What's Happening?
Solera Health has released a report titled 'Death by a Thousand Vendors: The Hidden Costs of Digital Health,' highlighting the financial and administrative burdens faced by organizations managing multiple digital health vendors. The report surveyed 106
senior benefits leaders at organizations with 1,000 or more employees, revealing that 90% of organizations spend over $1 million annually on digital health. The median annual cost of managing these vendors is approximately $580,000, which includes expenses for full-time employees and consultants. The report emphasizes the complexity and inefficiency of managing numerous 'point solutions' for various health needs, such as diabetes management and mental health.
Why It's Important?
The findings underscore the challenges faced by employers in the digital health landscape, where the promise of cost savings through specialized apps has led to increased administrative burdens. The fragmentation of digital health solutions has resulted in significant operational costs, diverting resources from strategic planning and potentially undermining the intended benefits. This situation highlights the need for better integration and streamlined management of digital health vendors to truly realize cost savings and improve employee health outcomes.
What's Next?
Organizations may need to reconsider their approach to digital health vendor management, focusing on integration and automation to reduce administrative burdens. The report suggests that automated feeds and better data integration could alleviate the challenges faced by benefits leaders. As the industry evolves, there may be a shift towards more comprehensive solutions that offer integrated services, reducing the need for multiple vendors and simplifying management processes.
