HIE Sustainability: Forget the Silver Bullet
The search for sustainable health information exchanges (HIEs) demands more than simply following the money. Driven by the desire or the necessity to stand on their own two feet, some HIEs have found a formula for success.

“Sustainability is evolutionary,” says Ted Kremer, executive director of Rochester RHIO (Regional Health Information Organization), an HIE that connects the 15 hospitals in the Rochester, N.Y., medical service area and has more than 3,800 care providers currently accessing clinical information—including elderly care information and radiology images.

The Rochester RHIO started in 2006 with a mix of community and state grant funding, Kremer says. In the beginning, RHIO stakeholders looked at the barriers to realizing savings and efficiencies, then developed metrics goals that would enable it to overcome those barriers.

The obstacles were basic and would be recognizable to most HIEs, says Kremer. For example, “If you’re going to propose queriable actions, patients have to consent their information to the HIE and there must be enough data to make the results valuable.”

Supported by a $4.7 million state grant and a little more than $1 million in community funding to start up the exchange, Rochester chose Axolotl’s Elysium platform to provide two core services: a traditional patient-centered clinical access portal and support for delivery of test results among hospitals and the 140 physician practices that currently have connected EHRs. Rochester RHIO reports that the query and support services have been operationalized and become sustainable, covering about $2 million in overhead in 2009 and 2010, Kremer says.

“We used early metrics to prove value to funders,” he says. Those metrics included total number of users, volume of data and number of results Rochester sends out to third-party vendors.

“HIEs need to think of themselves as companies with customers—and we have an obligation to prove value. Metrics and performance values are critical,” says Kremer. “Unless you can measure and demonstrate your HIE value, it’s hard to get people to pay for those services.”

Show me the data

By showing potential value through hard data, Cincinnati-based nonprofit HealthBridge built a solid HIE foundation that has attracted 5,500 physicians and more than 50 hospitals (28 of which are now live) in southwest Ohio, western Indiana and north-central Kentucky.

“On average, in a use case for delivery of results, we found [it costs] 75 cents per result to deliver clinical results on a hard-cost basis. Our cost to deliver that service was 12 cents,” says Keith Hepp, vice president of business development at HealthBridge.

The HIE’s business case has proven convincing—by “outsourcing” lab result delivery and other functions, hospitals and labs needn’t maintain contact information for every provider, or incur the costs of faxing, scanning and sending those results, nor manage EHR interfaces, hardware or software fees. “In our financial analysis, the average cost for managing this infrastructure is approximately 75 cents per result, [but it] can be as low as 30 to 50 cents or higher than $1.25, depending on the level of automation that a data sender [hospital, lab or imaging facility] uses,” Hepp says.

Rather than government grants, HealthBridge was financed by seven loans of $250,000 each from hospitals and health plans, Hepp says. From its inception in 1997, “the way we were funded forced us to have a very business-oriented focus. We had to return capital and for every dollar the hospitals paid us, we had to save them $1.50.”

Because hospitals were investing their money, they needed to prove value by showing they were lowering their cost of doing business. The HealthBridge business model has allowed it to make significant infrastructure investments, retire loans early and be a profitable nonprofit every year since 2003, says Hepp.

Moving forward, HealthBridge is switching its operational game plan. “There’s still a value to cost-based services, but what HIEs need to do for sustainability is to improve cost and efficiency of care transactions and inform pay-for-performance and disease-management programs,” says Hepp. “Once we had clinical information in a single place and standardized, we began preparing for how quality-driven improvements would be able to bend the cost curve.”

For sustainability, Hepp says: “There is no silver bullet; it’s a series of services that you can wrap on top of expensive infrastructure.” For example, HealthBridge added an ambulatory order entry system as a fee-based service on top of a basic communications platform (Axolotl). It was able to make this new service profitable because the system repurposes existing clinical data.

“The service doesn’t cost as much incrementally because you’re using existing infrastructure in new ways.”

HIE for the public good?

As HIEs get started, their operators must have a plan in place for getting the exchange to stand on its own. Sustainability demands a critical eye toward the future, as Rochester RHIO and HealthBridge demonstrate. This was the case for Michigan Health Connect (MHC), a Grand Rapids-based nonprofit organization created in 2010 that now connects 46 hospitals and 2,800 providers.

“As we develop our Year Two budget, we are looking at what we expected costs were going to be in Year One versus what they ended up [being],” says Doug Dietzman, executive director of Michigan Health Connect.

Using a Medicity platform, MHC set up physician referral and built out office-deployed services including results delivery, radiology orders and lab ordering. The HIE was built using private funds and is now bolstered by a subscription-based model in which hospitals pay for the particular services they access via the HIE.

The HIE service is free for physicians in private practice at this time, Dietzman says. “Discrete results delivery into the office EMR and electronic inbound/outbound referrals management are two of the most popular services right now.”

HIEs in general can get caught up in “end points that are esoteric and hard to put a value to and ask hospitals, health plans or other stakeholders to put money into. So we have to approach this as a business that is value-based and discrete,” says Dietzman. For example, if an HIE is collecting discharge data, that would be of value to a health plan.  

“HIEs that are publicly funded may have a harder time sustaining themselves because they’re asking hospitals to put in mission-critical clinical data and money and trust [that] the HIE will not go away based on changes in the future political environment,” he says. “That’s a big [thing to] ask.”

Indeed, the future is a question mark for HIEs relying on a public funding component. “There is some uncertainty going forward,” says David Cochran, MD, president and CEO of Vermont IT Leaders (VITL). As the designated HIE for the state of Vermont, VITL was completely funded by state legislation three years ago and continues to be supported by taxpayers as part of a broader health reform initiative.

“Two-tenths of 1 percent of all medical claims [money] in the state is earmarked to support state health IT initiatives,” or approximately $2 million to $3 million annually, Cochran says. However, the legislation that codified VITL’s fiscal support into state law is expected to sunset in 2015, although there is some doubt on that. “I expect that this will be an open question until the health reform work is further along in future years,” says Cochran.

“In a healthcare [environment] in which [the concepts of] accountable care organizations and evidence-based care are more active, it’s clear that clinical information is critically important [and more likely] to receive funding,” says Cochran.

VITL provides two groups of services via subscription. One is direct clinical exchange, such as radiology reports from practice to practice. The other group includes a clinical summary structure for practices to flow information into a registry that supports Vermont Blueprint for Health, a chronic care initiative. “Community health teams use the registry to look for gaps in care,” he explains.

The next phase will be a full exchange where opted-in patients’ information is available and HIE members can query the exchange to see what clinical data are available. Cochran notes: “As we look forward to reform with value-based payments and [fewer] fee-based models [in the U.S.], it’s going to be easier to see how an HIE can contribute and to make the case, whether it’s a public utility or fee-based [in Vermont].”

Know Your HIE Role
There is no substitute for engaging exchange stakeholders individually nor talking to them regularly to uncover problems or additional opportunities, advises Laura Kolkman, RN, MS, president of HIE consulting firm Mosaica Partners in Seminole, Fla. "The basis of stakeholder engagement and participation is the apex for sustainability. Understanding the wants and needs of your stakeholders – if they are continually engaged—will drive your governance model, business plan and technology."

Kolkman recently authored "The HIE Formation Guide: The Authoritative Guide for Planning and Forming an HIE in Your State, Region or Community," published by the Healthcare Information & Management Systems Society (HIMSS).

"Healthcare, like politics, is local," says Kolkman. "Once you understand what stakeholders value, you can understand what they will change their behavior for. In our experience, we find that different stakeholders value different things. For example, physicians value the ability to provide better informed care for their patients; patients value being assured that their care is well-coordinated among their various providers and payors value the efficiencies demonstrated through reduced redundancy in lab tests."

Communication must be bi-directional, Kolkman adds. When stakeholders feel they are being heard, and that their needs for services will be addressed, they are more likely to stay engaged in the HIE. "Not every requested service can be implemented on day one, but through an on-going dialogue with your stakeholders the HIE can help them understand when their needs will be met.

"Stay abreast of healthcare changes," Kolkman says. "The key is to be innovative in the services HIEs deliver. HIEs must be adaptable to changes within the market place. HIE is about improving patient care, but it is a business and it is a market place."