Introduction
As digital health solutions continue to evolve, measuring the Return on Investment (ROI) has become crucial for healthcare organizations. A recent survey by Sage Growth Partners, conducted on behalf of Panda Health, found that improved patient outcomes are considered the top ROI metric for hospital leaders evaluating digital health technology. This article explores the survey’s findings, key Return on Investment metrics, challenges in assessing digital health ROI, and current trends in virtual healthcare investments.
Patient Outcomes as the Primary ROI Metric
Survey Findings on Key ROI Metrics
The survey, conducted in June 2024, included responses from 75 hospital leaders, representing CFOs, clinical leaders, IT leaders, and operations leaders. Among the various metrics for evaluating digital health Return on Investment, improved patient outcomes emerged as the most significant factor, with 61% of respondents ranking it as the highest priority. This finding underscores the importance that healthcare leaders place on tangible improvements in patient health as the ultimate measure of a digital solution’s effectiveness.
Other critical Return on Investment metrics included improved patient experience and enhanced quality measures. Improved patient experience was ranked second by 47% of respondents, while improved quality measures followed closely, chosen by 39%. These metrics reflect a growing focus on value-based care, where enhancing the patient journey and maintaining high-quality standards are essential goals.
Improved Patient Experience and Quality Measures
The emphasis on patient experience aligns with broader healthcare industry goals. Digital health solutions that streamline care, offer convenience, and provide personalized interactions tend to boost patient satisfaction. Additionally, quality measures—such as accuracy in diagnostics and treatment efficiency—remain a central focus for hospital leaders aiming to reduce error rates and improve outcomes.
Challenges in Measuring ROI for Digital Health Solutions
Distrust in Vendor ROI Claims
Despite the high priority placed on ROI metrics, the survey revealed a significant degree of skepticism among hospital leaders regarding vendor-provided ROI estimates. About 39% of respondents expressed distrust in vendor ROI information, while 36% indicated they somewhat trust these claims, and only 25% fully trust them. Hospital leaders are often cautious, as vendors may present optimistic projections that do not always align with real-world performance.
This skepticism may arise from previous experiences where vendor promises did not materialize as expected. More than half of the respondents (59%) stated that vendors’ ROI projections fall short more than half of the time, leading to a cautious approach in setting internal ROI expectations.
Internal ROI Expectations and Vendor Accountability
Hospital leaders appear to be setting lower internal expectations for digital health solutions to mitigate potential disappointment. As noted in the report, only 25% of hospital leaders place high trust in vendor-provided ROI data. Instead, they tend to hold vendors accountable through risk-based contracts and performance metrics built into contracts. For example, 58% of respondents prioritize ongoing engagement with vendors, and 56% incorporate ROI performance clauses directly in vendor contracts. These strategies allow healthcare providers to maintain control over the expected ROI outcomes and demand accountability.
Trends in Digital Health Investment
Focus on Virtual Care and Remote Monitoring
A recent report from Trilliant Health highlights a shift in digital health investments, with a focus on virtual care solutions that enhance patient access and experience. In 2024, 76% of health systems invested in virtual health tools, with a significant focus on improving patient engagement and access to care. Many providers are also prioritizing digital front doors (61.5%), remote patient monitoring (53.5%), and virtual care platforms (48%) to address the challenges of labor shortages and expand access to healthcare services.
Spending Priorities in Digital Health Tools
Another recent report by the Peterson Health Technology Institute and the NORC at the University of Chicago revealed the specific digital health tools that healthcare providers prioritize. According to the report, 65% of surveyed health systems have invested in digital diabetes management solutions, while 62% prioritize digital primary care. Mental health (56%) and preventive care (56%) solutions also rank highly on the spending list.
Conclusion
The emphasis on improved patient outcomes as the top measure of digital health it reflects healthcare leaders’ commitment to patient-centered care. While challenges in assessing ROI persist, many hospitals have adopted strategies to hold vendors accountable and set realistic expectations. As virtual healthcare and digital tools gain traction, the focus on patient outcomes will remain a critical metric, guiding digital health investments. With strategic investments and evolving digital health solutions, healthcare organizations can optimize care delivery and support long-term health improvements for their patients.
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FAQs
1. Why is patient outcomes the top ROI metric for digital health solutions?
Ans: Patient outcomes are a direct measure of a digital health solution’s impact on patient health. Improved outcomes demonstrate the solution’s effectiveness in supporting better health, aligning with healthcare providers’ core mission of enhancing patient care.
2. What challenges do hospitals face in measuring digital health ROI?
Ans: Challenges include skepticism about vendor-provided it claims, limited formal processes for ROI assessment, and variations in expected versus actual performance. To address this, hospitals use risk-based contracts and track performance metrics.
3. How do hospital leaders hold vendors accountable for ROI?
Ans: Hospital leaders prioritize ongoing vendor engagement, build its performance into contracts, and employ risk-based agreements to ensure vendors meet promised outcomes.
