The 2026 State of Digital Health Purchasing was published by the Peterson Health Technology Institute on September 29, 2026. It reports that most employers and health plans pay for digital health tools based on measured performance instead of a flat subscription. If you deliver virtual care to employer clients, the operations department is responsible for this requirement. The staff must produce numerators, denominators and outcome values that they can defend for a specific population. Five data elements are necessary for this process – eligibility file linkage, program cohort tags, structured outcome fields, visit attribution and an audit trail. Many telehealth platforms are for the delivery of visits and are not systems for evidence.
What does performance based contracting actually obligate you to prove?
A performance based contract makes part of the payment dependent on a measured result. The result is usually one of the following
- Engagement – A portion of an eligible population finishes a specific action within a specific time.
- Disease control – A clinical value changes or stays within a range for a measured cohort.
- Utilization – Avoidable visits, emergency department use or referrals decrease when compared to a baseline.
Each measurement is a fraction – the numerator is the simple part because it describes an action of the platform. The denominator describes a population that the client defines – this part is where many programs fail.
Purchasers are now more strict – the assessments of PHTI reviewed 22,374 pieces of evidence from 70 digital health solutions. The Peterson Center on Healthcare publishes evaluations that find results from vendors are often less significant than the vendors claim.
Why is the denominator harder than the outcome?
Three questions determine the denominator – a telehealth platform does not answer those questions by default.
Who counts as enrolled? The number could include everyone on the eligibility file, everyone who activated an account or everyone who completed a first visit. Each definition creates a different number from the same care. The difference is often larger than the performance threshold.
When does enrollment start? The start could be the date the employer added the member, the date the member registered or the first clinical contact. If the system stores only the registration timestamp, you cannot connect a measurement period to other dates.
What happens to employees who leave mid-period? If employees who leave are removed from the denominator without notice, the engagement rate increases for reasons that are not related to care. An auditing purchaser will discover this error.
The parties should agree to all three definitions in writing before the measurement period starts. Definitions that are created after the fact are the most frequent reason for disputes over performance payments.
Which five data elements are hardest to get out of a telehealth stack?
- Eligibility file linkage. Employer files contain member IDs that are not the same as patient IDs in your system. You need a stored mapping that you can run again.
- Program cohort tags. Each patient needs a permanent tag that names the employer, program and measurement period. Notes that contain free text are not sufficient.
- Outcome values as structured fields. A blood pressure reading that is inside a narrative note is not possible to aggregate. You must capture it as a typed field.
- Visit attribution. If a member sees three clinicians across two programs, the reporting must identify which encounter belongs to which contract.
- An audit trail. The system must have timestamps that cannot be changed, the modality, the participants and the history of amendments for every encounter.
| Evidence source | Holds up in a dispute | Capture effort | Data owner |
|---|---|---|---|
| Platform recorded encounters | Strong | Low | You |
| Structured clinical fields | Strong | Moderate | You |
| Eligibility linked cohort counts | Strong | Moderate | Shared |
| Self reported engagement claims | Weak | Low | You |
| Medical and pharmacy claims | Strong | High | Payer or employer |
Why is self reported engagement the weakest evidence you can offer?
Counts that your own system produces without an external anchor are not verifiable and are almost always favorable to you. “82% of enrolled members engaged” is not meaningful without the definition of enrollment. Purchasers now ask for this definition first.
The use of measured behavior from structured records is a better substitute. There were more than 1.6 billion outpatient visits in 2024. Patients with an active portal account had a 6.2% no show rate while patients without an account had a 7.9% no show rate – this is a 21.5% relative reduction according to Epic Research’s analysis of portal use and no-shows – this is the form of evidence that is defensible. It has a structured event that is countable, a group for comparison and a result that remains after adjustment.
What are the honest trade-offs?
The collection of outcome data requires time from medical providers. Every structured data field that a developer adds is a field that a clinician completes during a medical appointment. The user should select the minimal set of data points that a legal agreement requires and incorporate those fields into the electronic encounter form.
There are specific types of data relevant to contracts that a provider does not possess. Insurance claims records of medication fulfillment and records of emergency department visits remain with the insurance carrier or the employer. If a contract provides payment based on the prevention of medical services, the provider is unable to measure this result without a formal arrangement to share data. The legal agreement must include this requirement.
What components are necessary for a contract when a provider cannot guarantee specific outcomes?
The provider should replace guarantees of outcomes that they cannot measure with three specific legal provisions
- Measurement definitions that parties agree upon at the start, which specify the rules for the denominator, how they assign patients to providers and how they manage patients who leave the program.
- A clause for data sharing that specifies which digital files move between parties, the direction of that movement, the file format and the frequency of transfers.
- A period of baseline measurement that uses the same definitions as the period of active performance.
Medical providers who examine their software infrastructure frequently discover that the lack of integrated reporting and the separation of data are the primary limitations, rather than the quality of video streaming. Organizations use platform based methods because the infrastructure for reporting is functional at the time of purchase. Healee’s white label telehealth platform operates as a single tenant system, which provides a specific server instance and a database for each individual client – this technology serves 1M+ patients, 200+ clinics and 5M+ appointments. Because of this scale, the tags for patient groups and the logs for audits that support performance reports are functional through extensive use and are not experimental features for a single contract.
Next steps
The user should select one contract and attempt to generate the performance statistics from the previous quarter using only the internal platform before the next renewal with an employer. Any data point that the user cannot generate represents a deficiency in the system. To observe how a system manages patient group tags, the collection of structured outcome data and audit records under a specific brand, request a demo.
Frequently asked questions
What is the definition of performance based contracting in the field of digital health?
A portion of the financial compensation for a technology vendor is contingent upon measurable results, like the level of patient interaction, the management of a disease or the reduction in the use of medical services, instead of a fixed subscription fee. In September 2026, the Peterson Health Technology Institute reported that a majority of employers and health insurance plans use this model.
Which data sets are necessary to demonstrate performance for a contract with an employer?
The requirements include the connection to patient eligibility files, permanent tags for program participant groups, values for outcomes recorded in structured data fields, the assignment of medical visits across different programs and a permanent record for every recorded clinical encounter.
Why do disagreements regarding performance typically involve the denominator?
The definition of enrollment varies across three different methods, the files for patient eligibility change every month and employees depart from companies during the middle of a reporting period. The same medical care produces different statistical results under different sets of rules. It is necessary to agree upon the rule before beginning the work.
Is it possible to measure the prevention of emergency department visits without data from insurance claims?
It is not possible to do so with accuracy – the records for insurance claims and pharmacy services remain with the insurer or the employer. As a result any contract that provides payment based on the reduction of service usage requires a provision for data sharing and a period of baseline data that both parties accept.
Is a single tenant software architecture important for the reporting of performance?
It is helpful for two reasons – in this architecture, database queries run against a dedicated system that contains no data from other customers. The separation of data also makes the legal review of data sharing agreements for HIPAA compliance less complex.
Sources:
- 2026 State of Digital Health Purchasing – Peterson Health Technology Institute, 2026
- Health technology evaluations – Peterson Center on Healthcare, 2026
- Patient Portal Use Associated With 21 Million Fewer Visit No-Shows in 2024 – Epic Research, 2025