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Health information exchanges prove their worth


The ability of health information exchanges to sustain themselves is questionable, so they must show that their data is worthy enough to outweigh the costs.

WITH AN ELECTION YEAR winding down, many eyes are on Washington to see what changes are ahead for healthcare. Organizers of health information exchanges (HIEs) will no doubt be among the most anxious to see if President-elect Barack Obama can make good on his promise of spending $50 billion on electronic health records.

By sharing electronic health records, HIEs eliminate redundancies and save time, which in turn provides better healthcare to patients. According to the eHealth Initiative's Fifth Annual Survey of Health Information Exchange at the State and Local Levels, HIEs are having a significant impact on the communities they serve. The survey included responses from 130 community-based initiatives and indicated that 69% of the fully operational HIEs reduced costs.

Respondents reported that HIEs (also known as RHIOs) decrease redundant tests, reduce the number of admissions for adverse drug events, decrease costs for chronic care patients and reduce administration. But creating an IT system and procedures to gather, protect and share information isn't cheap.

With states and private organizations looking for ways to improve healthcare, millions of dollars in startup money for HIEs has become available. Exchanges have proven they can get over the initial technological hurdles of collecting data from disparate systems, mapping it and securely presenting it to participants in an easy-to-digest format. But the question remains: How can HIEs sustain themselves financially?

"In all honesty, that's the biggest challenge for RHIOs," says John Hopkins, CEO of Rocky Mountain Health Plans in Colorado. In 2004, the company used $2.5 million won in a lawsuit to create the Quality Health Network RHIO.

"At this point, we have the least benefit from the exchange," Hopkins says. "Hospitals and physicians see direct benefits. We're involved, quite frankly, because we think the benefits will be there in the long run. [Providers'] being able to access information electronically indirectly benefits the health plan in terms of cost savings. We think that ultimately this will improve our system and care."

Rocky Mountain Health Plans set up the non-profit Quality Health Network to oversee the exchange because it realized a viable HIE wouldn't work if it were owned by a health plan, hospital or physician group, says Hopkins.

Initial stakeholders have invested $250,000 into the network and could eventually participate in a fee-based structure.


In other states, government is funding the HIEs. In New York, for instance, the Health Care Efficiency and Affordability Law for New Yorkers Capital Grant Program provided a $4.1 million grant to start the Bronx RHIO. In July, the Bronx RHIO became the first in New York City to begin exchanging patient data.

It continues to grow, exchanging information on lab results, prescribed and dispensed medications, diagnoses, procedures, encounters and demographic information. There are 55 sites in the Bronx that are feeding data about the borough's 1.4 million people into the databases-the equivalent of the 10th largest city in the nation.

The growth of the HIE is thanks, in part, to another state grant in 2008 that provided an additional $8.9 million. A $132,288 grant from the U.S. Health Resources and Services Administration and contributions from participating member organizations have also sustained its funding thus far.

"Right now we feel like we can make it through the next two years," says Barbara Radin, executive director of the Bronx RHIO of its funding. "Hopefully we can come up with good ideas in that time to sustain funding. . . . If we can show the RHIO has an impact on improving patient care and saving costs, we can engage those people in a conversation about who's going to put up the stake."


Cost savings was the impetus behind the formation of the MidSouth eHealth Alliance, an HIE serving the Memphis area. Tennessee Governor Phil Bredesen's need to reduce the costs of TennCare, which was one of the most expensive public programs in the country, helped start the HIE in 2004. Federal funding from AHRQ, state funding and contributions from the Vanderbilt Center for Better Health added up to $12.5 million.

"We've been exchanging data for about two years now," says Tom Duarte, executive director of the MidSouth eHealth Alliance. "There are 1.14 million unique patient medical records in the system and we share 2.97 million clinical lab results per month."

Like many HIEs, MidSouth has turned its attention to showing its value. One area it is interested in is demographic trending.

The Bronx RHIO also realizes information has value. Being able to see how many people have a particular medical condition in the Bronx, eventually in the state of New York and the country, would help identify trends. But Radin concedes they have a lot of work before that type of demographic information is available.

Jamie J. Gooch is a Cleveland-based freelance writer.

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