Can Digital Health Save Healthcare?

Introduction: Why Digital Health Is the Battleground for Healthcare’s Future

Digital health is no longer a side project; it’s the front line in the fight to save American healthcare from unsustainable costs, burnout, and vanishing access in rural communities. The stakes are high: U.S. healthcare spending topped $4.5 trillion in 2022 and continues to outpace inflation and GDP growth. Leaders are desperate for solutions that don’t just digitize paperwork but fundamentally change how—and where—care is delivered.

That’s why voices like David Fletcher’s, System Director for Telemedicine at Vandalia Health and veteran digital health consultant, matter more than ever. On a recent episode of The American Journal of Healthcare Strategy podcast, Fletcher unpacks two decades of telemedicine leadership—from the early days of rolling video carts in Arkansas to today’s AI-driven, consumerized platforms. His perspective is unique: he’s been inside both academic medical centers and payer-provider hybrids, has watched big tech’s march into care delivery, and now consults for organizations racing to keep up.

The central question: Can digital health and telemedicine not just improve but truly save healthcare? If so, who stands to win—or lose—in the coming transformation?

What Did Digital Health Look Like 20 Years Ago—And Why Does That Matter Today?

Short answer: Two decades ago, telemedicine was clunky, expensive, and a logistical nightmare—yet it was already closing gaps for patients in underserved communities. That early innovation, says Fletcher, built the foundation for today’s explosion of digital health tools.

“We were in Arkansas, kind of surprisingly an early adopter… Our Medicaid plan really invested in it, and that helped us get it off the ground before a lot of health systems really were able to.”

In the early 2000s, video visits meant rolling a bulky cart with specialized hardware into a rural clinic. Broadband was so scarce that Arkansas needed a $102 million federal grant to connect its counties. Even then, patients would travel to a local clinic just to use the video cart to consult with a specialist at a distant academic center.

Why this matters now:

• The need for infrastructure investment—like broadband—remains a policy challenge in rural America.

• The early days instilled a focus on value creation and equitable access:

  “When I was finally implementing new programs, I had that background of thinking about value and equitable care across a lot of demographics… That’s part of what I do every day.”

• Many U.S. regions still face the same digital divide, making lessons from those pioneering days relevant to today’s leaders and policymakers.

Key takeaway:
Digital health’s origins were pragmatic, focused on necessity and equity. Despite the tech revolution, some barriers haven’t changed—and those who ignore the infrastructure gap risk repeating history.

How Has the Role of Telemedicine Shifted in the Last Decade?

Short answer: Telemedicine has expanded from specialty consults for the few to mainstream primary and urgent care for the many. Consumer expectations, not just technology, are driving this reversal.

“It used to be that in Arkansas, our whole bread and butter was we had the only Maternal Fetal Medicine specialist in the state, located in Little Rock. That was a big point of emphasis. But now, it’s really expanded. Primary care offices are doing it, urgent care—all that.”

Why did this shift happen?

• Consumerism: Patients expect healthcare to match the convenience of apps like Uber or Netflix.

  “Patients have come to expect that as well… so you see Amazon, Walmart, Dollar General getting into that space.”

• Wider broadband and smartphone adoption: Most Americans now have a video-enabled device in their pocket.

• COVID-19 acceleration: Even small hospitals had to adopt some form of telemedicine during the pandemic.

Implications for leaders:

• The competitive threat is no longer just the hospital down the road—it’s tech giants and retail chains moving into healthcare.

• If your organization doesn’t offer virtual urgent or primary care, expect to lose those patients to someone who does.

Key takeaway:
Telemedicine’s scope now covers the full continuum—from chronic disease management to urgent care—changing not just who delivers care, but who owns the relationship with the patient.

What’s the Difference Between Telemedicine and Digital Health—And Why Should Executives Care?

Short answer: Telemedicine is a subset of digital health. Digital health is the bigger, messier universe—encompassing data analytics, connected devices, AI, and workflow automation, in addition to virtual visits.

“Telehealth is a component of digital health. I think of digital health as the harnessing of two major forces for improving patient health: data/information, and technology.”

How does this play out operationally?

• Telemedicine = direct patient-provider video or phone encounters

• Digital health =

  • Remote patient monitoring (e.g., weight tracking in CHF patients)

  • AI-powered triage or scheduling

  • Digital stethoscopes and diagnostics

  • Data-driven population health

Why it matters for strategy:

• Digital health enables earlier intervention.

  “If you know in the patient’s home that they’ve been trending in a bad direction, you can intervene earlier… Particularly for chronic diseases, where a lot of the healthcare dollars go.”

• Backend optimization: Much of the impact is invisible to patients—improving patient flow, decision support, and population health management.

Key takeaway:
Executives must see telemedicine as only the entry point. The broader digital health ecosystem will separate winners from losers—by enabling smarter, more scalable, and data-driven care.

Is Value-Based Care Finally Arriving—And How Will Digital Health Accelerate It?

Short answer: We’re on the cusp of a real shift—because payers, not just providers, now demand value. Digital health tools will be essential for making value-based models viable at scale.

“The payers are really pushing for that… The healthcare cost just can’t continue to grow at the rate they have been. If you’re a health system and you’re on the hook for the overall health of patients, how do you manage them if you don’t know they’re sick until they show up in the ER?”

Key drivers:

• Shared risk/shared savings models are becoming more common, even if full capitation remains rare.

• Digital health provides real-time, actionable data for proactive management—identifying risk and intervening before costly hospitalizations.

• Payers and consumers are both demanding care “closer to home.”

  • Less expensive for the payer

  • More convenient for the patient

What about provider incentives?

• In fee-for-service worlds, preventing ER visits can paradoxically hurt a hospital’s bottom line.

  “You’re essentially punishing yourself for doing those things… That was a big reason I wanted to go to Geisinger—because they were both the payer and the provider, so it made sense to invest in prevention.”

Key takeaway:
As the industry transitions to value, health systems that master digital health will thrive. Those that stick with fee-for-service—and ignore the digital imperative—will see margins and relevance erode.

Are Small Hospitals at Risk from Big Retail and Tech—And What Happens When They Leave?

Short answer: Small and rural hospitals face existential threats from Amazon, Walmart, and others. If these giants withdraw, communities could be left with no care at all.

“Primary care isn’t really where most health systems make their money… it’s kind of a loss leader, but it’s how they get patients into their system. If Walmart takes those, when that woman decides to have a baby, is she going to have that hospital there to deliver?”

Potential scenarios:

• Retailers win the “front door” (primary/urgent care), draining health systems of revenue and referrals.

• Hospitals close:

  “If Walmart leaves, you could have thousands of people in the middle of the U.S. with no healthcare access… They’ve got to drive two hours just to get basic care.”

What should small systems do?

1. Invest in digital tools now to keep patients in their ecosystem—even if it feels like a stretch.

2. Seek outside expertise to overcome organizational barriers.

   “It’s difficult to know whose job it is to do telemedicine… Sometimes it’s important to have a neutral party help set it up.”

3. Use telemedicine to address provider shortages—by extending reach through remote staffing or partnerships.

Key takeaway:
Ignoring digital health is not an option. Small health systems must “go digital” to remain viable—or risk being replaced by retail and tech giants who may not stick around.

What Practical Steps Can Leaders Take—Especially in Resource-Limited Settings?

Short answer: Focus on two leverage points: organizational clarity and creative workforce solutions.

1. Clarify ownership of telemedicine and digital initiatives.

   • Many systems are organized by service line; telemedicine cuts across these lines.

   • Appoint a leader or team—or bring in outside help to launch and scale digital services.

   “Just getting through those organizational barriers is huge. Sometimes an outside consultant is key.”

2. Use digital health to solve provider access challenges.

   • Virtual nursing: Experienced RNs can work from home doing admissions, discharges, and paperwork.

   • License portability: Partner with telehealth firms to tap providers licensed across multiple states.

   • Leverage labor flexibility:

     “Sometimes providers are willing to take a little less pay for the convenience of working from home—especially with young kids or lifestyle needs.”

Additional ideas:

• Keep digital workflows simple, especially for older patients.

• Embrace digital health as a tool for both patient retention and workforce sustainability.

Key takeaway:
There’s no “one size fits all” solution—but leaders must act now to build organizational muscle around digital health, before they are forced into it by outside competition or crisis.

What Surprised Fletcher About Digital Health Adoption—And What Do Most Leaders Get Wrong?

Short answer: The biggest misconception is that older adults won’t use or benefit from digital health. Data shows they love it—if it’s designed with them in mind.

“Older patients absolutely love it… Our surveys at Geisinger would start with ‘I actually’—because there was a little surprise at how much they liked it. If you make them go through 30 steps, yeah, they’ll be frustrated—but so will younger people.”

Why does this matter?

• The U.S. population is aging. Failing to engage older adults digitally is a strategic error.

• Digital health can reduce social isolation, transportation barriers, and care fragmentation for seniors.

Leadership takeaway:
Don’t design digital health “for millennials only.” If you simplify the experience, older adults can—and will—use it, driving outcomes and satisfaction.

The Road Ahead: Will Digital Health Really Save Healthcare?

Short answer: Digital health alone won’t “save” the system, but it’s a necessary foundation for everything else—value-based care, workforce flexibility, and consumer-centric service.

Fletcher’s experience across health systems, payers, and consulting gives him a unique vantage point. He’s clear-eyed about both the promise and the pitfalls.

“I’m not opposed at all to Amazon and Walmart… They’re super convenient, and I hope they push the industry to get more consumer friendly. But I also want to make sure we don’t lose those hands-on, local health systems that do the hard work when people need it most.”

Actionable Takeaway: Don’t Wait—Start Building Your Digital Health Future Now

Whether you lead a multi-state system or a rural hospital, the message is clear: digital health is not a distant threat or a luxury—it’s the new cost of doing business. Leaders should:

• Map your digital health capabilities against patient expectations and market trends.

• Invest in broadband, workflow redesign, and digital literacy for both staff and patients.

• Partner—don’t compete—where you can’t build expertise internally.

• Design solutions for all ages and abilities; simplicity wins.

• Monitor the competitive threat from retail and tech, but use it as motivation, not paralysis.

The future won’t wait. As Fletcher reminds us, “the main thing is to keep these kinds of digital tools available, or risk losing the local access that communities depend on.” The digital health revolution isn’t about gadgets—it’s about survival.

For more insights or to connect with David Fletcher, System Director for Telemedicine at Vandalia Health, visit Fletcher Health Consulting or follow him on LinkedIn. For strategy leaders, now is the moment to take the next step—before the choice is made for you.