HIEs struggle to develop sustainable business models

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Though the number of health information exchanges is growing, most still struggle to become self-sustaining, according to research from the University of Michigan.

The study, published in Health Affairs, found 119 operational exchange efforts nationwide--a 61 percent increase from 2010. It also found that 30 percent of U.S. hospitals and 10 percent of doctors' offices are involved in an HIE.

However, 74 percent of the exchanges reported that they're struggling to develop a sustainable business model. That poses a problem, since federal backing for HIEs ends in January 2014.

"The healthcare providers are not willing to pay for the service at the level needed," lead researcher Julia Adler-Milstein, an assistant professor at Michigan's School of Information and School of Public Health, said in an announcement. "They don't see enough value, and that's because much of it doesn't accrue to them. It goes to patients and to health insurance companies. The central challenge is that the incentives and the business model are not aligned yet for this to really work."

However, Adler-Milstein said, exchange organizations are realizing the value of the data, which could be used to improve care delivery. Indeed, an Institute of Medicine discussion paper published in April asserted that data about individual patients collected every day in doctor's offices and hospitals could be used to improve care among the population at large.

The information could aid in clinical trials and the development of evidence-based treatments, the paper says. Exchange efforts could also aid in the establishment of accountable care organizations to coordinate care and reduce duplicated services.

"If you want to know how things are going from a quality perspective, that requires data," Adler-Milstein said. "It's a broader effort that's really about aligning incentives for healthcare, but underneath it all is health information exchange."

A Colorado study of ambulatory practices, however, found that the number of tests dropped with HIE adoption, but there was little effect on costs.The HIE's economic benefit could come through "downstream outcomes of better informed, higher quality care," the authors wrote.

In a May webinar on the Beacon Community experience, National Coordinator for Health IT Farzad Mostashari said that the Beacon pilots have shown that information exchange meets real business needs and brings value to the industry.

To learn more:
- here's the study abstract in Health Affairs
- read the announcement

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