Digital health interventions, including the use of telehealth augmented by artificial intelligence (AI), support an increasingly broad range of improvement goals for prevention and treatment. Limitations obstructing the many digital benefits of the targeted healthcare innovations from reaching their full potential include the lack of robust usability and user-centered design, nimble regulatory policy, and lack of adequate high-quality evidence and methodologies to evaluate the performance generalization and clinical robustness. We explore health innovation using different value systems and solutions proposed to overcome the fundamental limitations arising in the data value system. We propose a new telehealth paradigm and incorporate intervention designs, which combine clinical innovation with innovation in data resource development. Machine learning and AI have the potential to enable circular economies for digital and health innovation, in which sustainable solutions can be offered within a data-enabled collaborative and shared digital ecosystem. Alignment of industry standards, adjustments to regulatory policies, and the embrace of new governance models for telehealth-based innovation are essential for this new approach for health innovation scaling, clinical adoption, and social innovation.