The interplay between HIEs, credit ratings and hospital M&A

The interplay between HIEs, credit ratings and hospital M&A

Hospitals, health systems and other provider organizations are increasingly taking on more responsibility for the quality of care they provide, and they are being held accountable for that care over a longer period of time. Changes in how hospitals care for patients on an ongoing basis combined with the transition to value-based payment models is creating the need for health systems to adopt tools that will enable them to increase their reimbursement for the care they provide.

Benefits of using information exchanges
For many organizations, those tools take the form of extended data sharing networks that enable them to track and keep up with patients and their care.

“The term ‘extended network’ could refer to a number of resources that help hospitals better manage patient data for improved outcomes,” says Mark J. Jacobs, CIO for the Delaware Health Information Network. “For physicians and hospitals, there has been a focus on developing a strategy in their systems for how and when they want to connect with the community and leverage an extended network, one that enables them to share digital data with a health information exchange that provides data back to the hospital.”

The DHIN aims to provide healthcare providers — including physician office practices, hospitals, nursing homes, labs and diagnostic facilities — across the state with patient data via an integrated, statewide health data system to support their information needs. In 2007, the DHIN began offering a statewide health information exchange that utilized a community master patient index and record locator services to enable patient record searches of laboratory reports, radiology data and admission, discharge and transfer sheets. Demand for DHIN’s servies have evolved to offering encounter notifications, radiology image sharing, medication history and clinical gateways for analytics.

There are three key forms of HIEs — directed exchange, query-based exchange and consumer-mediated exchange. A directed exchange allows care providers to send and receive secure information electronically among one another, which can benefit both providers and patients. For instance, a primary care physician can use the exchange to directly send electronic care summaries to a specialist when referring a patient. This information helps prevent duplication of tests and medication errors, according to

The number of hospitals partnering with HIEs or extended networks to exchange information with other systems and organizations is growing steadily, according to an American Hospital Association report. The information exchanged most often includes test results, clinical care summaries, radiology reports and medication histories, all of which grant providers a more complete picture of a patient’s care plan.

A study published in the Journal of the American Medical Informatics Association found that including an HIE query for every patient encounter in an emergency department setting could significantly reduce the number of tests and examinations ordered in hospitals and reduce costs. Efficient HIE usage was associated with a 52 percent reduction in the total number of laboratory tests per patient and a 36 percent reduction in the number of radiology examinations ordered per emergency department patient, according to the study.

The connection between HIEs and reimbursement
Hospitals and health systems are increasingly using value-based payment models as they transition away from fee-for-service medicine: As of February, 42 percent of hospitals reported that 10 percent or more of their revenue stems from value-based contracts, according to a survey from Kaufman, Hall & Associates. In August 2014, only 22 percent of hospitals reported that 10 percent or more of their revenue stemmed from these types of contracts.

The survey found even more dramatic growth in expectations for future use of value-based payments. The percentage of responding hospitals anticipating that value-based contracts will constitute 50 percent or more of their revenue within the next 24 months tripled in six months, from 7 percent to only 22 percent

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