Fifty years ago, Americans were afraid to go back into the water after Jaws terrified and thrilled moviegoers. Today, our healthcare system faces a less cinematic but equally chilling threat: “Shadow AI.”
Shadow AI happens when healthcare employees use personal artificial intelligence apps such as ChatGPT or Claude to do their jobs without their employers’ knowledge or approval. It’s called “Bring Your Own AI,” and it’s a “shadow” because most hospitals don’t even know it’s happening.
This poses serious risks: sensitive patient information can be inadvertently exposed, with entire prompt histories vulnerable to data breaches. Neither hospitals nor patients realize their private health data might now live in an unsecured AI database.
Consider two realistic scenarios. An emergency room nurse inputs patient symptoms into a personal ChatGPT app to speed up diagnosis and hit hospital efficiency targets. A radiologist uploads a patient’s CT scan into an unauthorized AI tool to double-check an analysis. Neither acts maliciously; they’re simply trying to be efficient and accurate. Yet both unintentionally expose healthcare providers and patients to massive malpractice and privacy risks.
Shadow AI thrives in environments with unclear rules and no oversight. That’s how you get data leaks, lawsuits, regulatory action, and fines. Think this sounds alarmist? Consider the data:
- 38% of employees admit to sharing confidential information using unauthorized AI tools.
- 57% of employees have input highly sensitive data into public AI platforms.
- AI-related lawsuits surged by 143% from 2023 to 2024.
How safe is your healthcare data, really? Most patients assume their doctors and hospitals are using approved systems, but AI slips in through backdoors that no one is monitoring.
Nearly a century ago, a snail in a bottle triggered one of the most important negligence cases in legal history: Donoghue v. Stevenson. That case, brought by a woman who fell ill after drinking contaminated ginger beer, set the foundation for modern personal injury law.
Trial lawyers now see Shadow AI as the next frontier.
Imagine a patient suing after a misdiagnosis caused by AI delays urgent treatment. Or a patient learning that their private health data was exposed in a ransomware attack on a tool their doctor never told them about. These scenarios could trigger massive lawsuits, class actions, turning individual mistakes into systemic legal and financial disasters.
With threats this clear, a federal solution is needed now.
The Biden administration, with an eye likely on keeping their massive trial lawyer lobby happy, didn’t go near this. Congress, during the One Big Beautiful Bill Act reconciliation, also recently rejected a 10-year pause on conflicting state-level AI regulations. A small group of GOP antagonists and, predictably, every Democrat rejected the moratorium, claiming states needed the flexibility to govern AI. In practice, that created a regulatory Rubik’s Cube with no consistency.
Now, healthcare providers face a compliance nightmare: Does a telehealth doctor in Florida treating a patient in Ohio fall under Florida’s AI laws or Ohio’s? Without a national standard, trial lawyers and ransomware gangs hold every advantage. Smart federal rules don’t mean more red tape; they mean stopping the next healthcare disaster before it happens.
President Donald Trump, along with his pro-growth allies in Congress, must urgently pass a sequel to the big, beautiful bill — a federal push for AI policy clarity with smart, consistent, safe use rules for healthcare:
- Require AI Safe Utilization Policies for providers handling patient data across state lines, aligned with the Health Insurance Portability and Accountability Act’s privacy protections.
- Appoint an empowered AI Compliance Officer at every major institution.
- Encourage continuous monitoring and proactive audits of employee AI use.
- Enforce real penalties for violations, such as fines, breach disclosures, and executive accountability.
- Hold consumer-level AI vendors accountable when their tools mishandle protected data.
This isn’t bureaucracy; it’s economic survival. It protects the U.S. healthcare system from ransomware gangs and ambulance-chasing lawyers already on the hunt.
Every hospital executive thinks they’re protected until hackers and trial attorneys destroy their bottom line, credibility, and patients’ trust. Shadow AI’s first major breach will unleash lawsuits, regulatory crackdowns, and reputational ruin.
X CEO LINDA YACCARINO STEPS DOWN A DAY AFTER GROK CHATBOT ENDORSED HITLER
The president and the GOP face a defining moment in AI safety. It’s time to pass a big, beautiful AI safe use bill before America’s healthcare leaders and their patients echo Chief Brody’s warning from 50 years ago:
“You’re gonna need a bigger boat.”
Bryan Rotella is the managing partner and chief legal strategist of GenCo Legal.