How Consolidation Can Improve Digital Employer-Covered Healthcare Platforms

With healthcare costs dominating the conversation in recent years, the topic of employer-covered healthcare is a key issue. With most Americans getting their health insurance coverage through their employers, this is a key area that impacts how much people feel the burden of healthcare costs.

One way that employers are looking to reduce costs without impacting benefits is by turning to digital health platforms. However, the evidence is still unclear as to how much of a positive impact that these platforms actually have.

Pharmaceutical Executive spoke with Michael Abrams, managing partner at global healthcare consultancy Numerof & Associates about strategies employers are using to reduce costs while still providing effective coverage. He also discusses the impact of digital health and how it appears to actually be impacting the market.

Pharmaceutical Executive: How can consolidation have a positive impact on digital healthcare platforms?
Michael Abrams: The digital health arena — and here I'm specifically talking about employer-facing companies — saw a significant proliferation of new entrants in its early stages. In many ways that reflects entrepreneurship and creativity filling a gap that the healthcare system has largely left open. For years there has been extensive discussion about hospitals doing care navigation, about hospitals ensuring patients receive care at the least costly appropriate point in the care continuum. These are things health systems should do. Largely, they don't.

That gap created an opportunity — especially for employers — to fill the void at scale. Employer-facing digital health companies stepped in offering care navigation, utilization management, and the kind of proactive health engagement that helps ensure people don't end up receiving more care than they actually need. It is an important addition to the healthcare continuum.

In the early stage of this market, what we saw was a proliferation of companies each occupying a very narrow slice of healthcare — what are often called point solutions. Some focused on musculoskeletal issues. Others addressed metabolic conditions, a category that has expanded significantly with the rise of GLP-1s and the chronic conditions they treat.

I think we have seen the peak of investment in this space, and we are now seeing consolidation among these point-solution providers. Companies are looking to broaden their offerings — sometimes with adjacent capabilities, sometimes not — in order to reduce the number of separate doorways employees have to navigate to take advantage of their healthcare benefits. The general direction is toward broader platforms that make it easier to share health histories across services and give employees a more unified experience as they move through the system.