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Public vs. Private HIE (Part 4)

November 7, 2014
by Gabriel Perna
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Erick Maddox

Health information exchanges (HIEs) are at a crossroads in 2014. A recent survey revealed that most HIEs are struggling with the financial costs of interoperability as well as building a sustainable operational model. Fewer than half of HIE leaders surveyed by the eHealth Exchange said that dues or fees were their greatest source of funding. Forty-nine percent of all HIEs surveyed said they were sustainable.

The end of federal funding of state-designated HIEs has shifted the landscape. Many public HIEs have been forced to shut down or dramatically shift gears, while others have succeeded in connecting major healthcare providers within and even across state lines. Meanwhile, some are turning to private HIEs for data exchange.

Healthcare Informatics Senior Editor Gabriel Perna spoke with four leading HIE executives –in both public and private organizations – who shared their thoughts on the challenges of running an HIE, the advantages of being public or private, where they’ve succeeded, and where they see the market headed.

Part 1 of this four-part series was an interview with Doug Dietzman, executive director at Great Lakes Health Connect

Part 2 was with Michael Matthews, CEO of MedVirginia, a regional HIE in central and eastern Virginia.

Part 3 was with Dan Paoletti, CEO of the Ohio Health Information Partnership (OHIP), which operates the statewide Clinisync HIE.

Part 4 is with Erick Maddox, HIT Manager at HealthInsight, which is a nonprofit organization that operates HealtHIE Nevada, a private statewide HIE. HealtHIE Nevada started up in 2010 and has experienced growth from the time it received its startup capital from community stakeholders. It includes most of the large healthcare delivery systems in Nevada, various primary and specialty medical care groups as well as independent physicians, major laboratory systems, imaging centers, and three payers. HealthInsight’s background as a quality improvement organization (QIO)/regional extension center (REC) was a huge leg up in growing the HIE.

Below are excerpts from the interview.

How have you been able to recruit hospitals and providers?

We had a lot of relationships with those facilities originally. We are not starting from scratch. We’re not trying to prove why they should listen to us. We have the relationships in place through our QIO work and the REC work, or through any other number of collaborative organizations we work with. That’s helped significantly. If we don’t have a history and can’t leverage a relationship, someone we work with typically does and can walk in the door with us and help us make the case. It’s a small state. We all know each other. It’s easy to run into the same people you’ve been running into for the last 10 years of your career on a regular basis. That helps in the process.

How were we able to get them to go? To say we have them all, it’s all there, and it’s working…it makes it sound simple. It’s been a fight and a struggle. We’ve worked hard at it and it’s taken four years. Only recently did we receive the agreements for the last urban acute-care hospital we needed in the state. We’re still working to get rural and critical access hospitals. There are other challenges there.

It’s leveraging those relationships, looking at the data sets. In some cases facilities or doctors will say they will participate, but they need to know they’ll get the data from a certain hospital or lab. It’s following the referral patterns and following the business relationships that already exist in the community and bringing on those in clusters. Rather than, just saying we’ll bring doctors using a certain EMR. I can bring on every doctor using PracticeFusion, for instance, but that doesn’t mean the data will be used correctly. We need our data providers. We start with a few key ones and start building out their referral networks from that point.

What is your sustainability model?

I’ve been asked this before and I’m never quite sure how to describe the sustainability model. It’s all subscription-based. We take the approach that everyone pays to play. Everyone. I got pushback early on. I went to some lab systems and they were surprised we wanted to charge them. It took a little, not tons, of working through the argument. Everyone that integrates and participates with the HIE has skin in the game. They’re paying towards sustainability. That fee-for-service rate is distributed in a very specific way, in what our community stakeholders believe, reflects value proposition in the system. For instance, of all the money required that operate us, 50 percent is coming from payers. They pay at a rate of 21 cents per member per month. After that, hospitals are next in line, then physician offices, and those lab systems…they have one of the smallest fractions. Everyone pays into it but their burden of sustaining the HIE ties it back to who is accruing and compounding the benefit of the existence and function of the information.

How do you justify those fees?

That’s always in flux. I have had two meetings on that subject with participants this week. What’s valuable to each one of those systems differs and depends on how at risk they are, how fee-for-service they are in agreements, their populations, the services they provide. All of that factors in. Value to one hospital will look different to another hospital. We try to take a broad brush to it while understanding that for some of the folks in the system, there may not be value. We’re OK with that. We’ve had some folks that we’ve told, “This isn’t for you right now. You may want to do it but here’s what has to happen first.” When we looked at concept of going into a physician office, we found it may be necessary to step in with practice transformation and look at how they are doing business, how they are looking at workflow. Maybe they need to go through vendor selection on EHR and get a new one in place. We bring in that larger perspective of what’s going on in that facility before just telling them they need HIE. The value proposition for each one is different.

From what you have seen, how do private and public HIEs compare? Are there advantages that you have that they don’t? And vice versa?

One of the key advantages that a private system has that, particularly a state-based system like the State of Nevada was attempting to set up, one key advantage is the ability to move very quickly and be very responsive to our market and to our stakeholders. One of the key disadvantages that the state system had was they had to comply with all of the transparency requirements that are at their state government. Everything had to be posted in accordance with (Nevada’s Open Meeting Law). You can’t hold a meeting and make a decision without going through agenda creation, putting it up on a board, waiting five days for comments, and if don’t have a quorum you can’t do it. You can’t run a business that way. That’s a huge advantage that we have that a public system doesn’t have.

There are some markets where the state system is looked at favorably. If it’s a state system then that’s got credit and some weight to it. In some places, they have some heft behind them because they’ve been doing things in healthcare informatics for some time. In the State of Nevada, that was probably not the case. They are working their rear ends to set up informatics programs but they haven’t existed in a robust way in the past.

Is there a role for both private and public HIEs in healthcare?

I think that’ll depend on the market. I heard arguments for the state HIE in Nevada that said, “Well California has 10 of them.” Well, California has 14-times the population of the State of Nevada. They have 10 times the number of hospitals than the State of Nevada. I think it really depends on the market. In this state, there is probably not a lot of space for two or more robust, statewide, publically available HIEs.

In a state like this, one of the things a state designated entity – maybe not an exchange – can do is facilitate and make effective policy changes on behalf of the healthcare community. It’s new and not something existing policy folks have experience with. When you go to policy analysts and you go to people who write regulation within our state boundaries, this is something they’ve never dealt with before. Where do you start at? What do you go after? Being able to provide that is a role the state-designated entity can play within a market like Nevada.


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