Are Legacy Systems Holding Back Digital Health Innovation?
HealthSpark, Episode 19: Ariel Stern, Alexander von Humboldt Professor for Digital Health, Economics, and Policy at the Hasso Plattner Institute and Professor at the University of Potsdam, discusses why so many promising digital health tools fail to move beyond pilot projects and outlines the steps health systems, payers, and industry partners must take to integrate these solutions into routine care for patients and clinicians.
How do 20th-century hospital and payment structures limit digital innovation?
Many health systems still operate with the physical layouts, departmental silos, billing codes, and reimbursement rules designed long before today's data-rich, AI-enabled tools existed. These inherited structures often favor volume over value, paper-based processes over interoperable data, and face-to-face visits over virtual care. As a result, they can slow or even block the adoption of digital tools that could otherwise improve efficiency, widen access, and support better outcomes.
What drives the adoption of digital tools?
Success requires more than a compelling product demo. Digital health solutions must integrate into clinical workflows, align with staffing patterns, and be supported by leadership and training. Otherwise, they are unlikely to be used and remain "innovation for innovation's sake." Equally important are the perceptions and experiences of the people expected to use them. Clinician trust is critical: their confidence in a digital tool’s safety, impact on workload, and benefit for patients ultimately determines whether it is adopted in practice.
Can payment and policy keep up with digital transformation?
Even when clinicians want to implement a new technology, payment and policy often determined whether it can be used over time. Reimbursement policies, contracts, and regulatory requirements are often the determining factors to its sustained use. Coding rules and coverage decisions may support new digital tools by recognizing and paying for new types of services, or they can unintentionally lock health systems into existing patterns of care when billing structures and reimbursement policies align with traditional care delivery. To scale digital health solutions, hospitals, payers, and technology companies must rethink how they define and reward value.
Key question to take forward:
As you watch the video and consider your own setting, you might reflect on:
What would need to change for digital tools to be used consistently and meaningfully in everyday care?