Data Interoperability in Healthcare: 6 Challenges to Tackle

The healthcare industry is a massive generator of data, producing an exponential amount of information every second. With the global healthcare data storage market projected to grow from $7.08 billion in 2025 to $14.64 billion by 2029, the sector is becoming one of the largest producers and consumers of data globally. Yet, much of this wealth of information remains untapped due to a critical barrier: data silos. 

Currently, less than 60% of the data generated by healthcare organizations is utilized for making intelligent business decisions. Such silos prevent seamless information exchange and are among the most persistent interoperability challenges in the industry. The lack of interoperability has a ripple effect: it can lead to errors in patient care, inflate costs, and prevent the adoption of public health initiatives. This article explores the obstacles on the way to implementing true data interoperability and examines potential solutions for a more efficient and effective future. 

What is Interoperability?

According to Healthcare Information and Management Systems Society (HIMMS), interoperability in healthcare means that different information systems, devices, and applications can access, exchange, integrate, and use data in a coordinated manner across organizational, regional, and national boundaries.  

With the help of data exchange frameworks, APIs, and standards, this secure sharing ensures that the right information reaches the right people across all levels of care. 

Healthcare interoperability functions on four different levels: 

• Level 1. Foundational: Establishes basic requirements for systems or applications to securely communicate and exchange data. 
• Level 2. Structural: Defines the format, syntax, and organization of data exchange, including the interpretation of data fields.
• Level 3. Semantic: Ensures a common understanding of the data by using standardized definitions from publicly available value sets and coding vocabularies. 
• Level 4. Organizational: Addresses the governance, policy, social, legal, and organizational factors to facilitate secure, seamless, and timely data communication and use across and within organizations. 

The Current State of the Market and Regulations

The global healthcare interoperability solutions market is on a rise. In 2025, it is estimated at $4.5 billion, with projections reaching $14.4 billion by 2034. This shows a significant compound annual growth rate (CAGR) of 13.89% over the forecast period. 

To understand this growth better, let’s explore what regulatory measures are driving interoperability in the United States and across the world. 

U.S. Regulations

In the United States, key regulatory measures laid a solid foundation for improving interoperability in the healthcare industry: 

• 21st Century Cures Act (2016): Signed by President Obama, this act mandates that Electronic Health Record (EHR) systems provide a patient-facing API to maintain federal certification. This Act was created to ensure patient data accessibility and reduce information blocking between facilities.
• CMS Interoperability and Patient Access Rule (2020): Issued by the Centers for Medicaid & Medicare Services (CMS), this rule obliges health plans and providers that receive federal funds to enable easier access to health information. 

A survey of the top 50 health systems in the United States revealed that over half of these organizations planned to increase their spending on interoperability by 5% to 20% in 2023. Moreover, software platforms are expanding their impact in healthcare, with generative AI and machine learning enhancing data connectivity and healthcare interoperability software solutions to deliver more granular insights.  

Global Digital Health Strategy and Initiatives 

Countries around the world are implementing regulations and partnerships to streamline health data exchange and adopt common standards. The notable examples include: 

• European Health Data Space (EHDS): Effective from March 26, 2025, this initiative seeks to drive innovation and improve cross-border data exchange within the EU. A central aspect involves creating a standardized European Electronic Health Record Exchange Format to enable the smooth sharing of health information among EU member states. 
• World Health Organization (WHO) and Health Level Seven International (HL7) Collaboration: It focuses on implementing HL7’s Fast Healthcare Interoperability Resources (FHIR) standard, facilitating seamless data exchange across diverse healthcare systems. 
• OECD Member Countries’ Initiatives: According to the OECD’s 2023 report, nearly 90% of responding member countries are introducing legislation to require interoperability standards. Approximately 66% are adopting HL7-FHIR, and 42% are implementing SMART on FHIR, which simplifies data queries and access between systems. 

Why is Interoperability Important in Healthcare?

Interoperability in healthcare is essential for both patients and healthcare providers as it greatly reduces redundant administrative tasks. Here are the main benefits of interoperability in healthcare.  

Improved Care Coordination

At this moment, only 7% of healthcare providers had all necessary patient information stored in their EHR. To reach the necessary data, employees then spend about 15% of their workweek seeking information outside of their core systems. This highlights how important it is to streamline healthcare data access and integration.  

Time Spent Looking for Data in External Systems 

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Interoperability is the difference between inefficient inter-facility communication and better care coordination among healthcare providers. It allows clinicians to easily access a patient’s complete health records, avoid duplicated tests, and prevent treatment conflicts based on the available information. As a result, we can expect more accurate diagnoses, fewer mistakes, and safer patient care.

Elevated Performance

Interoperability improves the performance of healthcare organizations with a simplified approach to data integration and analysis. When data flows effortlessly between systems, healthcare providers can identify trends, evaluate past performance, and make data-driven improvements in patient care. This enhances operational efficiency, minimizes errors, and optimizes resource use, ultimately enabling more accurate and effective healthcare delivery. The two most cited reasons behind efforts to improve interoperability in healthcare were improving patient outcomes and optimizing clinical workflows and performance. 

Enhanced Experiences

Implementing interoperability positively impacts the experiences of both healthcare professionals and patients. Hospitals that implement interoperable systems often see a significant decrease in administrative workload, boosting staff job satisfaction. For patients, this translates to smoother experiences – faster check-ins, reduced paperwork, and overall more efficient care.

Case in point. MentorMate partnered with Tactile Medical to enhance patient experience for individuals managing chronic venous insufficiency. We developed a cloud-based mobile application that uses Bluetooth to connect to Tactile’s pneumatic compression device and guides users through their treatment. The app includes educational resources, order tracking, symptom monitoring, and the ability to share treatment logs with healthcare providers. Built on Azure for both iOS and Android, the app features a back-end-driven architecture using Contentful which allows dynamic updates without requiring users to download new versions. This digital solution empowers patients to manage their therapy more effectively and improves communication with their care teams.  

Main Challenges of Interoperability in Healthcare 

Healthcare data-sharing capabilities have seen significant progress, yet several challenges still impede their full realization. Achieving compatibility is a complex effort, full of barriers to interoperability in healthcare, most notably related to data management. This complexity stems from various data formats, system architectures, and the important need to protect patient information while assuring accessibility and usability. 

1. Lack of Standardization

The absence of universal and harmonized standards for data collection and transmission significantly hampers health data exchange. Most health information systems (HIS) operate with proprietary formats and unique data elements, leading to non-interoperable and disparate data versions. For instance, proprietary HIS systems often modify incoming lab data by mapping it to their internal terms. This creates numerous data conversion cycles that are difficult to document and trace back to the original data elements. As a result, repeatedly mapping and remapping data between inconsistent internal codes and standardized formats often leads to errors, inefficiencies, and increased costs, particularly when the exchanged data is reintegrated into the receiving HIS. 

2. Inconsistent Information

Even within the same system, data inconsistencies arise. The varied use of codes, abbreviations, and terminology can cause confusion and errors during record sharing. For instance, discrepancies in units of measurement are common — a patient’s blood sugar level may be recorded in mmol/L at one hospital and mg/dL at another. These variations can complicate medical interpretations and treatments, highlighting the urgent need for standardized protocols in healthcare data management. 

3. Technical Issues

A recent survey highlighted technical limitations as the primary barrier to accessing data for decision-making in healthcare, with 68% of healthcare professionals identifying these challenges as „extremely difficult“ or „challenging“ to overcome. Additionally, 55% point to regulatory complexities and delays as compounding factors affecting interoperability. 

On-premises data storage presents scalability and integration challenges, making it expensive and complex to connect with external systems like partners, vendors, and third-party platforms. Although some healthcare organizations have adopted cloud-based data management, many have yet to take advantage of cross-cloud and interregional collaboration. This lack of integration hampers the creation of standardized health information exchange systems essential for seamless data sharing across healthcare networks. 

4. Isolated EHR Systems

Communication within an EHR may suffer due to insufficient interoperability between its components or with external systems. In one case, clinicians couldn’t access laboratory results for a hospital patient from records held in a different part of the hospital. Healthcare providers may find it hard to interpret information because EHR displays are confusing, cluttered or inaccurate. For example, a clinician tried to order 3.125 mg of medication, but the EHR listed only a 6.25 mg prescription, with a 3.125 mg dose listed in small print, which led to confusion. 

5. Organizational Barriers

The integration of digital technologies impacts healthcare organizations holistically. However, many organizational leaders perceive these advancements as relevant only to IT departments, prioritizing short-term cost reductions over long-term strategic benefits. According to a recent survey, 44% of healthcare professionals identify organizational barriers as „challenging“ or „extremely challenging“ impediments to achieving interoperability. 

These organizational barriers manifest in various ways, including resistance to change, inadequate investment in training and resources, and hierarchical structures that hinder cross-departmental collaboration. Such challenges not only delay the adoption of interoperable systems but also undermine efforts to leverage data-driven insights for improved patient care and operational efficiency. 

6. Data Security and Privacy Concerns

With the ever-present risk of data breaches and unauthorized access, healthcare providers must be vigilant in protecting patient privacy. Year 2024 witnessed the largest healthcare data breach to date, with 14 incidents each affecting over 1 million records14 incidents each affecting over 1 million records. The financial impact of these cyberattacks was significant. According to IBM’s 2024 Cost of a Data Breach Report, the average cost of a healthcare data leak was $9.77 million, marking the 14th consecutive year that healthcare topped all industries in breach-related expenses. 

A significant contributor to the year’s data breach statistics was the cyberattack on Change Healthcare, a subsidiary of UnitedHealth Group. This breach affected approximately 190 million individuals, disrupting healthcare operations nationwide and costing the company an estimated $3.09 billion. 

Healthcare Data Breaches of 500+ Records 

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These alarming figures underscore the importance of robust cybersecurity strategies and compliance with data protection regulations. Healthcare organizations must continuously invest in the technologies and practices that mitigate risks and enhance data security resilience to maintain patient trust and regulatory compliance in an increasingly digital healthcare landscape. 

Case in point. MentorMate partnered with Medibio to enhance their mental health platform, ilumen™. By migrating ilumen™ to AWS and implementing robust security measures (encryption, threat detection, and continuous monitoring), we helped the client ensure the protection of sensitive patient data and mitigate the risks of potential data breaches.  

How to Improve Interoperability in Healthcare: Practical Solutions

As interoperability becomes more mainstream, organizations approach it in a variety of ways. More than half of all survey respondents report that they are addressing barriers to interoperability by improving data quality and 53% are migrating to a single, integrated EHRs.  

To achieve truly comprehensive interoperability, a multi-pronged approach is likely necessary. This could involve government initiatives that prioritize standardization efforts. Clear guidelines for data format, terminology, and exchange protocols would significantly improve how information flows between healthcare systems. 

Other strategies being implemented by healthcare organizations include: 

• 37% are collaborating with interoperability technology partners.
• 36% are investing in data literacy among staff through upskilling and hiring.
• 32% are adopting healthcare exchange standards such as HL7 FHIR, DICOM, and IHE XDS.
• 30% are utilizing health information exchanges.
• 28% are investing in self-service tools and advanced analytics, such as AI/ML and NLP.
• 20% are driving a unified data governance strategy.

However, 9% of organizations have yet to initiate efforts to address interoperability barriers, which emphasizes the need for a more general adoption of proactive strategies throughout the healthcare sector. The advancement of interoperability and improvement of healthcare services depend on constant dedication to these approaches. 

Conclusion

Achieving data interoperability in healthcare still remains a challenge due to a variety of technical and organizational constraints. To address these difficulties, healthcare providers must work with IT partners who understand the complexity of standards, system integration, and data accessibility. Bridging interoperability gaps requires a multi-pronged approach: clear data standards, collaboration with industry-savvy experts, and data-literate workforce. This ongoing investment in technology, standards, and people is key to a truly connected healthcare ecosystem.