What the ONC Interoperability Rule Means for the Next Five Years of Health IT Investment

The HHS Office of the National Coordinator for Health Information Technology finalized its rule on interoperability and information blocking in March 2020. The rule establishes FHIR API-based data access requirements for certified electronic health record systems and prohibits information blocking practices by health IT developers, health information networks, and healthcare providers. Its effects on health IT investment will take years to fully materialize, but the direction is clear.

The most immediate effect is structural: EHR data is becoming more accessible. This matters for AI companies because the core constraint on clinical AI has always been access to longitudinal patient data in structured, machine-readable form. FHIR-based APIs do not solve this completely — Epic, Cerner, and other dominant EHRs still control how data is surfaced — but they establish a compliance obligation for data portability that gives third-party application developers a legal foundation for demanding access.

For investment purposes, the interoperability rule creates a bifurcation. Companies that have built their clinical AI architecture around FHIR-based data access are now in a structurally better position than companies that depend on custom HL7 integrations or proprietary extracts. The former can scale their integrations more efficiently; the latter are accumulating technical debt that will become increasingly visible as the rule's enforcement provisions take effect.

The second-order effect is competitive. Legacy health IT vendors whose competitive position depended on data lock-in are facing a genuine architectural threat. When a hospital CIO can allow multiple AI vendors to access patient data through a standardized API, the switching cost calculus changes. This creates an opportunity for new entrants with better AI capabilities to compete on merit rather than on integration exclusivity.

Our diligence on health IT companies is now explicitly asking about FHIR architecture from the first meeting. A clinical AI company that has not thought carefully about the ONC rule's implications for its data access model is a company that has not thought carefully enough about the regulatory environment it is operating in.