MCOs can improve care for lower costs with RHIOs

March 1, 2006

News that Blue Cross and Blue Shield affiliates have begun funding the formation of Regional Health Information Networks (RHIOs) should serve as a wake-up call for all managed care organizations (MCOs).

News that Blue Cross and Blue Shield affiliates have begun funding the formation of Regional Health Information Networks (RHIOs) should serve as a wake-up call for all managed care organizations (MCOs).

Indeed, the Blues' funding pledges-$4 million to assist RHIO development in California and $50 million for a Boston-area effort to enhance sharing of electronic health records (EHRs) among providers-signals an emerging reality. At-risk payers are beginning to recognize they stand to gain the biggest financial benefit from RHIOs and their promise of delivering improved patient care at lower costs. The Blues' funding support also demonstrates that such forward-thinking MCOs may be onto something: If they take an active role in the development of RHIOs, they will likely have a leg up on ensuring the long-term loyalty of their participating providers and patients.

Healthcare industry experts estimate more than 100 RHIOs are in various stages of development and execution. Some already have begun to fulfill the RHIO vision of delivering patient information electronically to all providers to ensure more consistent, better informed and higher quality care to patients within a RHIO's geographical footprint-irrespective of where the patient seeks care or treatment.

Such concerns are in virtually every effort to establish a RHIO. This makes the financial support that MCOs such as Blue Cross and Blue Shield are investing in RHIOs all the more striking.

On some level, these MCOs understand the fundamentals of their business charter. They exist to manage the care of patients, to help them prevent diseases and other ailments before they become chronic and costly to treat. Long-term success and profitability flow from the loyalty these organizations achieve with their participating plan providers and their patients. Such loyalty flows from utilizing the most up-to-date technology and resources to ensure providers have the tools to deliver the best possible care to patients in the most affordable manner.

Barriers to widespread adoption

Some organizations believe that they are already functioning as a RHIO. They have established a network of providers to serve their members in a given geographic region. And while not all participating providers may have access to uniform patient data, the managed care organizations have taken a "this is the best we can accomplish" attitude that hampers support for RHIO participation.

At the same time, competitive concerns among individual providers have proven to be a barrier to RHIO development. Some providers view the patient information they gather as proprietary and show little interest in sharing it among other providers they perceive as competitors. This is particularly true in organizations that have invested in EHRs and have trained providers how to access and use the data.

Costs are another concern. Any MCO that has invested time and money to develop an EHR system understands the challenges, complexities and costs of integrating patient information from disparate systems into a uniform standard. As they view RHIOs, concerns about the costs and effort to establish uniform data standards across a network of disparate providers can erode genuine interest in RHIO participation.

On the cost side, some industry estimates have pegged the cost of developing a national health information network that would contain individual RHIOs at $156 billion over the next five years. Estimates of the costs to maintain the national and regional networks run about $50 billion a year.

But some recent developments in technology may make both the cost projections, as well as the concerns about competitive losses, dissipate and encourage MCOs to take a more active role in RHIO development.

Emerging technologies

On the technology side, strides in data-sharing technology and capabilities have lowered the cost of integrating disparate systems. Most efforts to develop RHIOs have focused on creating a centralized IT infrastructure that would house patient data and enable the uniform transfer of information among providers.