“Open source is eating software faster than software is eating the world”
- Joseph (JJ) Jacks
As we look back over the past decade, it’s no secret that Open-Source Software (OSS) giants have emerged as legitimate disrupters in an industry previously ruled by proprietary vendors — take Gitlab, Airbyte, Elastic, Apollo, Confluent, or Databricks, as a few examples. When Metriport attended Y Combinator's Summer '22 batch, there was no shortage of exciting new open-source startups in our cohort, many of whom we got to know personally, such as Windmill, Payload CMS, Medplum, and Lotus. Even beyond the batch we attended, there’s a growing number of companies making their way onto YC’s prestigious Top Companies list who have emerged in only the last few years, like Airbyte, Supabase, Spruce Systems, and PostHog. In fact, the number of open-source companies YC has funded is over 75 and counting, and for good reason — OSS offers a plethora of major advantages over closed-source, proprietary software, including greater reliability, transparency, and affordability. While these advantages continue to define a new paradigm in software, there still seems to be one vertical that has been particularly slower to adopt the open-source approach: healthcare.
Why is this? While open-source has left its mark across almost every major category in software, from product analytics, to DevOps, to data integration, there’s a notable lack of large OSS companies in the world of healthcare. On the surface, this makes little sense for an industry that sees $4.3 trillion dollars of annual spending — you’d expect more innovation on the technology side of things. But for anyone who’s familiar with the healthcare space, this barely comes as a surprise, due to the fact that the industry itself is *at least* a decade or two behind on the technology front. Indeed, when we analyze the landscape of healthcare software today in 2023, we see a space that resembles much of the world of enterprise software in the late 2000s or early 2010s, judging by the sheer lack of legitimate OSS alternatives to propriety giants. Taking this into consideration, we can expect to see a rise of open-source healthcare software companies emerge in the coming decade, who will disrupt existing closed-source, proprietary vendors.
As security, cost savings, and developer friendliness become increasingly important factors for modern healthcare organizations looking to position themselves for longterm success, it’s becoming more obvious that the open-source approach will inevitably make its way into the healthcare ecosystem. When we set out to build our open-source API for healthcare data at Metriport, we were shocked that there was no existing solution in the space that was solving HIE and EHR integrations in an open-source manner already. Due to what we saw as an obvious missing piece in interoperability, we decided to go and build the solution we wish existed, and offer digital health companies new opportunities and advantages that weren’t previously available.
One reason why open-source companies hold an unfair advantage over their proprietary counterparts is that they're essentially immortal. Customers of OSS companies rely on their code, not their business. If a closed-sourced company goes out of business tomorrow, all of their customers are left with nothing. This is especially a concern with API vendors, as customers normally spend a ton of engineering resources integrating with the APIs in the first place. If a closed-source API vendor goes belly up, all the work their customers did to integrate with that API is wasted — not to mention their product now has a major hole in it.
With the open-source approach, customers can sleep at night knowing that they'll always be free of vendor lock-in, with the ability to self-host the code they rely on. You can see how this advantage could be especially critical to telehealth practices, for example, where losing access to their patients’ medical records for even a short period of time would be catastrophic for operations. A smart move would be for a practice to have a self-hosted version of a product they use in parallel, ready to use if needed — something that’s only possible with OSS.
A major part the plan to improve healthcare over the next decade and beyond will center heavily around cost savings. For any provider looking to offer cost savings to their patients, vendor cost savings must be factored into the equation. Thankfully another huge advantage open-source software offers is an alternative to typical SaaS cloud usage fees. While proprietary software companies are only able to offer a monthly subscription due to the cloud nature of their offerings, OSS companies are able to offer two models: cloud hosting, and self-hosting via a flat licensing fee. This model is especially attractive to large enterprise companies who would normally rack up insanely high monthly usage fees, allowing them to modify and maintain code with no additional costs. It’s often compelling enough for a company to choose an open-source vendor for a long term partnership, even if they start with a cloud-hosted offering, knowing they can always self-host down the road once they scale their business.
Perhaps one of the most important reasons why OSS is needed in healthcare is for greater transparency in a highly regulated industry. Because source code can be externally audited any time, security vulnerabilities or other issues can be identified and addressed quicker than closed-source. Furthermore, closed-source vendors may not be as forthcoming about any security issues, leaving their customers vulnerable to potential security breaches.
From a trust perspective, if a closed-source company is providing a service and claims their offering is flawless — can they prove it? Without the source code, unfortunately not. If company X has been rumored to do shady things with customer data, can they be externally audited? Without the source code, unfortunately not. As the healthcare IT landscape evolves and new open-source alternatives start to emerge, customers will begin to have a choice with who they choose to do long term partnerships with. Once healthcare organizations have the option to choose more transparent and secure vendors, we may see a more rapid shift towards OSS than we've ever seen before, and for good reasons.
It goes without saying, but developers are at the core of healthcare IT and software. When we close-source software, we close off a whole world of community contributions. Another major reason why we decided to go open-source at Metriport is because we believe so strongly in the power of developer communities, and we want to invite others outside our organization to contribute to making healthcare more modern and efficient. Although we alone can't change the industry, we can offer a much greater solution when we collaborate with other great minds.
We hope to see more companies in the space take this approach, as we believe it will accelerate progress at a speed much greater than we currently see, thanks to the wonders of collaboration, putting developers at the center of the equation.
While we obviously have a strong conviction that our open-source, API-first approach will win the long term game at Metriport, we also see some well-positioned OSS companies building in parallel right now winning too — specifically companies like Medplum, a headless open-source EHR, building critical backend infrastructure to power new digital health companies, as well as Tuva Health, a company taking the open-source approach to transform and rectangularize messy healthcare data. While the rate of OSS adoption in healthcare has been slow, it’s refreshing to see new companies emerge and start to challenge the status quo. We definitely expect open-source adoption to accelerate in healthcare going forward, as a new wave of modern companies redefine the space and set new standards along the way.
Are you part of a company building in the healthcare space? If so, we’d love to hear from you. Get in touch with us today, or come join our community on Github.
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