Recently, the White House Office of American Innovation hosted an event focused on healthcare interoperability, citing “citizen access to health records and interoperability a top priority.”

It’s encouraging news for anyone with a vision for an improved American health system – a smart health market. Data sharing among providers is improving, according to the Office of the National Coordinator for Health Information Technology (ONC). Still, it’s obvious that there’s a long way to go before EHRs are interoperable enough to streamline the delivery of care.

Case in point, ONC recently reported that only 41% of acute care hospitals are able to punch through all four fundamental tasks of data interoperability: sending, receiving, finding and integrating. Sure, that figure represents improvement over time, but current capabilities are still less than what should be acceptable in our $3 trillion market.

Your favorite retailer probably knows more about your health habits than your doctor does—and can summon the information in a fraction of the time. Certainly, if retailers can do it, so can healthcare organizations.

Here’s the problem

What’s standing in the way of data exchange among providers simply boils down to this: proprietary EHR systems do an abysmal job of integrating outside data. ONC says the majority of hospitals can send data but only half can effectively integrate it into the medical record.

Not good enough.

ONC is looking to modify its latest health IT certification criteria specifically to drive more interoperability, but the timeline remains unclear. Meanwhile, HHS Secretary Alex Azar continues to encourage the private sector to chip away at the challenges, rather than waiting for federal policies to address data integration.

And it’s the private sector that has the expertise, not HHS.

The role of federal agencies is to work in tandem with the private sector to facilitate greater support of what’s known as application programming interfaces (APIs)—the connectors that translate health data across unrelated software platforms. However, the elephant in the room is that EHR developers remain reluctant to share their APIs.

Getting to a solution

Progress on interoperability will lag until new economic incentives drive data-sharing activity. According to a report by HHS and the departments of treasury and labor delivered to the president in December, health IT “too often facilitates anti-competitive practices.” It’s not uncommon for a health system to use an IT vendor that “preferentially shares clinical data with other high-priced providers to the exclusion of competitors.” And let us not forget that policies like the HITECH Act focused incentives on EHR adoption, but not health information exchange and interoperability.

In other words, no one IT vendor is incentivized to solve the data sharing problem single-handedly. Nor are there any incentives in the prevailing fee-for-service model for the end users of EHR systems—the providers—to exchange patient data. Every stakeholder knows value-based models depend on interoperability and seem to champion the cause. However, alignment of business incentives will be the only fuel that propels the system at large beyond the interoperability challenge.