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HIEs and the Funding Dilemma

May 3, 2010
by Kate Gamble
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In states like New Jersey, the intent to build a connected care network is there — but the money is not.

Over the past several months, the health information exchange (HIE) has become quite a hot-button topic in the healthcare IT industry. And while it’s a concept that almost everyone supports, at least in theory, there are countless questions as to how HIEs should be executed, and how can be sustained in the current economy.

Last week, the Healthcare Stimulus Exchange National Road Show, a national event series focused on connected care initiatives, came to New York, where several industry leaders were on hand to discuss some of the key topics relating to statewide HIEs.

In March, the Department of Health and Human Services (HHS) awarded $162 million to help 16 states and qualified state designated entities facilitate the exchange of data. Less than a month later, HHS announced it was doling out $267 million to 28 additional non-profit organizations to establish Regional Extension Centers (RECs).

Clearly, a great deal of money is being allocated for HIEs. But is it enough? And is it being allocated and invested properly?

Bill O’Byrne, state coordinator of New Jersey eHIT Development, isn’t quite sure. One of the speakers at the Healthcare Stimulus Exchange, O’Byrne is working with the N.J. Health IT Technology Commission and the Department of Health and Senior Services to create a statewide e-health information network.

As it turns out, trying to establish a system of connected care in the Garden State is turning out to be quite an uphill battle. One of the biggest issues, he says, is that by providing a lump sum up front, the federal government is essentially saying to the states, “here’s the money — now make it work.”

With this type of model, “the incentives all fall on the providers, and not the payers.” And while the federal government will provide guidance, it’s up to state leaders to figure out how to build the infrastructure that will sustain an HIE.

New York, which is quickly becoming the “golden child” of HIEs, has been able to invest heavily in a data infrastructure. Since 2007, the state has invested $250 million in the New York eHealt Collaborate (NYeC), with the private sector kicking in another $200 million. And the organization has received additional funds as part of a grant from the state through Phase 10 of the Healthcare Efficiency and Affordability Law for New Yorkers (HEAL 10) to start work on the Statewide Health Information Network for New York (SHIN-NY).

Across the river, however, the story is quite different. New Jersey, the most densely populated state in the country, has received just $11.4 million to fund the HIE infrastructure, a “woefully inadequate” sum that amounts to a “drop in the bucket,” according to O’Byrne.

“We have zero capital and zero taxpayer funds available” for the program, he says, pointing out that the state’s poor economy isn’t helping matters. New Jersey currently has four regional HIEs that have been established, but unless more funds become available from the private sector and payer contributions, it’s unclear how the state will be able to achieve a connected system of care.

“I have confidence we’ll figure a way out of it, but right now, I don’t know how that’s going to happen,” he says.