As the healthcare landscape continues to evolve, 2025 is sure to be a big year for digital health innovation. We asked our team at Nixon Law Group to share their insights on the trends and predictions shaping the industry this year. Here’s what they had to say:

Increased AI Regulation and Adoption

The rapid expansion of AI in healthcare continues to create opportunities as well as challenges. 

In 2025, we expect to see AI being used in a wider range of healthcare applications—more than just reducing administrative burdens—such as diagnostics, treatment planning, and drug discovery. NLG Partner Mike Pappas expects to see “the growth of AI in the Foodcare space”, where AI's ability to personalize nutrition and wellness has the power to revolutionize preventative care.

NLG Counsel Sam Pinson predicts that “without a centralized federal AI regulatory framework, states will lead the way, with nearly every state adopting some form of AI law—especially in high-risk areas like healthcare and employment.” 

This approach could create complexities for digital healthcare innovators but also offers opportunities for those prepared to navigate different state requirements. 

At the same time, we expect to see more federal legislation and regulation around AI issues, regardless of the incoming administration’s expressed desire to reduce regulation in general.

Renewed Focus on Preventive and Value-Based Care 

Value-based care is not a new trend in healthcare, but we expect to see this model continue to grow in prominence throughout 2025. The new Advanced Primary Care Management codes introduced by Medicare this year may influence primary care models toward value-based approaches focused on population health. 

Plus, we expect to see investors increasingly focus on companies that are actively shifting to VBC models.

Additionally, digital therapeutics and food as medicine will take center stage this year as the healthcare industry focuses more on preventative care. 

Founder and Managing Partner Carrie Nixon, adds that “digital health companies can play a role in this by developing tools and services that help people to monitor their health and make healthy lifestyle choices. Food as Medicine is an example.”

More Audits for Remote Monitoring and Care Management Services 

In September 2024, the Office of Inspector General (OIG) released a report calling for greater oversight of Remote Patient Monitoring (RPM) in Medicare. The report emphasizes the need for stronger safeguards and increased transparency to ensure proper utilization and billing of RPM services.

Stephanie Barnes, Senior Counsel at NLG, anticipates a significant increase in audits and denials of Virtual Care Management (VCM) services stemming from recent OIG findings. “This is an opportunity for digital health companies to shore up their documentation and audit support capabilities,” she notes.

Regulatory Changes for Digital Health Devices and Digital Therapeutics

With digital devices becoming more sophisticated, we expect the FDA to increase its regulation of digital health devices and digital therapeutics, particularly those that previously fell under the agency's enforcement discretion. 

Digital device companies have the opportunity to set themselves apart from competitors in the market by preparing now for potential changes. Staying ahead of these changes will be crucial for healthcare innovators looking to bring their products to market and remain compliant.

Renewed Growth in Digital Health Investment and M&A Activity

The digital healthcare industry will continue to see investment growth into 2025 as health system VC arms/ VC spinoffs will continue to lead funding rounds for the most innovative startups in the digital health sector. In an effort to reduce point solution fatigue, we'll also see an uptick in mergers and acquisitions by the most well-funded digital health companies. 

The potential for a permanent telehealth policy— or at least a multi-year extension— could accelerate digital healthcare, particularly for companies reluctant to begin or invest with a looming deadline.

Increased Attention on Cybersecurity and Interoperability

With an increase in the exchange rate of sensitive data and on the heels of the disastrous Change Healthcare breach , cybersecurity will continue to be a major concern for healthcare providers and digital health companies. Companies will need to invest in robust cybersecurity measures to protect patient data.

At the same time, we expect a growing focus on interoperability. Digital health platforms that can seamlessly integrate with Electronic Health Records will be considered essential for providing coordinated care and improving patient outcomes.

Looking Ahead

At Nixon Law Group, we are lucky to work with some of the brightest minds in digital health— leaders like you who are changing the industry!

We hope these predictions provide valuable guidance as you begin to anticipate your company's needs in 2025.  As always, we’re here to help you navigate today’s challenges and prepare for tomorrow’s opportunities. Ready to take the next step? Let’s discuss how we can support your goals for the year ahead!