If private HIEs corner the market on the most profitable services, state HIEs—charged with providing a wider scope of services with a lower return on investment, such as connecting rural providers—are being set up to fail.
This argument was made in a controversial paper published in
January 2012 in the Journal of the American Medical Informatics Association by Leslie Lenert, professor of medicine and biomedical informatics at the University of Utah’s School of Medicine. In the paper, Lenert and his coauthors say recent ONC
initiatives such as the Direct Project, as well as private HIEs,
undermine RHIOs and state HIEs.
“If exchange of data and meaningful use certification can be
achieved without connecting to a RHIO, there may be little reason for providers to join one, particularly if RHIOs have higher
costs,” the authors state. State HIEs would require a monopoly
on the more profitable aspects of HIE in order to offset unprofitable services.
“It is very difficult for public utility model enterprises that have
to subsidize activities and provide universal service to compete
against free enterprise organizations that don’t have to provide
these services,” Lenert said during the March National eHealth
Collaborative roundtable meeting, which in part discussed his
Alignment or Bureaucracy?
Another argument for state HIEs is they are uniquely positioned
to bring together competitors and connect different private
HIEs. The state HIE in the regulator role, establishing a single
set of rules for privacy, data exchange, and services fills a need
currently lacking in HIE. In Kentucky, all providers and HIEs
must sign a participation agreement that enables the standard
exchange of information between different systems, Chrisman
State HIEs are in a better position to develop both intra- and
inter-state exchange, tackling the tough issues in an open public
forum regarding patient content, differences in state law, and
developing standards around HIE issues like exchange authentication, supporters say. Eventually, this work could be translated into a nationwide connection between states. Some vendors
disagree, like Marc Willard, CEO of private HIE vendor Certify
Many health systems cross state lines, which would require
those systems to join several state HIEs just to exchange health
information within their own systems, Willard says. He believes
it is better to leave HIE to the local health systems, which can
then connect to a state HIE if they have a need to exchange information with systems outside their area.
“We have five or six health systems that will connect with each
other without any state HIE, without any bureaucracy, and they
will do that on an as-needed basis,” he says.
State HIEs may be shoehorning themselves into the marketplace, adding an unnecessary layer and offering services that
private HIEs could handle themselves, according to Willard.
But while private HIEs may have the technical capability to
connect to other private HIEs, they may lack business incentive
to do so on a large scale. When private HIEs do link up, it is usu-
ally to serve a narrow business case and not for the type of extensive record exchange that supporters of state HIEs envision.
“The public good is actually about creating a level playing field
for grouping information across all organizations, and if we take
away the structure to do that we are going to be in more trouble
than we think,” Lenert warns.
Private HIE: Focusing on the Business Need
The track record for regional and state HIEs is not a good one.
Many have folded, unable to find sustainable business models
that support their missions.
Just ask Chris Voigt, senior director at HIE vendor MobileMD,
which is owned by Siemens Healthcare. Voigt helped develop
and launch the once-promising RHIO CareSpark in the Tennessee area. The RHIO ceased operations in June 2011 after it was
unable to develop a solid business model despite a string of government contracts and local provider support.
Voigt also helped ONC develop several national HIE projects
like the NwHIN, which has been slow to find users, Voigt says,
because it lacks a strong business case.
“I worked with ONC on all the NwHIN projects, and it was a
wonderful thing and we were going to save the world, but no-
body used it, nobody picked it up, not because the technology
wasn’t there but the economics never matched,” Voigt says. “So
why should providers share data and how should they coordi-
nate care with this technology? In the enterprise private space
with our HIEs, there are a lot of financial reasons to do it.”
State HIEs must seek alignment from stakeholders spanning
entire regions when developing their networks. This can be dif-
ficult when developing policies on contentious issues like pri-
vacy and security practices, patient consent processes, and even
fee structures. In Kentucky, KHIE has been working for a year
and a half to conduct a cost analysis and get necessary approval
from legislature before it can charge HIE fees.
Private HIEs don’t have the same restrictions. They can determine their own data exchange standards and fee structures.
Private HIEs typically form between trading partners that have
established relationships and are happy to trade data. State HIEs
don’t have that luxury, Voigt says, and they usually must reach
hard fought consensus between parties, Voigt says.
“When it comes to state HIE, everybody involved is extremely
risk adverse, so those HIEs are threatened by such tight control
and such low risk exchange that you may even be hurting the
patient,” Voigt says. “Because of the decisions people made in
the public HIE about taking ‘no risk’ views to exchange, you are
actually not exchanging anything, which would be even worse.”
For the same reasons, private HIEs can be faster to offer new
services and adapt to new business situations, Voigt says.
“We can react extremely quickly here,’” he says.
Lenert asserts that this difference creates a disservice to the
patient and the taxpayer; that state HIEs should receive backing to serve as the HIE for a state and not face direct competition with the sometimes self-serving private HIEs. That revenue
should drive the health services provided is counter to the goal
of healthcare—treating patients, Lenert says.
“(This) argument that every transaction in healthcare is one