The US health care sector is regulated through a spiderweb of state and federal laws and public and private payment systems that address care delivery qualification and standards, drug and device qualification, data privacy and security, and a plethora of other matters. These systems work only vaguely in concert, and the number of regulatory agencies involved is staggering. And, because these systems are generally defined by laws and regulations, they have only limited flexibility.

These dynamics are further complicated by the fragmentation of our health care system: It is not one thing controlled by one organization. Policy goals in health care are determined by multiple organizations, sometimes working at cross purposes. Accordingly, while there are frequently broadly accepted generalized goals for our health care system, they may be articulated in vastly different ways, depending on the payment system or regulatory body trying to address them.

Getting ahead by getting AHEAD

Fixing the US health care system will require changing laws and regulations and establishing consensus on the fundamental principles of what our health care system should be. Whatever that solution is, it is not around the corner. However, The All-Payer Health Equity Approaches and Development (AHEAD) program that was launched by the Centers for Medicare & Medicaid Services in 2023 shows promise. AHEAD may have some flaws, but its fundamental focus could result in a much more welcoming environment for digital health solutions.

Modeled on the Maryland All-Payer Model, at its core, the AHEAD model focuses on reducing hospital-based care and improving care management dynamics: Each participating state sets hospital inpatient annual revenue amounts for government payers (and at least one commercial payer), incentivizing hospitals to reduce their own utilization.

The program also includes additional support for primary care to assist in the process of improving the health care resources for care management, navigation and health maintenance—all areas where digital health tools are proving their value.

Related: Looking 'AHEAD': CMS rolls out ambitious new primary care program for 8 states

The AHEAD model is very complicated, and each state that deploys the model will have the opportunity to define some of its contours. A few hospitals in New York are participating in a Medicaid-only version of the model, but we will not know the total number of participating states until after the final application deadline in mid-August.

The AHEAD program is no panacea, and it has significant systemic challenges. However, it would improve the environment for developing and implementing more efficient digital health solutions. The digital health community could benefit significantly in those states that adopt the AHEAD model and could become active participants in the evolutionary efforts of the system.

Engage to change

The digital health community is a part of a much larger health care ecosystem, and by recognizing the broader systemic challenges that we face—and embracing the ecosystem when it is embracing change itself—the digital health community can demonstrate its value and improve the environment in which it operates. To achieve this goal, digital health stakeholders must engage more fully with the institutions that are wrestling with the challenges we face and demonstrate that they can be a part of the solutions that are being developed from within.

Dale C. Van Demark is a partner at McDermott Will & Emery.