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What Caused the Collapse of the Nevada HIE? (UPDATE: Infograph)

November 20, 2014
by Gabriel Perna
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Update: We added an infograph timeline on the Nevada HIE at the end of the article

On Jan. 24, 2014, the board of directors at the Nevada Health Information Exchange (NV-HIE), the state-designated entity to foster data exchange, ceased operations by a vote of four to two.

Thanks to Nevada Open Meeting Law requirements, the decision is immortalized for future generations to ponder.

One month after the vote, the NV-HIE shut down completely. CEO David LaBarge stayed on until March to close up operations completely. All the parties involved in the NV-HIE have since moved on, and the only thing remaining is the website.

It’s easy to say the board killed the Nevada HIE that day in Carson City. However, this isn’t a simple “whodunit.” The NV-HIE wasn’t done in by its board of directors, the maid, or the butler. There are several elements that led the people behind the NV-HIE to cease operations, just as there would be if a local startup restaurant flopped.

LaBarge, a health IT veteran currently working as a consultant, whittles the failure of the HIE down to three specific reasons.

“The lack of opt-in capabilities; not having the legislator allocate money from the Medicaid population to help fund and sustain the HIE; and not starting early were three components we didn’t have that make most HIEs successful. If you don’t do at least one or two of those three, it’s pretty difficult to get started and to be sustainable,” LaBarge says. “We were zero for three.”


The genesis of the HIE was the State Health Information Exchange Cooperative Agreement Program, based on the Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009. HITECH authorized the establishment of the infrastructure that would lead to statewide HIEs. In 2010, the Office of the National Coordinator for Health Information Technology (ONC) doled out grant funding to 56 states and territories through the State HIE Cooperative Agreement Program. The Nevada Department of Health and Human Services (DHHS) was awarded $6,133,426 over the course of a four-year period.

Simple math tells us that those four years have passed. With funding from the Cooperative Agreement Program finished, many HIEs are facing serious sustainability concerns. In 2013, a survey of HIE entities from the Robert Wood Johnson Foundation determined that three out of four were struggling to develop a business model for their organization. A few HIEs that were developed from the cooperative funding have already ceased operations, like in Nevada, and some have been forced to make substantial shifts in direction.

It hasn’t been all bad. Other statewide HIEs have seen substantial success. HIEs in Maine and Delaware, for example, are blossoming examples of the concept at work. Some have even achieved sustainability. It’s a mixed bag, and many observers are wondering how HIEs will take shape.

Andrew Pasternak, M.D., a physician with Silver Sage Center for Family Medicine in Reno and one of the NV-HIE board members who voted to cease operations, was involved with the HIE from its earliest days. His experience left him with more questions than answers.

“I think we’re going to need a lot more clarification of who is paying for HIEs. How are we going to make them financially viable and also, how many do you need in a state? How will this all play out? That’s what I’ve been reading nationally. Those are the two big issues,” Dr. Pasternak says.


Timing isn’t everything, but it’s close to it. In many successful HIEs, leaders have gotten the concept off the ground, implemented a plan, and moved forward at rapid pace. Take North Carolina, for example, where the plan for the statewide HIE (which covers 800 ambulatory sites and 33 hospitals, thus far) was laid back in late 2010, shortly after the funds were distributed. Many involved with the NV-HIE say that kind of far-back planning didn’t happen in its case.

“[We] had nine months to do a multiyear project,” says LaBarge, who was hired in May 2013. In 2010, the Nevada Office of Health Information Technology (OHIT) developed the “State Information Technology Strategic and Operational Plan.”

[We] had nine months to do a multiyear project. David LaBarge

This was finalized in May of 2011. The same year, the Nevada Senate passed a bill that required DHHS to establish or contract a governing entity for the statewide HIE. In late 2012, NV-HIE was established as a nonprofit organization. A few months later, it became the sub-grantee of the DHHS State HIE grant.

The NV-HIE board of directors came on board in May of 2012. Pasternak was recruited as a physician representative because of his history with health information technology. Silver Sage was one of the first offices in Nevada to qualify for meaningful use Stage 1.

“When they decided to create the Nevada HIE board, the Nevada State Medical Society put my name forth as a physician representative,” Pasternak recalls. The board met, in accordance with open meeting laws, for the first time in August of that year. LaBarge was hired nine months after this and a request for proposal (RFP) for the HIE technology vendor was released two months after that.

According to Amber Joiner, DHHS Deputy Director and NV-HIE board member, the NV-HIE was on a timeline similar to many other states. Further, she says they met all of the milestones according to the federal grant guidelines. “People have different impressions of when implementation starts and what success means, and for us, we were successful in meeting our milestones for that grant,” she says.