Assess the incentives most provider organizations (which care for most patients) operate on, and these shortcomings make sense: value from digital investments is elusive under fee-for-service (FFS) payment because many of the processes and services they aim to eliminate are incremental revenue generators. As a result, many digital innovators design products that fit their customers’ FFS-driven business models.
This leaves adoption of the highest leverage digital innovations limited to two groups that combining to own the care of only a small share of patients.
First, large, progressive health systems with payer arms or significant revenue at risk have invested heavily because they reap outsized value from tools that reduce cost of care through early or preventative intervention. Nonetheless, they represent just the upper echelon of health systems. Second, direct-to-consumer digital health providers are eagerly seeking to steal market share from traditional providers by differentiating on a more efficient, consumer-friendly digital care model. But they have won little market share to date. Case in point: 78% of patients receiving virtual care do so from their own provider, compared to just 2% using an app or online service they found.
This innovation and adoption trajectory is unlikely to generate the impact digital-optimist leaders want and the industry needs. On our industry’s current path, holistic, scalable, and equitable digital care tools will continue to advance. But those digital tools that are adopted at scale—and therefore, accessible to most patients—will remain focused on supporting, rather than reinventing, the legacy business models under which most organizations continue to operate. The result will be a missed opportunity to transform patient care at scale and further fragmentation of patient care and data across a widening range of uncoordinated provider organizations.
Industry leaders instead must advance business models, partnerships, and strategies that align incentives—including those of traditional market players—around adoption of the truly innovative technologies that put us all closer to achieving shared priorities. This will ensure that the benefits of digital health are engrained in the traditional care delivery system, rather than at its edges for only few patients to use.
If the industry embraces digitally enabled health care as such, it can reap outsized benefit in solving challenges that all sectors face. This includes, but is not limited to, the priorities discussed earlier: promoting health equity, caring for an aging population, and advancing value-based care.
The following three sections identify select, high-leverage examples for how digitally enabled health care could help the industry pursue these cross-industry goals. These examples are far from exhaustive. But they are instructive of how making health care more digitally enabled is not a goal unto itself—but rather a tool in our industry’s toolbox as it pursues solutions to its greatest challenges.