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The meteoric rise of telehealth and other types of virtual care during the Covid-19 pandemic sparked some of the highest funding in digital health’s history. This avalanche of investment — akin to the boom in electronic health record systems more than a decade ago — created a media frenzy, with health care and consumer media outlets creating the impression that digital health will solve the industry’s problems.

Not all of this enthusiasm was misplaced. Digital health continues to massively change the health care industry. Yet health care providers, payers, and investors have become warier about funding and partnering with startups. Several high-profile and well-funded digital health companies were recently shown to have misled, overprescribed, or were outright fraudulent in their claims toward customers and partners.

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