Despite decades of federally funded upgrades to healthcare digitization, fax use among hospital systems has quietly grown since 2018, providing investors with a unique — and retro — opportunity.
Source: ONC Health IT Data Brief, Hospital Health Information Exchange, 2018–2025.
Key Stat: The share of hospitals sending and receiving clinical records by fax ticked upward even as local health information exchange rose 24% and national network use jumped 40% over the same period. Interoperability isn’t killing fax use; fax use is growing alongside it.
What to Look for: Cloud fax vendors are well-positioned to capitalize on this structural stickiness. Because fax requires no technical integration and imposes no compatibility burdens on counterparties, it functions as the lowest common denominator exchange across a fragmented provider landscape of physician practices, skilled nursing facilities, home health agencies, and behavioral health providers. That durable role creates a long runway for cloud fax platforms to evolve beyond fax delivery into full-suite interoperability solutions that aggregate unstructured data and serve as connective tissue across all provider types and specialties.
Mitigated Risk: The primary investment risk lies in upcoming rule changes regarding electronic data exchange. They include healthcare claim attachment transaction standards, set to take effect May 2028, and the Centers for Medicare & Medicaid Services (CMS) requirement that some plans, such as Medicare Advantage and Medicaid managed care, build standardized connectors for prior authorization. Cloud fax vendors that rely heavily on those transactions face near-term pressure, though other high-volume fax transactions — doctor referrals, hospital discharge summaries, and medical record requests — face no such digital mandates. They support continued growth for those vendors amid increasing data volume and the continued unstructured nature of the data.
