I called 2021 weird, then 2022 just as weird, but 2023? Decidedly weirder. This year I have Alex Peitz and Garrett Rhodes with me again to help me reflect on what we got right and wrong last year, and what we should be prepared for next in 2024.
2023: the year where nothing changed, and yet everything changed
Reflecting on our predictions from last year, we are quite baffled why we didn’t say anything about AI. After 12 straight months of hype, clearly, we didn’t anticipate how central AI would be to the narrative and how much (or how quickly) it would change the healthcare technology landscape (at least in theory). Beyond that huge miss, we were kind of right in our overall predictions for 2023 (although mostly wrong on pacing). Here are some specific reflections:
FHIR adoption: We missed the mark on our HL7® Fast Healthcare Interoperability Resources (FHIR®) growth prediction. Garrett thought record retrieval would rid itself of the fax machine in 2023. Sadly, he was wrong. It certainly is growing, but FHIR has not picked up the steam we had hoped for in 2023. Through our research with our partners at Sage Growth, we found that only 62% of providers and 38% of payers have adopted the FHIR standard for their data interoperability use cases. Where adoption is growing is in areas where FHIR offers net-new capabilities that are not possible with legacy standards. We reflected on that in our recap of 2023 FHIR DevDays. A dramatic change in adoption will require regulatory enforcement, which has largely been delayed, but we do believe this is coming (see our 2024 predictions below).
TEFCA progress: On the Trusted Exchange Framework and Common Agreement (TEFCA) front, we were right—TEFCA did make progress. Just last week, five organizations were officially recognized as QualIfied Health Information Networks (QHINs) and HHS announced TEFCA as officially operational. While we love being right, we must admit it feels a little unsatisfying as TEFCA, in its current state, won’t move us much beyond what is already available via Carequality, eHealth Exchange, and CommonWell. TEFCA was going to differentiate by expanding beyond the Treatment purpose that is permitted by Carequality, but Payment and Operations purposes are not currently required by TEFCA’s Standard Operating Procedure, and Individual Access faced some last-minute road bumps on its way to approval. Further, TEFCA does not currently require the use of the FHIR standard. We expect that TEFCA will incorporate additional purposes and FHIR in 2024 after the Common Agreement Version 2.0 is drafted.
Expanded regulations: We were mostly wrong on the ways regulation would be expanded in 2023. As mentioned, TEFCA remains limited to Treatment, and the “Interop 3” (CMS-0057-P) rules have yet to be finalized (although we expect them soon). Although we were wrong on the specifics, there was plenty of regulatory activity in 2023. Last week ONC finalized the Health Data, Technology, and Interoperability: Certification Program Updates, Algorithm Transparency, and Information Sharing (HTI-1) rule. We expect this legislation to amplify FHIR adoption and information sharing while also introducing the first requirements for AI algorithms used in certified health IT.
Impact of macroeconomic environment: The only prediction that we were exactly right on is the one we most hoped we were wrong about. 2023 has been rough on the entire digital health ecosystem. We saw many large-scale closures – Babylon Health, Pear Therapeutics, and Olive AI stand out. The phenomenon was not necessarily unique to health tech. For most tech companies, big and small, survival in 2023 required significant downsizing and/or restructuring.
2024: Prepare to be wrong
I will start our predictions by saying I predict we will be wrong. With an unpredictable macroeconomic environment, a flurry of expected regulations, and a Presidential election — there is simply no crystal ball or algorithm strong enough to predict what comes next. That said, predictions are fun! Let’s go.
- AI hype will continue: We missed this last year so I’m putting it #1 this year. Generative AI will continue to lead the healthcare technology narrative throughout 2024 and beyond until the industry lands on exactly how to use and implement it. We hypothesize that the hype in healthcare stems from a strange combination of immense promise, immense fear, and no tangible examples of success at scale (yet). We think solving data challenges will be paramount to achieving success at scale. Organizations that want to Generative AI by the end of 2024 (yes, it is a verb now), should be Redoxing (yes, also a verb) soon. Check out this event recap for more of our thoughts on that.
- We won’t land on a solution for regulating AI: As the use of AI becomes more prevalent, especially in healthcare diagnosis and treatment, we expect heightened regulatory interest, but no actual clarity on how or when AI will be regulated. ONC’s HTI-1 introduced the first requirements for AI algorithms in healthcare, but it isn’t designed to directly regulate AI. Instead, it focuses on enhancing data quality, transparency, and interoperability to create an ideal environment for developing responsible AI solutions. Many eyes are on the EU’s AI Act as it could set a global precedent for AI governance. But the likelihood that the EU AI Act or any other legislation will have a real impact in 2024 is slim. So we will likely spend another year in speculation and “what if” when it comes to regulating AI.
“As the use of AI expands in the absence of regulations and standards, expect to see a lot more focus on what’s in the data set and how it was created. Data provenance is going to be a hot topic as folks learn to trust AI in an industry that has historically been averse to that sort of change.”
Alex Peitz, Sr. Product Manager
- FHIR adoption will remain slow and steady: As mentioned, expanded regulation and enforcement will be required to truly accelerate FHIR adoption and a lot of things are brewing in that space. HTI-1 makes FHIR mandatory for certain data exchange use cases. Interop 3, which we expect to be finalized soon, will make FHIR mandatory for prior authorization. NCQA is piloting FHIR digital quality measures. TEFCA is expected to require FHIR in the near(ish) future. While promising, the impacts will likely take several years to dramatically change FHIR adoption, so FHIR adoption will continue at its current, somewhat lackadaisical pace in 2024 with a focus on using FHIR for new use cases. This means organizations will need to be able to effectively manage both the new and old simultaneously. Organizations will run to implement things like Generative AI (see #1) while also keeping HL7v2 through VPNs afloat. If that sounds overwhelming, it is. That said, we’d love to help. Contact us.
- TEFCA will pick up some steam: The promise of TEFCA is still bright, and if permitted purposes are expanded to include Payment and Operations in 2024, it could be transformative. Redox plans to be an on-ramp to any QHIN, poised to connect you to whatever QHIN you choose while offering value-add services on top of the core exchange. Contact us for a review of your TEFCA strategy and get our recommendations on what might make the most sense for your organization given your goals.
- State-based interoperability efforts will be tested: In 2024, the State of California will be the first to implement comprehensive healthcare interoperability requirements with the California Data Exchange Framework. The industry will be watching. If it goes well, other states are likely to follow suit. We are hoping the evolution of TEFCA in 2024 will render this unnecessary but, as is the case with California, some states may decide to take matters into their own hands.
- 2024 will mark the start of The Great Consolidation: As mentioned previously, 2023 was a rough year for digital health startups and incumbent companies. As budgets and teams continue to shrink, and funding resources remain scarce, companies will realize joining forces is the best way forward.
“Combined with the growing concern of point solution fatigue amongst providers, I think 2024 is the year we see serious consolidation in the digital health space. Startups coming together, incumbents acquiring startups, and incumbents merging with incumbents (looking at you Cigna and Humana… sort of) are all on the table.”
Garrett Rhodes, Redox Product Strategist
As the African proverb says, “if you want to go fast, go alone, if you want to go far, go together.” As organizations look to tighten their belts in 2024, be on the lookout for new Redox features that will offer efficiencies and reduced reliance on other tools. First up? Self-service tools for customer translations.
- Interoperability use cases will grow: This last prediction is probably the only one we have full confidence in. Our research with IDC this year indicated that 85% of provider leaders expect to increase their spending on technology. The top spending areas include telemedicine/RPM, cloud, and AI for clinical applications. All these solutions will require data exchange and integration between legacy EHRs, digital health solutions, and the cloud. With a full product portfolio, a growing ecosystem of over 6,000 live integrations, and rapidly expanding partnerships with cloud partners like AWS, Databricks, Google Cloud, and Microsoft, Redox is prepped and ready to help providers, payers, and digital health vendors meet their soaring interoperability needs.
With that, we rest our pen in 2023. It will likely be a bumpy ride, but we can’t wait to see where 2024 takes healthcare interoperability and what Redox customers will do next. See you over there.