A "franchising" model for health information exchanges

June 22, 2007

The eHealth Initiative Foundation, which promotes the value of health information exchanges (HIEs) in local communities, has released a report on the viability of HIEs and a business model that community leaders can use to build their own data exchanges.

The eHealth Initiative Foundation, which promotes the value of health information exchanges (HIEs) in local communities, has released a report on the viability of HIEs and a business model that community leaders can use to build their own data exchanges. Patterned after the successful HIEs in Indianapolis, Cincinnati, and New York's Taconic Valley, the eHI model is intended as a template to facilitate the rapid spread of HIEs elsewhere.

The eHI report confirms that the business case for HIEs (also known as RHIOs) is generally weak. Most of the fledgling data exchanges still depend on government grants and haven't been able to support themselves financially. "It's not natural for the market to reward data sharing," notes Janet Marchibroda, CEO of eHI. Moreover, to have a real impact on quality improvement, she says, HIEs will have to develop more extensive data sharing than most now offer.

One key conclusion of the report is that "the long-term sustainability of HIE rests squarely on reimbursement reform" in the health-care system. "One way to reform the system," the report continues, "is to reimburse care on a fixed budget that compensates episodes of care."

This sounds a lot like the "Prometheus Payments" system advocated by Bridges to Excellence leader Francois DeBrantes, health-care attorney Alice Gosfield, and others (Medical Economics, "Can this payment model work?" Nov. 17, 2006). Marchibroda acknowledges that one author of her organization's new report is part of that effort, but says eHI is not specifically endorsing Prometheus Payments' approach.

Why would reimbursement reform lead to greater use of HIEs? "As the payment system rewards better health care—especially using clinical measures—that will place pressure on the system for the use of information systems," says Marchibroda.

The government's long-term objective—to build a National Health Information Network from local HIEs—can be achieved without reimbursement reform, says Marchibroda, "but it will be a much longer process."

The eHI chief contends that progress on regional data exchanges can be made without widespread adoption of EHRs. She cites the IHEs in Indianapolis and Cincinnati, which have enabled many physicians to get online lab results from hospitals, for example, without having EHRs.

Nevertheless, Marchibroda does not play down the importance of doctors getting EHRs. "Based on the findings of the report, universal adoption of EHRs will be a big step forward in improving health care and reducing errors," she adds. "EHRs improve the ability to improve quality and to enable clinical decision support, which is hard to achieve via access to information using web portals."