Inside Payer Innovation: What I Heard Behind Closed Doors at HLTH

By the third day of HLTH in Las Vegas, I realized something that’s hard to admit out loud. Payers aren’t allergic to innovation. They’ve just outgrown the hype.

In my conversations with leaders from Humana, UPMC, Avalon, and HealthWorks, the tone felt different from the scripted, panel-stage optimism that fills the expo hall.  Gone were the catchphrases about “meeting members where they are” or “harnessing the power of AI.”

Behind closed doors, the tone was sharper, more disciplined, and more honest.

These leaders weren’t talking about apps or pilots or buzzwords. They were talking about operational change. About ROI, governance, integration, and affordability.

If you want to understand where payer innovation is actually headed and what that means for digital health founders, it starts there.

1. ROI Isn’t a Pitch - It’s a Publication

As one leader from Healthworx put it, “ROI should have the most conservative definition: actual published evidence that shows impact year over year. Not something anecdotal.” 

That single sentence sums up the new standard. Promise no longer counts. You have to show proof, and it has to stand up to actuarial math.

In previous years, health plans would pilot solutions that “felt right” or that addressed a visible member pain point. Today, that era is over. Every dollar has to survive internal scrutiny: CFO reviews, compliance audits, and quality reporting cycles.

Many leaders agreed that today’s innovators must come armed with hard data. That means quantified reductions in total cost of care, HEDIS improvements, or retention outcomes among high-risk populations. 

The message is clear: If your ROI lives only in a slide deck, you’re not ready for procurement.

Across multiple HLTH conversations, executives emphasized that they’d rather see slower adoption with strong evidence than fast deployment with shallow proof. Innovation today isn’t about speed. It’s about sustainability.

2. Integration Has Become the Ultimate Differentiator

If ROI is the first filter, integration is the second. At Humana, innovation and operations teams aren’t spending their days debating which app will engage more members. Instead, they’re focused on mapping out how to connect pharmacy, home health, and primary care in ways that actually simplify life for both patients and clinicians.

One leader put it this way:

“Not everyone’s going to do everything well on their own, but if you bring the right partners [together] and drive innovation sooner [and] faster, it creates a better experience for everyone.”

That mindset flips the startup playbook upside down. Payers don’t want to replace what exists. They want to enhance and align it.

And we’re witnessing that shift everywhere. Humana’s CenterWell integrates pharmacy, home health, and primary care under one umbrella. Elevance’s Carelon takes a similar approach, uniting analytics and behavioral health in a single platform. Blue Shield of California’s Altais reduces physician burnout by embedding tech directly into care delivery. And UnitedHealth’s Optum has quietly become one of the country’s most advanced internal technology and care organizations.

The line between payer and innovator has blurred because innovation now lives inside the payer’s DNA.

This is why the most successful digital health partnerships today aren’t the shiny new platforms. As a UPMC leader put it, the real innovation is happening in the plumbing. The unglamorous, deeply integrated systems that quietly fix operational bottlenecks like eligibility validation, prior authorization, care-gap closure, and pharmacy adherence.

And that’s not a bad thing, it’s where transformation becomes durable. When you give people clear data, they behave like consumers. Higher-quality providers get chosen more often, and network performance improves naturally. That’s the kind of quiet innovation shaping the payer landscape right now.

3. AI Is on Trial and the Jury Wants Evidence

You couldn’t walk three feet at HLTH without hearing someone mention AI. But behind the bright screens and glossy demos, a different story was unfolding. 

In payer backrooms, the tone was less about excitement and more about evaluation.

A Healthworx executive laughed when I asked about generative AI pilots: 

“AI is a buzzword that’s been thrown around. It’s important to draw out priorities and identify where AI is solving actual issues, not just building tech and backtracking to fill a use case.”

Across dozens of conversations, the same theme surfaced across nearly every interview. AI isn’t innovation until it’s accountable.

What I observed during this event is that payers consistently emphasized three priorities, and that accountability starts with three questions. 

1. Governance: How do you ensure AI outputs are explainable and auditable?

2. Integration: Can this tool fit into existing systems without risking compliance?

3. Operational Value: Does it automate administrative friction or clinical waste in a measurable way?

In short, no one needs another “AI-driven” anything. They need tools that can survive a compliance review.

Several leaders I spoke with said the same thing with bluntness. Governance in healthcare AI isn’t really about algorithms. It’s about the data that feeds them.

UPMC’s innovation and analytics team described what that looks like on the ground. The hardest part isn’t training the model. It’s managing forty domains of healthcare data, each living in its own silo with its own compliance rules. Progress slows not in the code, but in the connections.

AI depends on data that is secure, standardized, and connected. Governance, then, isn’t a technical checkbox. It’s the scaffolding of trust, and the infrastructure that makes innovation possible in a system that can’t afford mistakes.

As one leader told me, founders need to reframe their narrative. Your AI isn’t the differentiator. Your governance model is.

4. Medicaid and Medicare Are Now the Real Innovation Labs

In nearly every conversation, I heard the same concept repeatedly. The next wave of digital health growth won’t come from commercial plans. It’ll come from public programs, particularly Medicaid.

One leader described Medicaid as “the pressure cooker of innovation,” explaining that it forces payers to think holistically about the person, not just the patient. It’s where affordability, digital access, and social care all collide.

“Digital health can be the connective tissue between a plan, community-based organizations, and state or federal entities,” another executive told me. “Solutions that reach complex members where they are, are where we’ll see the biggest breakthroughs.”

This shift represents something profound. Innovation is moving from the “apps and access” era to the “infrastructure and equity” era.

Payers aren’t looking for digital health companies that just connect members. They’re looking for ones that complete the circle, helping keep coverage continuous, benefits activated, and care navigation frictionless for vulnerable populations.

And the momentum is real. From what I heard, this is where the biggest payer innovation budgets will flow in 2025 and beyond.

If commercial plans define the first chapter of digital health, public programs are writing the next one. They are proving that innovation doesn’t have to start with profit margins or market share. It can start with people.

5. Pilots Without a Path Are Dead

Everyone I spoke to brought up the phrase “pilot purgatory.” But it’s not actually the concept of a pilot that frustrates payers; rather, it’s the lack of a credible plan for what comes next.

One payer leader put it plainly:

“Every pilot has to have a path to system-wide adoption. If we can’t see the operational owner or funding source on day one, it’s a science experiment, not an investment.”

That perspective struck me as a radical redefinition. In this environment, the founders who succeed are those who show up with integration maps, funding models, and timelines before the pilot begins. They know who inside the plan will own the outcome, how it connects to existing systems, and what KPI will trigger scale.

They expect to see pilots designed with defined success metrics, such as ROI thresholds, engagement rates, or quality measures, all before day one.

I saw what that looks like in practice from UPMC. Their innovation sandbox lets startups validate solutions on de-identified data without waiting months for compliance approval, leading to real proof points faster. It’s a model that turns pilot purgatory into a proving ground.

It’s no longer “test and see.”

It’s “prove and plan.”

6. Affordability Is the New North Star

When I asked every leader what theme drives their innovation agenda for 2025, one word came up across nearly every conversation: affordability. 

Affordability was not used only as an ideal or marketing term, but as a shared operating goal used as a guide among payers. Whether in commercial or Medicaid, payers are under relentless pressure to reduce total cost of care while maintaining access and equity.

To summarize what one executive noted, employers and the government are the biggest sponsors of healthcare. They’re pushing for innovation that reduces total cost and increases transparency. Innovation usually costs up front, but it’s essential for long-term affordability.

This creates an interesting paradox familiar to those in healthcare. Innovation costs money but not innovating costs more. The difference is in how you measure time horizons. The right kind of automation reduces cost and improves access at the same time.

I believe the takeaway from these conversations boils down to one simple idea: The payers that survive this cycle will be the ones that treat affordability not as a finance problem but as a design principle, embedding it into every member interaction, every partnership, and every workflow.

And they’re expecting their partners to do the same.

The Quiet Revolution Happening Inside Health Plans

As I left Vegas, one thought stuck with me: Payer innovation isn’t slowing down. It’s growing up.

The energy I felt in those conversations didn’t feel like fatigue. It felt like focus. More specifically, it felt like focus on measurable change, not marketing headlines. Every leader I spoke with at HLTH echoed the same sentiment. The experimentation era is giving way to an era of execution, evidence, and embeddedness.

Payers aren’t looking for saviors or slogans anymore. They’re looking for systems-level partners who can help them do the unglamorous operational work that actually changes outcomes.

That’s where the opportunity lies for digital health founders willing to evolve with them.

If the last decade was about proving digital health could innovate faster than payers, the next one will be about proving it can integrate deeper than anyone else.

Innovation in healthcare hasn’t disappeared. It has just moved inside the halls where payers walk. Across the industry, the most effective models are the ones built in direct partnership with health plans themselves, working inside the payer ecosystem, not outside it.

The line between payer, provider, and innovator isn’t just blurring. It’s disappearing. And those who learn to build within those walls, not around them, will be the ones shaping what comes next.

Closing Thought

Behind every flashy panel on the HLTH stage this year was a quieter truth echoing in private rooms: Innovation isn’t a category anymore. It’s a competency.

The payers that master it will redefine healthcare.

The founders that understand it will finally scale within it.

That’s the real story of HLTH 2025.