Digital health’s next big test: Reflections on the Digital Health Festival

In May, Nous attended the 2026 Digital Health Festival in Melbourne. We were keen to see what people were talking about, what challenges they were facing, what opportunities they were excited about. These reflections from the festival point to a sector moving into a more consequential phase. There are a number of tensions now shaping digital health: rapid innovation alongside growing fragmentation, accelerating AI adoption alongside uneven regulation, and the increasing need for governments and system leaders to act as stewards rather than simply funders or observers. Our reflections show that the next chapter in digital health will be defined not only by what technology can do, but by how deliberately the system governs, connects, and scales it.

The biggest issue in digital health is national interoperability between systems. Leadership at a Commonwealth, state and territory level needs to be explicit about what the priorities are for interoperability, how it will be resourced, what standards will be set, and how governments might move into more of a regulatory mindset. The risk otherwise is a proliferation of technology solutions and platforms funded directly by health services or promoted by private providers. Those solutions may be helpful in one component of a health service activity, but they do not help the broader objective of having information that flows across the system.

That is the biggest challenge for all of us. There is a bit of a Wild West out there, which is good because innovation matters. New ideas, new platforms and new approaches are needed. But the question is how the West gets won. How does the system create room for innovation without ending up with fragmentation? How does it stop useful local solutions from making the national picture harder to connect? Without stronger direction, clearer standards and more deliberate leadership, innovation risks producing disconnected gains rather than a more coherent system. The central challenge is making sure digital progress contributes to information flowing across the system, rather than creating more isolated activity inside it.

Yael Cass, Principal

Since last year, tech vendors have become more purposeful with their AI claims. They are clearer on solving problems rather than simply saying they had put AI inside a box. That suggests a more mature conversation about digital health, where claims are tied more clearly to use, application and practical value. The shift matters because the sector has heard plenty of broad or inflated claims about AI. A stronger emphasis on solving real problems points to a more grounded and useful direction.

Another important line of thinking is the value of analysing the startup alleyway and identifying the themes those startups are trying to solve. In a sense, that speaks to public health areas that government could turn its attention to. Looking closely at startup themes could show where innovation energy is going, what kinds of gaps are being addressed, and which problems are being treated as urgent or worth solving. That kind of analysis could become a useful way of reading the market and understanding what digitally enabled public health might need to pay more attention to.

Paul Kennedy, Principal

The Digital Health Festival made clear that the pace of change in AI is accelerating, and there is a proliferation of new tools, applications and providers entering the health sector. AI is now embedded in routine systems and procurement cycles across clinical documentation, imaging, scheduling, triage and care coordination. But the scale and speed of adoption is also surfacing a more fundamental challenge: there is a lack of coordination across settings, organisations and reform agendas that limit the opportunity, and creates significant risks.

That requires government and system leaders to take on a stewardship role that is active and deliberate. This means making considered judgments about where AI should be encouraged, where it requires guardrails, and where the risks outweigh the benefits. It’s important to ensure these decisions connect to broader reform priorities around care coordination, reduced fragmentation, and better outcomes for patients. Getting the calibration right matters. Moving too incrementally risks missing genuine opportunities for system improvement. Moving at the level of grand strategy risks disconnection from what is actually changing on the ground. System stewardship sits in that space. It’s important for stewards to be close enough to what is happening to recognise real value and real risk, and elevated enough to ensure we’re investing in the right things, and ultimately improving patient outcomes and experiences.

Monique Jackson, Principal

Government’s role to support the uptake of digital technologies that help improve the care and health of Australians is rapidly shifting. A clear takeaway from the Digital Health Festival is the time for top-down system design and direct, large-scale investment has largely passed. Citizens, clinicians, and providers are already moving ahead, adopting and deploying a wide range of tools that meet their needs in real time. Barriers to entry have fallen, enabling a proliferation of products and platforms that are reshaping how care is accessed and delivered. This democratisation of health infrastructure is empowering individuals to better understand and manage their health, and giving providers more options to tailor care. But it is also driving increasing fragmentation and complexity, with disconnected systems and uneven user experiences creating new challenges.

Rather than attempting to control or standardise the system through direct investment, governments need to create the conditions for innovation to flourish while ensuring coherence and safety. This means reforming funding models to give providers the flexibility and confidence to invest in virtual care, home-based models, and improved digital systems. A regulatory approach which provides standards for integration and interoperability, and clear guardrails for protecting citizen health, safety and privacy will support a diverse and equitable ecosystem of digital solutions. 

Ben Whitton, Director

There was a lot of discussion about AI at last year's Digital Health Festival and, unsurprisingly, even more this year. What stood out, however, was a clear shift in maturity in how governments, organisations and startups are approaching its use. 

Regulators are actively grappling with the challenge. The TGA has been undertaking substantial work to better understand digital therapeutics, including research into emerging models of care and stakeholder perspectives. Consumers and providers are calling for greater transparency around whether digital health tools have actually been assessed or approved by the TGA.

At present, a digital mental health tool may be excluded from TGA medical device regulation if it delivers mental health support based on established clinical guidelines that are clearly referenced and viewable within the software. There has been a rapid proliferation of AI-enabled therapy agents (some better than others) and many remain outside formal medical device regulation. 

This places the sector at a pivotal moment. Innovation is accelerating and has the potential to expand access to care for many more people, especially with persistent workforce shortages, long waitlists and high out-of-pocket costs. Yet it also introduces new risks, particularly where tools are deployed without appropriate oversight, safeguards and clinical governance. Regulation in Australia must keep pace. The cost of getting this wrong falls on the people these tools are ultimately intended to help.

Olivia Mallett, Director

Organisations need to build up their epidemiological and biostatistical capability. As AI takes over more coding, modelling and analysis, the real differentiator becomes the judgment around the data. The core of that judgment is understanding what data can tell us, what it cannot, and how much certainty a finding can bear to separate useful insight from noise. Four threads run through it:

1. AI answers the question you operationalised, not the one you meant. Epidemiologists help define the effect to estimate, in which population, and under what intervention before analysis begins.
2. Epidemiologists and biostatisticians assess what insights data can validly support by interrogating bias and transportability. A model trained in one population may not produce relevant insights in another.
3. AI often communicates results with false precision, without adequately reflecting uncertainty, including from multiple testing as the marginal cost of running models approaches zero.
4. Regulators and organisations need to consider what counts as good evidence in the age of precision medicine. While we have clearly understood standards for evidence from RCTs and observational studies, further work is needed to communicate evidence standards from predictive personalised medicine (e.g. genetic testing).

The critical questions are no longer simply whether an analysis can be run, but whether the right question is being asked, whether the evidence is robust enough, and whether the findings are meaningful for patient safety, quality and decision-making. In this context, the need for epidemiological and biostatistical capability grows rather than shrinks. In an AI-enabled health system, organisations will need stronger capability to connect analysis to action and evidence to better outcomes.

Jack Marozzi, Director

The question for the digital health sector is no longer whether new technologies will reshape the system, but whether governments, providers, and regulators can create the conditions for that change to deliver real public value. Interoperability, stewardship, evidence, regulation and human judgment will determine whether innovation scales safely, equitably, and usefully. The opportunity is significant, but so is the responsibility to shape digital health as a more connected, trusted and outcomes-focused system.

At Nous, we are confident that the sector is more than equal to this challenge.

Get in touch to discuss the future of digital health.

Connect with Yael Cass, Paul Kennedy, Monique Jackson, Ben Whitton, Olivia Mallett, and Jack Marozzi on LinkedIn.