Regional Health Exchanges Slowly Start to Share Data

Hospitals, physician practices, and health insurers are slowly forming regional data exchange networks that the federal government hopes can one day become the backbone of a national health information infrastructure.

Hundreds of regional health information organizations (RHIOs) have been formed over the past several years. However, only a handful of the RHIOs have so far overcome financial, technical, and cultural challenges to even begin pilot projects, analysts said.

This week, the San Diego Medical Society launched a project to create a system that can electronically link 35 hospitals and 7,000 area physicians.

Funding plans for the San Diego Medical Information Exchange Network are not yet set, and sponsors expect the planning and recruitment phase to last at least a year.

"Physicians have been slow to adopt electronic health records because of cost and [because] productivity drops for at least six months," acknowledged Steve Carson, chief medical officer at the San Diego Medical Society Foundation, which oversees the fledgling RHIO.

Carson expects that hospitals will begin signing up for the RHIO over the next year to use Sun Microsystems Inc.'s Integrated Composite Application Network software. That software will give the hospitals an automated view into patient demographics, insurance eligibility, and notes about emergency room visits.

The RHIO estimates that it will cost physician practices about US$6 per month to use the system. Carson said the group still needs to decide how much to charge hospitals and health plans to participate and determine what types of data physicians can include in the system.

The MidSouth eHealth Alliance, a Tennessee RHIO formed a year ago by a group of hospitals, physician practices, universities, insurers, and others throughout three counties, began running a pilot system two months ago.

The system has been getting live data feeds of lab results, pharmacy information, and demographic details from about nine hospitals, said Mark Frisse, a professor of biomedical informatics at alliance partner Vanderbilt University in Nashville.

The MidSouth RHIO, which isn't yet using the data obtained for clinical care, hopes the pilot can demonstrate the value of the alliance to potential partners. The project was funded with a $5 million federal grant and $10 million from the state legislature.In the long run, MidSouth aims to become a utility for hospitals and physicians, Frisse said.

Anticipated Savings
The Kansas City Regional Electronic Exchange in Missouri plans to launch its pilot project before the end of the year. The project will be undertaken with Blue Cross and Blue Shield of Kansas City, Commerce Bank NA, and Saint Luke's Health System Inc., a chain of nine area hospitals. The goal is to test a system for electronically validating insurance coverage and processing claims, said John Wade, CIO at Saint Luke's.

The Kansas City exchange was formed in 2000 before the federal government began pushing the concept. It anticipates that it can save $13 million over three years by ending a paper-based claims-processing procedure that has 40 manual steps and replacing it with a regional electronic processing system with Commerce Bank, Wade said.

The founders expect that the system can be funded over the long term using the savings, Wade said. "You can't be reliant on the government to just fund these things on a perpetual basis," he said. "[A RHIO] has to be a self-sustaining model."

The Kansas City exchange struggled mightily to get to the pilot stage. It took two years to create a governance model that then languished for another two years after a for-profit corporation acquired 14 hospitals in the region and an insurance company changed owners, he added.

Eric Brown, an analyst at Forrester Research Inc., said that while hundreds of RHIOs have been formed throughout the country, the vast majority are "people with a little bit of grant money, a mission statement, and a PowerPoint stack."

Fewer than 10 RHIOs have launched pilot tests of systems for exchanging data, Brown said. Others have been struggling with the details of governance models, addressing security and privacy concerns, and trying to determine a way to pick vendors that all stakeholders will agree to use.
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