Digital health reimbursement: The path to improved adoption and impact

Digital health reimbursement: The path to improved adoption and impact Kate Dion

Quick Takes

• Despite an explosion in the number of digital health solutions coming to market, many lack robust evidence, partly due to unclear or ill-defined reimbursement pathways
• Major markets are at different points with regard to the alignment of evidence standards and digital health reimbursement opportunities, with Germany leading the way ahead of other countries
• It is imperative to establish clear reimbursement pathways for digital health solutions at a national scale to drive stronger evidence generation and wider adoption of digital solutions

There has been an explosion of digital products in healthcare in recent years. However, it is clear that many lack rigorous analysis of their safety, efficacy, and value to patients or health systems.¹ A recent study revealed that 44% of 224 US-based digital health companies focused on prevention, diagnosis, or treatment that raised at least one round of venture funding of $USD 2 million or more between 2011-2020 had no regulatory filings nor clinical trials published.²

While there are many reasons for this, one key factor is that routes to reimbursement for digital solutions remain unclear in many markets. When the pathway to payment for these new digital health solutions is not defined or even non-existent, there is little incentive for high-quality evidence generation on the part of developers.

Currently, most countries do not have digital health reimbursement processes or procedures. Consequently digital solutions are treated like traditional health services, medical devices, drugs, or diagnostics. However, digital solutions do not fit easily into most of these mature funding pathways. This presents a challenge to innovators in their quest to deliver digital health solutions at scale.

It is possible to create well-defined routes to market with financial rewards more closely aligned with evidence standards. When this is achieved, digital health companies will be more prepared to invest in robust evidence generation. National frameworks are emerging that make it possible for digital health solutions backed by robust evidence to be prescribed and reimbursed. Let’s take a closer look at a few countries to see where they are on this journey.

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Digital health reimbursement pathways in key markets

Germany

Germany is notable as the first country to have implemented a national “Fast Track” pathway for the reimbursement of digital health applications (“Digitale Gesundheitsanwendungen” or DiGA). Legislation introduced in 2019 determined that all German citizens covered by statutory health insurance (approximately 90% of the population) were entitled to use approved digital health apps prescribed by doctors.

Prescriptions issued by physicians for approved solutions work in much the same way as traditional drug prescriptions. A clinician completes a prescription form and gives this to the patient, who then sends this form to their health insurance provider. The patient receives an activation code from their insurer, allowing them to access the solution, and the insurer reimburses the costs.

Currently, approved apps may include class I or class IIa medical devices, as classified under European Medical Device Regulation (MDR). The Federal Institute for Drugs and Medical Devices (BfArM) further investigates each digital health solution, requiring additional evidence of efficacy, robust quality management systems, and compliance with data protection standards. Prices for individual solutions are negotiated in advance with a collective of all health insurers (rather than individually with each), so reimbursement is consistent at a national level.

While developers of a digital solution can apply directly for permanent status on the approved DiGA register, there is also a preliminary pathway, with lower initial evidence requirements. Solutions meeting these preliminary requirements can be granted temporary registration, often for 12 months, without the requirement of data from clinical studies. Temporary registration is easier  for manufacturers to obtain, and, once registered, manufacturers then must use this period on the market to produce real-world evidence to support their application for permanent status.

Aside from the Fast Track pathway, the main route to reimbursement for digital solutions in Germany is through individual contracts with the country’s health insurance providers. This can be a more accessible route for some developers due to the costs associated with securing inclusion on the national DiGA register.

The progress of Germany’s Fast Track process is being followed closely around the world. The success of the system and any challenges encountered are likely to influence other countries’ approaches to reimbursement for digital solutions.

So far, only 18 digital solutions have secured permanent registration in the national DiGA directory, however this is increasing steadily over time.³ Prescription rates are also increasing. The number of DiGA access codes issued to patients tripled from the first to the second year of the program, ^4,5 which indicates that clinicians and their patients may be becoming more aware of the benefits of digital health solutions.

France

France has followed Germany in establishing a national register of approved digital health solutions, together with a reimbursement program. Approved solutions are available to all via the “Mon Espace Sante” (My Health Space) mobile health platform.

Before a digital health application is included on the register, the solution must be evaluated against criteria to validate its safety, efficacy, and compliance with other standards. This is conducted by the Ministère de la Santé et de l’Assurance Maladie (Ministry of Health and Health Insurance). The final details of France’s national reimbursement framework are expected to be published soon.

France has also introduced its own rapid access route for some digital solutions, called Prise en Charge Anticipée (PEC-AN). This enables temporary access for digital therapeutics and some remote patient monitoring (RPM) solutions, with reimbursement (at a fixed price) by statutory insurers for one year, in order to give patients access to promising digital solutions before permanent approval for reimbursement by statutory insurance has been awarded.

From the start of this period, developers must file a request for permanent listing within 6 months for digital devices (therapeutic solutions), and within 9 months for RPM solutions. Notably, in comparison with Germany’s Fast Track pathway, all classes of medical device (I, IIa, IIb, III) under EU MDR are eligible for France’s PE-CAN route to market.

United States

The Centers for Medicare and Medicaid Services (CMS) is the most significant source of government healthcare funding in the US, operating the country’s two largest healthcare programs, Medicare and Medicaid. Up until now, CMS has not set a clear policy on the reimbursement pathways for digital health solutions. This has limited the wider uptake of these solutions, since existing frameworks, such as those developed for pharmaceuticals, are largely not applicable to digital technologies.

Private health insurance plans have therefore taken the initiative in the adoption of digital solutions, including therapeutics. Larger health plans have started to develop their own standardized evaluation frameworks for digital products and services, and to integrate these solutions into their offering.

As a result, the reimbursement landscape for digital health remains fragmented. Overall, policymakers in the US are still contending with the issues of how best to regulate and pay for digital health solutions, limiting wider adoption of even the most promising digital innovations.

United Kingdom

The National Institute for Health and Care Excellence (NICE), which handles clinical guidelines and evaluates technologies for clinical efficacy and cost-effectiveness in England, Wales and Northern Ireland, has published an evidence standards framework (ESF) for digital health technologies (DHTs). This is designed to assist health system decision makers in analyzing whether a solution is likely to benefit its users and the wider health system.⁶

The NICE ESF is viewed broadly as a useful model and a step in the right direction. However, since the standards are merely guidance and are not tied directly to any reimbursement process, there is no strong incentive for innovators to comply.

While some progress has therefore been made in the UK, right now the country is lagging behind the leaders in Europe with regard to efficient reimbursement pathways and routes to national scale.

Improved digital health reimbursement pathways will be critical for solutions to achieve their potential

Health systems should aim to establish clear digital health reimbursement pathways at national scale through frameworks similar to the Fast Track process in Germany, which encourage greater use of real-world evidence in the decision-making process. These should be accompanied with clear guidelines for innovators on what evidence is required for the reimbursement of different types of digital solutions.

Of course, innovators themselves also play a critical role. First, they need to have a strong understanding of the health systems in their target markets, as each country has a unique ecosystem and reimbursement landscape. As we have seen, many are at different stages of maturity concerning their readiness for the adoption of digital solutions. In addition, innovators need to demonstrate a strong value proposition for their solution, including a comprehensive health economics case for adoption by the prospective purchaser.

Effective digital health reimbursement pathways that are aligned with evidence standards and accompanied by efficient routes to national scale will be critical to encourage more robust evidence generation and the wider adoption of digital health solutions.

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1. Safavi et al. (2019). Health Aff (Millwood) 38, 115-23.Paper available from https://pubmed.ncbi.nlm.nih.gov/30615535/ [Accessed May 2023]
2. Day et al. (2022). J Med Internet Res, 24, e37677. Paper available from https://www.jmir.org/2022/6/e37677 [Accessed May 2023]
3. Bundesinstitut für Arzneimittel und Medizinprodukte. (2023). Information available from https://diga.bfarm.de/de/verzeichnis?type=%5B%22active%22%5D [Accessed May 2023]
4. GKV Spitzenverband. (2022). Report available from https://www.gkv-spitzenverband.de/media/dokumente/krankenversicherung_1/telematik/digitales/2022_DiGA_Bericht_BMG.pdf [Accessed May 2023]
5. GKV Spitzenverband. (2021). Report available from https://www.gkv-spitzenverband.de/media/dokumente/krankenversicherung_1/telematik/digitales/2021_DiGA_Bericht_final_barrierefrei.pdf [Accessed May 2023]
6. National Institute for Health and Care Excellence. (2018). Report available from https://www.nice.org.uk/corporate/ecd7 [Accessed May 2023]