The beginning of July marked the launch of an ambitious U.S. experiment to drive digital transformation across healthcare through open APIs. Proponents believe this could unlock opportunities for new digital health services and applications.

This first major step promises to open medical data for patients through APIs, making it easy to search through the system and improve coordination across primary care providers, medical specialists, and insurance organizations.

The U.S. Centers for Medicare and Medicaid Services (CMS) wields a big stick as it drives this effort. The department is threatening to cut off payments for non-compliance. CMS manages all federal insurance payments to healthcare providers across the U.S.

Plans have been underway for almost a decade to bring healthcare into the mainstream of system development, but API innovation has lagged.

Building a faster process

U.S. healthcare communication has typically been a slow and methodical process, which may be one reason why America spends twice as much as other developed countries. One big challenge has been an ancient system of data exchange based on the Electronic Data Interchange (EDI) standard developed in the 1960s.

While other U.S. industries have migrated to more flexible APIs, the medical industry has been stuck with an outdated approach for exchanging even simple data across providers.

It often takes days for a hospital to get information about insurance authorization or complex situations, said Ruby Raley, vice president of healthcare and life sciences at Axway, an API tools provider. The new APIs will allow healthcare providers to process these requests in real time.

Over the next two years, additional rules will kick in to further drive healthcare system transformation. These include:

• A Payer-to-Payer Data exchange, which will require health plans to share data with other plans when a member transitions to a different health plan
• A No Surprises Act to address unanticipated medical bills for emergency services and out-of-network events
• The Prior Authorization rule, which builds on ongoing changes to improve prior authorization processes
• The Transparency in Coverage rule, which will give consumers access to pricing information through an internet-based self-service tool, while requiring most group health plans and health insurance issuers to disclose price and cost-sharing information.

A linchpin of the new interoperability efforts is the Fast Healthcare Interoperability Resources (FHIR) framework. FHIR provides a method for consistently representing data and makes it easier to share the same data across multiple payers, providers, and medical specialists coordinating a patient’s healthcare. In addition, FHIR standardizes how data and elements are formatted for exchanging clinical, claims, and pharmacy records.

Healthcare providers must also comply with new security requirements such as OpenID Connect for credentials and OAuth 2.0 for authorizations. They must also make sure they do not block information from someone who has a right to access it.

Open APIs auger new opportunities

Healthcare organizations have traditionally approached integration from a project-based perspective, in which integration specialists would create a custom integration for specific requirements. The new rules promise to open opportunities for a self-service marketplace of APIs, Raley said. This will make it easier to integrate data across existing electronic medical records and new AI algorithms, digital twins, and home health equipment to detect and treat disease.

The interoperability rule would drive expanded use of health information portals and improve conversations between clinicians and patients.

The jury is still out as to whether these rules drive meaningful change for patients. Some providers will merely do the bare minimum, while others will explore creative ways to save money while improving patient outcomes. But significant change may be in the offing, Raley predicts.

“We can see this as a chance to lay a foundation and build things as we’ve never been able to do before,” she said.

This initial step is the beginning of what Raley expects to be a five-year journey that will ultimately change every aspect of patient portals, collaboration with partners, and healthcare business processes.

Demand for data will increase as consumers become comfortable accessing their personal health information using apps. New tooling for healthcare records can be expected to emerge to manage data throughput and expand capacity as the demands on systems increase.