03 May Sharing your health information: Is California RHIO defying the odds?
Editor’s note: Don Holmquest, president and CEO of CalRHIO, presented at WTN’s annual Digital Healthcare Conference May 7 and 8.
Madison, Wis. – Regional health information organizations (RHIOs) have plenty of doubters. While even RHIO critics concede a noble objective – the facilitation of patient data exchange between different health systems – they point to real business modeling flaws that threaten to undermine the entire effort.
The value of sharing patient data, however ambitious, is not in dispute, but RHIOs have been undermined by the stubborn problem of misaligned incentives and only partial buy-in from various beneficiaries.
“People are tying to solve a problem that has never been solved before,” said Dr. William Yasnoff, managing partner of National Health Information Infrastructure Advisors. “The proof-of-business model is whether people are willing to pay for [data-sharing] services, and does what they pay cover the cost of what is being delivered?”
After grants
The primary challenge of sharing patient data is interoperability. Most patient health information is not contained in a central repository that is accessible to every healthcare provider, it is scattered among different providers with different computer and business systems that may not be interoperable. In other words, the computer systems cannot communicate with one another to share health information. Since patient data on allergies or medications, for example, often is not available in emergency-room settings, caregivers can be flying blind when trying to make sound medical decisions on patients they don’t know very well.
To reduce risk for patients and caregivers, RHIOs are trying to build secure health information exchange systems. Another challenge for such organizations is to establish a sustainable business model that can take them beyond the government grant stage to a point where there is enough revenue to sustain the effort when government money runs out.
That’s where stakeholder buy-in comes in. Dr. Barry Chaiken, chief medical officer of DocsNetwork and chairman of the Digital Healthcare Conference, said healthcare is unique in that improvements made by one stakeholder may not benefit all stakeholders. If, for example, an organization invests millions of dollars in an electronic medical record, those who benefit include patients and insurance companies, but not necessarily the hospitals who theoretically gain efficiencies but lose revenue.
In addition, Chaiken said even though insurers benefit, they are not required to give provider organizations any money to implement the EMR. One altruistic payer may want to invest in the technology, but may pause because other payers choose to not make the investment.
“What if four of five payers agree, and the fifth benefits as much as the other four without participating in the financing?” Chaiken asked.
RHIOs can work in much the same way. According to a 2007 Harvard University study, the reason that one-fourth of the nation’s RHIOs have failed is a lack of public investment to cover large, upfront costs, and lukewarm interest from private stakeholders.
California model
California is attempting to buck this trend with CalRHIO, a collaborative statewide initiative that would put the financial onus on those who benefit from a given exchange of patient data.
Under the CalRHIO model, patient data services would be delivered through a utility. The organization anticipates multiple revenue streams, but the main source would be fees charged to healthcare entities for each exchange of patient information. Transaction fees, whether they are per transaction or another structure, will be negotiated in advance with each health plan that does business in the state. In the case of an emergency room care, if there is no payer (insurer), CalRHIO will charge the hospital or the patient.
“Essentially, it’s a charge for usage,” said Don Holmquest, president and CEO of CalRHIO. “It’s transaction-based, not an administrative transaction. If they (healthcare providers) query our network and they don’t find the patient information they are looking for, we won’t charge them.”
Are health plans squawking? Not so far, according to Holmquest, but they are engaged in due diligence.
CalRHIO recently received the benediction of the California Public Employees’ Retirement System (CalPERS), which encouraged its health plans to negotiate contract terms with CalRHIO. CalPERS, the third largest purchaser of healthcare in the U.S. after the federal government and General Motors, includes plans like Anthem Blue Cross, Blue Shield, and Kaiser Permanente.
“We’re talking to all of them,” Holmquest said, “and they ask detailed questions like what will the CPT code look like? Honest to goodness, there are 1,000 details you have to work out.”
Most RHIOs that have reached the point of exchanging information share data like patient test results, medication history, and inpatient and outpatient information. California’s health information exchange will be rolled out in two phases. Phase I has two parts, starting with the delivery of simple clinical and patient identification information to emergency departments, with prior patient consent, over a secure Internet connection in each of the state’s 338 hospitals. This part of Phase I, which is about to launch, would deliver information on lab results and medication histories from national databases and relevant claims and eligibility information from health plans.
CalRHIO will not look to hospitals as sources of patient information in Phase I, so it will not have to worry about connecting with their legacy systems until Phase II.
In the second part of Phase I, the service will extend to physician’s offices. “We will present consolidated data, with the aide of a user interface, a web connection, and browser,” Holmquest said. “We can develop an electronic gateway to the EMRs in physician’s offices.”
The entire project will take about five to seven years, but optimization will continue. “Quite honestly, you’ll never finish because the [business] systems in hospitals are constantly changing,” Holmquest noted.
Praise and skepticism
Miriam Paramore, senior vice president of corporate strategy for Emdeon, a large national health information network provider, believes that RHIO models can work if they provide services that people are willing to pay for, not network infrastructure they want no part of.
“I use the analogy of a public utility,” she said. “People want to pay for heat, not the pipe that delivers it.”
There really is no need to build out a large infrastructure, she said, because RHIOs can partner with firms that have built large administrative data exchanges. Paramore said the RHIOs that survive are the ones the build incrementally, offer services that stakeholders will pay for (and incrementally add new services over time), and don’t build new infrastructure.
“Whether you want financial data or clinical data, it’s still data,” said Paramore, who sits on the advisory board of the Healthcare Information Management Systems Society. “You don’t need to build new interstate highways.”
The more successful RHIOs, such as HealthBridge in Cincinnati and the Utah Health Information Network, feature such a service-oriented approach, she added.
[CalRHIO is not building infrastructure from scratch, but is negotiating with a software vendor that would serve as the primary platform, Holmquest said.]
Doctors and patience
Yasnoff, who also is founder of the eHealth Trust Initiative and the Health Record Banking Alliance, is more skeptical of RHIOs, but he conceded that CalRHIO may have a sustainable model.
Yasnoff has promoted health record banking over RHIOs because he believes the delivery of complete patient information at the point of care requires a large central repository. However, if health plans are willing to pay for the conveyance of specific sets of data, “by definition, it will be sustainable,” he said.
In Yasnoff’s view, a potential flaw of CalRHIO is the lack of incentive for physicians to adopt EMRs. “Phase II assumes that all doctors will get EMRs,” he said. “That’s just not going to happen.”
Asked if there is any part of the CalRHIO business model that compensates physicians for making this investment, Holmquest said the early focus of the implementation is the delivery of a simple information package to emergency departments so physicians can care for patients they are not familiar with.
“The implementation is planned to be relatively straightforward because we are not using physicians or hospitals for data sources,” he explained in an e-mail. “We will delay dealing with those data sources until we get our first phase strongly underway.”
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