Singapore bets on AI in healthcare, but success will depend on commercial sustainability

SINGAPORE – Artificial intelligence innovations are attracting growing interest from private healthcare players and investors, but translating them into commercially viable applications within the sector can be more difficult.

A deep talent pool and strong government support within the ecosystem has seen Singapore’s medtech and biotech sectors grow considerably in recent years, with an increasing number of start-ups finding success developing AI tools for clinical use. For example, an AI-powered wound care scanner by local start-up KroniKare has found its way into hospitals around the island, reducing wound assessment time by up to 70 per cent.

Still, only a small minority of healthcare AI algorithms developed eventually make it into real-world clinical settings while remaining commercially sustainable, said Associate Professor Daniel Ting, director of the SingHealth AI Office in an interview with The Business Times.

The biomedical sciences industry has seen its fair share of high-profile failures and funding winters over the years as investors turned towards lower-risk sectors.

Singapore’s AI ambitions in healthcare

For the Republic, fostering robust and competitive innovation within the healthcare industry is increasingly becoming a national priority.

Singapore has keenly backed AI technology through strategic investments as part of its National AI Strategy 2.0, positioning the country as a prominent hot spot for private enterprises deploying AI across various sectors from software to manufacturing.

The healthcare sector, Ting believes, is among the most well positioned to benefit from this national AI push.

As part of the Research, Innovation and Enterprise (RIE) 2030 five-year strategy, the Ministry of Health will emphasise AI compute capabilities and health data to build the Republic’s medical research capacity. The latest tranche of RIE 2030 has earmarked $37 billion for research and innovation to address key national needs – including healthcare for a rapidly ageing population.

Earlier in July, the Republic launched the Singapore Medical Foundation AI Model, an initiative which will integrate AI models tailored specifically for Singaporean patients and medical practices into public healthcare systems.

Private healthcare systems are distinct from public healthcare in their for-profit objectives, but Ting noted that both have different yet complementary roles in driving the sector’s technological transformation as AI adoption accelerates.

Private players are increasingly deploying AI tools across operational and medical processes.

Fullerton Health has selectively implemented AI into its operations, with use-cases ranging from reading X-rays to writing code, while Singapore Exchange-listed integrated healthcare group IHH Healthcare has introduced AI tools for nurse rostering and fee estimation processes.

But industry leaders believe AI’s biggest commercial opportunities extend well beyond improving hospital operations. Drug discovery, for instance, could see major transformation as AI augments the development process.

Ting explained that traditional timelines in drug development are often long, generally taking 10 to 15 years from identifying a biological target to regulatory approval, while failure rates remain high.

These development challenges are why drug prices remain high, as drugmakers often seek to recover costs from both the successful development process and other pipelines that failed to discover viable drugs.

“The costs can be a few billion dollars,” Ting added. He said AI could shorten the medical product life cycle by helping researchers identify promising molecules, recruit suitable patients for clinical trials and reduce costly failures.

“With AI, you can potentially cut the cost by 50 per cent throughout the total medical product life cycle,” Ting said.

Global pharmaceutical giants such as Pfizer and Eli Lilly are investing heavily in AI tools that could accelerate timelines rapidly, while local players like biotech start-up Nanyang Biologics are betting on the technology to drive long-term growth.

Meanwhile, the rapid development of agentic AI systems could transform how healthcare is provided. Within hospitals, such tools could drive efficiency in triage, medical screenings, diagnosis and prescription of care, he noted.

The opportunities for deploying AI agents extend beyond hospitals. “If you look holistically at healthcare, medical care is just one of the big pillars – there is still nutrition, mental wellness, counselling and education,” Ting added.

But scientific breakthroughs alone are not enough to guarantee commercial success, he noted. Rather, what matters more is how these innovations can be applied to drive productivity and revenue within the private sector.

“If the innovation is scientifically robust and clinically applicable, the technology will remain,” said Ting. “Then it comes down to the business model, the go-to-market strategy, and how financially sustainable it is.”

He acknowledged that profitability remains critical in sustaining private healthcare, as revenue-generating providers can attract better technology and purchase better equipment.

Reducing patient cost

For private healthcare providers, however, those investments must ultimately translate into lower costs and better outcomes for patients, said Dr Prem Kumar Nair, group chief executive of IHH Healthcare, at a panel discussion at the recent FutureHealth.Now 2026 conference.

Nair acknowledged that rising costs are an increasing concern for many of IHH’s patients, adding that medical inflation often rises faster than the consumer price index worldwide.

“Payers and policyholders are getting very anxious,” he said. “I have patients who tell me they are more concerned about their insurance policies than the outcome of their surgery.”

Investors share a similar view.

Ganen Sarvananthan, managing partner at asset management firm TPG Asia, said private capital is also closely watching the potential of AI to raise productivity and revenue, while lowering costs for the consumer.

Also speaking at the conference, he said: “The payers, whether they are governments or insurers, want to see lower costs.”

He added that investors are increasingly backing healthcare providers that can use technologies to increase the volume within their existing infrastructure.

“If you can treat more patients in your hospital, that allows you to pass on cost savings to customers,” he said.

But Sarvananthan cautioned that investments in technology may not always lead to immediate cost saving. Often, labour costs remain unchanged while hospitals incur additional spending on AI platforms and computing resources, meaning overall costs may initially rise.

But AI could then be used to reduce, for example, the time specialists spend interpreting routine scans, allowing them to devote more time to complex interventional procedures.

The long-term return, he said, lies in enabling hospitals to make better use of expensive clinical infrastructure while improving productivity, rather than simply reducing headcount. THE BUSINESS TIMES