Healthcare’s Legacy Data Infrastructure is a Broken Promise

Even in those early days, cracks in the data infrastructure were appearing. The system successfully digitized information but didn’t bring it together cohesively. So I often plotted lab values by hand under the glow of the computer screen.

When I became an executive, I saw these cracks widen and spread throughout healthcare from a new perspective. While the industry embraced electronic health records, with hospital adoption rates rising from 9 percent in 2008 to 96 percent in 2021, healthcare’s underlying IT systems haven’t always kept pace with technology’s rapid evolution.

The year before Covid-19 shut down the globe, about 70 percent of hospitals still used fax machines to exchange health information.

And consider these findings from Black Book Market Research. In 2017, outdated or underperforming IT systems cost American hospitals about $1.7 billion annually. In 2024, losses ballooned to more than $8 billion a year across the entire industry. These numbers, which may be low estimates, were the result of “the compounding inefficiencies, system downtimes and ineffective integration of health IT.”

Technology shortcomings didn’t just drain budgets. They compromised security, created administrative burdens and delayed care.

It’s no wonder healthcare payers singled out legacy technology as their No. 1 pain point in a 2024 Bain & Company survey.

What causes legacy data infrastructure to be a persistent source of inefficiencies, headaches, risks and costs? Four key issues stand out:

1. Patchy aggregation

Healthcare generates more data than ever, but it’s scattered across providers, payers, labs, pharmacies, vendors and digital health companies. Many of these organizations split their data between internal and vendor-supported systems, with teams working on different pieces of the same puzzle. Add in the archipelago of legacy infrastructures that dots the industry, and you have a tangled mess that makes data aggregation a nightmare.

The repercussions of working with fragmented data are profound. Doctors deliver care without a holistic view of their patients’ medical histories. Payers generate one-size-fits-all engagement strategies that disappoint their members. And business leaders struggle to understand what’s happening on the ground.

2. A widening IT age gap

Healthcare is also grappling with a generational divide. Some organizations still run systems built when President Bill Clinton was in office, while others use data infrastructures that are barely a year old. As you’d expect, supporting communication between the two is a perennial interoperability challenge.

I’ve seen teams reconfigure and rewrite outdated systems for years on end before realizing that a full-scale transformation to a modern environment is the only way forward. But that can feel like leaping from the frying pan into the fire. Converting and migrating data can threaten its integrity, and, in our industry, every inaccuracy can compromise care.

3. Reduced scalability

I remember a pilot project that ran flawlessly for a test group of 100 people but froze when the team rolled it out to hundreds of thousands of patients. They faced the same challenge that legacy infrastructures encounter today when shouldering growth: complexity.

Scaling in healthcare demands more than added storage capacity. It requires managing a world where every medical history is unique and records stretch back decades. When you add a patient or customer, you multiply the number of questions and considerations your infrastructure must handle. Legacy systems just aren’t up to the task.

4. Weak links

In the early days of cloud migration, it seemed that the new environment would solve many of our data problems. Now it’s clear that the transition came with a tradeoff. While the cloud is making strides in delivering affordability and enhanced interoperability, it’s also opening the door to cyberattacks. Healthcare’s legacy infrastructure only increases its exposure.

Consider that the United States Department of Health and Human Services described the industry’s aging technology as vulnerable to cyberattack and highlighted the importance of implementing strategies that mitigate risks.

The fallout from the 2024 Change Healthcare cyberattack reminds us of what’s at stake. The breach leaked the private information of 190 million people and froze a vital payment system for weeks, stranding providers as they scrambled to keep the lights on and deliver care.

The way forward

Not all of healthcare is stuck in the digital dark ages. At a recent healthcare conference, I saw AI-enabled solutions that would’ve seemed like science fiction a few years ago. But if legacy data infrastructure is struggling now, how will it perform under the immense data volumes and compute demands of next-generation technologies?

It may not.

To fulfill its core mission and harness advanced technology, healthcare needs modern systems with these three qualities:

First, data infrastructures must be able to pull data from disparate sources, enhance interoperability and create a unified view of patients and customers. This is as important for delivering frontline care as it is for optimizing back-office workflows.

Second, speed and accessibility are non-negotiable. Doctors can’t wait 10 minutes to load charts, and — like it or not — they’ll use their phones to access records at the bedside. Likewise, health plans need timely access to data to provide the personalized engagement their members deserve.

And third, security needs to be ironclad. In an industry where data is stored in one location, accessed in another and analyzed in a third, security can’t be an add-on. It must be baked into every layer of the system.

What environment can support this balancing act?

Hybrid clouds.

These best-of-both-world data infrastructures merge the performance and security of “on-prem” with the flexibility and scalability of the cloud. The result is an environment that offers healthcare organizations precisely what they need: resiliency, accessibility and continuity.

A healthier future courtesy of data infrastructure

Imagine if the clinic where my colleague worked had a modernized system. He would treat his patient with her complete history at his fingertips, ready to deliver more personalized care. And if his patient changed her insurer, they could meet her with personalized engagement and services that might prevent health issues.

The benefits would spread to organizations, as providers and administrators spend less time wrangling outdated systems and more time on what drew them to healthcare: helping people. Their streamlined workflows would reduce inefficiencies, leading to lower costs. And insights drawn from healthcare’s entire wealth of data would help unlock the next big breakthroughs.

Upgrading healthcare’s data infrastructure doesn’t just fix an IT problem. It’s an opportunity to create a healthcare system that lives up to its promises.