(adsbygoogle = window.adsbygoogle || []).push({});

The Business Model for Digital Healthcare Explained

Technology seems to continue to disrupt industries while creating new business models where companies can serve customers, clients, and even patients better. One of the newer business models that has become a force in the world is the digital healthcare model. While traditional healthcare providers are utilizing technology to improve their businesses, some businesses are taking things to another level by providing health and wellness services completely with the help of technology.

In this article, we will look at the digital healthcare business model, some examples, as well as the advantages and disadvantages of this model of business.

Understanding the Digital Healthcare Business Model

The digital healthcare business model represents a transformative approach to delivering healthcare services, leveraging technology to enhance accessibility, efficiency, and patient outcomes. At its core, this model integrates digital tools, platforms, and data analytics into traditional healthcare frameworks to offer personalized, convenient, and cost-effective care. Usually, businesses utilizing this approach are internet-based businesses.

The adoption of electronic health records (EHRs), telehealth services, mobile health applications, and wearable devices exemplifies the shift towards a more digital-centric healthcare system. These innovations enable healthcare providers to deliver care remotely, monitor patient health in real time, and make data-driven decisions that improve the quality of care.

Examples of Digital Healthcare in Action

Several examples highlight the impact of digital healthcare. Telemedicine platforms, for instance, allow patients to consult with healthcare professionals via video conferencing, reducing the need for physical visits and making healthcare more accessible to those in remote areas. Wearable technology, such as smartwatches and fitness trackers, monitor vital signs and activity levels. This provides valuable data that can inform personalized health plans.

Additionally, AI-powered diagnostic tools and chatbots offer quick, preliminary assessments and health advice. For the patient, this streamlines the process of seeking medical help. By some estimates, 90% of hospitals will use AI-powered technology for early diagnosis and remote patient monitoring by 2025. There are mobile health applications available. These apps offer various services from medication reminders to mental health support. 

1. Teladoc Health

Teladoc Health is a pioneer in the field of telehealth, offering a broad range of services including general medical consultations, mental health services, and specialized consultations for chronic conditions. This platform allows patients to connect with healthcare professionals through video calls, phone calls, or messaging, providing convenient access to medical advice and care. Teladoc has been instrumental in making healthcare more accessible, especially in rural or underserved areas.

2. Fitbit (Google)

Fitbit, now under Google’s umbrella, is renowned for its wearable technology that tracks physical activity, sleep patterns, and other health-related metrics. These devices collect data that users can monitor via an app.

This should help them to stay motivated and informed about their health and fitness goals. Fitbit’s integration with Google’s resources and technology has the potential to further innovate in the wearable health tech space.

3. Zocdoc

Zocdoc is a digital healthcare company that simplifies the process of finding and booking appointments with healthcare providers. Patients can search for doctors based on specialty, location, insurance coverage, and available appointment times. Zocdoc’s platform enhances the accessibility of healthcare services, making it easier for patients to connect with the right healthcare providers.

4. 23andMe

23andMe is a leading genomics and biotechnology company that offers direct-to-consumer genetic testing. Through simple saliva-based tests, individuals can gain insights into their ancestry, inherited traits, and potential health risks.

23andMe’s services empower users with valuable information about their genetics and health predispositions, contributing to personalized healthcare and wellness planning. Although this company has experienced much success, the past few years have been challenging as they have struggled to continue scaling their business model.

5. Omada Health

Omada Health focuses on digital chronic disease management programs that provide users with tools, coaching, and personalized interventions to manage and prevent chronic conditions such as diabetes, hypertension, and mental health issues. Their approach combines technology with human support to encourage healthy habits, monitor progress, and achieve better health outcomes.

6. Amwell

Amwell (American Well) is a telehealth company that offers virtual visits with doctors, therapists, and specialists. Their services cover a wide range of medical conditions, from urgent care needs to ongoing health management. Amwell’s platform supports both on-demand and scheduled visits, facilitating access to healthcare professionals from the comfort of the patient’s home.

Read: 8 Types of Business Models for Startups to Utilize


Advantages of the Digital Healthcare Business

The implications of these advancements are profound. A study by the McKinsey Global Institute predicts that the application of digital healthcare could save the US healthcare system up to $350 billion annually by improving efficiencies and patient outcomes.

Expanded Market Reach

The digital healthcare business model significantly broadens the market reach for healthcare providers. By leveraging online platforms and telehealth services, businesses can extend their services beyond traditional geographical limitations, tapping into a wider audience.

This expanded reach not only opens up new revenue streams but also increases the visibility and accessibility of healthcare services, allowing businesses to cater to patients in remote or underserved areas who might not have access to quality healthcare otherwise.

Cost Reduction and Efficiency

Digital healthcare businesses benefit from substantial cost savings and operational efficiencies. The adoption of digital tools reduces the need for physical office space. It also cuts down on administrative burdens and streamlines patient management processes.

A study that sought to evaluate cost savings from completed telehealth appointments was conducted in 2022. The study included 11 688 patients younger than 65 years, with 25 496 telehealth visits at a National Cancer Institute–Designated Comprehensive Cancer Center from April 1, 2020, to June 30, 2021. According to cost models, the estimated mean total cost savings ranged from $147.4 to $186.1 per visit.

Telehealth consultations, for example, can be more time-efficient compared to in-person visits. This allows healthcare providers to see more patients in less time. While there are concerning issues with this, (we will discuss that in the next section) the efficiency is appreciated by many patients and providers. 

Digital health platforms can also automate routine tasks. Things like appointment scheduling and patient reminders can be done with little staff involvement. This can further reduce operational costs and enhance efficiency.

Competitive Advantage through Innovation

Digital healthcare businesses gain a competitive edge by embracing technological innovations. Offering telehealth services, personalized health apps, and wearable technology can differentiate a business from traditional healthcare providers.

Companies that innovate and integrate advanced technologies like AI for diagnostics, treatment planning, and patient engagement are more likely to attract and retain tech-savvy consumers seeking convenient and modern healthcare solutions.

Data Analytics for Strategic Insights

Digital healthcare businesses have the advantage of access to data analytics. This data can inform strategic decisions and improve patient care. By analyzing patient data, businesses can identify trends easily. They can also measure the effectiveness of treatments and optimize their services.

This data-driven approach enables personalized care delivery, enhances patient outcomes, and supports the development of new services and products.

Disadvantages of the Digital Healthcare Business

Regulatory and Compliance Challenges

Navigating the complex landscape of healthcare regulations and ensuring compliance is a significant challenge for digital healthcare businesses. The need to comply with health information privacy laws, such as HIPAA in the United States, and other regulatory standards can be daunting.

The rapid evolution of digital healthcare technologies often outpaces the development of regulations, leading to a regulatory grey area. As a result, some services operate without comprehensive oversight. This can risk patient safety and care standards. Additionally, there is the international nature of digital platforms. This can complicate regulatory enforcement. This is because services can be offered across jurisdictions with varying health regulations.

Data and Privacy Concerns

In 2023, more than 540 organizations and 112 million individuals were implicated in healthcare data breaches reported to the HHS Office for Civil Rights (OCR). This shocking number is one of the major issues with this business model for both companies and individuals.

Health information is one of the most sensitive types of information besides financial information. Because of this, it is also one of the most coveted. Digital healthcare businesses and startups need to be proactive in protecting this information. 

Patient Trust and Adoption Issues

Building trust and encouraging the adoption of digital healthcare services among patients can be challenging. Concerns over the impersonality of virtual consultations and skepticism about the effectiveness of digital health interventions can hinder patient engagement.

Digital healthcare businesses must invest in educating their audience about the benefits and safety of digital health services to overcome these barriers. The quality and efficacy of digital healthcare services have also been subjects of debate.

The impersonal nature of online consultations can sometimes lead to misdiagnosis or oversight of critical health issues. Some of these would be more readily identified in a traditional face-to-face consultation. A 2021 UK study of rheumatology patients and clinicians found that the vast majority of respondents – 86% of patients and 93% of clinicians – felt that telemedicine was worse than face-to-face consultations for accuracy of assessment. Some also reported misdiagnoses from their online visit.

The lack of physical examination can limit the healthcare provider’s ability to fully assess a patient’s condition. This could have an enormous impact on the quality of care.

Dependence on Technological Advancements

Digital healthcare businesses are heavily reliant on continuous technological advancements and must keep pace with rapid changes in the field. This dependence means that businesses must constantly invest in updating their technology and training their staff to use new tools and platforms.

Staying at the forefront of technology can offer significant advantages. However, it also poses a risk if a business cannot adapt quickly enough to changing technologies and patient expectations.

The Future of Digital Healthcare

The future of digital healthcare promises even greater integration of technology in medical care. This will be driven by ongoing innovations and a growing emphasis on patient-centered services. According to a report by the World Health Organization, the use of digital health technologies is on the rise globally. 

As technology advances, we can expect the emergence of more sophisticated AI and machine learning algorithms. Consequently, this will enhance diagnostic accuracy, personalized treatment plans, and predictive health analytics. 

Wearable technology is expected to become more advanced. Today, sensors can monitor a wider range of health indicators and even dispense medication. Also, the expansion of telehealth services is anticipated to continue. This will make healthcare even more accessible, especially in underserved regions.



The digital healthcare business model represents a paradigm shift in how healthcare services are delivered and experienced. This business model focuses on leveraging technology to improve access, efficiency, and outcomes. By doing this, digital healthcare is setting the stage for a future where healthcare is more personalized, accessible, and effective.

As technology continues to evolve, so too will the opportunities to further enhance the healthcare system. Hopefully, this means that it will become more responsive to the needs of patients and providers alike. The statistics and trends indicate a bright future for digital healthcare. While the model still has many issues without clear solutions, this model has benefited many providers and patients all over the world.

Also read:

Social Enterprise Business Model: Examples, Advantages, and Disadvantages

Why Business Models Are Important to Understand

Thomas Martin
Tom is a member of the Editorial Team at StartUp Mindset. He has over 6 years of experience with writing on business, entrepreneurship, and other topics. He mainly focuses on online businesses, digital publishing, marketing and eCommerce startups.

Like this article? Get updates by email and get our eBook for FREE

Subscribe and Get Updates!


Invalid email address
Give it a try. You can unsubscribe at any time.

Article Tags:
· · · ·
Article Categories:
Business Models · Find Your Way · Grow Your Business · Sales · Technology

Tom is a member of the Editorial Team at StartUp Mindset. He has over 6 years of experience with writing on business, entrepreneurship, and other topics. He mainly focuses on online businesses, digital publishing, marketing and eCommerce startups.

Recent Posts

Related Posts

Popular Posts

Comments are closed.