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Integration & IT Modernization

APIs in Healthcare: Adapt to a Value-Based Model


Healthcare is undergoing a shift from a fee-for-servicebased payment model to a value-based-care payment model in which the government provides incentives and penalties based on quality metrics. With the value-based care model, healthcare providers and health plans have shared accountabilities when it comes to managing the health of the individuals and populations they serve. In many cases, health plans and provider organizations are formulating accountable care organizations (ACO) to work together to provide high-quality care to their patient populations. According to Definitive Healthcare, there are more than 800 ACOs representing more than 200 health plans, 3,900 providers, and 300,000 physicians.

A critical component to the success of an ACO is patient engagement, and both providers and health plans need to leverage technology to empower patients and members throughout their journey. It is essential for providers to engage patients to motivate and incentivize them to Changing healthcare modelmanage their wellness instead of their sickness, especially now under a value-based model. Additionally, health plans need to motivate and incentivize cost-savings behaviors with a great deal of quality metrics and dollars at stake.

Federal and state mandates are also a major driver of change in the healthcare business model. For instance, in the past decade, three major regulations have transformed the industry: National Provider ID, HIPAA 5010 upgrade, and ICD-10. Healthcare organizations face tremendous – and costly – challenges to comply with these mandates, and those likely to occur over the course of the next decade.


APIs expose existing data on reimbursement to facilitate a new value-driven business model for healthcare providers. Part of the government incentive program also motivates organizations to identify and cut down on costly services lines. APIs can collect and even analyze that data to better inform the service offerings of a healthcare provider and increase incentive dollars. This API data can also provide meaningful insights and demonstrate cost savings to patients through advanced analytics reports. For example, if a report indicated a high risk of a preventable medical condition in a certain geographic region, companies can use this information to incentivize their members to use healthy habits and monitor those results over time. This insight helps both members and service providers to achieve better care and keep costs down in the long term.

Organizations must change as fast as the regulations and economy around them are changing, which can require ramping up new initiatives quickly. APIs allow rapid prototyping of new programs without a significant investment. More or less, most of the healthcare giants in the U.S. are already thinking about a strategy for API management solutions. In terms of adoption, API strategies are being more widely adopted in the healthcare startup realm. Following the paths of other more faster-paced industries, healthcare is poised to invent a large number of implementation solutions using API platforms, which will give them a competitive edge in the market.

Healthcare providers and plans can only benefit from APIs. As a patient or member is provided more “personalized” care, they are bound to use those services more often. If companies do not invest in laying a foundation for API solutions, they will eventually start losing business without the ability to deliver highly personalized, adaptable service.


An evolving business model is just one of the healthcare challenges that can be alleviated by API management. Download our guide, Digitally Transforming Healthcare with APIs, for the other ways APIs are changing healthcare and get real-world success stories from industry leaders.

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Nishikant Singh

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