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Innovative HIE Leaders Talk Opportunity, Challenges in Creating Sustainability

April 12, 2015
by Gabriel Perna
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Health information exchanges (HIEs) have to provide a good business reason for existing explained panelists at the HIE Symposium at the Healthcare Information and Management Systems Society (HIMSS) Conference in Chicago. 
Speaking on the panel, Interoperability and Innovative Health Information Exchange, was David Watson, the CEO of the California-based HIE, CAL Index and Joel Vengco, Vice President and CIO at the Springfield, Mass.-based Baystate Health, which runs a regional HIE, Pioneer Valley Information Exchange (PVIX). Watson told attendees of the symposium that HIEs that are simply there to provide a public good will fail. They need a good business reason to sustain. 
“Our business proposition is a lot more finely honed than a lot of HIEs. I’ve seen a lot of HIEs talk about how ‘sharing data is a good thing so we should share data.’ Well that’s commendable but people won’t pay you for that,” Watson said. “That’s why so many HIEs have failed over the last 10 years.”
Watson and Vengco talked about where their HIEs are providing services to ensure that members will pay for it. Watson’s CAL Index, which was propped up last year by major payers in the state and has connected 10 million in the state already, is appealing to the state’s drive towards risk-based sharing models. “Our value proposition is the data itself and the work we do to bring it together,” he said.  
Because it’s payer and provider data, brought together in a longitudinal patient record through a repository model, stakeholders can share and use actionable data to manage risk. He said that the state has approximately 70 ACOs. In the future, Watson says they’ll link other sources of community data—such as registries—to help stakeholders better drive value. 
In Massachusetts, Vengco’s provider-led HIE similarly understands that stakeholders aren’t going to pay for just data exchange.  Instead of focusing on analytics and risk-based sharing models, PVIX is going a different route to adding value. It’s created a portal for patients to use, which will allow them to input their own data. It’s also in the process of bringing on secure mobile texting capabilities between providers, an image exchange, clinical alerts when a patient goes into the emergency room, and some sort of record exchange through telemedicine capabilities. 
Both HIE leaders shared their challenges with developing HIEs, in the area of sustainability and elsewhere. Specifically, they both said that they have to figure out a financial model to bring smaller providers on board when those providers already been paying high fees to interoperate. Vengco said EMR vendors overcharging smaller providers to extract data is the biggest hinder to interoperability. 
“In our membership alone we have five-doc to 25-doc to 85-doc practices all being charged the same for extraction of data, sometimes $15-25,000 in transaction fees. I can’t be expected to charge them a subscription fee year-after-year if they have all these other charges associated with their desire to interoperate as well,” Vengco said.
Watson concurred that a plan needed to be developed to bring on non-hospitals and health systems into the HIE. His plan for CAL Index is to attract the largest health systems first then go after the smaller providers. He said they’ll have to subsidize the smaller providers in some way, but it can’t be free. “Free is not a good price point,” he said. 
He agreed with Vengco that a huge issue was EMR vendors charging substantial fees for the extraction of data. Watson said he plans to talk with those vendors that operate in that space and see if they can provide lower fees at a fixed price in exchange for leveraging CAL Index’s market power.