The digital health landscape is witnessing a significant trend of consumer willingness to pay for digital health services. Among various digital health services, three stand out as top preferences, while one payment model is chosen as the most favorable option.
As the digital health landscape rapidly evolves, the willingness of patients and consumers to invest in their well-being through digital health services has become a prominent trend. However, amidst the growing enthusiasm surrounding digital health solutions and services, one crucial question persists: which specific services are customers truly willing to pay for?
In order to understand the opinion of digital health stakeholders on willingness to pay, best payment models, the monetization approaches and more, R2G conducted a global survey on How to make money in digital health? The detailed results are published in the whitepaper Monetizing Digital Health Solutions – 2023. Survey results indicate that most of the patients or consumers are willing to pay for weight loss services (43%), closely followed by mental health services (40%) and fitness services (35%).
In 2022, consumer spending in the healthcare industry demonstrated a clear focus on specific segments, with weight loss and fitness, mental health, and women’s health solutions taking center stage. Notably, consumers in Europe spent more than $500 million in health and fitness and medical apps listed in app stores during that year.
Furthermore, the top revenue-generating health & fitness and medical apps for 2022 in Europe included Strava, Headspace, MyFitnessPal, Fitbit, and Flo Period & Pregnancy tracker. These five apps collectively generated over $100 million in revenue in Europe alone during that year1. The success of these apps aligns with the survey respondents’ belief in patient willingness to pay for digital health solutions. The popularity and financial success of these apps demonstrates that patients are indeed willing to invest in digital health solutions that cater to their specific needs and preferences.
On the other hand, subscription-based payment method is the best payment model as per the opinion of majority (67%) of digital health decision makers. Subscription-based pricing models are widely adopted in various industries, including the digital health sector, prices of which vary in each digital health market segment.
Patients in the digital health market segment have the flexibility to choose between out-of-pocket payments or seeking reimbursement through health plans or employers. In the digital diabetes market, for instance, subscription pricing has emerged as the prevailing model. Digital health diabetes companies offer subscription plans with an average price range typically spanning from approximately $20 to $200 per month.
Basic plans usually provide essential features like glucose monitoring, medication tracking, and educational resources, often with a limited number of test strips. On the other hand, premium plans offer more advanced features, personalized coaching, and additional support services at a higher price point. For example, MySugr‘s subscription plans range from $2.99 to $49 per month, offering different levels of access, from basic digital content to premium bundles that include digital content, coaching, and unlimited test strips.
Additionally, approximately 40% of survey respondents believe value-based payment to be the best payment method. Value-based payment method refers to a model that focuses on the outcomes and value generated by digital health interventions, rather than simply paying for the quantity of services provided. It incorporates metrics such as patient satisfaction, improved health outcomes, reduced healthcare costs, and overall population health improvement.
For example, US based diabetes reversal company, Virta Health, offers value-based pricing model rather than the fixed prices, i.e., the payor pays for the solution when/if they see cost savings and improved A1c levels.
In conclusion, the digital health landscape is witnessing a significant trend of consumer willingness to invest in their well-being through digital health services. Weight loss, mental health, and fitness solutions stand out as the top choices among consumers. Additionally, the subscription-based payment model emerges as the preferred choice for payment of digital health services.
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R2G has been constantly monitoring the global digital health industry since 2010. We provide strategic advice for how to build and grow a successful digital health business within all therapeutic areas, business models and regions. We are happy to talk and share our experience!
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 App stores and R2G estimates