hie base.research.101
DESCRIPTION
Health Information ExchanTRANSCRIPT
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HIE Base ResearchAugust 2010
Rex OsbornClinical Informatics SME
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RHIO vs HIEA RHIO is an organization whose chief objective is to bring community leaders together from disparate stake holding interests around a vision of health data interoperability. By arguing that systemic improvements result from fully mobilized patient data, they initiate a process of trust building, whereby stakeholders are brought into convergence. As momentum gathers, conversations yield to negotiations, and stakeholding leaders lay the groundwork for governance, mission statements, business plans, choices of functionalities, privacy and security policies, management teams, financial commitments, and covenants. The result of these hard-won efforts is a RHIO, usually a non-profit organization composed of influential stakeholders bound by covenants and vision. As opposed to economic or technical functions, its chief utility is political, and as such, is the indispensable catalytic agent of change without which the economic and technical functions of exchange will not come to pass.
By contrast, Health Information Exchange represents the human capital side of the equation. HIE is what emerges from the presence of RHIO activities, e.g., social capital giving birth to human capital. Human capital is the specialized knowledge and skill sets that make exchange possible. It ranges from executive team business acumen to technology platforms. All RHIOs at this point are not only acting as catalytic agents of social capital, but also as incubators for whole new sets of skills and technology applications that constitute the means of exchange, from data hubs to edge system connectors. This is the aspect of exchange that is so disruptive — people working within the exchange must acquire novel skills to successfully leverage the new potential. Management must develop creative services and revenue models to support them, along with inventive applications of traditional finance and accounting disciplines. Technical staffs have to master vendor products. They must, in turn, be able to support and teach edge system users how to deploy the new functionalities. End users, such as physician offices, need to alter workflows to leverage enhanced information flows.
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HIE Exchange
EMPI
Source:
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HIE Stakeholders
HEALTHCAREPAYORS
LABORATORIES
AMBULATORYEHRs
MEDICATIONINTERMEDIARIE
S
OTHER PHRs /HEALTH BANKS
PUBLIC HEALTH
AGENCIES
WEB PORTALS
DIAGNOSTIC IMAGING
HOSPITALS
HIE
eHealth Initiative (EHI)Report Key HIE Survey Findings:
The value of HIE is not clearly understood by the majority of respondents: 54.9% disagree or strongly disagree with the statement that the value of HIE is clearly understood.
The majority of respondents believe outreach to consumers about the value of EHRs and HIE is not effective: 66.6% disagree or strongly disagree with the statement that current outreach to consumers about the value of EHRs and HIE is effective.
There has been an increases in functionality amongst health information exchange initiatives with respect to the meaningful use rules: The top 3 functionalities being provided by the initiatives: Connectivity to EHRs (67) Results Delivery (50) Health Summaries for continuity of care (49)
The top 5 types of data exchanged by the initiatives: Laboratory Results (68) Medication Data (63) Outpatient laboratory results (62) Allergy Info (61) ED episodes/discharge summaries (58)
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Source: 199 of 234 participated in survey/ 48 of 56 SDE’s participated
The top 3 services offered by the state designated entities: Electronic prescribing and refill requests
(4) Prescription fill status and/or medication
fill history (3) Electronic eligibility and claims
transactions (3)
Revenue Sources for Operational HIEs
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Ongoing Revenue Sources for Operational HIEs
Hospitals 27%
Physician Practices 20%
Payors - Private 15%
Labs / Ref Labs 12%
Federal Gov’t Grants & Contracts 7%
State Gov’t Grants 7%
Payors – Medicaid / Medicare 6%
Public Health 6%
Hospitals Physician Practices Payers - Private Labs / Ref Labs Federal Gov’t Grants & Contracts State Gov’t Grants Payers – Medicaid / Medicare Public Health
7%7%
6% 6%27%
20%15%
12%
Source: eHI 2010 Rpt
Funding Sources
Top 3 Funding Sources for Operational HIEs Subscription Fees or Membership Dues to Data Users / Providers -
65% Transaction Fees Charged to Data Users / Providers – 20% One-time financial contribution to HIE (Donation) – 12%
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Subscription / MembershipOne-Time DonationTransaction FeesAdvertising or MarketingPublic Health Utility
65%12%
20%
2%1%18 break-
even initiative
s
Source: eHI 2010 Rpt
eHealth Initiative (EHI)
Dependency on Federal Funding (All Initiatives) Dependent on Gov’t Funding –35% Independent Funding – 61% Not Sure – 7%
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Dependent35%
Independent61%
Not Sure4%
Source: eHI 2010 Rpt
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eHealth Initiative (EHI)Sources of Startup
Hospitals
State Gov’t
Federal Gov’t Grants
Payors / Private
Physician Practices
Philanthropic Sources
Payors – Medicaid / Medicare
Public Health
Medical SocietiesHospitals
21%
State Gov’t 19%Federal
Gov’t Grants 17%
Payors / Private
12%
Physician Practices
11%
Med-ical Soci-eties 4%
Philan-thropic Source
s 8%
Medicaid / Medicare 5%
Public Health
3%
Source: eHI 2010 Rpt
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eHealth Initiative (EHI)Sustainable Model Revenue Sources
– Stakeholders paying dues/fees
Hospitals
Health Plans
Community Clinics
Independent Labs
Primary Care Physicians
Mental Health
Long-Term Care
Ambulatory Surgery Centers
Specialty PhysiciansHospitals
19%
Health Plans 14%
Community Clinics
12%Independent Labs 10%
Primary Care Physicians
10%
Mental Health 10%
Long-Term Care 8%
Ambulatory Surgery Centers
8%Specialty
Physicians 8%
Source: eHI 2010 Rpt
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eHealth Initiative (EHI)Sustainable Initiative Top
Services
Connectivity to EHR
Alerts to Providers
Referrals & Consultations
Results (Lab / Dx Study Results)
Health Summaries - CCR
Clinical Documentation
eRX
Alerts to Providers Drug – Drug & Drug – Allergies
Connectivity to EHR 15%
Alerts to Providers 12%
Referrals 12%
Results (Lab / Dx Study Results)
12%
Health Summaries - CCR
11%
Clinical Doc-umentation
11%
eRX 10%
Alerts to Providers D/D
D/A 19%
Source: eHI 2010 Rpt
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TOP HIE Initiative Challenges
1.Sustainability model (over 60%)2.Addressing Government Policy &
Mandates (over 60%)3.Defining the value of the HIE (over
50%)4.HIPAA – Privacy, Consent,
Confidentiality, Security & Breach policies (over 50%)
5.Technical infrastructure; Architecture, Applications & Connectivity
6.Governance Issues 7.Legal Issues8.Cross Referencing Patients9.Engaging Health Plans (coverage
area)10.Engaging Practicing Clinicians
(coverage area)11.Systems Integration 12.Engaging Laboratories (coverage
area)
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HIE FACTS• 2010 = 234 HIE initiatives• Less than 10% of Hospitals are currently linked to a
HIE• There are 73 operational initiatives in 2010 up from 57
in 2009• Sustainable #’s
• 44 of the 73 operational initiatives have no financial relationship with the entities involved in the initiative “coopetition”
• Proven ROI Points: Reduced staff time spent on clerical administration and filing (33 sites) - Reduced staff time spent on handling lab and radiology results (30 sites) - Decreased dollars spent on redundant tests (28 sites)
Excerpts from - The State of Health Information Exchange in 2010: Connecting the Nation to Achieve Meaningful Use
107 initiatives are not dependent on federal funding, up from 71 in 2009 18 initiatives are operational, not dependent on “any” federal funding & have broken even through operational revenue
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HIE FACTS• 131 of 199 HIE respondents cited addressing
government policy mandates as a major challenge
Excerpts from - The State of Health Information Exchange in 2010: Connecting the Nation to Achieve Meaningful Use
Fed. Policy Issues67%
NO Fed. Policy Issues33%
Source: eHI 2010 Rpt
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FACTS
Excerpts from - The State of Health Information Exchange in 2010: Connecting the Nation to Achieve Meaningful Use
States and State Designated Entities (SDE) have varying perspectives oftheir purpose. 40 entities see their role as
planning for health information exchange
8 entities see their role as building or maintaining a technical infrastructure
22 entities see their role as supporting a technical infrastructure
2 entities are not directly involved in building an infrastructure, but in coordinating or creating policy
Patient engagement has increased dramatically. More organizations are providing services to patients and providing access to patient data through a HIE. 44 initiatives allow patients to
view their data, up from 3 in 2009
31 initiatives allow patients to contribute information on their health status, up from 7 in 2009
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FACTS (HIE MU)
Excerpts from - The State of Health Information Exchange in 2010: Connecting the Nation to Achieve Meaningful Use
There have been increases in functionality amongst HIE initiatives with respect to the meaningful use rules.o The top 3 functionalities being provided by the initiatives:
Connectivity to electronic health records (67) Results Delivery (50) Health Summaries for continuity of care (49)
o The top 5 types of data exchanged by the initiatives: Laboratory Results (68) Medication Data (63) Outpatient laboratory results (62) Allergy Info (61) Emergency Department episodes/discharge summaries (58)
o The top 3 services offered by the state designated entities: Electronic prescribing and refill requests (4) Prescription fill status and/or medication fill history (3) Electronic eligibility and claims transactions (3)
It is NOT currently a MU requirement to
connect to a HIE
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FACTS (HIE MU)
Excerpts from - The State of Health Information Exchange in 2010: Connecting the Nation to Achieve Meaningful Use
HIE HIPAA Consent Approaches: Allow patients to control the level of access to their PHI. 61 initiatives have global opt-in/out
policies 36 initiatives have organizational
opt-in/out policies 34 initiatives have provider opt-in/out
policies 14 initiatives have emergency care opt-
in/out policies 13 initiatives have individual data element
opt-in/out policiesThe goal of the meaningful use rule is to improve the quality and efficiency of patient care by providing incentives to eligible providers and hospitals to utilize certified EHR technology for the electronic exchange of health information and the reporting of clinical quality measures. HIE initiatives can provide the technologyand support providers and hospitals who want to qualify for meaningful use incentive payments.
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FACTS Protecting Pt Privacy
Excerpts from - The State of Health Information Exchange in 2010: Connecting the Nation to Achieve Meaningful Use
What types of policies do initiatives use to protectpatient privacy?At a minimum, all initiatives are required to abide by HIPAA standards, but mostorganizations have policies that go beyond HIPAA. Only 36 respondents, 13 of whichare state designated entities, said they have no policies in place or in developmentbeyond HIPAA. There has been a significant increase from 2009 in privacy policies thataddress sharing aggregated data with third parties. Of those that have policies in placeto protect patient privacy beyond HIPAA, the most common include:
Patient consent required to share clinical data deemed to be sensitive (e.g., mental health, STD, AIDS) with another provider for treatment purposes (62)
Patient consent required to share clinical information with another provider for treatment purposes (opt-in) (61)
Patient consent required to share clinical information for healthcare operations purposes (31)
Patient consent required to share aggregated or de-identified information for purposes other than treatment, payment, or healthcare operations (31)
More stringent restrictions are in place for use and disclosure for research (31) Patient consent required to share information for payment purposes (30)
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FACTS
Excerpts from - The State of Health Information Exchange in 2010: Connecting the Nation to Achieve Meaningful Use
Health information exchanges span all 50 states, the District of Columbia, and the U.S. territories of the Virgin Islands, Puerto Rico, American Samoa, and the Northern Mariana Islands, and the island of Guam. Florida (22), New York (20), California (15), North Carolina (13), Washington (11), Michigan (10), and Virginia (10) have the highest concentration of initiatives.
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FACTS
Excerpts from - The State of Health Information Exchange in 2010: Connecting the Nation to Achieve Meaningful Use
Operational HIE Initiatives in 2010 = 73
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FACTS
Excerpts from - The State of Health Information Exchange in 2010: Connecting the Nation to Achieve Meaningful Use
Numbers of HIEs & SDEs & their respective stages…
Stage 1 Recognition of the need for health informationexchange among multiple stakeholders in your state, region or community. (Public declaration by a coalition or political leader)Stage 2 Getting organized; defining shared vision,goals, and objectives; identifying funding sources, setting up legal and governance structures. (Multiple, inclusive meetings to address needs and frameworks)Stage 3 Transferring vision, goals and objectives totactics and business plan; defining your needs and requirements; securing funding. (Funded organizational efforts under sponsorship)Stage 4 Well under way with implementation –technical,financial and legal. (Pilot project or implementation with multiyear budget identified and tagged for a specific need)Stage 5 Fully operational health informationorganization; transmitting data that is being used by healthcare stakeholders.Stage 6 Fully operational health informationorganization; transmitting data that is being used by healthcare stakeholders and have a sustainable business model.Stage 7 Demonstration of expansion of organization toencompass a broader coalition of stakeholders than present in the initial operational model.
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FACTS
Excerpts from - The State of Health Information Exchange in 2010: Connecting the Nation to Achieve Meaningful Use
Physician Involvement: Seventy-five HIE initiatives said that physician engagement in the exchange is difficult, while 75 also said engagement was not difficult. Physician engagement is incredibly important to the success of health information exchange, which makes this an important finding. Respondents cited the following as the main reasons why physician engagement is difficult: Lack of understanding of benefits (64) Concern regarding implementation (34) Physicians have limited access to
broadband (27) Costs too much to participate (26) Takes too much time to look up (24)
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FACTS
Excerpts from - The State of Health Information Exchange in 2010: Connecting the Nation to Achieve Meaningful Use
Patient Engagement via HIE: Operational initiatives are offering more services to patients than last year. In 2009, only 3 operational initiatives allowed patients to view their health data; now 44 initiatives report that patients can review their health data. The number of initiatives that allowpatients to add information on their health status is up from 7 to 31. Thirty-three initiatives now provide electronic communication between patients and care providers, and 30 initiatives provide patients with access to education information on health and Healthcare. While many initiatives are still not providing services to patients, there has been a marked improvement in patient services over the last year. Thirteen operational initiatives currently allow patients to view and receive data. Eight initiatives allow patients to provide data, and 25 allow them to be involved in governance.
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FACTS
Excerpts from - The State of Health Information Exchange in 2010: Connecting the Nation to Achieve Meaningful Use
Many exchanges strive to demonstrate that HIE can reduce costs for physicians, hospitals, payers and patients. Forty-six of the operational initiatives havequantified financial savings through surveys, electronic medical records, and other clinical IT systems. Operational initiatives are helping their customers realize financial savings through the following:
Reduced staff time spent on clerical administration and filing (33) Reduced staff time spent on handling lab and radiology results
(30) Decreased dollars spent on redundant tests (e.g., laboratory tests,
radiology results) (28) Reduced medication errors (16) Decreased cost of care for chronic care patients (16) Reduced staff time spent on handling prescriptions (15)
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Meaningful Use & the Value of HIE
Stage 1 Meaningful Use Core Items
Connectivity to EHR (67 sites) Health Summaries (CCR) (49
sites) eRx (37 sites) Alerts Drug to Drug (35 sites) Alerts Drug to Allergy (31 sites) Clinical Decision Support (26
sites)
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Statistics & HISTORY
&Sources:
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Background: Funding Data
Organization Stage Geographical AreaDate
FoundedTotal Funds to Date Primary Source of Revenue
Greater Rochester RHIO 5 Rochester, NY 2005 $20,700,000 Government grants
Bronx RHIO 5 Bronx, NY 2007 $13,100,000 Government grants
MidSouth eHealth Alliance 5 Memphis, TN 2005 $12,500,000 Government grants
Big Bend RHIO 6 Tallahassee Region, FL 2005 $10,400,000 Government grants
NYCLIX 5 New York, NY 2006 $8,300,000 Federal + community org
grants
DC RHIO 5 DC 2006 $6,000,000 State grants
CalRHIO (now HIE) 4 CA 2004 $4,610,000 Hospitals, Foundations, Health
Plans
VT ITL 6 VT 2005 $4,200,000 State grants
Brooklyn RHIO 5 Brooklyn, NY 2007 $4,000,000 Government grants
Keystone HIE 5Central and Northeastern
PA2005 $3,500,000
Government + private org grants
United Health Services 4 Johnson City, NY 2005 $3,500,000 Government grants
Secure Med. Rec. Transfer Network
7 Oklahoma 2005 $3,400,000 Sponsor grants
Lakelands Rural Health Network
4 Lakelands, SC 2005 $1,800,000 Government grants
SAFEHealth 5 Massachusetts 2005 $1,500,000 Federal grants
Capital Area RHIO 4 Mid-Michigan 2009 $1,400,000 Government grants
CareSpark 5 Appalachia (TN & VA) 2005 $600,000 Government + sponsor grants
Tampa Bay RHIO 4 Tampa Bay, FL 2005 $500,000 Government grants
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# of HIEs & their Stage of Development according to eHI
57 HIEs were deemed as
Operational in 2009 Stages 5-7
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Stages of HIE Development
Stage
Characteristics of HIE
Stage 1
Recognition of the need for health information exchange among multiple stakeholders in your state, region or community. (Public declaration by a coalition or political leader)
Stage 2
Getting organized; defining shared vision, goals, and objectives; identifying funding sources, setting up legal and governance structures. (Multiple, inclusive meetings to address needs and frameworks)
Stage 3
Transferring vision, goals and objectives to tactics and business plan; defining your needs and requirements; securing funding. (Funded organizational efforts under sponsorship)
Stage 4
Well under way with implementation –technical, financial and legal. (Pilot project or implementation with multiyear budget identified and tagged for a specific need)
Stage 5
Fully operational health information organization; transmitting data that is being used by healthcare stakeholders.
Stage 6
Fully operational health information organization; transmitting data that is being used by healthcare stakeholders and have a sustainable business model.
Stage 7
Demonstration of expansion of organization to encompass a broader coalition of stakeholders than present in the initial operational model.
Op
era
tion
al
HIE
30HIE Stages of Maturity (Technology)
Level Defining Characteristics
1 Non-electronic data—no use of IT to share information (examples: mail, telephone).
2Machine transportable data—transmission of non-standardized information via basic IT; information within the document cannot be electronically manipulated (examples: fax or PC-based exchange of scanned documents, pictures, or PDF files).
3
Machine-organiz’able data—transmission of structured messages containing non-standardized data; requires interfaces that can translate incoming data from the sending organization’s vocabulary to the receiving organization’s vocabulary; usually results in imperfect translations because of vocabularies’ incompatible levels of detail (examples: e-mail of free text, or PC-based exchange of files in incompatible/proprietary file formats, HL-7 messages).
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Machine-interpretable data—transmission of structured messages containing standardized and coded data; idealized state in which all systems exchange information using the same formats and vocabularies (examples: automated exchange of coded results from an external lab into a provider’s EMR, automated exchange of a patient’s “problem list”).
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#1 Challenge for HIEs US Sustainability
Economic sustainability is the state of the RHIO / HIE can be maintained at a satisfactory financial and operational level indefinitely.
Annual revenues exceed annual expenses and your RHIO has a sufficient return to fund its ongoing capital and operating costs including funded depreciation.
In addition, you have developed a business model where you can fund your expansion requirements in accordance with your strategic plan.
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Steps to Independence
Considered several alternative methods / approaches for funding your RHIO / HIE.
Investigate various revenue models and consider various options.
Examine several methods of raising your required investment capital.
Develop a financial plan for obtaining the required funds to support your ongoing operations.
Price out your technical infrastructure and understand your organizations staffing requirements.
Convert all of this information into long-term economic sustainability model.
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Models Simplified
• Model 1 – Government-Led Electronic HIE: Direct Government Provision of the Electronic HIE Infrastructure and Oversight of its Use.
• Model 2 – Electronic HIE Public Utility with Strong Government Oversight: Public Sector Serves an Oversight Role and Regulates Private-Sector Provision of Electronic HIE.
• Model 3 – Private-Sector-Led Electronic HIE with Government Collaboration: Government Collaborates and Advises as a Stakeholder in the Private-Sector Provision of Electronic HIE. Most # of
Sustained Entities Model 3
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HIE Franchising
• Successful pioneer HIEs may sell their experience, expertise and technology to other emerging RHIOs who wish to take advantage of an established model. The trade-off is between, on the one hand, costs, ease of implementation, speed of scaling up, and risk sharing, and on the other hand, reduced financial upside, strategic freedom, and brand control.
• While franchising may take several forms in mature industries, Business Format Franchising is the most commonly known form and provides the franchisee with a complete business plan for all aspects of operating a business within that system. HIEs may be attracted to the franchise model on the basis of proven, verifiable success, faster time to market, training and know-how, established name, patents, trademarks, copyrights, lower capital requirement and financing conditions, scale through association with existing data and net
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EligibleProviders
Stage 1 Criteria for Meaningful UseCommunicate with Public Health
1) Immunizations2) Syndromic Surveillance
1) Immunizations2) Syndromic Surveillance3) Reportable Disease
RHIO / HIE
Public Health
Prevention Children & Adolescents Adults & SeniorsSyndromic Surveillance / Early Warning Outbreaks Disease – natural, emerging, terrorism Food borne
Communicable Disease Case Investigation MitigationOutcomes Monitoring & Evaluation Comparative EffectivenessChronic Disease Management (CDM) Bio-surveillance
Improve Population Health
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Reasons Early RHIOs Failed
•Lack of buy in due to competing/conflicting organizational interests
•Perceived lack of control and trust in the network organizational processes
•Lack of clear rules for ownership of data •Lack of financial sustainability •Technological difficulties
Sustainable HIE• Sustainable HIE reflects a situation where: the costs
and benefits of HIE are constructed so that ongoing HIE operations will be funded based on the value generated from HIE (e.g. transaction fees, subscriptions, 3rd party reimbursements) instead of other sources external to direct value chain (e.g. government grants and subsidies)
• Challenges:▫ Misalignment of benefits and incentives▫ Broad stakeholder support, competing interests▫ Privacy concerns, technical challenges, EHR adoption▫ Quantifying benefits
*Source: NORC, 2009
It is possible for any healthcare provider, Healthcare consumer or payer to electronically share individually identifiable information to support efficiency and quality of care in a standards-based format using non-proprietary mechanisms and in a manner compliant with all state and federal security and privacy laws, regulations, and policies*
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Value Creation &Sustainability
• Necessary conditions▫ EMR adoption▫ Support of key
stakeholders▫ Governance structure▫ Adequate seed funding▫ Viable business model
• Factors influencing sustainability▫ Ability to quantify value▫ Data availability▫ Presence of competition (other HIEs)▫ Scalable business model leveraging ASP or pay per
use model of paying for services provided by vendors▫ Avoiding fixed costs such as IT employees or
investments in IT infrastructure without firm commitments from customers about usage, pricing and revenues
▫ Leverage cost by connecting to physician EMR▫ Develop clinical drug trials and protocols directly
with Pharma▫ Develop quality and transparency pilots▫ Develop pay-for-performance initiatives with payers▫ Develop direct payer-coordinated claims processing
efficiency pilot
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The key to RHIO sustainability is to identify sources of value for each stakeholder group, create services to deliver the value, and monetize that value strategically
Returns Reported by HIE’s• HIE cost savings were reported by 40 operational initiatives in a
range of ways:▫ Decreased staff time spent on handling lab and radiology results (26
operational initiatives).▫ Reduced staff time spent on clerical administration and filing (24).▫ Decreased dollars spent on redundant tests (17).▫ Decreased cost of care for chronic care patients (11).▫ Reduced medication errors (10).
• Operational initiatives report the following impacts for practices that utilize the exchange:▫ Improved access to test results and resultant efficiencies on practice (28
operational initiatives).▫ Improved quality of practice life (i.e., less hassles looking for information,
getting home sooner at the end of the day, etc) (24).▫ Reduced staff time spent on handling lab and radiology results (23).▫ Reduced staff time spent on clerical administration and filing (22).
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Services Mix Frequency
40
Current Functionalities for Data Exchange 2008 2009 Change
Results delivery (e.g. laboratory or diagnostic study results) 31 44 13
Connectivity to electronic health records n/a 38 n/a
Clinical documentation 38 34 -4
Alerts to providers 26 31 5
Electronic prescribing n/a 26 n/a
Enrollment or eligibility checking 29 25 -4
Electronic referral processing 17 21 4
Consultation/referral 23 20 -3
Clinical decision support n/a 19 n/a
Disease or chronic care management 19 19 0
Quality improvement reporting for clinicians 14 19 5
Ambulatory order entry n/a 16 n/a
Disease registries 11 16 5
Reminders 14 16 2
CCR/CCD summary record exchange n/a 15 n/a
Public health: case management 7 13 6
Public health: surveillance 9 13 4
Quality performance reporting for purchasers or payers 9 12 3
Connectivity to personal health records n/a 10 n/a
Est. HIE Services Value41
June, 2010
Activity Performed by RHIO / HIE?
Quantity estimate
Is it already performed by some other
entity?
WTP by stake-holder
Cost Pricing
Current Services
View patient information (demographics)
View clinic observations
View clinic allergies
View clinic diagnoses and procedures
View clinic medications
View lab results
View hospital discharge summaries
View hospital radiology reports
Potential Services
Service 1
Service 2
Service N
Sample Benefits
Reduction in unnecessary tests and procedures
Save time associated with handling chart requests and referrals
Reduction in administrative portion of test costs
Better health outcomes from rapid identification of pre-existing conditions
Improve identification of billable patients
Reduce unnecessary ED admissions
Other benefits…
Funding Sources• Grants• Contracts• Debt• Equity• Regulated funds, such as insurer
assessmentsor municipal bonds
• Revenue/Cash Flow from Operations
Maturity
As the HIE matures, sustainability must be based on the quantifiablevalue being created for participants willing to pay for that value.
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• Until revenues = operating costs the HIE will require funding
Economics
Funding
Revenues
Today
Operating costs
FutureBreak even
$
Time
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HIE Revenue Models
Revenue Models Definition
Membership/Subscription Members pay a set subscription fee for participation, typically based on size (e.g. bed size, revenues). Subscription fee benefit is that for one price, participants can utilize without counting costs of transactions. RHIOs should pay close attention in developing pricing scheme to ensure costs and margin are covered.
Transaction Fees Participants pay a fee per transaction (e.g. for every result delivered). Transaction fees are best when tied to direct sources of value, e.g. the receipt of electronic test results that otherwise would have quantifiable handling costs. Transaction fees should be avoided in instances where the fee disincentivizes data contributions to RHIO.
Hybrid Model A common approach, in a hybrid model, certain services are included in a subscription mechanism with other services or transactions fee-based. Those data transactions which directly contribute to the value of the RHIO, such as data feeds from labs, such as clinical results, are usually in the form of subscription
Sales of goods or services Revenue from selling goods, information or services. E.g implementation services, selling cleansed data. This source of revenue is typically ancillary to core services.
Value Exchange Agreement between stakeholders (typically payers) to pay HIE for value generated based on an agreed upon economic model. Based on premise of “shared savings”. In April 2009, United Healthcare became the first U.S. commercial health plan to agree to pay for HIE services for their members in California. The administration costs of value exchange can be high and it has an additional level of complexity.
Other sources revenue: online training programs, transcription services, clinical research trials, disease management pilots.
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Benchmark DataMHIN HealthBridge DHIN
Business Model
$8,000 - $500,000 annual subscriptions, ancillary services (interface deployment, quality, EHRs)
Tiered Subscription for unlimited data most services. Transaction fees for select services.
DE statute requires private sector matching funds from stakeholders. Working on a “sustainable model”.
Founded 1998 1997 1997
Funding Origination
$200K from 6 hospitals and laboratory
$1.75M loan $12M
Services
Results reporting, “print efficiency”, community repository data sourcing
Clinical messaging and portal. Sends information including lab data, radiology/ADT information, demographics, admissions notices, discharge summaries, transfer notices.
Results delivery (EHR direct, clinical inbox, direct to fax), Patient search function
Funding Current
Commercial Services (100%) Commercial Services (100%) Federal (1/3), State (1/3), Customers (1/3)
Physicians 1,000 4,400
Hospitals
~ 7 hospitals, 80+ total organizations
29 hospitals, 5500 physician users, 17 local health departments, 700 physician offices and clinics
3 health systems, adding 4th, 800,000 patient records
Keys to success
Accelerating the pace of benefit, broad and supportive constituency , adding data sources.
Push system value, Stakeholder Support
All the players at the table, Strong government support, limited geography
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Estimating Revenue Potential
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June, 2010
Org Type # Orgs Service
s Valued
Mean Subscripti
on Fee
Total Subscripti
on Fees
Mean Trx Fees
Total Trx Fees
Potential Revenue
Other Services
Total Revenue
Hospitals
Medical Clinics
Physician Offices
Skilled Nursing Facilities
Laboratories
Pharmacies
Health Plans
Medicaid
Public Health
Conclusions on Sustainability
• Sustainability requires concerted broad public and private stakeholders support
• Business case of respective services for each stakeholder will determine appropriate pricing
• Interim funding will be required until sufficient operating revenues can be achieved
• Must understand which services are valued and deliver those services in an appropriate way that fits with workflow
• Ultimately, payment mechanisms must incentivize participation in coordinated care and HIE use
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Sources of Funding –Grants & Govt funds are deemed as seed / start-up money
&Sources:
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Sustainable Principlesfrom Indiana HIE
Build a nexus around key payer and provider organizations to secure private funding
Provide a clear value proposition to participants
Structure the deal intelligently to anticipate challenges and change
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IHIE
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IHIE SustainabilityPrinciples
Principle 1: HIE is a Business Principle 2: The Leveraging of High‐cost, High‐
value Assets Principle 3: No Loss Leaders Principle 4: Independent, Local Sustainability Principle 5: Natural Monopoly Principle 6: The Need for Scale Principle 7: Avoidance of Grants for
Operational Cost
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HIE is a business P1 & P2
HIE is a business and as with all businesses, creating a sustainable HIE requires: offering services that the market wants… at a price the market will bear… doing so in such a way that revenue exceeds expenses. services delivered by the HIE must be at a level that
healthcare organizations have come to expect from their suppliers.
Once dollars have been invested in the creation of HIE infrastructure, it is essential to leverage and reuse those assets to deliver as much and as many services as is necessary to achieve sustainability. the services an HIE is able to provide to the market must be
capable of producing sufficient revenue to cover expenses due to the cost of the infrastructure that is required, offering
multiple services to various market stakeholders is conducive to sustainability.
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Leverage Experience
HIE assets are interdependent and, once created, can be leveraged to deliver additional services.
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No Loss Leaders
Loss leaders are goods or services “sold at a loss” to create profit through other, related goods or services
In the business of HIE, avoid loss leader services that promise to amass data or infrastructure to support a future sustainable service. The HIE policy and business model landscape is
evolving too rapidly The risk that the future services might never be
possible is too great and should not be factored into sustainability plans
Examples include many “secondary use” concepts (e.g. information for pharma research)
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Natural Monopolies
•HIEs are natural monopolies.▫the total cost of producing HIE services for
a given market is lower if there is just a single producer than if there are several competing producers.
▫There is a large cost for the necessary infrastructure (which is a fixed cost), making the creation of a redundant infrastructure wasteful and detrimental to the economy as a whole.
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Avoidance of Grants
• Grants are indispensable sources of start‐up funds for HIEs or individual services, but should not be counted on to cover operational costs beyond a ramp up stage.
• Once fully operational, HIE services must be able to generate revenue equal to or in excess of expenses such that grants (or other non‐operating revenue sources) are not necessary to cover operational costs.
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IHIE Sustainability
Stuff an HIE could
do toHelp save
The healthcare
system
Services on which you can base a
sustainable HIE
Stuff an HIE could
do that someone will pay
for
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Sources of Funding – Gov’t Focus
• The American Recovery and Reinvestment Act (ARRA) of 2009
• Assessments on insurers
• General tax revenues
• Consumption-based taxes
While some of these revenue sources only supply short term investments (e.g., HITECH, consumption-based taxes), others have the potential to provide funding for HIE over the long term. Also, to the extent that direct funding may be inadequate to cover the start-up expenses for establishing mechanisms for HIE, loans and other forms of financing may also be required. - SERVICES
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Participation / Stakeholder Value
A common thread running through many of these approaches is the need to establish operational criteria for what constitutes engaging in HIE for each stakeholder. These criteria would be necessary in legislation or regulations to determine (depending on which options are implemented)
Which Stakeholder is eligible for incentive payments; meet participation requirements; or qualify for loans, grants and tax incentives.
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Financial ApproachesLeverages Public Policy for Sustainability
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Integrating ApproachesLeverages Public Policy for Sustainability
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Summarizing Trade-offs
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Integrating Across Approaches
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Promoting HIE 1 of 2Governance Entities: States could support the development of sustainable state-level HIE governance entities or of regional or other forms of HIOs through various financial mechanisms such as appropriations (i.e. budgetary spending), grant and contract funding, and agency operational funding.26 Such an effort may have an initial emphasis on ensuring that providers and insurers involved in Medicaid and state employee health benefits plans have access to a mechanism for exchanging health information.
Public Utility Model: States could use grants to establish HIOs that are heavily regulated private entities where supply is guaranteed and prices are structured following a public utility model.
Private Matching Funds: States could leverage federal funds by requesting that governmental funding be matched by similar contributions from the private sector. This could help stimulate initial buy-in from large Healthcare stakeholders who would substantially benefit from predominately state-sponsored HIE. As the regulators of health insurers, states could assess health insurers a set amount per member or transaction—an approach being used in Vermont. (However, an Employee Retirement Income Security Act (ERISA) exemption might be required to allow those assessments to extend to self-insured plans.)
Carrots and Sticks for State Insurers and Providers: Consistent with the discussion of the FEHBP in the federal approach, states could develop a series of carrots (reimbursement, start-up funding) and sticks (participation requirements) to providers or insurers who take part in providing health benefits for state employees.
Licensure and Accreditation: Engagement in HIE could be integrated into the licensing and accrediting of Healthcare facilities and states could support the development of accreditation standards and processes for HIOs. Additionally, education designed to help providers use HIE to improve the quality and efficiency of care could be developed and could count towards continuing education requirements for physicians, pharmacists and other providers.
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Promoting HIE 1 of 2Health Planning: Assessing the ability of a provider to engage in HIE could be incorporated into health planning efforts. For example, if a hospital decides to upgrade its health information technology system, it could be required to demonstrate plans to engage in state-level HIE as part of an application for a certificate of need (CON). (This strategy has been adopted by the State of New York.)
Direct Funding: States could pass along direct funding to providers, for example by distributing grants or loans or implementing tax incentives, to support start-up expenses of providers who could demonstrate a plan to integrate HIE into their workflow to improve the quality of care. Direct financial support might be particularly important to subsidize public health reporting and HIE for safety net organizations—two areas that are unlikely to be initiated by market demand.
Technical Assistance: States could ensure the availability of technical assistance to help providers effectively engage in and sustain HIE through either the direct provision of such assistance or by entering into contracts with third party vendors and generating a volume discount that could be passed on to providers. These state TA efforts could complement the assistance incorporated in HITECH.
Malpractice Insurance Premiums: States could work with malpractice insurers to encourage them to reduce premiums for entities who engage in HIE. (Some medical malpractice companies do reduce premiums for HIE; however expanding the number who do so, or making those premium reductions more sizable, may prove challenging if there is insufficient actuarial data to support these reductions. A potential role for state or federal governments would be to conduct research to demonstrate the association between patient safety and participation in HIE.) Another strategy, which could break down an even greater barrier for providers, is enacting state law to indemnify providers who follow set privacy and security guidelines against liability for damages (or create a state fund to cover those damages) resulting from breeches in security or other risks that providers who take reasonable precautions may be exposed to by engaging in HIE.
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Original 10 Gov’t Funded RHIO
1) Colorado Health Information Exchange2) Indiana Health Information Exchange3) Maryland D/C Collaborative for Health Information
Technology 4) MA-SHARE/MedsInfo-ED ePrescribing Initiative5) Santa Barbara County Care Data Exchange (CA)6) HealthBridge (OH)7) Taconic Health Information Network and Community (NY)8) Tri-Cities TN-VA Care Data Exchange9) Whatcom County Health Information Exchange (WA) 10)Wisconsin Health Information Exchange.
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Examples of ValueValue Creation at the Point of Information Exchange A HIE is an operational entity that facilitates efficient exchange
between providers of Healthcare services. In the process, it creates value by extending participants’ capacity to extract value from the coordinated collection of data relevant to more efficient delivery and consumption of Healthcare services.
New England Healthcare EDI Network has reduced the costs of administrative data transactions from $5.00 to $0.25, bringing transaction costs down from $12.5 million a month to $625,000.
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Advance Exchange Value
Redefine the role of HIEs as clinical data and information intermediaries (infomediaries) by expanding their customer base
Re-conceive the role of RHIOs not as local non-profits that build everything de novo, but as social capital generators that build the necessary trust relationships needed for health information exchange
Reform the reimbursement system so that incentives for adopting health information technology and HIE in particular, reduce or eliminate current financial and institutional barriers While the last of these requires the actions of policy makers
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Operational HIE
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Start-up / Financial
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Transactions w/ ValueHospitals Clinical Messaging Medication Reconciliation Shared EMR / EHR Credentialing Eligibility Checking Referral mgt Physicians Results Delivery Secure Document Transfer Shared EMR / EHR Clinical Decision Support Credentialing Eligibility Checking Referral mgt LABS Clinical Messaging Orders
Public Health Needs Assessment Surveillance Reportable Conditions Results Delivery Syndromic Reporting Payors Clinical Quality Measurement Claims Adjudication Secure Document Transfer Researchers De-identified, longitudinal
clinical data Patients Personal Health Record (PHR)
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Ingenix Route to HIE Financial Independency• Empower consumers. Patients receive coordinated care, actionable information, and
answers to make informed, value-based decisions based on comprehensive, standardized information.
• Empower providers. Streamlined administrative functions, comprehensive clinical insight and answers right at providers’ desktops will allow more time for treating patients according to evidence-based medicine (EBM), in addition to eliminating duplication and reducing risk in treatment.
• Enable state and federal governments. Providing access to data will allow states and the federal government to better target underserved and at-risk populations with preventative measures, inform best practices, and provide public health and bioterrorism monitoring.
• Engage payers. Reduced costs, greater value, and decreased complexity will help payers better control administrative expense and improve operational efficiencies.
• Provide opportunity for existing clearinghouses/gateways to realign in a changing market. Although the new model redirects spend from current clearinghouses/gateways to HIEs, it also creates opportunity for the development of new services and innovations for companies that choose to pursue that path.
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Governing HIE Entity
An organization that oversees and governs the exchange of health-related information among organizations according to nationally recognized standards. These organizations may be regionally focused, represent multi-provider organizations such as hospital systems and integrated delivery systems, or include horizontal networks of providers such as health center networks.