State funding unlikely to carry HIEs beyond start up

October 1, 2007

The benefits of Health Information Exchanges (HIEs) are obvious, and have been for decades. And what better time than now, well into the Information Age, for HIEs to realize their full potential using real-time electronic communications over the Internet? As grant money to fund HIE startups and a national health information network begins to dry up, sustainability has become paramount.

THE BENEFITS OF Health Information Exchanges (HIEs) are obvious, and have been for decades. And what better time than now, well into the Information Age, for HIEs to realize their full potential using real-time electronic communications over the Internet? As grant money to fund HIE startups and a national health information network begins to dry up, sustainability has become paramount.

About a year ago, the Deloitte Center for Health Solutions estimated there were more than 165 HIEs in the United States. It also predicted many of them wouldn't be able to sustain themselves. Those predictions are coming true.

One newcomer to the HIE arena is taking the lessons learned in Santa Barbara to heart. It has already seen the dangers of relying heavily on state funding. The Albany-based Health Information Exchange of New York (HIXNY) was organized in 1999 by two co-founders, the Iroquois Healthcare Alliance (IHA) and the New York Health Plan Assn. (HPA) to collaborate on HIPAA transaction standards. It didn't begin its broader health information exchange work in earnest until it was awarded a $1.6-million state grant last year.

"The challenge in getting it off the ground was that it took much longer than expected to get through the state approval process," says Ray Murphy, project director of HIXNY. "In 2005, New York State announced the HEAL program [the Health Care Efficiency and Affordability Law for New Yorkers Capital Grant Program]. Before that, HIXNY had two members. After 2005, we had 20. The grant was awarded in May 2006, but we didn't receive our first check until July 2007."

Though they've just begun planning the exchange, Murphy says HIXNY's members realize they cannot rely on grants to sustain the program. However, he admits they have no concrete plan for long-term sustainability.

"The fact that we got a grant the first year is no guarantee that we'll get another grant," he says. "Right now we are basically funding it through assessments of our 20 members. The conceptual plan is to supplement that through some sort of subscription or fees for users of the system when it gets up and running."

In many ways, HIXNY's experiences in creating a system are typical.

SUCCESS STORIES

"After the grant money is awarded, there's a post-honeymoon period when exchanges ask, 'What's next? How do we get there?'" says Paul Keckley, executive director of the Deloitte Center for Health Solutions. Deloitte has issued a number of research reports on HIEs. "Even in successful HIEs, like in Memphis, it takes longer than people thought to go from the initial press release about the HIE forming to getting things done."

The Memphis-based HIE Keckley refers to is part of the MidSouth eHealth Alliance in Tennessee. It was one of five organizations to be awarded State and Regional Demonstrations of Health Information Exchange contracts in 2004 from the federal government via the Agency for Healthcare Research and Quality (AHRQ). In 2005, Maryland joined the list beside Colorado, Indiana, Rhode Island, Tennessee and Utah. The five-year project supports statewide data sharing and interoperability activities on a state or regional level aimed at improving the quality, safety, efficiency, and effectiveness of healthcare for patients and populations.