By Mike Taylor, VP of Customer Success, Panda Health
As VP of Customer Success at Panda Health, I talk with hospital and health system leaders daily about their top priorities and current market challenges—all with the aim of ensuring Panda fully delivers on their digital transformation needs.
Over the past few weeks, I noticed leaders asking: What digital health trends is Panda predicting for 2024, and how will they impact my organization?
Luckily, Panda is releasing our third-annual Digital Health Technology report this month, which dives into results from a survey of 100 hospital and health system leaders. In the report, we’ll analyze responses to the most pressing questions about digital health, while exploring the top trends and takeaways today’s leaders need to know.
In the meantime, I wanted to break down some of my top predictions based on conversations with many health system and vendor leaders over the past month.
Prediction #1: After a slowdown in digital health solution adoption in 2023, activity will pick up.
As most of the industry knows, digital health solution adoption slowed at many hospitals last year, due mainly to decreased operating margins and reduced spending. However, we’re hearing from leaders that economic pressures have begun to ease as a result of restructured operations, cost cutting, and an overall adjustment to the new economic norms.
As a result, we see economic pressures easing and coinciding with an increase in solution adoption activity—although we predict specific solutions will be more in demand than others. I believe the biggest driver of digital health purchasing this year will be hospitals’ efforts to increase automation to counteract labor challenges.
This also aligns with findings from our Digital Health Tipping Point report, which was released in December. That report—based on a survey of 100 hospital and health system leaders— found automation-oriented solutions, such as self-service patient scheduling and digital patient intake, will experience a significant uptick in adoption this year.
Prediction #2: As digital health solution adoption increases, hospital leaders will become more cautious and more diligent during the solution selection, evaluation, and contracting process.
Although economic pressures are less severe, they are still very present and real for hospitals. Budget and resources for digital health solution investments will continue to be tight. As a result, hospital leaders will be heavily focused on thoroughly evaluating solutions across a variety of factors, including ROI.
Panda’s 2024 Digital Health Technology Report will also dive into strategies health system leaders are employing when evaluating potential vendors, given the shuttering of operations for several well-known digital health companies.
In fact, two-thirds of the survey respondents say their confidence in vendors has fallen since these companies—which include Olive, Pear Therapeutics, and Babylon Health—closed their doors. Two-thirds of survey respondents also say they’ll request more proof regarding results and impact when evaluating vendors as a result.
Prediction #3: Mergers and acquisitions among digital health vendors will increase significantly.
The number of new digital health vendors and solutions exploded during the pandemic. There was an acute need for digitization within healthcare, and cheap money for investments due to low interest rates fueled growth for early stage digital health companies. Last year, however, digital health purchasing among hospitals and health systems slowed down significantly, and as a result, many vendors began to experience significant market challenges.
This year, the full force of market correction will hit digital health vendors, with many smaller companies closing their doors, and many medium-sized companies merging or becoming acquired. I predict 2024 will bring the highest number of mergers and acquisitions of digital health vendors. For hospital and health system leaders, this further underscores the need for additional diligence when evaluating vendors.
What’s the next move? Top advice for hospital and health system leaders
At Panda, we’ve helped hundreds of hospitals and health systems determine which digital health solutions will best meet their needs. Most approach the process with a long list of features and use cases they want the digital health solution to meet. Often, several of those use cases relate to future objectives— that at the time of evaluation, lack the necessary people, processes, or support systems to support them.
At Panda, we recognize although the goal always is to innovate, the vendor evaluation process can become clouded, leaving organizations sometimes overlooking the right solution for them. That’s why we pride ourselves on Panda’s approach to vendor selection, where we employ proprietary evaluation tools, market analysis and more, all in an effort to streamline and ease the process for our health system partners.
Because of that, my advice for system leaders is to spend sufficient time defining the operational, clinical, or financial objectives you’re looking to achieve through the use of a digital health solution.
From there, you should reflect on and prioritize the smallest number of use cases possible that will drive the most progress toward achieving your objectives. This will provide clarity on what’s most important, while ensuring you’re choosing the solution with the best chance for near-term success and positive ROI. Your team (and CFO) will thank you!
Hoping to stay on top of the latest digital health solution trends? Sign up to be one of the first to receive our 2024 Digital Health Technology Report.