For many employers, managing digital health vendors generates both operational and administrative costs that can rival the savings these programs are expected to provide, according to a new report.
Solera Health surveyed 106 senior benefits leaders at midsize, large, and leading U.S.-based companies across a variety of sectors, including healthcare. Forty-two percent of employers surveyed in the April 2026 report said they manage eight or more digital health vendors, and 90% reported spending more than $1 million annually on costs.
“Employers are spending six figures just to manage vendors that should have saved them money,” Glenn Alphen, Solera Health’s chief commercial officer, said in a statement. “This is not a staffing issue, it’s an architecture issue. When digital health is delivered as a curated network rather than a stack of point solutions, complexity is removed at the source rather than adding people to manage it.”
According to the report, the estimated median administrative cost for digital health vendors is $580,000 in addition to the annual digital health benefit budget. “And the burden accelerates, rather than flattens, as spending increases,” the researchers wrote.
60% of organizations report an increase in vendor management burden over the past three years, and 80% of benefits teams spend more than five hours per week maintaining vendors. Additionally, 75% of respondents reported that their organization has two or more full-time employees dedicated to vendor management, and 81% have requested additional support.
For organizations that need additional support, 72% report using external consultants, brokers, or third-party administrators, and 60% of organizations that spend $500,000 or more on external consultants still intervene on issues weekly or more.
Additionally, 81% of respondents reported that other digital health benefit initiatives have been affected by implementation delays, with 69% reporting that it was affecting “multiple initiatives at the same time.”
When asked about their ideal vendor implementation experience, respondents told Solera:
- Pre-integrated with major HR information systems/electronic health record systems: 39%
- Guaranteed schedule within 90 days with financial penalty: 32%
- Clear change management and communication support: 31%
- Vendor handling all IT integration: 29%
- Dedicated implementation team, not shared: 28%
- Technical evaluation before contract signing: 27%
“Vendor sprawl is becoming more than just an operational headache, it is becoming a strategic liability that undermines executive trust, creates team fatigue, and hinders innovation,” the report said.
