The rising wave of digital health technologies has not gone unnoticed by healthcare purchasers, who have increasingly allocated significant funds to these innovations. According to a recent survey conducted by the Peterson Health Technology Institute (PHTI) and the National Opinion Research Center at the University of Chicago, an overwhelming 75% of health plans, employers, and health systems have boosted their digital health budgets in the past two years. Moreover, this upward trend is set to continue, with plans for further budget increases in the coming year. However, a critical question arises regarding whether these investments are truly effective, given the constraints imposed by short-term contracts and inconsistent evaluation criteria.
Drivers of Digital Health Investments
Healthcare purchasers are investing in digital health solutions with specific goals in mind, aiming to achieve cost savings, enhance clinical care outcomes, increase operational efficiency, and expand access to medical services. The survey revealed that a proven track record is paramount when selecting digital health technologies. Roughly 40% of the surveyed purchasers reported investing in three to five digital health solutions, while 43% have invested in six or more. These investments commonly target conditions such as diabetes, mental health, primary care, cardiac care, and obesity. Clearly, the focus is on addressing prevalent health issues that have broad implications for society.
Despite these efforts, only 55% of purchasers adhere to standard evaluation criteria when assessing digital health technologies. The others rely on internally set criteria, which can vary significantly from one organization to another. For health plans, value-based contracting is a preferred approach, often resulting in direct contracts with digital health companies. Employers, on the other hand, typically use formularies or pharmacy benefit managers. This fragmentation in evaluation approaches raises concerns about the uniformity and objectivity of assessing the effectiveness of digital health solutions.
The Challenge of Short-Term Contracts
One notable point from the report is that most contracts for digital health technologies typically span just one to two years. This short duration is cited as a significant limitation, hampering the ability of digital health solutions to demonstrate their full value or clinical improvements. Healthcare technologies often require a longer time frame to show meaningful results. However, the constraints of short-term contracts make it difficult to capture the benefits accurately, leading to a possible underestimation of the technology’s potential.
Annual reviews by most employers and payers and the as-needed updates by health systems add another layer of complexity. Regular review cycles ensure that organizations stay updated with the latest technologies, but they also mean that digital health solutions are under continuous scrutiny, often with insufficient time to exhibit substantial outcomes. This creates a cycle where effective technologies may be prematurely dismissed, and the potential for long-term benefits is overlooked.
Future Considerations for Maximizing Impact
As the healthcare industry continues to embrace digital health, it is crucial to address the limitations posed by short-term contracts and inconsistent evaluation methods. Moving towards more standardized evaluation criteria could be one way to ensure a more accurate assessment of the effectiveness of digital health solutions. Additionally, extending contract durations could provide a more realistic time frame for these technologies to demonstrate their true value. While healthcare purchasers are optimistic about the potential of digital health, a cautious strategy is essential to navigate the landscape effectively.
The insights from the PHTI survey highlight a clear trend towards increasing investments in digital health, underpinned by the pursuit of better clinical and financial outcomes. However, to fully realize the benefits of these technologies, it is imperative to overcome the challenges posed by short-term contracts and varied evaluation standards. The findings from this survey underscore the need for a more coherent and long-term approach, fostering an environment where digital health solutions can thrive and deliver on their promises.
Conclusion
The surge in digital health technologies has caught the attention of healthcare purchasers, leading them to increasingly allocate substantial funds to these advancements. A recent survey by the Peterson Health Technology Institute (PHTI) and the National Opinion Research Center at the University of Chicago indicates that a notable 75% of health plans, employers, and healthcare systems have increased their budgets for digital health over the past two years. Even more telling is the expectation of continued budget growth in the upcoming year. However, this brings up a significant concern: Are these investments genuinely effective? Short-term contracts and inconsistent evaluation criteria pose challenges to assessing the true value and impact of these digital health initiatives. These factors contribute to uncertainty about whether the financial resources are being used most effectively to improve patient outcomes and system efficiency. As the industry moves forward, it will be crucial to develop standardized metrics and longer-term strategies to better evaluate the efficacy and return on investment of digital health technologies.
