HIE sustainability pic

Healthcare Reform

HIEs: Meeting the sustainability challenge

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HIE sustainability pic

Initial health information exchange funding runs out in 2014, so what happens then?

Different perceptions of health information exchanges – online data networks that connect patients’ electronic health records from different health systems – persist across the nation. Some states have regarded their HIEs as a government responsibility, readily facilitating resources to provide for easy communication among stakeholders. Other states have taken the opposite tack, essentially leaving HIEs in the hands of those stakeholders, often looking to private enterprise to find solutions. But most HIEs are facing a new long-term challenge — federal grants used to initiate many of these projects are running out, and exchanges have to look for new funding solutions in order to keep growing.

The Office of the National Coordinator has been reluctant to regulate HIEs. Rather than issue heavy governance policies, the agency instead prefers to oversee the governance efforts of individual states.

Lee Stevens, director of HIE Policy for the ONC, said that the agency thoroughly researched how stringently it needed to dictate policy, but stakeholders felt that it was too soon to regulate governance when the market was still evolving. “We are very careful not to stymie innovation in any way — a heavy regulatory approach can sometimes stop progress in its tracks if things don’t work as they’re supposed to,” he told Health Biz Decoded.

ONC expects that states will structure their exchanges differently, based on the political culture and geographic needs of the population, according to Stevens. “Delaware or Maryland are more centralized, and are traditional health information exchange organizations,” Stevens said. “With a state like Texas, it’s equally effective to have private HIEs that are interoperable, covering the state.”

Since many HIEs arose under different circumstances, they can be “a fractured, disaggregated market,” said Jack Buxbaum, vice president of HIE services for Xerox.

“Some of our clients are state-designated entities and some are Medicaid organizations — and some were smart enough to become both,” Buxbaum said. “Iowa and Kentucky are good examples of that. They said, ‘It’s crazy to have two different initiatives at the same time, so let’s pool our resources and funding together.’ Those are the ones who tend to be the most successful.”

Until now, states had “a small amount of skin in the game,” he added. “But most of that ONC funding is going to run out in 2014. They can still get some money from CMS, but that can still be a little choppy as we see what happens in Washington in the next two-and-a-half years.”

Stakeholders are faced with two challenges, according to Buxbaum. The first is achieving self-sustainability so as to meet funding needs. The second is to achieve enough positive momentum to survive any shifts in the political culture at the federal level.

In April, for example, Kansas Governor Sam Brownback signed legislation transferring responsibilities of the Topeka-based Kansas Health Information Exchange, which was a public/private entity, to the Kansas Department of Health and Environment. The changes go into effect July 1, and place the exchange’s operations in the hands of the state.

The exchange’s infrastructure is firmly in place, KHIE chairman Joe Davison told the Wichita Eagle, but its long-term sustainability was in question; KHIE received no state funding and the actual records work was performed by outside entities, so they had no means by which to collect fees either. Relinquishing control to the state seemed to be the best solution.

Indianapolis-based Indiana Health Information Exchange (IHIE) is taking a different approach — it announced recently that it would partner with the Regenstrief Institute, an informatics and healthcare research organization, to spin off a private company offering HIE services in other states.

“We are a health information exchange that, by virtue of our partnership with Regenstrief, has our own software,” said John Kansky, vice-president of Strategy and Planning at IHIE. “As we go out of state, we’re not going to put that software into a box per se. We’re going to offer a turnkey HIE software solution and support service to support the exchange of information for public and private exchanges, and accountable care organizations.”

IHIE had “just about saturated the state of Indiana to fulfill our mission,” according to Kansky. Giving the example of a northwest Indiana resident who might seek out healthcare services in Chicago, Kansky explained that patient data must very often be transferred between myriad settings.

“Patient care does not obey state lines,” Kansky said. “Patients go where patients will go. To fulfill our mission, and to support the value of our services, we needed to go beyond our state borders.”

The original 501(c)(3) will continue to exist and serve its customer base in Indiana, he added. “It will of course have a customer-supplier relationship with the new company but the other company will be more focused on selling and delivering services to the other 49 states.”

Stevens said ONC supports whatever actions states need to take to keep the HIEs going so stakeholders can meet long-term interoperability goals.

“The idea that some of these aspects will ultimately have to spin off into the private sector, once the government funding is over, is a bit inevitable — some of those services will have to be provided by different entities,” Stevens said.

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