As healthcare costs continue to skyrocket and organizations navigate an uncertain economic landscape, new employer investments in digital health solutions are tapering off.
The Peterson Health Technology Institute’s 2025 State of Digital Health Purchasing surveyed health plans, health systems and employers, finding that the latter is the most concerned about keeping costs down. As a result, employer spending on digital health, such as virtual healthcare, is flattening, while health systems and plans are expecting increases.
Only one-third of employers surveyed cite an increase in spending in 2025—a significant decline from the 75% that said the same last year. On the other hand, 84% of respondents from health plans and 79% of health systems representatives report increased digital health spending—both greater than last year.
“This shift reflects employers’ focus on maintaining their current suite of digital health solutions,” say researchers.
Cost appears to be playing a significant role in employers’ solution decisions.
About two-thirds of employers surveyed cited cost as the top factor when evaluating digital health providers. Meanwhile, just 42% of health systems and 23% of health plans listed cost as the most important factor, instead prioritizing a vendor’s proven track record.
What would prompt an employer to switch to a new digital solution? Again, cost reigns supreme: Two-thirds of employers say the overall cost of the digital health solution is the top factor that would motivate them to look for a new provider, with other key factors including data security and integration challenges.
A shifting landscape
Looking ahead, 65% of employers plan to maintain their current spending levels on digital health in 2026, while only 14% anticipate an uptick in investment next year.
Although they aren’t increasing spending, many employers do report relatively strong employee uptake of the solutions they currently offer. About 44% of eligible workers have enrolled in digital health solutions, according to the report.
The last few years have seen a sharp increase in interest in such offerings among employees, particularly around virtual healthcare, WTW’s Meg Bracht and Jessica H. Jones recently wrote for HR Executive. From primary care to chronic condition management and mental healthcare, digital health offerings became particularly popular during and after the pandemic, they say, valued for their convenience and support of work/life balance.
To drive adoption and prioritize cost savings for the employer from digital health offerings, they say HR needs to focus on strategic messaging. For instance, they suggest emphasizing to employees the convenience and time-savings of digital health solutions, and using data to demonstrate to leaders how such offerings can help the employer ultimately reduce costs associated with on-site care.
Similarly, Barbara Wachsman, head of employer strategy at team-based medical practice Galileo, says HR can play a critical role in garnering leadership buy-in for ongoing investment in digital health offerings—especially as they continue to evolve and improve.
“Don’t look past virtual care,” she writes. “Look for it to enter a new, better era—and be a part of it.”
