Funding HIEs: A chicken and egg scenario

Health information exchanges have been lauded as a necessary means to connect healthcare providers and seamlessly share patient health information with the ultimate goal of improved patient care and lower costs. In theory, such an infrastructure would streamline care and potentially improve outcomes with a few clicks of the mouse and a computer; however, the practicality of HIEs isn't so seamless.

A key factor prohibiting the establishment and growth of HIEs comes down to money. Not many providers or organizations are willing to front the capital for a costly exchange system.

"It's the classic chicken and egg scenario," said Marion Jenkins, PhD, chief strategy officer of 3t Systems, a health IT services company, on a panel at the Becker's Hospital Review 6th Annual Meeting in Chicago. "The data is there and proving value, but nobody's willing to pay for it. But it won't get to [the point of usability] until someone steps up to pay for it."

Maria Russo, CIO of Carrollton, Ga.-based Tanner Health System, and Indranil Ganguly, CIO of Edison, N.J.-based JFK Health Systems, joined Dr. Jenkins on the panel. Both Tanner Health System and JFK Health Systems are connected to an HIE.

Tanner Health currently operates a private HIE, meaning just the health system and physician group are connected. Ms. Russo said they are preparing to also connect affiliated organizations on the HIE.

However, since the HIE is private, Tanner covers all the costs to keep it operational. Ms. Russo said currently the health system sees no return on investment from the HIE, nor does it anticipate it will in the future. However, that is not a reason to jump ship, she said.

"As you move toward a value-based reimbursement, it won't be about the transactional dollars to support the HIE. The HIE will be the fundamental vehicle for us to provide the care and demonstrate the value," Ms. Russo said.

Mr. Ganguly agreed with Ms. Russo. At JFK Health Systems, the 30 hospitals in the system fund the HIE to which they connect, though it has been a tough sell for chief executives. "CEOs of hospitals say they see little to no return on it, but we all recognize that it is a community good and ultimately believe if we can get over a whole set of hurdles, it will deliver value through the community," Mr. Ganguly said.

Dr. Jenkins said physicians aren't willing to pay to sustain HIEs for similar reasons — a fee, even at $50, is more than they want to pay, especially if they don't see the value or a return on investment.

Financing HIEs, Mr. Ganguly said, will remain a responsibility of hospitals and health systems until the price of maintaining the infrastructure drops. "Right now, it's a clunky ecosystem that takes a lot of care and feeding to make functional. Until it becomes more usable for the physicians the price points drop appropriately, the sustainability is going to be on the backs of hospitals," he said.

An audience member attending the session proposed the model of funding HIEs like highway tolls. If a patient goes for an office visit, they pay a "toll," be it 50 cents or $1.

Dr. Jenkins, though, said the federal government will likely be the financier of HIEs for much more time to come.

"I'm not really optimistic [HIEs] will be all that sustainable and survivable, which is why so much of it is being funded through grants and federal prop-ups," Dr. Jenkins said. "It's like wind power. It's not as buyable as fossil fuel yet, so it has to be subsidized in order to be viable."

More articles on HIEs:

Health data exchanges: We're doing it wrong
HIEs lack records of former care facilities
5 ways HIEs and public health registries can work together

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