As API Adoption Grows So Do Opportunities for Healthcare Innovation
August 02, 2021

G. Shah
Change Healthcare

In my role at Change Healthcare, I spend much of my time thinking about transforming the healthcare ecosystem and addressing systemic challenges such as a lack of data access and interoperability, inefficient workflows, and fragmented experiences that prevent patients from receiving and doctors from providing great, quality healthcare.

While industries like financial services, travel, and banking have faced and solved similar problems — most notably through APIs — healthcare lags behind. However, recent changes to healthcare regulations and mandates from the Centers for Medicare and Medicaid Services (CMS) and the Office of the National Coordinator for Healthcare IT (ONC) have unlocked the healthcare industry's ability to use APIs to solve these and other problems, creating a new set of opportunities for developers who are skilled in the use of APIs to create digital solutions and experiences and to drive healthcare innovation.

Just as in other industries, standards-based APIs in healthcare enable secure and simplified exchange of data across disparate systems, allow the generation of insights and creation of experiences that drive outcomes for patients and doctors, and simplify delivery of those experiences across platforms. Starting now and for the foreseeable future, federal regulations will drive the use of APIs to enable standardized access and data sharing between patients, doctors, and insurance companies.

Partly as a result of these mandates and partly due to the need for change, the digital health ecosystem is growing rapidly. In Q1 of 2021, investment in digital health companies topped $6.5B compared to $14B for the entire previous year. For developers who already understand this model, the time is now to take your skills and use them to create the next generation of great digital health applications.

We're Just Getting Warmed Up!

Recently, Change Healthcare and ENGINE Insights partnered through research to better understand the state of APIs in healthcare. The research uncovered three major challenges that healthcare organizations face as they embrace the use of APIs.

Our research revealed that although 90% of healthcare stakeholders believe that APIs are crucial to their business strategies, less than a quarter are using them at scale. As a whole, hospitals and health systems are further along than other healthcare organizations in the process of API adoption, with more than half at full maturity compared to less than a third of insurance companies. While the need is known, adoption is still in its early stages.

Experience Creates Opportunity

The US healthcare system is moving to a model where we compensate doctors based on the quality of care they deliver to patients rather than the number of procedures they do. This transition has created the need to unlock data, make it available at all stages of the healthcare journey, and efficiently deliver care across locations. Doing so requires that we reimagine the healthcare experience.

The creation of great consumer experiences has historically been one of the biggest drivers for API adoption in other industries, and healthcare consumers are demanding the same data-rich, user-friendly experiences more and more. Healthcare leaders are recognizing this demand, as consumer experience has shot to the top of their priority list in the past year.

A lack of access to consolidated data and common healthcare workflows has historically made creating these experiences difficult. With data access and sharing now mandated by healthcare regulations, developers can combine their skills in building great consumer experiences with healthcare data provided by APIs to create these new experiences for patients and doctors.

Skills Gaps Create Opportunity

The vast majority of healthcare stakeholders anticipate a substantial increase in API consumption in the next two years. More than half of all organizations, including two-thirds of hospitals and health systems, expect to be fully mature as API consumers by 2023. And in just three years, all three groups expect monster gains in maturity as API producers, including 64% of providers, 65% of payers, and 59% of healthcare technology vendors.

However, a surprising skills gap exists among all research respondents. Half of healthcare technology companies (50%) report lack of knowledge of how to use APIs being a barrier to adoption, compared with 35% of payers and 29% of providers. Herein lies an opportunity for developers skilled in creating API-powered solutions to be on the leading edge of innovation in healthcare and enable that next set of innovations in patient care, provider experience, and operational efficiency.

The Challenge of Security and Scale

Healthcare is complex and decentralized. Across the healthcare ecosystem, organizations face unique challenges in reaching API maturity. Hospitals and health systems, which are at the leading edge of healthcare-data generation, will bear the burden of incorrect data use. Thus, the vast majority (52%) perceive security concerns as their greatest barrier.

Meanwhile, insurance companies are interested in operating on the data received in the fastest and most efficient manner. As a result, they cite infrastructure as a significant barrier to adoption (45%). Our research showed that universally, these challenges stem from legacy systems, industry complexity, vendor offerings, and use cases.

In both cases, developers need to overcome the “triple challenge” formed by the need to create connections across a decentralized system, to operate in that decentralized system at scale, and the need to rapidly bring products. While developers may be able to tackle one of these challenges while creating a product, a better approach is to focus on creating the best experiences, algorithms, and insights and partnering with a company that understands healthcare; provides healthcare-specific APIs that are comprehensive, secure, scalable, and performant; and most importantly, makes it easy to use those APIs in those products.

Using such an approach can accelerate development, mitigate scale issues, and allow organizations to spend precious capital on solving their most important or impactful problems first. Such an API partner should provide a comprehensive developer experience that includes documentation and provides guidance on and tools to assist in implementation; education and reference material; tutorials; developer communities; and other resources, including access to healthcare standards like FHIR.

The Time is Now

At a time when regulatory requirements have lowered the barriers to API use, and healthcare is rapidly innovating, developers have a rare opportunity to enter the healthcare ecosystem by combining their expertise in creating great experiences, innovative AI models, and new insights with standards-based APIs with proven performance and scale from the right partner.

APIs hold the key to delivering better patient care, creating differentiated patient and provider experiences, increasing efficiency, and easing interactions across all parts of the healthcare ecosystem.

G. Shah is VP, Healthcare Platform and Marketplace, at Change Healthcare
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