Looking for ROI in All The Wrong Places

By Kal Patel, MD

In March 2024, the Peterson Health Technology Institute (PHTI) roiled the digital health space with a report evaluating digital diabetes management tools that showed the technologies "do not deliver meaningful clinical benefits, and they increase healthcare spending relative to usual care."

According to PHTI's press release, the report found that patients using the tools "achieve only small reductions in hemoglobin A1c (HbA1c) compared to those who do not, and these reductions are not sufficient or sustained enough to change the trajectory of their health, care or long-term prognosis, including cardiovascular risks."

Pushback from the digital health industry was swift—with critics questioning the evaluation's approach, its narrow focus on HbA1c, its small sample size, and the lack of endocrinologists involved in creating and reviewing the research.

However, are these criticisms missing the point? Although it's true that the existing body of evidence around digital health solutions is still relatively small, it's important to remember that the industry is still in its very early days. We're not yet at the stage to have amassed the quantity and quality of data needed to drive that level of research.

Consider the banking industry. Early versions of banking apps had frustratingly limited levels of functionality. Today, banking customers routinely use the apps for all manner of transactions, from checking account balances to depositing checks to transferring funds. In fact, banking is now typically a mobile-first experience, while visiting a brick-and-mortar bank branch and interacting with tellers is reserved for more complicated financial activities.

Reaching that level of functionality required the technology to go through many iterations and accumulate many users to weed out what worked and identify areas that were lacking. It also required the development of ancillary technologies such as two-factor authentication to make it all work.

Similarly, it will take time and iteration for digital health solutions to reach the scale needed to provide the kind of tangible ROI the PHTI report was seeking. You need users, and a lot of users engaging regularly, to get the right data and use it to improve the product.

But what about measuring ROI where the industry stands today? Digital health delivers robust ROI in a number of areas.

Take brand loyalty. Many patients struggle to stay compliant not because they're averse to the therapy but because of difficulties obtaining the medication consistently. For example, an asthma patient whose $600-a-month inhaler isn't covered by their insurance, although they literally need it to breathe, is forced to jump from brand to brand to find affordable treatment. A digital health app that handles the red tape like eligibility assessments and prior authorizations may make it easier for patients to stick with a brand.

Digital can also help with marketing. The granular insights that apps can provide about customer behavior enable more efficient, less costly marketing that's more targeted and precise. Online marketing campaigns are easier to adjust on the fly as new customer data comes in and requires less scale to be effective.

In the R&D department, digital can help accelerate the identification of new indications for existing therapies. Allergan first offered its Lumigan glaucoma treatment in 2001. Soon, physicians began prescribing it off-label, as the therapy turned out to have a beneficial side effect: hypertrichosis, which is characterized by darkening, thickening, and lengthening of the eyelashes. Allergan launched a clinical study, releasing its Latisse eyelash treatment in late 2008.

Now imagine if Allergan had been tracking its Lumigan patients via app, capturing quality-of-life data along the way. How much sooner would it have been able to recognize that its drug had a powerful—and lucrative—potential second indication?

Digital health can also have a powerful positive impact on patient compliance and adherence. Many patients never initiate therapy despite being clinically appropriate. Some discontinue treatment, while others fail to follow the prescribed treatment regimen.

In-app education and counseling can help ease concerns around administering the therapy, treatment efficacy, and side effects. Dose scheduling and tracking can drive stronger engagement; electronic patient-reported outcomes (ePRO) and quality-of-life surveys can demonstrate results to patients, encouraging adherence and persistence. And the digital patient support mentioned above, such as prior authorization tracking, copay card management, and registration and document exchange, work in concert to smooth the patient’s path. All of these digital functions combine to improve compliance, meaning more patients initiate and maintain the therapy, another example of demonstrable ROI.

Let's revisit the banking analogy from earlier. Ten years from now, it's entirely possible (and likely) that healthcare will become a virtual- or mobile-first industry, with patients only visiting care providers for more complicated procedures or when it suits them. The efficiencies this will create for patients, burnt-out providers, payors and more are significant.

Companies that adopt digital health can realize significant benefits on a variety of levels. However, I believe looking for ROI too soon—or looking for ROI in the wrong places—is short-sighted and, moreover, misses the potential future impacts when scale is reached.