A profound and dangerous mismatch exists between America’s healthcare challenges and the digital infrastructure designed to solve them. While significant resources have been funneled into creating a data-rich environment within hospital walls, this focus has become a strategic liability. The modern patient journey is no longer defined by isolated, acute-care episodes but by the continuous, long-term management of chronic diseases that takes place in homes, clinics, and community facilities. This hospital-centric model, a legacy of foundational legislation, is now fundamentally misaligned with the population’s needs. To achieve meaningful progress in patient outcomes and cost containment, a radical re-envisioning is necessary—one that shifts investment and integration efforts toward the vast, yet technologically neglected, post-acute care ecosystem where the majority of healthcare now resides. This strategic pivot is not just an option; it is an urgent necessity for building a sustainable and effective healthcare system.
A System Built on an Outdated Foundation
A decade of policy has inadvertently reinforced a siloed approach to health data. The 21st Century Cures Act, while laudable in its goal to foster a free-flowing, interoperable data ecosystem, was implemented with a myopic focus on the acute-care setting. It succeeded in building digital bridges between hospitals but failed to extend that infrastructure to the places where patients spend the vast majority of their time. This created a system akin to a highway network connecting every emergency room but with no paved roads leading to patients’ homes, skilled nursing facilities, or primary care offices. The critical connective tissue needed to support individuals after they leave the hospital was never woven into the digital fabric of the system. This oversight has left a deeply fragmented and inefficient landscape, where crucial health information is lost or delayed at every transition of care, undermining the very goals of safety, quality, and efficiency the legislation sought to achieve for providers and patients.
The primary impetus for this required transformation is the seismic shift in the nation’s health profile, with chronic diseases now representing the defining challenge of American healthcare. These long-term conditions account for an astonishing 90 percent of the country’s approximately $4.9 trillion in annual healthcare expenditures. The scale of the issue is immense and growing; over the past decade, the percentage of adults with at least one chronic condition has climbed to 76%, while those with two or more has surpassed 51%. Managing these conditions is not a hospital-based activity but a complex, lifelong journey involving a disparate array of providers, including primary care physicians, specialists, home health agencies, pharmacies, and even non-clinical community organizations. The lack of digital connectivity and data transparency across this fragmented continuum creates severe care coordination hurdles and dramatically inflates costs, a reality underscored by data showing that Medicaid spending nearly quadruples for patients with three or more chronic conditions.
The Consequences of Digital Isolation
The system’s most critical and damaging failure is the continued digital isolation of the post-acute care sector. This is not a niche segment of healthcare; it is a colossal and rapidly expanding industry valued at over $482 billion and projected to exceed $786 billion by 2034. It is the operational backbone for patient recovery, managing between 40 and 50 percent of all ongoing health interventions and handling over 40 percent of all hospital discharges. Despite its immense scale and central importance, this sector remains the most digitally disconnected part of the care continuum, often described as being “largely invisible online.” This has resulted in a stark, two-tiered system of data access: one for the hyper-connected acute-care ecosystem and another for the isolated post-acute world, which is forced to rely on antiquated and inefficient tools like the telephone and fax machine to coordinate complex patient care, leading to errors, delays, and duplicated services.
This technological disparity is the direct result of a chronic and systemic imbalance in resources and regulatory attention. Post-acute and community-based providers have historically lacked the funding, technical capacity, and staffing resources afforded to their hospital counterparts, leaving them unable to invest in the foundational technology required for modern data exchange. While governmental bodies like the Centers for Medicare & Medicaid Services (CMS) are beginning to acknowledge this gap through pilot programs like the new ACCESS Model, these efforts are nascent and insufficient. Foundational government frameworks, including the Cures Act and existing CMS interoperability rules, have not been meaningfully updated to support the post-acute sector. As a result, these essential providers remain technologically under-resourced and digitally isolated, creating a barrier that prevents the realization of a truly integrated and patient-centered healthcare system for all.
Charting a New Path for Interoperability
Rectifying this deep-seated imbalance requires a fundamental shift in strategy, moving beyond simply imposing more rules on the already-connected players and toward actively empowering the disconnected. The next great leap in interoperability will come from a cohesive, three-pronged approach aimed at bringing the post-acute ecosystem into the digital fold. The most direct and necessary step is to provide dedicated infrastructure grants to post-acute care providers, facilities, and community-based organizations. This targeted financial support would equip them with the foundational technology and resources needed to become active participants in the digital health network, finally moving them beyond their reliance on outdated and insecure communication methods. Complementing this investment, regulatory oversight must evolve. The focus must expand beyond merely punishing bad behavior like information blocking and be updated to build in accountability for the proactive inclusion of all post-acute entities, making their integration a mandated priority rather than a perpetual afterthought.
This strategic rebalancing of focus and investment was what ultimately moved the system forward. The incentive structure of healthcare was realigned with the reality of longitudinal care, shifting financial rewards away from simple, point-of-care compliance and toward outcomes achieved through genuine multi-setting coordination. By incentivizing results that reflected the entire patient journey—from the hospital to home health and beyond—the system naturally encouraged the very collaboration and data sharing that had been missing. Achieving true interoperability and a more efficient healthcare system was contingent upon this deliberate empowerment of the post-acute ecosystem. It was a recognition that lasting health improvements are forged not just in sterile operating rooms, but in the community settings where millions of Americans live, age, and manage their health for the long term.
