Transforming Health Care: The Drive For Digital Health and Health IT
Digital health transformation has been a hot topic in the healthcare space thanks to the growth of new technology that has revolutionized the way care is sought and delivered. The advent of change and expansion in this area has been hastened by the circumstances that healthcare providers, investors and patients have faced throughout and in the wake of the global pandemic. Beyond the impetus of the pandemic, other factors are also at play that are actively shaping the shifting digital health landscape. A shortage of healthcare talent, new developments in healthcare technology, a busy regulatory environment and evolving consumer demands have combined to shape today’s digital health space. Examining the interplay of those factors can give us a glimpse into the digital health transformation possibilities we will see in the next few years.
Consumer demand and satisfaction is always a major factor in shaping the healthcare environment, and consumers have made it apparent that they are not happy with the fragmentation of health care that they have experienced in the last few years. Both finding care and getting started in the process of receiving it can be onerous. The transition to digital health information technology hasn’t worked out the way that consumers hoped it would. The process of tracking down their information and transferring it to another provider is still burdensome when they need care from a new source. It is estimated that a single consumer’s healthcare data is now strewn across 73 to 78 different locations, leaving them frustrated with the time and effort required to obtain care. Information technology transformation that offers them a more accessible and transparent consumer experience, facilitated by interoperable digital healthcare solutions, can help solve this problem and increase consumer satisfaction.
Healthcare Worker Shortages
Digital health can also help alleviate some of the burdens that healthcare systems and patients face due to a dearth of available healthcare talent, especially in high-demand specialties. The ongoing shortage of healthcare workers has translated into a shortage of mental health practitioners in the U.S. That problem was exacerbated by sharply increased demand for mental health services during the COVID-19 pandemic. This is an area in which digital health technology can provide massive benefits for both clinicians and consumers, going a long way toward providing a workable solution to staffing shortages in specialties like mental health that can be impacted by factors like geography.
Telehealth and other digital tools can not only help make the most of mental health clinicians’ valuable time, but they can also help to ensure that a patient receives the right mental health service in a timely manner at a convenient location right when they need it the most.
The Regulatory Environment
At the same time, we’re looking at a wide range of activity in the legislative and regulatory space that impacts the future of digital health, including how much care can be delivered virtually and how that impacts reimbursement. Fast-evolving state laws are shaping the boundaries of acceptable levels of virtual and in-person care. Many state laws, as well as Medicaid reimbursement rules and some healthcare plans, have implemented restrictions or guidance that require patients to receive at least a percentage of their care from in-person providers. That could limit virtual care opportunities for patients and increase the pressure on already overburdened healthcare providers. This may encourage digital health companies to pursue hybrid models that involve elements of in-person care.
Overall, the current regulatory environment is favorable to ongoing innovation in digital health care, with a bright forecast for the near future. The U.S. federal government is beginning to establish parameters that make telehealth work beneficial for both patients and healthcare providers. Even though The Office of the National Coordinator (ONC), the Centers for Medicare and Medicaid Services (CMS) and the U.S. Department of Health and Human Services have been very prescriptive around facilitating telehealth, ONC has said that it remains committed to creating a shoppable healthcare consumer. The rollback of some anti-kickback and safe harbor rules allows providers and payers to prevent leakage and refer into their own systems, opening up the possibility of creating stickiness by offering digital loyalty programs featuring monetary incentives to consumers for closing gaps in care that are aligned to their care plan.
Digital Health Investment
While the public markets have become choppy around digital health, investors remain bullish on digital health for those companies that have “figured it out” or appear to be on the path to doing so, because it is clear that digital health care is here to stay. Consumers and providers like the benefits that digital health brings to the table. Advancements in technology and evolution in the way that people live and work have fostered an environment that is favorable for continued digital health transformation and growth. But caution is warranted.
Investors will need to carefully evaluate their targets in the digital health space. It is also critical for investors to keep in mind the possibility that the high valuations of 2021 and early 2022 are seeing adjustments. Accordingly, these adjustments should create more opportunities for value investing and actually bring more investors to the table. With the rapid technological transformation in health care over the last two years, and the success it helped foster during the pandemic, we can reasonably anticipate ever-evolving business models that are adaptable and quicker to market to meet consumers where they are. The days of a consumers adapting to existing care models are waning with alternative models powered by technology now significantly more capable of adapting care models to consumers.
In addition to shifts in pricing and valuation, investors should expect to see consolidation among healthcare technology companies and providers throughout this year. The stage for this transformation in the digital health care space has already been set. Indications are pointing to evolution in the next 12 to 18 months as investors see a massive amount of consolidation in healthcare technology and tech-enabled health care. Private equity has been good at finding consolidation plays. If there are a number of point solutions that can be combined into a broader care continuum, that is an area that we can see private equity dollars flow in to create more longitudinal platforms and technological innovation.
Overall, the future of digital health care and health information technology transformation generally looks bright. Consumers, healthcare providers and regulators are invested in shaping the digital health space to meet today’s evolving needs by overcoming challenges and facilitating a balance between digital health and traditional care. It is clear that digital health is an important part of health care today that will only grow more important tomorrow, driving innovation and investment into the future.
Article source: MedTech Intelligence