Lessons from the HIE Front

Joseph Goedert, News Editor
Health Data Management Magazine, February 1, 2009

This is the first story in an in-depth, four-part series on information exchange issues that Health Data Management will present during 2009. We will offer six other series throughout the year covering data security, patient safety, executive management, revenue cycle management, EHR achievement, and hardware. These series are designed to provide insightful, concise and timely information to our readers on the technology and business issues that shape their strategic initiatives.

-Gary Baldwin, Editorial Director

For every health information exchange and regional health information organization, there are hard lessons being learned as the initiatives struggle to start operations and grow.

For Liesa Jenkins, executive director of Kingsport, Tenn.-based CareSpark, the big lesson is that the Internal Revenue Service has stymied other federal government efforts to promote HIEs and RHIOs as the backbone of a national health information organization.

For more than three years, CareSpark has been waiting for the Internal Revenue Service to rule on bestowing 501(c) not-for-profit status on the organization. Such status can aid HIEs and RHIOs in getting grant funding from corporations, foundations and other entities. "What is it that the IRS wants?" Jenkins asks. "We still do not have our 501(c) designation after three-plus years."

CareSpark comprises hospitals, physicians, insurers, public health departments and other stakeholders serving 17 counties in Tennessee and Virginia. The HIE filed its application for not-for-profit status in August 2005, and Jenkins has asked for a status update monthly since December 2005. That's when the application was routed to a specific IRS office in Washington that was going to handle such requests. "They told us in June 2007 that they had all the information they needed, but had to create policy for handling RHIOs, with no timeline."

The region's senators and representatives have had no better luck getting the IRS wheels turning. Consequently, CareSpark has lost grants it could have gotten and watched other grant opportunities come and go, Jenkins contends. "I want government to get out of the way and let us do what we need for our communities. The government is a barrier. I don't know why an application for a RHIO would be treated differently than other non-profit organizations."

For the Ann Arbor Area Health Information Exchange, the big lesson learned is that physicians are not adopting electronic health records systems as quickly as envisioned. In part, that's because the region's hospitals haven't offered to subsidize ambulatory EHR costs.

The physician-driven HIE started with four group practices that use the same EHR system and access data from two hospitals.

Now, the HIE is testing a Web portal to enable other physicians, including those without EHRs, to participate. "We're starting to work with small practices to see if they're going to bite on that," says Carlotta Gabard, executive vice president and director.

Other HIEs and RHIOs have learned that consensus over data sharing issues is hard to achieve even when rivals have historically cooperated in other regional projects and have developed trust. Another lesson being learned is how to comply with privacy laws in an electronic, HIE environment.

But among data exchange veterans, the most commonly cited lesson is just how tough it is to establish HIEs and RHIOs. "I wouldn't say there's been anything in these projects that has been particularly easy," says Irene Koch, executive director of the Brooklyn Health Information Exchange. "I think most people involved would say it's the hardest thing they've done in their lives."

Seeking Viability

Some HIEs and RHIOs are finding the toughest lesson so far is the difficulty in establishing a sustainable business model.

"Sustainability is still something that needs to be addressed," says Daniel Porreca, executive director of HEALTHeLINK serving Buffalo and eight Western New York counties. "We will create value; the challenge is demonstrating and quantifying that value."

The HIE to date has received matching grants from the state, but the last grant ends in mid-2010. While Porreca has commitments from participants to continue, he also knows that reaching consensus on a sustainable business model has to be a priority. "I do have a sense of urgency and the timetable would be before the end of this grant period." Shareholders, he believes, also share the urgency.

HEALTHeLINK is not alone in its search for consensus on a business model. The Brooklyn Health Information Exchange is another of several HIEs that have received start-up funds from the state. But the grants run out in mid-2010. The organization is working on various models. "The challenge to doing sophisticated financial planning is that it is very time consuming," says Koch, the executive director. "There are many other competing priorities."

The Indiana Health Information Exchange in Indianapolis went live in late 2004 and became financially sustainable - cash-flow positive - two years later, says J. Marc Overhage, M.D., president and CEO. "My CFO may argue we're still not able to generate cash for new investments," he concedes.

One of the challenges of HIEs is recapitalization, Overhage says. Most HIEs, he notes, are not-for-profit organizations so they don't have access to Wall Street and private investors. "Squirrel some revenue away and use grants to capitalize new initiatives," he advises.

IHIE charges transaction fees for its core clinical messaging service to 38 hospitals and just over 10,000 physicians, as well as labs and radiology and imaging centers. The initiative recently launched an insurer-focused disease management service using a grant to get the program running. Insurers pay fees on a per member per month basis. Seven payers have committed to the program and five were live in December.

A Working Model

Organizations still searching for a sustainable business model may want to consider a trip to Cincinnati to visit the folks at HealthBridge.

The health information exchange launched in May 1998 and today serves 29 hospitals, 4,600 physicians, 17 public health departments and other provider sites in the region. HealthBridge started with a Web portal to give physicians access to patient data in hospital information systems. "That gave a huge benefit to doctors and the hospitals," recalls Robert Steffel, CEO. "It leveraged existing systems to give value immediately and started building trust among competing hospitals."

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