Digital health and artificial intelligence (AI) are now seen as key to fixing the healthcare system’s biggest problems, according to a new report by Ziegler, a specialty investment bank. The white paper says AI and digital tools can help with limited access, staff shortages, and high care costs. With more seniors needing care and not enough places or workers to help them, digital health is becoming more important than ever.
Healthcare at a Turning Point
Ziegler’s new report, Deconstructing the Digital Health & AI Industry: Part V, says the digital health sector is changing fast. The reasons include a growing senior population, rising costs, and better technology. AI is becoming central to these changes.
New computer tools, more data, and stronger hardware mean AI is no longer a side project. It is now being used in real medical settings to help patients, save time, and cut costs.
“We’re seeing AI move from a limited use tool to a powerful solution for healthcare,” the report says.
What AI and Digital Health Can Do
The report lists many ways digital tools can help improve care:
- Make it easier for people to get medical help
- Cut down on healthcare costs
- Help health workers manage their jobs better
- Get patients to the right kind of care
- Help patients stick to treatment plans
- Make care more human and caring
These tools also help manage chronic illnesses by making it easier to monitor patients at home and get them help earlier.
Positive Trends in Digital Health
Ziegler highlights reasons why digital healthcare is growing:
- Patients and doctors are using more AI tools
- More money is going into digital health companies
- Lawmakers are supporting payment for online care
- Data systems are getting stronger and easier to use
Challenges That Remain
But not everything is smooth. The report warns about:
- Mixed rules and laws in different areas
- Hard-to-measure return on investment
- People’s mistrust in using AI for medical care
- Economic ups and downs affecting tech funding
Senior Living Shortage and a Big Opportunity
A serious problem is the growing shortage of senior living homes. More people need care, but not enough homes are being built.
By 2030, there could be a shortfall of 550,000 senior care units, according to NIC MAP. This gap could cost the U.S. up to $275 billion — or even $1 trillion by 2040.
Ziegler says that home healthcare, powered by digital tools, could help ease the pressure. This includes things like remote monitoring, online doctor visits, and digital check-ins.
“Digital AI tools are key to solving the problems of access, staff shortages, and patient flow,” the paper notes.
Helping the “Forgotten Middle”
A big issue raised in the report is the lack of help for the “Forgotten Middle.” These are older adults who make too much money to get Medicaid, but not enough to pay for private care.
A study mentioned by Ziegler shows that by 2033:
- 16 million older adults will be in this group
- 56% will have trouble moving around
- 31% will have memory or thinking problems
- 72% won’t be able to afford private assisted living
Ziegler suggests a few ways to help:
- Expand Medicaid to include more people
- Create new funding plans for long-term care
- Invest more in home and community-based care
- Make virtual care easier to access
A Look Back: Ziegler’s Digital Health Series
This white paper is part of a longer series Ziegler started in 2016. Each part has focused on how digital health is changing over time:
- Part I (2016): Over 200 telehealth companies featured
- Part II: Improving online care access
- Part III: Helping doctors care for more people
- Part IV (2023): Post-COVID tech growth and 830+ digital health companies
This fifth edition shows how far the industry has come — and how much work still needs to be done.