Digital health has transformed healthcare over the past two decades, but according to a new report from the Organisation for Economic Co-operation and Development (OECD), the next phase of progress will depend less on introducing new technologies than on connecting the systems that already exist. Despite widespread adoption of electronic health records and digital health applications, healthcare data often remain fragmented across hospitals, clinics, laboratories, pharmacies and insurers.
The OECD argues that improving interoperability, the secure exchange and use of health information across different systems, has become a strategic priority for healthcare systems seeking to improve care quality, strengthen resilience and unlock the full potential of AI. The report estimates that effective interoperability could generate economic benefits equivalent to 2.7% to 6.6% of annual healthcare expenditure, making it one of the highest-value digital investments available to governments.
Beyond digitalisation
According to the OECD, many countries have invested heavily in digital healthcare infrastructure, yet much of that investment delivers only limited value because systems continue to operate in isolation. Patient records frequently remain confined to individual software platforms, making it difficult for healthcare professionals to access complete medical histories when patients move between care providers.
The consequences extend beyond administrative inconvenience. Patients may need to repeat their medical history multiple times or undergo duplicate diagnostic tests, while clinicians spend valuable time searching for information or manually transferring records instead of delivering care. The report suggests that these inefficiencies contribute to higher healthcare costs, delays in diagnosis and treatment, and a less satisfactory patient experience.
Connected health information systems could address many of these challenges by enabling clinicians to access relevant patient information more quickly. According to the OECD, improved data exchange could also strengthen preventive care, support chronic disease management, enhance emergency response and improve public health surveillance. As healthcare demand continues to rise because of ageing populations and increasing prevalence of chronic disease, interoperability offers a way to improve care delivery without requiring proportional increases in healthcare spending.
A policy challenge, not just a technical one
The report stresses that interoperability should not be viewed simply as a software issue. Instead, it requires coordinated national strategies that combine legislation, governance, cybersecurity, technical standards and workforce development. Countries that continue implementing isolated digital health projects without an overarching interoperability framework risk creating increasingly expensive digital ecosystems that remain unable to deliver integrated care.
The OECD therefore recommends that governments establish national interoperability frameworks, adopt internationally recognised health data standards and modernise legacy IT systems that continue to impede information exchange. Strengthening regulatory oversight and improving digital skills among healthcare professionals are also identified as essential elements of long-term success.
The report extends these recommendations beyond national governments. International development organisations, multilateral development banks and donor agencies are encouraged to shift future digital health investments away from stand-alone electronic health record projects towards broader programmes that support governance, institutional capacity and interoperability standards. According to the OECD, such an approach would improve the long-term impact of digital health investments while helping countries build more resilient healthcare systems.
Building the foundations for AI
The report places particular emphasis on interoperability as a prerequisite for the next generation of digital healthcare technologies. Applications such as AI, predictive analytics, precision medicine and digital therapeutics all depend on access to large volumes of reliable, standardised and connected health data. Fragmented datasets reduce algorithm performance and limit the clinical value of AI, regardless of how sophisticated the underlying models may be.
Although internationally recognised standards, including HL7 FHIR, SNOMED CT, ICD, LOINC, openEHR and OMOP, already exist, implementation remains inconsistent. Legacy systems, fragmented governance structures, privacy concerns, shortages of digital expertise and insufficient long-term investment continue to slow adoption. The OECD argues that addressing these barriers requires more than technical standardisation. Sustainable interoperability also depends on secure governance frameworks, clear rules for data sharing, continuous workforce development and ongoing public investment.
Opportunities and pressure for industry
The report also highlights the wider economic implications of connected healthcare. Better interoperability could improve productivity, reduce waste and strengthen governments' ability to manage rising healthcare costs. More integrated datasets would also benefit medical research, disease surveillance and preparedness for future public health emergencies.
For industry, this transition is expected to create growing demand for interoperable digital health solutions. Healthcare technology companies, cloud providers, cybersecurity firms, software developers, medical device manufacturers and digital health startups may all benefit as healthcare organisations seek systems that comply with international interoperability standards.
At the same time, the OECD cautions that vendors relying on proprietary platforms designed to limit data exchange may face increasing regulatory scrutiny as governments promote open standards and competitive digital markets. Expanding cross-platform data sharing will also require continued investment in cybersecurity, privacy protection and regulatory compliance.
Ultimately, the OECD concludes that the future success of digital healthcare will be determined less by how many hospitals have adopted electronic records than by how effectively those systems communicate with one another. Countries that prioritise interoperability today will be better positioned to improve patient care, support AI-enabled innovation, strengthen public health resilience and maximise the return on their digital health investments. Those that fail to connect fragmented health data ecosystems risk higher costs, slower innovation and missed opportunities to build more integrated and future-ready healthcare systems.
WHO joins OHS-SF
Earlier this year the World Health Organization (WHO) joined the newly established Open Health Stack Software Foundation (OHS-SF), a Linux Foundation initiative aimed at helping countries build interoperable, standards-based digital health systems. Supported by WHO, Google and an international coalition of health and technology organizations, the foundation provides open-source software, shared standards and reusable digital infrastructure to reduce fragmentation in healthcare.
Building on the Open Health Stack project launched in 2023, the initiative enables countries to develop digital health platforms based on international standards such as HL7 FHIR and WHO SMART Guidelines, allowing clinical recommendations to be embedded directly into healthcare software. The technologies are already being used in national health record systems and community health programs across Sub-Saharan Africa, South Asia and Southeast Asia.
The foundation also introduces AI Commons for Global Health, a collaborative environment for developing shared AI protocols, evaluation frameworks and health-specific tools. According to WHO, the open-source, community-governed approach will help countries strengthen national ownership of digital health infrastructure, avoid vendor lock-in and prepare their healthcare systems for future AI applications while ensuring interoperability, transparency and long-term sustainability.
