Health plans, employers & providers expect to increase spending on digital health solutions

The recent robust spending on digital health solutions is expected to continue in the coming year, according the 2024 State of Digital Health Purchasing survey from the Peterson Health Technology Institute.

“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 the independent organization. “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.”

Spending on digital health has increased rapidly over the past two years, and the survey indicates that purchasers plan to continue to grow their spending on digital health offerings in the year ahead:

• Ninety-seven percent of employers, 86% of health systems and 84% of health plans intend to maintain or increase spending on digital health solutions over the next year.
• The reasons for increased spending are relatively consistent, with all three purchaser groups reporting increased consumer demand (83%) and improved health outcomes (62%) as primary motivators.
• Three out of five health plans cite cost savings as a top reason for increased investment in digital health, and 49% of health systems and 34% of employers agree.

The survey shows that most contracts with digital solution providers last for two years or less, giving purchasers frequent opportunities to reassess the performance of these products. Risk-based contracts are common, with 79% of purchasers using performance arrangements for at least some of their digital health solutions. Health plans (95%) and health systems (88%) are more likely to focus on health outcomes, while employers tend to evaluate contracts based on user adoption and engagement. Patient and member satisfaction is a common measure across purchasers.

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Purchasers plan to prioritize digital health solutions for diabetes (53%), preventive care (51%), mental health (50%), cardiovascular disease (47%) and primary care (46%), which is consistent with current priorities. Although most purchasers offer digital health solutions for five or fewer conditions, 43% currently offer solutions for six or more clinical indications.

“The insights from purchasers in this survey can help digital health companies and their investors understand how solutions are being selected and how their customers are evaluating their performance,” said Meg Barron, managing director of engagement and outreach for the institute. “These findings call for companies to invest further in evidence generation, focus on user experience and demonstrate return on investment.”