As life settles into the new normal after the worst of the COVID-19 pandemic, it is clear that digital health solutions are here to stay. However, in order to separate themselves from a crowded field and ensure their long-term success, digital health providers will have to demonstrate their value to not only their consumers, but also other key constituents, including employers, insurance companies and government agencies.
To Cover or Not to Cover?
For digital health products to remain low cost or free to consumers, the cost is often covered or subsidized by employers, insurance companies, Medicare or Medicaid. Whether it’s a telehealth visit, a virtual chronic care management program or a digital therapeutic, a few factors influence their willingness to pay, including:
Limited Clinical Evidence - Traditional drug therapies used in treating conditions go through a rigorous FDA approval process to prove their safety and efficacy that requires at least two clinical trials. This type of clinical evidence does not always readily exist for digital health products. Even digital therapeutics that are regulated by the FDA go through a different approval process that does not require clinical trials, but rather a demonstration that it is safe and effective when compared to other devices or reasonable assurances of its safety and efficacy, depending on the approval pathway.1,2
Cost Concerns - Cost is also a concern when it comes to insurance and employer coverage and digital health is no exception. A recent survey by the leading benefits advisory company WTW, found that nine out of 10 employers are planning to change health and wellbeing vendors in the next two years as they take a closer look at the value and cost savings that vendors can provide.3
Prior to the pandemic, Medicare did not cover the cost of telehealth visits and now that things are returning to normal, Congress is studying the cost effectiveness and value of telehealth visits and trying to determine if they should be reimbursed at the same rate as an in-person doctor's visit.4 Concerns were also voiced that the ease of telehealth could lead to more visits and, thus, more costs, as well as the potential for fraud.
Additionally, an Institute for Clinical and Economic Review (ICER) report on digital therapeutics used to treat opioid use disorder found that a particular product, with a price tag of $1,200, was only cost effective if the patient remained abstinent for five years or more.5 These examples show how insurance companies and governing bodies are questioning the costs of digital health.
Lack of Guidance - As a relatively new and evolving therapy area, there is a lack of guidance on who and how to cover some digital health products and services. For example, while some digital therapeutics require a prescription, they often offer cognitive behavior therapy, which is typically covered under the medical benefit. Additionally, digital therapeutics do not have national drug code numbers, which are traditionally used for billing and reimbursement of prescriptions. All of this makes it easier for insurance companies to simply deny coverage.
Is it Worth the Download?
Consumer acceptance brings a different set of challenges. Some people do not trust the technology. They could fear privacy issues, believe face-to-face interactions are better, or they simply might not have the skillset to understand and use the products.
Another issue is the sheer volume of options available. According to an article in Chief Healthcare Executive magazine, there were 325,000 health and fitness apps on the market in 2018 and probably even more today.6 Additionally, many behavioral health oriented digital products focus on the same chronic conditions, such as diabetes, cardiovascular disease and musculoskeletal issues. This means that providers need to find a way to differentiate themselves and prove their worth.
The Proof is in the Real-World Data
To overcome these hurdles, you need to be able to provide clinical evidence that your digital health product improves patient outcomes equally or better than conventional alternatives, as well as the cost effectiveness compared to other therapies or not seeking treatment.
Real-world data (RWD) from sources such as medical and pharmacy claims, electronic health records, hospital chargemaster data, and lab results can provide a longitudinal view of the patient’s healthcare journey—conditions they’ve been diagnosed with, treatments they’ve received, healthcare visits they’ve had and other valuable information. This data can be analyzed to demonstrate improved patient outcomes and a positive return on investment. By establishing a control group, comparator analyses can be generated to determine cost effectiveness compared to alternative treatments and provide real-world clinical evidence on the performance of your product versus other treatments or care delivery models.
However, there are also challenges in accessing RWD. A variety of data is needed from the right sources in order to conduct these analyses, giving a view into both the patient journey and the cost effectiveness. These various data sources need to be procured and the patients de-identified to meet privacy regulations. The RWD also needs to be interoperable with your primary data that includes your existing patients and it all needs to be normalized into a standard format to apply the appropriate analytics.
This can take a lot of time and resources. HealthVerity offers a turnkey digital health solution:
De-Identify and Match Patients - With HealthVerity Census®, we use advanced patient identity resolution techniques to de-identify and compliantly match patient records persistently over time and across data sources, including your patient data. This allows you to supplement your data or seamlessly select a control group.
Find the Data You Need - HealthVerity Marketplace, the nation’s largest interoperable, HIPAA-compliant healthcare and consumer data ecosystem, with over 75 data sources representing more than 330 million patients, allows you to easily discover and license only the data you need.
Conduct Analyses Using Data Fit for Your Purpose - All of HealthVerity data is HIPAA compliant and research ready when you receive it. Additionally, we normalize the data so that it fits seamlessly into your workflows.
Combine Data and Do a Custom HIPAA Certificate - If you choose to combine different datasets (e.g., your patient data with HealthVerity real-world data), we can complete the custom HIPAA certification process so you only focus on bringing your study to life.
With this comprehensive offering, you can prove the value of your digital health solution and thrive in the post-pandemic world.
1 U.S. Food & Drug Administration (FDA). Premarket Notification 510(k). https://www.fda.gov/medical-devices/premarket-submissions-selecting-and-preparing-correct-submission/premarket-notification-510k
2 FDA. De Novo Classification Request. https://www.fda.gov/medical-devices/premarket-submissions-selecting-and-preparing-correct-submission/de-novo-classification-request
3 WTW (2023). 9 in 10 employers plan to change health and wellbeing vendors in next two years, WTW survey finds. https://www.wtwco.com/en-US/news/2023/02/9-in-10-employers-plan-to-change-health-and-wellbeing-vendors-in-next-two-years-wtw-survey-finds
4 Tribble, S. J. (2023). It’s ‘Telehealth vs. No Care’: Doctors Say Congress Risks Leaving Patients Vulnerable. Kaiser Health News. January 31, 2023. https://khn.org/news/article/its-telehealth-vs-no-care-doctors-say-congress-risks-leaving-patients-vulnerable/
5 Institute for Clinical and Economic Review. Digital Health Technologies as an Adjunct to Medication Assisted Therapy for Opioid Use Disorder. November 6, 2020. https://icer.org/wp-content/uploads/2020/08/ICER_Digital_Therapeutics_for_OUD_Evidence_Report.pdf
6 Murtha, Jack (2018). Why the Future of Digital Health Must Be Simple. Chief Healthcare Executive magazine. October 18, 2018. https://www.chiefhealthcareexecutive.com/view/why-the-future-of-digital-health-must-be-simple