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Digital Health Spending to Surge as Purchasers Prioritize Value and Outcomes

by Fred Pennic 10/14/2024 Leave a Comment

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What You Should Know: 

– A new survey by the Peterson Health Technology Institute (PHTI) reveals that health plans, employers, and health systems are poised to increase their investment in digital health solutions in the coming year. 

– The 2024 State of Digital Health Purchasing survey provides valuable insights into the evolving landscape of digital health adoption, highlighting key trends in spending, contracting, and future priorities.

Sustained Growth in Digital Health Spending

The survey, conducted in partnership with NORC at the University of Chicago, polled 332 decision-makers responsible for purchasing digital health solutions. The survey indicates a strong commitment to digital health solutions across all purchaser groups:

  • Employers: 97% intend to maintain or increase spending.
  • Health Systems: 86% intend to maintain or increase spending.
  • Health Plans: 84% intend to maintain or increase spending.

Driving Forces Behind Increased Investment

Key factors motivating this increased investment include:

  • Consumer Demand: Growing demand for digital health solutions among consumers is a primary driver for all purchaser groups.
  • Improved Health Outcomes: Purchasers recognize the potential of digital health to enhance the quality of care and improve patient outcomes.
  • Cost Savings: Health plans, in particular, cite cost savings as a major motivator for investing in digital health.

Contracting Trends and Performance Measurement

The survey reveals key trends in contracting and performance evaluation:

  • Shorter Contract Durations: Most contracts with digital health providers last two years or less, allowing purchasers to regularly assess performance and adapt their strategies.
  • Risk-Based Contracts: Performance-based arrangements are prevalent, with 79% of purchasers utilizing them for at least some of their digital health solutions.
  • Focus on Outcomes: Health plans and health systems prioritize health outcomes when evaluating contract performance, while employers focus on user adoption and engagement.

Prioritized Disease Areas

Purchasers are prioritizing digital health solutions for:

  • Diabetes
  • Preventive Care
  • Mental Health
  • Cardiovascular Disease
  • Primary Care

“Health plans, employers, and providers want to meet continued demand for digital health solutions, while ensuring the solutions they purchase have strong evidence that they improve health and generate economic efficiencies,” said Caroline Pearson, executive director of PHTI, the U.S.’s only independent evaluator of digital health solutions. “This survey shows that there is a valuable opportunity for digital health companies to better align their offerings with what purchasers need and want, which in turn, will allow more people to access these tools and the benefits they can bring.”

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