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America's Top Model

June 25, 2010
by Kate Huvane Gamble
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As the health information exchange market heats up - with vendors jockeying for position and funds being allocated - one state is paving the way

Executive summary

As states move forward in establishing health information exchanges (HIEs), many are looking to New York State for guidance. New York, which got an early start in building a data exchange program, has been successful in securing private investments to supplement its public funds. It has also established a credible infrastructure, governance and policy framework for a statewide HIE network. However, significant hurdles to successful HIE implementation remain. One industry report cautions that policy, security, patient consent, lack of data standards and physician acceptance still need to be addressed.

With all of the legislative activity that has permeated the healthcare IT industry over the past year or so, one of the most compelling topics has been the establishment of statewide health information exchange (HIE) programs. In March, the U.S. Department of Health and Human Services announced it was awarding $162 million in American Recovery and Reinvestment Act (ARRA) funds to help build HIEs in 16 states. However, despite the funding that is available, a number of states haven't been able to secure enough support to launch and sustain successful exchange programs.

Jason hess
Jason Hess

“It's a topic that's very hot - and very misunderstood, and providers are just trying to make sense of it all,” says Jason Hess, general manager of clinical research at the Orem, Utah-based KLAS Enterprises LLC. Hess was the keynote speaker at the Health Stimulus Exchange Conference, held April 27-28 in New York, during which leaders from hospitals and health systems, government agencies and payer organizations from New York, New Jersey, Pennsylvania and Connecticut convened to discuss local initiatives aimed at facilitating health IT adoption and data exchange.

What became clear during the two-day conference is that while many states are struggling, one state - New York - seems to have found the right formula for success, and is emerging as a leader.

According to David Whitlinger, executive director of the New York eHealth Collaborative, New York has provided more than $260 million in grants to build a health IT infrastructure across the state. The grants, funded through the Health Care Efficiency and Affordability Law for New Yorkers (HEAL NY) initiative and supplemented by more than $280 million in private investments, are being used to help build the Statewide Health Information Network for New York, a component of the state's technical infrastructure. Currently, the statewide network is supporting 13 HIEs and regional health information organizations (RHIOs), including the Bronx RHIO and New York Clinical Information Exchange, in an effort to connect care across the state.

“The total investment in IT has been huge,” Whitlinger says. As a result, “New York is really out in front in terms of health IT strategy.”

One key advantage New York has over other states - in addition to its ability to raise private dollars - is the early start it had in building a data-exchange program.

Other states are looking to us as a leader. New York has developed solid financial and reimbursement models, and has ensured that its strategy aligns with federal health IT agenda. - David Whitlinger

In 2006, the same year that the New York eHealth Collaborative was established as a public-private partnership, the New York State Department of Health awarded $52.9 million to fund New York State health IT projects to help form several RHIOs. The grant was matched by $201 million in private investments. In 2008, $105.7 million was allocated to enable RHIOs to connect to the statewide infrastructure, and to provide support for the New York eHealth Collaborative statewide collaborative process, implementation of electronic health records (EHRs) in physician practices, and support of EHRs for clinical use cases. For this initiative, $152 million in private funds were made available.

David Whitlinger

The market for HIEs is a mile wide and an inch deep. It's poised for explosive growth. - Jason Hess

Then in 2009, $100 million was awarded to fund nine projects focused on coordination of care through the support of patient-centered medical homes, according to Roberto Martinez, M.D., medical director at the New York State Department of Health's Office of Health Information Technology Transformation. Some of the funds were also used to further develop and support the infrastructure of Statewide Health Information Network for New York, which he refers to as “the centerpiece that connects hospitals, pharmacies, physicians, labs and patients.” Adds Martinez: “We've made great progress.”

While those in other states might envy New York's resources, the state has truly distinguished itself in the HIE arena by developing and maintaining the infrastructure, governance and policy framework necessary to foster growth of HIEs and RHIOs and pave the way for a statewide network, according to Whitlinger. “Other states are looking to us as a leader. New York has developed solid financial and reimbursement models, and has ensured that its strategy aligns with the federal health IT agenda.”

Martinez emphasizes that while the dollars certainly help, it takes more than funding to create a connected care network. “It's about common goals, and it's about trust,” he says. “What we'Re doing is bringing together payers, providers, patients and hospital systems - entities that have never had trust in each other in the past - and working together to try to do this. We'Re very proud of the work we'Re doing.”

‘Big concern’

Although New York appears to be headed down the right path, it still has a long way to go in terms of establishing a true statewide connected care network. The reason is simple: “HIEs are very, very difficult,” says KLAS’ Hess.

In the 2010 HIE Performance Report, KLAS found that providers and administrators had many concerns about HIEs, including privacy and security, patient consent, financial viability, a lack of data standards, uncertainty about funding from the ARRA-Health Information Technology for Economic and Clinical Health (HITECH) Act, and physician adoption. “There's a lot of cynicism,” Hess says, noting that when participants have been asked if they were worried about future funding, 56 percent answered yes. “If you've got this thing up and running and you'Re concerned that it might not be viable in the future, this is a big concern,” he notes.

What's adding fuel to the fire, Hess says, is the fact that such a large number of vendors seem to be entering the HIE space. “Some vendors are following the money trail to HIE, and it's making it difficult to navigate what's true and what's not.” Since KLAS’ report was published in February 2010, more than two dozen additional vendors have staked claim in the HIE space.

“The market for HIEs is a mile wide and an inch deep. It's poised for explosive growth,” says Hess. And although there are almost 50 vendors vying for business in the space, he expects to see a great deal of consolidation in the next few years as leaders emerge. “It's going to be a very competitive and very difficult space.”

Healthcare Informatics 2010 July;27(7):14-16

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