Late last year, the U.S. Department of Health and Human Services (HHS) took a bold step toward modernizing healthcare data exchange by finalizing The Trusted Exchange Framework and Common Agreement (TEFCA). This initiative aimed to enhance equity, innovation, and interoperability by facilitating the secure exchange of electronic health records (EHRs). At its core, TEFCA sought to democratize access to healthcare data, ensuring that patients, providers, and researchers could benefit from seamless, standardized information-sharing.
However, under the new presidential administration, the future of this initiative is uncertain. Shifting regulatory priorities and skepticism toward broad healthcare reforms suggest that TEFCA’s vision of an open, interoperable health data network may never be fully realized.
Decentralized economy
This raises a pressing question: Can Web3 step in to bridge the gap?
Web3 in Healthcare—powered by blockchain, decentralized storage, and tokenized ecosystems now officially branded as DeSci and oftentimes DePin (depending on infrastructure)—offers a radically different approach to healthcare data management. Opening up access to healthcare data is important; however, Dr. Mitesh Rao, former Chief Patient Safety Officer at Stanford Healthcare and Founder and CEO of OMNY Health, does not view the potential loss of the TEFCA as a detrimental loss to the industry. In fact, Dr. Rao believes that TEFCA fell short in many ways, especially in efficiently organizing data for research-sharing purposes, which creates an opportunity for Web 3 to enter the chat.
Unlike traditional centralized health information exchanges, Web3 technologies emphasize:
- Decentralization: Eliminating single points of failure and reducing control by major healthcare entities.
- Patient Sovereignty: Enabling individuals to own, control, and monetize their health data.
- Security & Transparency: Using blockchain for immutable record-keeping and auditability.
The Reality Check: Web3’s Readiness in Healthcare
While Web3 presents a compelling alternative, several barriers stand in the way of widespread adoption in healthcare:
- Regulatory Uncertainty – The U.S. healthcare system is governed by stringent laws like HIPAA, which were designed for centralized models. Web3’s decentralized and pseudonymous nature poses legal and compliance challenges.
- Interoperability Issues – While TEFCA promotes standardization, Web3 solutions remain fragmented. Without a unified framework, integrating blockchain-based health data with legacy EHR systems is difficult.
- Adoption Hesitancy – Hospitals and insurers, entrenched in traditional systems, are slow to trust decentralized technologies. Many remain skeptical of blockchain’s ability to handle high-volume, real-time health data transactions.
- Data Ownership vs. Monetization – While Web3 empowers patients with control over their data, concerns arise around ethical monetization. Will selling personal health data introduce new inequalities, rather than solving existing ones, especially in considering many DeSci models and the funding mechanisms they propose.
The vision behind TEFCA—a more open, accessible, and interoperable healthcare system—remains crucial. Yet, with political and regulatory shifts, its success is in jeopardy. This presents an opportunity for Web3 to step in, but only if critical challenges around compliance, interoperability, and trust are addressed.
Web3 may not be fully ready to take over healthcare just yet, but with continued innovation, strategic partnerships, and regulatory evolution, it could become the key to unlocking a truly patient-centric health data economy.
