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Forward March: Cal INDEX’s CEO David Watson Sees Opportunities Ahead

March 31, 2015
by Mark Hagland
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Despite past challenges to HIE sustainability in California, Cal INDEX’s CEO David Watson sees real opportunity—and sustainability—ahead

The development of statewide health information exchange (HIE) has proven to be a very long, twisty journey in California. The nation’s most populous state has seen both HIE expansion and HIE collapse, including not only a very early HIE in Santa Barbara, but also the first two statewide HIEs in the Golden State—CalRHIO and Cal eConnect (which merged and later collapsed)—even as a dozen and a half regional HIEs have been created and survived so far.

Indeed, as HCI  Senior Contributing Editor David Raths reported back in May 2012, “The turmoil surrounding the development of a statewide health information exchange in California has led to another significant change. The California Health and Human Services Agency (CHHS) announced last week that the Institute for Population Health Improvement at the University of California-Davis will take over HIE implementation from Cal eConnect, the Emeryville, Calif.-based non-profit, public benefit corporation created to develop California’s HIE.” Indeed, the considerable turmoil around Cal eConnect ultimately led to its complete shutdown.

But perhaps the third time really will be the charm, when it comes to statewide HIE efforts in California: the Walnut Creek-based California Integrated Data Exchange, or Cal INDEX, was formally incorporated on July 31, 2014, and was publicly announced several days later on August 5. Initially created by the two biggest Blues plans operating in the state—Blue Shield of California and Anthem Blue Cross (formerly Blue Cross of California), which pledged $80 million in funding for the next five years.

David A. Watson, who joined Cal INDEX as its president and CEO last autumn, participated in a panel on data interoperability at the World Health Care Congress, which was held March 22-25 at the Marriott Wardman Park Hotel in Washington, D.C. During that session, he noted that “Cal INDEX was formed last August, and our goal is to provide HIE for California; which is interesting, because there are currently 19 HIEs operating in California. And our funding entities did not want to talk to 19 HIEs; they wanted to have one, so they put up $80 million to found Cal INDEX.”

David Watson

Watson told the audience of healthcare and healthcare IT leaders assembled for that panel discussion, “I view Cal INDEX as version 4. Version 1 was CHIN [community health information networks—a great aspiration, but nobody had any data to share, because it was all locked up in paper charts. And doing chart extracts to share was not very viable. Version 2, was RHIOs,” he said, referring to what were then called (and in a few places still are called) regional health information organizations. “I was involved in one of the organizations that funded CalRHIO. And we ran into a timing issue and a funding issue. Some organizations were implementing EHRs [electronic health records], and had no bandwidth to fund HIEs.”

The next phase, Watson told the audience, was “version 3, the Obamacare HIEs starting in 2009, where you got $20 million from the feds, and you got together a board of 23 directors, who were only concerned that you not [disadvantage] the consumers or other [stakeholders]. Most of those failed,” he noted. “Version 4 is Cal INDEX—HIEs bringing together payers and providers. The value there is immense. Prescriptions are an example: providers know what prescriptions were written, payers know what they’re paying for. And you can put those together and get medication adherence data. So there’s a business proposition there; in fact, payers say the investment in HIE is worth it just for that. And then there’s management of risk. That’s why Cal INDEX was formed,” he said. “We’ve loaded 10 million records already from among our two founding members. Prescription, lab, and radiology records from claims; and EMR-based provider data. And from that, they can share data.”

Shortly the panel concluded on March 23, Watson spoke with HCI Editor-in-Chief Mark Hagland, to add further comments to those he had shared in the data interoperability session at the World Health care Congress. Below are excerpts from that interview.

As you mentioned in the session a little while ago, HIE has really gone through a lot of ups and downs and ins and outs in California in recent years.

That’s right. There was CalRHIO and Cal eConnect, and they merged and then imploded. Cal eConnect was shut down in 2012. And then the state of California… Under HITECH, all states have to coordinate health information exchange, but don’t have to commission it, so California opened it up for county or regionally based exchanges, so they had 19 regional ones.

So the two Blues plans came together?

They were each building their own private exchanges to share clinical data with their ACO providers. So they agreed not to compete on a utility function. $80 from the two Blues over the next five years. 15 staff, to 26 by this summer.

And right now?

Right now, we’re doing outreach to the providers, and are in negotiations with 10 providers in both Northern and Southern California.

What are the biggest challenges and opportunities facing you and your colleagues right now?

The biggest challenge is getting to critical mass. So having two payers contribute roughly 10 million records is a start; but we need to sign up the other big payers in the state, as well as providers.