Fri. Jan 21st, 2022

This was a record year for private investment in digital healthcare. Investors have poured billions of dollars into digital health solutions with great promise to drive innovation in a highly outdated and inefficient industry.

As digital health has captured the attention of investors and gained validation from consumers, providers, and healthcare stakeholders, budding entrepreneurs must address the highly complicated yet mission-critical question: How can I demonstrate value and ROI?

The problems these companies are tackling are huge, and the potential to help consumers and their families is even greater – key stats that shouldn’t be overlooked.

With every new innovation, demonstrating a financially sound ROI case requires a combination of time and data, and digital health is no exception. In healthcare, proving ROI ultimately means calculating how much a digital health solution has improved in outcomes or realized in cost savings for the sponsoring organization and its members.

While claims-based ROI analysis is a critical long-term measure of success, industry-wide innovation will require ecosystem stakeholders to initially consider creative thinking and proxies to demonstrate value early on. Rather than allowing claims data to act as a brake on innovation, investors should refocus on the long-term direction of the business, the value delivered to the end user and the broader impact of the business on the healthcare system as a whole.

Three key questions can help reshape measurement and investment in early-stage startups:

  • What is the problem being solved?
  • What can be measured to identify early indicators of success?
  • Why (and how) is the delivered experience so much better than the status quo?

What is the problem being solved?

Digital health solutions are solving some of the biggest challenges facing our society today. Take, for example, access to mental health care. During the COVID-19 pandemic, about four in ten adults in the US reported symptoms of anxiety or depressive disorder.

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