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Digital Health Is Consolidating. What Does That mean?

Posted by Siobhan Bulfin on Oct 17, 2019 6:49:14 PM

In the wake of ACA reforms and HITECH incentives, digital health innovations have rapidly expanded. These innovations are much-needed in order for health systems to keep pace with value-based measurements and EHR requirements. 

However, many healthcare organizations have implemented disparate IT solutions, leading to unintended fragmentation and frustration for clinicians. This often results in providers spending more time ironing out details with vendors and less time with actual patients.


When medical systems consolidate they can share expenses that improve delivery such as collective nurse hotlines and EHR systems. Plus, mergers often allow for greater interoperability.

That's why many within health care are now consolidating health plans. This allows clinicians to focus on improving outcomes metrics and helping patients receive better care. 

Innovation leading to digital health consolidation 

Innovation leading to digital health consolidation

The U.S. health system as a whole has traditionally focused on shorter term ROI consisting of 12-24 month cycles. Because of this, health systems and health plans tended to concentrate on immediate financial traction. Conventionally, the best way to get instant revenue is to focus on frequent flyer patients—those who need help most often. 

Digital health companies, on the other hand, may take longer to prove their effectiveness. As such, they often have a longer timeframes for their ROI, spanning approximately seven years. 

This has lead to frustration for providers who often employ many vendors at one time. It has also caused vendor fatigue as they try to evolve with health care reforms. Because providers often have contracts with many digital health companies, these independent companies end up consuming much of the provider’s time. 

In addition, providers aren’t seeing the anticipated returns due to longer ROI outcomes of most self-employed digital health companies. It’s becoming increasingly apparent that this is a result of splintered health tech initiatives. 

On the other hand, health plans aren’t approaching wellness in the same way as many providers. They want to stabilize their risk pools by encouraging prevention and managing non-acute diseases, thereby reducing their long-term risk.

Because of the disconnect between providers and payers, medical systems have started leaning toward consolidated health plans that benefit both themselves and their payers. That’s why many are looking for digital health platforms that incentivize whole-person care and reduce costs.  

How can payers and providers keep up with consolidated health plans?

The next five years will most likely result in more cross-industry consolidation—similar to what we’ve experienced over the past 10 years. As digital health, payers and providers consolidate, they can reduce the total cost of care while making the patient experience more efficient and effective.

What’s really happening is a reinvention or rebirth of the health care system. Slow and steady, it’s gradually making a big difference in the future of medicine. 

Health plans reinventing the hospital

As health plans move away from fee-for-service models, they hold the power to help hospitals transition from revenue based on admissions, to profits based on patient loyalty and better outcomes.

Rather than health plans being pitted against hospitals, both can work together to increase revenue streams and stabilize patient retention. 

Intersecting technology and consumerism

In addition to payment reform, health systems and health plans need to implement better ways to give consumers what they want. Today, patients want immediate access to medical advice and treatments. Digital health platforms are often one of the most cost-efficient ways to meet this need.

Melon, for instance, merges consumer interests with cost-efficient medical access. This helps hospitals, health plans, and independent primary care clinics improve patient retention. 

With health coaching and peer support, patients can address their non-acute conditions and reduce their need for in-person appointments. This means that providers can monitor patient conditions while simultaneously improving patient outcomes. 

What does health care reinvention involve?

In the past, health care has emphasized treatment rather than prevention. Moving forward, however, providers and health plans need to invest in wellness to improve long term cost efficiency. 

Emphasizing prevention and wellness

Here’s how Melon accomplishes this. Patients with non-acute chronic conditions such as cardiovascular disease or obesity are eligible to enter a program that supports lifestyle change. These online programs often coordinate with in-person classes, such as diabetes prevention, so patients can stay connected and motivated even if they have scheduling conflicts. 

As a result, clinicians can help improve non-acute conditions without being overburdened. Do programs like these work? The answer is a resounding, yes! In Melon’s program for patients with pre-diabetes, 78% of patients who completed the program are no longer pre-diabetic.

Reform ROI expectations

Rather than expect to see returns upfront with digital health, providers should be looking for savings on the back end of the patient experience. To increase revenue streams with capitated payment models and ACA incentives, providers need to acquire and retain more patients. Then they can monetize on the other side of preventative medicine and patient loyalty. 

This flies in the face of traditional models that focus on hospitalizations or ED admissions. But in reality, this is the way forward for the future of stable health systems. 

Make self-management appetizing to patients

High-risk chronic disease drains health care resources. Providers need to help patients address these conditions before non-acute symptoms ever reach high-risk. To do this, clinicians need to make self-management more appealing to patients.

But with ever-growing patient needs and new patients acquisitions, clinicians often can’t handle this burden alone. That’s where digital health solutions like Melon come in. 

Melon fills the void that many patients experience when self-managing non-acute conditions. This is none other than the need for support on a daily basis. With peer support and access to health coaches 24/7, self-management is no longer a burdensome journey. Rather it turns into a situation to connect with and support others with similar symptoms.  

Consolidated health plans are becoming more common and helping payers, providers, and patients all get what they need.

How do you see consolidation affecting health care in 2020?

Ready to begin engaging patients with a consumer driven model? Download our guide to supported self-management to learn how. 

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Topics: healthcare,, scaleable healthcare, digital health, value based care

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