In the U.S. healthcare market, no single event defined the first quarter of the year, but across them a pattern became clear. 

Across federal policy discussions, state-level funding decisions, and conversations at conferences like HIMSS and Office of the National Coordinator (ONC) ASTP meeting, the same signals kept surfacing. Policy, funding, and technology are not moving in parallel. They are converging, and that convergence is concentrating influence in new ways.  

The question is no longer just what decisions are made, but who makes them and under what constraints. 

Policy Is Reshaping the Structure of the Market 

Policy is moving from the edges of the market to defining its structure. 

Signals from CMS, the ONC ASTP meeting, and other federal initiatives point toward a more coordinated approach. Interoperability mandates, AI governance, and funding programs like Rural Health Transformation Program (RHTP) are increasingly interconnected. 

CMS is also signaling greater standardization across states through concepts like national vendors and Health Tech Ecosystem participation. This reduces variability and shifts decision-making toward a more centralized model. 

This is also visible in interoperability. Conversations at HIMSS reinforced that while TEFCA is gaining momentum, it does not replace the need for strong local infrastructure. National exchange moves data, while local infrastructure determines how it is used. The issue is no longer access to data, but whether that data can be used in real-world decision-making. 

In a HIMSS session on TEFCA and national interoperability, it was noted that national interoperability may expand access to data, but “the real value comes from the organizations that make that data usable in practice.” 

The $50B Question: RHTP Funding as Both Fuel and Friction 

Funding is accelerating the timeline set by policy. 

RHTP funding presents a major opportunity, but execution is proving complex. States are under pressure to allocate funds quickly, often without clear long-term strategies. 

The funding points to transformation, but execution remains uneven. In practice, execution capacity, not funding, will determine outcomes. 

Discussions at the State HIT Connect Summit reinforced that the challenge is not vision, but execution. During a session on rural transformation, one recurring theme was that “the biggest risk is not the vision, it’s execution.” Speakers pointed to procurement complexity, implementation capacity, and provider readiness as the factors most likely to determine success.  

Key risks include: 

  • Procurement speed and contract complexity 
  • Vendor selection and alignment 
  • Implementation support and resourcing 
  • Limited technical capacity among rural providers 

States are also taking a more active role in shaping the market through initiatives like the Rural Tech Catalyst Fund, with a focus on shared infrastructure and sustainable care models beyond the funding period. 

AI: Rapid Advancement, Uneven Control 

AI is scaling quickly, but governance and operational readiness are not keeping pace. 

Q1 did not bring major breakthroughs, but it reinforced that AI is now embedded in healthcare. The more telling signal is the gap in adoption. Some organizations are accelerating, while others struggle to move beyond pilots. The divide isn’t about access, it’s whether the AI delivers usable intelligence inside real workflows. AI maturity comes down to whether systems can generate relevant, context-aware insights that can be trusted in real clinical environments.  

At the State HIT Connect Summit, early use case focuses on AI framed as a capacity multiplier, such as: 

  • Ambient documentation and scribing 
  • Chart summarization 
  • Image review support 
  • Workflow and workforce enablement 

Burden is reduced, but the intelligence layer is missing. The next phase AI is different.  

Real impact comes from combining multiple data sources, including clinical, claims, and operational data, to surface predictive and actionable insights at the point of care. For example, identifying risk earlier and guiding transitions of care. Interoperability makes that possible. Without full system connectivity, high-quality data AI cannot deliver meaningful intelligence. 

Organizations that operationalize trusted intelligence at scale will gain decision-making advantage. Others risk falling behind as the gap widens. 

Shaping How Decisions Are Made 

Buyers are making fewer decisions, and each one carries more weight. Execution capability is now part of the evaluation, not an afterthought. Policy constraints and funding timelines are increasing pressure. 

Evaluation criteria are evolving, with greater scrutiny on proof and scalability. Surface-level differentiation is no longer enough. 

Vendors are increasingly expected to support implementation and workflow integration. Organizations are looking for partners who can operationalize solutions, not just deliver them. 

Trust and demonstrated outcomes are becoming primary decision filters. 

What We’re Watching in Q2 

The next quarter will clarify where control is consolidating. Key areas include:  

  1. States’ allocations of RHTP funding, particularly data infrastructure.  
  2. How CMS advances national vendor pathways or ecosystem requirements.  
  3. Emerging signals on fraud and waste initiatives as federal investment supports more proactive detection and cost-containment strategies. 
  4. Shifts from pilots to scaled intelligent deployment that indicate AI maturity. 

        A Market Being Re-Architected in Real Time 

        Q1 made one thing clear: this is not incremental change. Policy, funding, and technology are converging in ways that are accelerating decisions and reshaping where control sits. 

        The organizations that move early, align with policy, and execute beyond pilots will define what comes next. 

        This is no longer just a question of what decisions to make, but who is positioned to make them and how quickly they can act. For organizations responsible for making data usable across fragmented systems, this shift elevates interoperability from capability to control point. 

        Want to understand how these shifts could impact your organization? Get in touch with our team to explore what this means for your strategy.

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