The Payer Role in HIEs

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

The core philosophy of health information exchanges is to bring together industry stakeholders to facilitate the appropriate sharing of patient data throughout a community, region or state.

But while HIEs have worked for years to get established, a major stakeholder - health insurers - remains absent or a marginal player in many initiatives. Some health plans still are waiting for a viable business model that will justify a major investment in HIE initiatives. Others, particularly national payers, don't have a large market share of covered members in many of the regions that have an HIE. These payers and even regional insurers also often can't get involved in HIEs if their employer clients aren't sold on the idea of data exchange.

Consequently, many insurers are still trying to figure out their role. Cigna Healthcare, for instance, is taking a new look at HIEs, in part, because of the American Recovery and Reinvestment Act's information technology provisions designed to accelerate the use of interoperable electronic health records.

Cigna is one of several insurers not ready to discuss in detail their HIE strategies. "We have engaged an internal eHealth steering committee to drive consensus among various constituencies to inform and shape our strategy," says Dan Carmody, vice president of information strategy and solutions at Cigna, via e-mail. "I would like to pass on a conversation for now and look to engage at a later time when our strategy and positioning are more solidified."

A small number of payers, however, are knee-deep into HIE initiatives. Chattanooga-based Shared Health, serving all of Tennessee, launched its HIE using claims data from two major insurers to provide physicians with a basic summary of care. Moreover, Blue Cross and Blue Shield of Massachusetts spent $50 million to wire up physicians with EHRs in three towns and get HIEs established there (see story, above). "We have answered questions that these systems can scale and how to implement them," says Steven Fox, vice president of provider network management at the Blues plan. "We view it as a worthy investment and successful."

Core Issue Unresolved

Who benefits most from health information exchange, payers or providers? That's a question still being debated more than 15 years after the first iteration of HIEs, community health information networks, hit the scene.

"Payers and employers have a more direct impact from cost savings and reduced readmissions, testing and emergency room visits," says Irene Koch, executive director at Brooklyn Health Information Exchange. "They also benefit from early post-discharge planning."

Providers certainly also benefit, Koch notes. But the costs of preparing for data exchange hit their bottom line. Even the efficiencies that HIEs are supposed to produce can hurt the bottom line for providers because of the nation's health care reimbursement policies. "Some providers may currently get reimbursed more if they do more procedures," she explains. "If an HIE helps them do fewer procedures, then they may get hit in an adverse way."

HealthInfoNet, the HIE of Maine, this summer expects to launch a year-long demonstration program. It has raised $3 million from a state foundation, $1.2 million from provider organizations and $600,000 from the Maine Center for Disease Control and Prevention. But it has only gotten $50,000 directly from health insurers. The group still needs another $1.2 million to get through the demonstration period.

"For the most part, the commercial insurers have been sitting on the sidelines and watching," says Devore Culver, executive director of HealthInfoNet. "They're concerned that information put in front of doctors doesn't mean they will use it, and they'll order that additional test." Payers, he adds, want to see the value of the HIE before ponying up.

But the HIE needs the payers now, Culver contends. "We need payers because we're providing the benefit to payers. They also are the third-party administrators and can encourage employers to invest in the exchange."

Culver believes he and other HIE proponents can bring in the half-dozen very large employers in Maine. "But the TPAs could be very helpful in moving the rest of the market."

Trust Factor

HIEs trying to attract payers are further hampered by the fact that many providers, misunderstanding the mission of HIEs, may not want the payers involved, Culver notes. "Providers don't want their clinical data to wind up with payers. They don't want payers to dictate treatment."

Some help from a big payer - the State of Maine - soon may be coming. The governor's budget asks for $1.7 million to help fund the HealthInfoNet demonstration program, with the hope of reducing Medicaid costs. "We're working to make sure that gets through the legislature," Culver says.

Fox of BCBS of Massachusetts has a quick answer for physicians who say insurers primarily benefit from health I.T. initiatives. "Sometimes we do, sometimes we don't; show me the data." As a not-for-profit insurer, "if I.T. lowers our costs, we pass that on to providers," he adds.

Two insurers, some unions and several employers have provided some of the start-up funding for the Louisville (Ky.) Health Information Exchange, which is developing a health records bank.

Under the health records bank model, a trusted entity collects a patient's paper and electronic medical records from physicians, hospitals, laboratories, pharmacies and other sources. Each bank account contains an electronic copy of an individual's health records. Individuals control who accesses their data and what data can be accessed.

When stakeholders complain that payers benefit the most from HIEs and therefore should contribute the most, they may hamper their own cause, says Sheila Andersen, chair of the Louisville HIE. Such talk can cause payers to initially believe they will have to pay the whole bill, she explains. "Anyone would react negatively to being told they will benefit the most and should pay. So, you have to know this argument is coming and be ready to quickly educate all stakeholders."

Spreading the Burden

In Louisville, Humana Inc., Anthem Inc., Yum! Brands, Ford Motor Co. and Kroger are among early supporters of the initiative. But their continuing support, as well as support from other stakeholders, is vital to keep the initiative going, Andersen says. That's especially important now with the recent selection of vendors to implement the health records bank. Salt Lake City-based 3M Health Information Systems will implement a clinical data repository, enterprise master person index software and a health care data dictionary. Wayne, Pa.-based InterComponentWare Inc. will supply interoperability services, consumer and physician portals, and personal health records software.

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