CA Powers Up $80M HIE to 'Create Value in the Data'

California's latest multimillion-dollar attempt to build a statewide health information exchange aims to shave healthcare costs and improve care, but its leaders face a long-term funding challenge.

This month's launch of an ambitious statewide health information exchange in California poses an $80 million challenge to the project's organizers: sustaining an HIE over the long haul.

Blue Shield of California and Anthem Blue Cross are picking up the $80 million tab for Cal INDEX during its first three years of operation. After the seed money has been depleted, subscription fees are expected to keep Cal INDEX finances in the black.

The Cal INDEX board and other leaders of the project are mindful of earlier attempts to create broad and sustainable health information exchanges in the Golden State that have fallen short of expectations. "We have to create value in the data," David Feinberg, MD, MBA, president of UCLA Health System and chairman of the Cal INDEX board of directors, said this week.

He says there is inherent value in gathering as much data as possible about a patient such as pharmacy and clinical service records and claims information to get "the complete picture" of a patient's medical status and history.

"We've gone from paper records to digital records," Feinberg says. "The real power is when we can start using that information to make good decisions."

But designing health information exchanges that can be self-funded and become long-term players in their respective markets takes not only planning and determination, but "a sustainable business model."

Cost Savings and Smarter Clinical Decisions
Feinberg says Cal INDEX officials have already begun to identify healthcare organizations that will be likely to pay subscription fees to gain access to the HIE's data, including 30 large accountable care organizations that have active relationships with Blue Shield of California and Anthem Blue Cross.

Lloyd Dean, CEO at San Francisco-based Dignity Health, says he is hopeful that Cal INDEX will not only be sustainable, but also fill a critical gap in efforts to contain the cost of healthcare in California.

"We believe that as the Cal INDEX program is scaled, it will create efficiencies that make it cost effective over the long term," Dean said this week.

"What's unsustainable is the status quo. Today, health care spending makes up 12% of California's GDP, and the healthcare industry is well behind other industries in terms of adopting cost-saving technologies. The bottom line is that we can't afford to wait to start implementing these integrated data-sharing programs."

He says Cal INDEX will initially focus on areas that are likely to improve quality of care and cut costs. "As more providers and payers join Cal INDEX and begin sharing information, we anticipate that we'll find more and more value in the data sets available."

"In the near term, we're looking for electronic health records that will help us determine which procedures or devices are the safest and result in the fewest readmissions. Studying such information will help us improve the patient experience and provide more cost-effective care over time."

Dignity Health, which features more than 40 hospitals and healthcare centers in California, Arizona, and Nevada, sees value in the data Cal INDEX is expected to collect, he said.

"From a provider perspective, the idea here is very simple: The more we know about our patients, the better care we can deliver," Dean says.

"We think Cal INDEX can provide doctors and nurses immediate access to health information at the point of care that allows them to make smarter clinical decisions and provide better care with better outcomes for patients. By working together instead of in silos, we can reduce costs by eliminating redundant tests and paperwork."

Hoosier HIE Thriving
In operation for a decade, the Indiana Health Information Exchange is one of the oldest and most successful HIEs in the country.

John Kansky, interim president and CEO of the Indiana Health Information Exchange, says he and his colleagues are well-aware of the necessity to craft an HIE business model capable of delivering value to the subscribing organizations that keep IHIE afloat financially. "There's a lot of focus on health information exchange sustainability, and it's a lot of work," he says.

Kansky notes that one of the first HIE projects in the country, launched with grant money in Santa Barbara, CA, failed, mainly because of a lack of long-term planning and outreach to potential sources of financing.

He says HIE projects started with grants or other finite seed money are risky without a solid business model designed to eventually achieve self-funding. "You've given yourself a runway, and when you get to the end of the runway, you better have a way to demonstrate value," he says.

Cal INDEX officials should already be approaching as many potential subscribers as possible, Kansky says. "'What would this exchange have to do for you in three years in order for you to pay for it?'" he said. "That's the question they should be asking everyone."

Indiana's HIE built a sustainable public-private business model by offering data and data services to a wide range of healthcare industry stakeholders. "We have multiple services to multiple sectors in healthcare," Kansky says, noting that IHIE subscribers include physicians, hospitals, laboratories, imaging centers, payers, and nursing homes. IHIE officials are constantly eyeing new markets, including self-insured employers, patients, and home care organizations.

In addition to having a large portfolio of data services to offer, successful health information exchanges must focus on establishing data use agreements with the organizations that are providing the data, Kansky says.

"When you agree to participate and pay fees, you also agree to provide data… It's not our data. There's this whole concept of data governance," he says of the process involved in setting rules for the use and sharing of HIE information. "Your partners absolutely need to trust you [and know] how the data is going to be used and not used."

Thinking Big
No matter how well a state-based HIE is designed and managed, it will have inherent limitations and will likely be unable to slake the thirst of clinicians seeking "the complete picture" of their patients, according to Brian Baum, CEO of West Friendship, MD-based vitaTrackr Inc.

"Counter to the Indiana experience, I think the state-based health information exchanges… are building an infrastructure for yesterday's healthcare," he said this week.

Baum points out that Americans are not only mobile, with many people moving from state to state several times over the course of their lifetimes, but they are also increasingly drawing healthcare services from nontraditional sources such as retail clinics and telemedicine.

Gathering up all of the jigsaw pieces that constitute "the complete picture" of a patient requires an integrated, national effort."

"It's just going to get exponentially worse going forward," Baum said of the growing number and variety of sources of information on individual patients such as wearable devices. "We're at the cusp of the industry having a flood of information."

He believes state-based health information exchanges will face an increasing challenge in gathering up all of the "baseline data that becomes the predictor of health," including blood pressure, weight, and cholesterol values. "That data is going to be increasingly coming from a more diverse set of sources," Baum said. "It's just expanding at a rate that we can't even project."

The vitaTrackr CEO says health information exchanges are an essential part of the drive to adopt population management techniques that will "move the needle" of American health, but the HIE future is national in scale.

"Ultimately, healthcare data is going to have to plug into a larger national infrastructure," Baum said. "You've got to enable an environment where in order to succeed in healthcare you have to be connected."