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Public vs. Private HIEs (Part 2)

October 24, 2014
by Gabriel Perna
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Michael Matthews, CEO of MedVirginia

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. Less than half of HIEs 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 into 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 of this series on HIE is with Michael Matthews, CEO of MedVirginia, a regional HIE in central and eastern Virginia. The HIE has been operational since January of 2006 and was the first to connect to the Nationwide Health Information Network (NwHIN), the Department of Defense and Department of Veterans Affairs (VA), and the Social Security Administration through the NwHIN. The HIE has rolled out value-add services, such as results routing and encounter alerts, to create a model of sustainability. Matthews himself has been involved state initiatives as the CEO of ConnectVirginia and national initiatives through his work with the NwHIN and its evolution into Healtheway’s eHealth Exchange.

Below are excerpts from HCI’s conversation with Matthews:

How have you been successful with recruiting health systems?

We’ve worked with health systems in past and we know the challenges they are facing. We appreciate the pain points of health systems and physician practices. Our basic message to them is to achieve meaningful use they have ever-increasing requirements for interoperability. More importantly than that, it is one way to increase the ROI on those EHR investments, become more interactive, and have data that’s able to follow the patients as they go from provider to provider. Data needs to flow. The physicians now that they have EMRs, they are hungry for discrete data. The forces are lining up, whether it’s from a triple aim/population health perspective, the incentives of meaningful use, the technologies are advancing.

From that perspective, what struggles are public HIEs facing?

All the states appreciate the funding that came from the government to help with the rollout of their HIEs. But it’s a pretty dramatic cliff to drop off of that funding and many were not able to get their policy framework in place, build the required infrastructure, get stakeholders on board, and get a sustainable business plan in place in the span of 2.5 years. That’s a heavy lift for even the most nimble of state organizations. Any one of those activities would have taken two years. Well, all of that had to happen in two years. Most people ran out of daylight.

In this perspective, what has MedVirginia and ConnectVirginia done that others have not?

Fortunately, we had a lot of engagement with our health systems and providers in the Commonwealth and we had extraordinary leadership by the Commonwealth itself. Secretary of Heath and Human Resources in Virginia, Dr. Bill Hazel is chair of the ConnectVirginia board and is a great champion of HIE. The health systems rallied with a lot of support. They recognized the situation and came up with bridge funding to further develop our infrastructure as we’re building to moving to a more sustainable business model over the next few years. We couldn’t have done this without the health system and Commonwealth support.

It sounds like you had a lot of vision, making the HIE live in 2006. From what I can tell, not everyone has had the same kind of foresight to do this before HITECH was passed and money was doled out.

I think that’s true. There is certain subject matter expertise that goes with this. I’m big on the concept of a trust framework for health information exchange activities. I’ve been around Virginia for 21 years and understand what’s required to build trust and to use use that trust to support meaningful health information exchange. If there were not a foundation in place of some sort, there would have not been enough time to build up the HIE and be sustainable.  

Where do see your HIEs in terms of sustainability?

We’re very bullish on our future both as a regional HIE that’s doing a lot of connectivity at an individual provider level and as statewide HIE, moving the Commonwealth forward on interoperability. We’re bullish on the opportunities to bring value on the population health and accountable care side. I won’t say I ever rest easy…every day we show up trying to determine how we add value to our partners.That’s a challenge we accept.

Do you consider your HIEs to be private or public?

MedVirginia is a private HIE. We’ve received federal funding as one NwHIN trial implementation but it’s always been a private LLC.

ConnectVirginia I’d call a public/private partnership. Technically, it’s a private nonprofit corporation. But we have such a close partnership with the Commonwealth of Virginia, including Secretary Hazel serving as Chair, that I’d say it’s a nice blend of the public and private sector.  

From what you’ve seen what are the major differences in how private and public HIEs operate?

Philosophically, most private HIEs I know of have taken the perspective of a public utility. I don’t think that most view this as an enterprise that can make money for investors. If they have that expectation, they’ll be sorely disappointed. It happens to be a private sector activity in some cases, but most people recognize it’s HIE is done for patient good and public good. Most are not trying to drive some competitive advantages for its particular set up and participants.

Is it more important for public HIEs to work with private HIEs or vice versa?

HIE is a team sport. I don’t think there’s one recipe for success. I think that all are necessary to be effective. When you look at the way HIEs have come into being across the country, generally you have a thought leader, some kind of technology champion, and a provider champion. When you’re trying to articulate the case for HIE, in some cases there are state entities are well positioned to do that and in other cases, it’s a private entity. In some cases, it’s a combination of the two. Indiana is an example of that last one.

One HIE’s success is not to the determinant of others. We can connect those successful initiatives together. That’s something you’ll see more of in the future.

How do you see the future of HIEs unfolding? The public well has dried up. Will we see consolidation of HIEs? How will this shape out?

As healthcare continues to move toward population health and accountable care, most recognize HIE is foundational for success in that arena. I think there will continue to be some innovative approaches to financing HIEs for a while. I also think the systems themselves will continue to be more interoperable. Meaningful use requirements have helped push this forward. I think we will have figured out the ways physicians can act on data that is external to EMR, in a lot more seamless way.

I think for the next couple of years, funding will be tight for most HIEs. As the value proposition continues to be demonstrated, we’ll get to point where new business models are going to emerge. Or we’ll end up having a totally different type of funding mechanism. Just like the interstate highways do not rely on every McDonalds from every exit to chip in to the cost of the interstate. We just recognize that for the economy to thrive and for there to be a viable interstate, it has to be publicly financed. At some point, we may come to that conclusion with health information exchange.

Did you see what happened with the California, with Blue Shield of California and Anthem Blue Cross providing $80 million in seed funding for a statewide HIE. Could payers be a financing opportunity?

I did see that. Payers have skin in this game and payers ought to be contributing to HIE. Their subscribers will be better off and their costs will be lower. I was encouraged to see they are willing to contribute to the cause of HIE. I hope that becomes integrated with other exchange activities in California.

Again, more people getting involved in the basic prose of HIE, we’re all better off….even if down the road, we have a bit of sorting out to do. I’d rather have to face that than everyone sitting on the sideline.


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