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Cost savings is not the only metric employers are considering when selecting digital health solutions. Ellen Kelsay, CEO of the employer-focused nonprofit advocacy organization Business Group on Health, said large employer members in her organization are looking for digital health solutions that can integrate with each other and traditional care providers.
“A lot of these virtual health solutions were offered as a one-off,” Kelsay said. “They are a well-intentioned and compelling one-off solution, but the sustainability isn’t there if these systems aren’t integrated more holistically.”
Companies selling to employers have taken notice of the changing priorities. At the J.P. Morgan Healthcare Conference earlier this month, Teladoc Health CEO Jason Gorevic promoted the company’s whole-person telehealth efforts that include primary care, mental health and specialty visits. The company recently put all its virtual health offerings onto one app.
“There are a lot of virtual care companies out there that are more narrowly focused, smaller in scale and are nipping at the edges of single [software] solutions,” Gorevic said.
The phrase “point solution,” an industry term for software products that only focus on one area of medical care, has become derisive among investors, buyers and other digital health companies. Those kind of companies are going to see a shakeout in the market, said Donald Trigg, CEO of healthcare navigation company Apree Health, which formed when Castlight Health and Vera Whole Health merged.
“There are some macro tailwinds around cost and there’s an appetite coming out of COVID for an integrated solution offer as opposed to the blizzard of point solutions that we’ve seen over the last number of years,” Trigg said.
Omada Health, a chronic care digital health company, has started selling to health systems including a partnership with Intermountain that was announced earlier this month. Sean Duffy, CEO of Omada Health, said employers are starting to tire of having too many digital health solutions.
“We’re seeing more request for proposals where employers are like, ‘I just need to consolidate my point solutions,” Duffy said.
Some companies in the space may have look to for potential merger and acquisition partners, experts say. At the very least, companies should better understand what employers are looking for in digital health solutions.
“The more they can prove over time that they’ve actually improved patient experiences and outcomes, it will bode well for their sustainability within the market,” Kelsay said. “But a lot of these companies come and talk about the merits of their own solution in a vacuum. They’re not paying attention to what success will look like for the patient and the employer.”
This story first appeared in Digital Health Business & Technology.
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