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August 11, 2016

The importance of determining ROI in the digital health value chain

Something is missing in the digital health value chain, according to a post on Medcity, written by Amos Sadler and Bill Simpson. They encounter in their line of work countless value propositions that digital health companies strive to (or claim to) deliver.

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While clinically and commercially validated digital health interventions are supposed to be paving the way towards success and bringing return on investment to the health stakeholder, the question remains: what exactly is the return on investment ROI that digital health promises to bring?

Sadler and Simpson believe there are a lot of grey areas when it comes to digital health ROI quantification. Is it qualitative and health outcome improvements that matter? How do you take something this multi-dimensional, quantify it in a metric and then somehow attribute fiscal value to that? Is it an objective improvement in medication adherence?

To narrow things down, the authors define value as an immediate improvement in revenues for healthcare stakeholder and/or demonstrable, repeatable, significant, short and long-term cost savings. Since it is way easier to sell the first proposition than it is to sell the second, true systemic digital health care innovation is a challenge to commercialize.

Short term gains not always apparent

The short-term gains are not always apparent in the cost-savings equation and not everyone has the patience (or fortitude) to view longitudinal outcomes as valuable. Every stakeholder has a different definition of what patient engagement or behavior change is and the value that it brings to their organization. This variability means that we can’t use these terms in our everyday discussions about the ROI of digital health, the post authors write.

 As an alternative they offer five terms that might not be perfect but may accurately reflect the value of digital health interventions. With a little definition and a lot of objective data, healthcare stakeholders can be shown ow the many domains of digital health can add value: Engagement Assurance; Behavior change; Patient Centricity; Population health management enablement; Innovation (read the post for a point by point explanation of these ROI terms.

Stakeholders need to define value

In the end of course it is up to the healthcare stakeholders to define value, define ROI, and, above all, define their measurement of when a digital health application has sufficient ROI. ‘Then, once you’ve understood how digital health can add value to your organization take that definition, lead with it and then let the digital health community do its job and deliver.’

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