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Why Interoperability is Important for the Health Care Industry

Denny Brennan
Executive Director and CEO
Massachusetts Health Data Consortium
Chair-Elect, WEDI

Interoperability is so important in healthcare because it’s the foundation for making the system work as one connected ecosystem instead of a patchwork of isolated silos. Here’s why it matters:

  1. Better Care for Patients
    • Patients move between primary care doctors, specialists, hospitals, labs, pharmacies, and insurers.
    • If systems can’t share information, critical details (medications, allergies, test results) get lost, leading to duplicated tests, delays, or even harmful errors.
    • Interoperability ensures providers have the full picture of a patient’s history and current treatment, improving safety and outcomes.
  1. Reduced Administrative Burden
    • Today, a huge amount of time and money is wasted on manual processes—faxing, phone calls, portals, re-entering data.
    • When data flows automatically between payers, providers, and regulators, it reduces overhead, accelerates prior authorization, eligibility checks, and claims, and lowers costs for both patients and the system overall.
  1. Regulatory Compliance and National Alignment
    • Rules like CMS’s Interoperability and Prior Authorization Final Rule (CMS-0057-F) and ONC’s 21st Century Cures Act APIs mandate that patients and providers can access and exchange data via standard APIs (FHIR, X12, etc.).
    • Without interoperability, health organizations risk falling behind on compliance, penalties, or exclusion from national networks like TEFCA.
  1. Equity and Access
    • Interoperability levels the playing field for smaller practices, community health centers, and post-acute providers who otherwise lack resources to connect with large systems.
    • By standardizing data exchange, patients in under-resourced settings get the same access to coordinated care as those in major academic medical centers.
  1. Innovation and Value-Based Care
    • Health plans and providers are shifting toward value-based models where reimbursement depends on outcomes, not just volume.
    • This requires shared data on quality measures, social determinants of health, and real-time utilization.
    • Interoperability makes it possible to bring in AI, digital health tools, remote monitoring, and patient apps that all plug into the same ecosystem.
  1. System-Wide Resilience
    • Public health crises (like COVID-19) exposed the dangers of fragmented systems: states, hospitals, and labs couldn’t easily share real-time case or capacity data.
    • Interoperable infrastructure strengthens preparedness for pandemics, disasters, and cybersecurity resilience.
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