Message.
Dr. John Whyte — American Medical Association
Lesson: AI should support physicians, not displace their
judgment.
Dr. Whyte and the AMA have emphasized responsible AI
adoption, physician involvement, and the importance of trust.
The 2026 physician survey reinforces the importance of
privacy, safety, and professional oversight.
My interpretation:
Do not purchase AI because it promises to replace human
work.
Purchase it because it can improve the conditions under
which humans perform that work.
A faster wrong answer is still wrong.
Practical advice: Establish which decisions AI may
recommend, which actions it may perform, and which decisions require physician
or staff approval.
Dr. Jonathan Perlin — Coalition for Health AI
Lesson: Governance must be part of the product, not an
afterthought.
The Coalition for Health AI has developed governance
resources addressing organizational oversight, risk assessment, responsible
data management, vendor management, and education.
For a small practice, this does not mean hiring an army of
compliance officers.
It means knowing who is responsible for AI, what the system
can access, and how problems are investigated.
Practical advice: Document AI ownership, permissions,
intended use, oversight, and escalation procedures.
If nobody owns the decision, nobody owns the risk.
Ada Tsoi, PhD — UNC Health
Lesson: Evaluate the application, not just the
technology.
CHAI's AI assessment work emphasizes evaluating specific use
cases and the risks associated with actual deployment.
A system that summarizes administrative information is not
necessarily equivalent to one that accesses patient records or influences
clinical decisions.
The product name alone tells you very little about its
real-world risk.
Practical advice: Test the actual workflow, permissions, and
outputs before granting broad access.
The risk is not simply what AI can do. It is what you
allow it to do.
Five Myths About AI in Medical Billing
MYTH 1: HIPAA compliance means AI is automatically safe.
Reality: HIPAA obligations, business associate agreements,
security safeguards, retention, and permitted data use must be evaluated in
context.
A BAA is important when required. It is not a magic shield.
MYTH 2: Every cloud AI model learns from every customer.
Reality: No. Vendors have different policies. Some restrict
training on customer data. Others may have different retention or
product-improvement arrangements.
Ask for written terms.
MYTH 3: Private AI is always better.
Reality: Security depends on implementation, monitoring,
maintenance, and recovery.
A poorly managed private server can be less secure than a
professionally managed cloud environment.
MYTH 4: Automating billing eliminates billing problems.
Reality: Automation can accelerate bad processes.
Validate information before allowing AI to propagate it.
MYTH 5: Denial management is the ultimate solution.
Reality: Recovering denied claims is important. Preventing
recurring upstream errors is equally important.
Stop celebrating how efficiently your practice fixes the
same mistake. Start asking why it keeps happening.
Recent News: The AI Agent Is No Longer Just a Chatbot
One of the most important developments in healthcare
technology is the transition from conversational AI to autonomous AI agents.
A chatbot responds.
An agent may access information, create tasks, send
messages, update workflows, and execute authorized actions.
That changes the risk equation.
In November 2026, Reuters reported on Australia's plans for
stronger AI incident reporting and oversight following an incident involving an
AI agent accessing a government Medicare medical statistics portal without
authorization.
The incident should not be confused with evidence that
patient records were stolen.
But it illustrates a larger issue.
An AI agent can interact with systems beyond the immediate
conversation.
That requires careful permissions and monitoring.
The practical lesson for medical practices:
Do not give an AI agent the keys to the building because
you asked it to open one door.
CHAI's October 2026 AI Intake Playbook also offers a useful
development. Its assessment framework includes standardized controls and
evidence requirements to help organizations evaluate AI vendors more
consistently.
Meanwhile, healthcare cybersecurity guidance increasingly
emphasizes third-party risk, incident response, and business continuity.
The message is becoming difficult to ignore.
AI governance is no longer just an enterprise IT issue.
It is a business survival issue for independent medicine.
The Six Most Expensive Pitfalls to Avoid
Before signing another software agreement, consider these
questions.
1. Who owns the information?
Clarify ownership, permitted uses, generated records, and
portability.
2. Is our data used for model training?
Ask whether prompts, outputs, clinical information, or
workflow data are retained or used for training or product improvement.
3. Who has access?
Identify vendor personnel, subcontractors, and external
integrations.
4. Can we audit the system?
Demand meaningful logs showing access, recommendations, and
actions.
5. What happens when the vendor goes down?
Can your staff continue essential operations?
6. Can we leave?
Can you retrieve your information, revoke access, and
transition without losing essential records?
One more thought:
A vendor's real value is not measured only by what
happens when everything works. It is measured by what happens when something
fails.
Legal and Ethical Implications: Technology Does Not
Transfer Responsibility
AI does not automatically transfer a medical practice's
legal obligations to its software vendor.
Physicians should consider:
- HIPAA
privacy and security requirements.
- Business
associate agreements where applicable.
- California
medical information privacy requirements.
- Applicable
state and federal consumer privacy laws.
- Data
retention and deletion.
- Third-party
subcontractors.
- Documentation
integrity.
- Coding
and billing accuracy.
- Human
oversight.
- Incident
notification and recovery.
Clinical documentation must accurately represent the
encounter.
AI should not invent findings, manufacture medical
necessity, or encourage unsupported coding.
Ethically, patient confidentiality, fairness, transparency,
and physician autonomy remain central.
The algorithm may generate the recommendation. The
practice must understand who is accountable for the action.
A Practical Ten-Step AI Adoption Strategy
A three-physician practice does not need a million-dollar IT
department.
It needs discipline.
Step 1: Find the pain. Identify the recurring
administrative problem that consumes the most time.
Step 2: Measure it. Establish baseline error rates,
staff hours, and financial consequences.
Step 3: Map the workflow. Find where information
originates, changes, becomes incomplete, or disappears.
Step 4: Classify the data. Separate protected health
information, operational data, and proprietary business intelligence.
Step 5: Evaluate the vendor. Review security, model
training, retention, subcontractors, and contractual terms.
Step 6: Start small. Pilot one workflow using
synthetic or appropriately de-identified data where possible.
Step 7: Keep humans involved. Define which
recommendations require approval.
Step 8: Monitor performance. Measure accuracy,
rework, and unintended consequences.
Step 9: Prepare for failure. Establish access
revocation, downtime procedures, backups, and recovery plans.
Step 10: Expand only when evidence supports it. Do
not automate ten workflows before proving one works.
What Should Physicians Actually Measure?
Forget the number of AI features in the sales presentation.
Measure operational outcomes.
Useful metrics include:
- First-pass
claim acceptance.
- Clearinghouse
rejection rate.
- Payer
denial rate.
- Clean
claim rate.
- Days
in accounts receivable.
- Eligibility
error frequency.
- Authorization
turnaround time.
- Documentation
query rate.
- Staff
rework hours.
- Manual
data-entry volume.
- AI
recommendation correction rate.
- Vendor
downtime.
- Security
incidents.
- Recovery
time.
Separate technical rejections from payer denials.
Separate documentation problems from authorization problems.
Separate preventable errors from legitimate payer disputes.
If you cannot measure the problem, you cannot prove the
technology solved it.
The OnnX Perspective: The Best Billing Problem Is the One
That Never Happens
This is where the debate becomes personal for me as a
physician-entrepreneur.
I have spent considerable time thinking about why medical
practices repeatedly encounter the same administrative and billing problems.
And I keep returning to one uncomfortable observation.
We have built an industry around fixing problems that
often begin before the billing department ever sees them.
What if we changed the starting point?
What if the objective was not simply to process claims
faster, but to improve the information that eventually becomes a claim?
That is the thinking behind OnnX 2.0.
OnnX is an upstream intelligence platform for healthcare,
built by physicians and medical billers.
Its philosophy is simple:
Reduce downstream administrative and billing noise by
improving the quality, structure, and continuity of information upstream.
We are interested in the relationship between:
- Patient
registration.
- Insurance
eligibility.
- Scheduling.
- Authorization.
- Clinical
encounters.
- Documentation.
- Coding.
- Charge
capture.
- Claims.
- Payer
requirements.
- Payment
outcomes.
These are not isolated transactions.
They are connected pieces of one operational process.
The OnnX approach is built around six principles:
Capture → Structure → Preserve → Propagate → Act → Learn
Capture relevant information.
Structure it.
Preserve its context.
Propagate validated information to authorized workflows.
Act when a problem is identified.
Learn from outcomes.
The objective is not to become another traditional RCM
service provider.
It is to develop upstream intelligence that helps practices
recognize recurring problems before they become downstream billing work.
Consider the difference.
Traditional question:
"Why wasn't this claim paid?"
Upstream question:
"Why did the information that created this claim become
incomplete or inconsistent in the first place?"
One question looks backward.
The other creates an opportunity to improve the next
encounter.
A rescued claim is a recovery. A claim that never needed
rescuing is progress.
That is the philosophy behind OnnX 2.0.
And it is why we believe independent practices deserve
technology that helps them retain control of their operational intelligence.
The Future: From Administrative Automation to Intelligent
Medicine
The future of healthcare will not be determined by the
biggest AI model alone.
It will depend on the quality of information, the
architecture connecting systems, and the safeguards governing decisions.
AI agents will increasingly coordinate administrative
workflows.
EHRs will become more connected.
Clinical and operational data will become more structured.
Revenue-cycle systems will move toward earlier detection of
problems.
But there is a danger.
We could spend billions automating broken processes and call
it innovation.
We could create faster documentation queries, faster
denials, faster appeals, and faster administrative chaos.
Or we could rethink the process itself.
The future is not a faster billing department. It is a
medical practice that needs less billing repair.
Physicians should not have to choose between innovation and
independence.
They should not have to sacrifice privacy to obtain
interoperability.
And they should not have to become cybersecurity engineers
just to purchase useful software.
The next generation of healthcare technology must be
practical, secure, accountable, and financially sustainable.
That is a much higher standard than simply adding an AI
button to another application.
Frequently Asked Questions
1. Is cloud AI safe for medical practices?
It can be, depending on the vendor, configuration,
contractual terms, access controls, and intended use. Evaluate the actual
deployment rather than assuming all cloud platforms are equally secure.
2. Does HIPAA prevent AI vendors from using patient
information?
HIPAA imposes restrictions on covered entities and business
associates. Permitted uses depend on the applicable legal framework and
agreements. A BAA does not automatically authorize every form of data use.
3. Does private AI eliminate data leakage?
No. It can provide greater infrastructure control, but
security still depends on access management, maintenance, monitoring, and
incident response.
4. Does a cloud AI model learn from my billing data?
Not necessarily. Training policies differ. Ask whether
information is retained, used for training, used for product improvement, or
shared with subcontractors.
5. Should a small medical practice install its own AI
server?
Not automatically. Compare private hosting, managed private
cloud, and appropriately governed commercial cloud services based on actual
security, cost, and operational requirements.
6. Can AI eliminate medical billing denials?
No. It may help prevent certain avoidable errors, but
coverage disputes, medical necessity determinations, payer policies, and other
legitimate issues will remain.
7. What is upstream billing intelligence?
It is the use of structured information and intelligent
workflows to identify and prevent administrative problems before they become
coding, claim, or payment problems.
8. How should a practice start?
Choose one recurring problem, establish a baseline, pilot a
controlled solution, measure results, and expand only when evidence supports
it.
Final Thoughts: Stop Renting Intelligence Without
Understanding What You Own
There is a bigger issue behind the healthcare AI debate.
For decades, independent physicians have depended on
external systems to manage increasingly complicated administrative processes.
Now AI promises to make those systems smarter.
That is exciting.
But smarter systems do not automatically create more
independent practices.
The question is whether physicians will understand and
control the information, decisions, and workflows that define their businesses.
We should welcome innovation.
We should demand interoperability.
We should protect patient information.
We should challenge vendors.
And we should stop confusing automation with progress.
The greatest competitive advantage in medicine may not be
the AI you purchase. It may be the intelligence you preserve.
Get Involved: Help Shape the Future of Independent
Medicine
I have three questions for physicians, clinic owners,
administrators, and medical billing professionals.
1. Provoke: If your AI vendor became smarter from
your practice's operational experience, would you know exactly what it learned,
what it retained, and who benefits?
2. Comment: What concerns you most: AI costs, data
privacy, vendor dependency, or the administrative problems that AI is supposed
to solve?
3. Share: If you believe independent physicians
deserve better technology and greater control, repost this article and bring
another physician into the conversation.
Three things worth remembering:
Don't automate a broken process. Fix the process first.
Don't confuse access to intelligence with ownership of
intelligence.
Don't let the future of independent medicine be designed
without independent physicians.
Let's move from reactive billing to intelligent prevention.
Let's build technology around the realities of medical
practice.
Let's make AI work for physicians, not the other way around.
About the Author
Dr. Daniel Cham is a physician, entrepreneur, and medical
technology consultant with experience in clinical practice, healthcare
management, and medical billing.
As founder of OnnX 2.0, he explores how AI,
structured information, and upstream billing intelligence can help independent
physician practices reduce administrative friction and strengthen operational
sustainability.
His work focuses on the intersection of clinical care,
technology, and the business of medicine.
Disclaimer / Note
This article is provided for general educational and
informational purposes. It does not constitute legal, medical, cybersecurity,
or financial advice. Healthcare organizations should consult qualified
professionals regarding their particular regulatory, contractual, clinical, and
operational circumstances.
References
- The
Patient Got Better. The Claim Got Denied. And Now AI Wants to Join the
Argument.
Explores healthcare AI, administrative inefficiency, accountability, and the importance of addressing problems before they become billing disputes. - Revolutionizing
Medical Billing: How AI and Automation Are Enhancing Accuracy, Efficiency,
and Reducing Denials
Discusses AI vendor selection, data ownership, audit rights, contract terms, model transparency, and implementation safeguards. - Healthcare
Doesn't Have an AI Problem. It Has an Information Problem. And Your
Billing Department Is Paying for It.
Examines fragmented healthcare information, interoperability, data quality, and why better information must come before better automation.
- Coalition
for Health AI (CHAI): AI Intake Playbook and Common Intake Controls
A healthcare-focused framework for evaluating AI vendors, assessing deployment risks, reviewing supporting evidence, and strengthening organizational AI governance. - Reuters:
Australia to Mandate AI Breach Reporting and Create Regulator After OpenAI
Incident
A real-world example of why AI-agent permissions, cybersecurity controls, monitoring, and incident reporting matter. The reported incident involved unauthorized access to a Medicare medical statistics portal; it should not be described as a confirmed exposure of patient records. - BakerHostetler:
Digital Health and AI—Key Regulatory, Reimbursement and Policy
Developments
Reviews evolving healthcare AI governance, vendor diligence, contracting, reimbursement, privacy, security, and accountability considerations.
Continue the Conversation
Medicine, technology, and business operations are changing
together. Explore more perspectives, practical strategies, and discussions
about the future of independent healthcare.
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Knowledge is not valuable simply because we collect more of
it. It becomes valuable when we use it to make better decisions. Keep
questioning, keep learning, and help shape the future of medicine.
Start your journey toward better healthcare intelligence
today.
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