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Member engagement influences digital health spending, report shows
Providers, payers and employers are prioritizing member engagement in digital health investments, with low enrollment being a challenge for most organizations, a survey shows.
Most healthcare providers, payers and employers plan to maintain or increase their spending on digital health tools in the coming year, but they increasingly want proof of strong member engagement, a new survey revealed. In fact, poor engagement is one of the top reasons for switching digital health vendors.
The survey, released by the Peterson Health Technology Institute, polled 321 people responsible for digital health purchasing decisions at provider and payer organizations as well as employers. The survey was conducted by KRC Research between July 1 and July 22, 2026.
A majority of organizations surveyed (64%) increased their spending on digital health solutions in 2026 compared to the past two years, while 35% maintained their expenditure. Over the next year, 56% of organizations plan to maintain their digital health budgets, while 38% will increase them.
Engagement outcomes are driving spending increases, with 64% of organizations citing strong member engagement as their top reason for boosting digital health investment. Improving access, outcomes and cost-savings were the other reasons, according to the survey.
Most purchasers define engagement as active use of the platform, followed by completing specific clinical interactions and registration or enrollment. However, enrollment appears to be a challenge for most organizations, with 47% of respondents saying that less than a quarter of their eligible members enroll in digital health offerings.
Lack of meaningful engagement appears in the top three reasons for switching digital health vendors across all purchasers, alongside cost.
"Getting members to engage is a shared responsibility between purchasers and companies, and it is where the two sides most often fail to align," said Meg Barron, managing director of engagement and outreach at PHTI, in the press release. "That is why engagement is becoming a defining issue for this market heading into 2027."
Value-based contracting popular for digital healthcare
Performance-based contracts are popular among digital health purchasers, with 57% saying they are currently using one. These contracts are especially popular among employers (68%) and payers (55%).
Most purchasers (67%) have about half of the digital health contract value at risk, according to the survey. Health systems put the most value at risk in their performance-based contracts, with 45% putting more than half of the value at risk.
However, purchasers report several barriers to maximizing the value of their performance-based contracts. The most pressing challenge is aligning with vendors on performance metric definitions, cited by 41% of purchasers. Challenges in managing contract negotiations due to limited internal resources (35%) and a lack of access to data (34%) needed to evaluate performance rounded out the top three.
The data challenges largely stem from hurdles to integrating vendor data with internal claims or utilization data (45%), as well as vendors using opaque measurement methodologies (42%). About 40% also cited vendors skewing their data by reporting outcomes based only on certain subpopulations rather than the full eligible population.
"While the industry is broadly aligned on [a performance-based] approach, employers and health plans still struggle to negotiate and adjudicate these contracts, which often depend on vendors to report clinical and financial data," said Caroline Pearson, executive director of PHTI. "Easing these administrative challenges is essential to driving broader adoption of performance-based contracts. Over time, these contracts can actually generate more data about how vendors perform and help build confidence in digital health solutions."
AI adoption aims to ease administrative burden
When it comes to spending money on AI-powered digital healthcare, purchasers appear to be focused on automating administrative tasks.
Among health systems, 41% reported multiple enterprise-scale deployments of clinical documentation and ambient scribing tools, while 28% are focused on broad-scale deployments on AI-driven patient engagement and navigation tools. On the other hand, only 18% of health systems report enterprise-scale deployment of AI tools for clinical decision support.
However, the industry may see broader deployments of AI-driven clinical decision support tools. About 44% of health systems reported limited case-specific deployments of AI for clinical decision support.
Payers reported multiple enterprise-scale deployments of tools that simplify or automate claims operations (30%) and member engagement and navigation tools (29%). Clinical documentation review tools are also proving popular, with 26% of payers reporting multiple enterprise-scale deployments and 41% reporting limited implementation.
Anuja Vaidya has covered the healthcare industry since 2012. She currently covers healthcare IT and innovation, including artificial intelligence, digital healthcare, EHRs and interoperability.
