Public vs. Private HIEs (Part 1)

Oct. 15, 2014
Leading HIE executives share their thoughts at the HIE landscape and different operational models in a time of uncertainty for the industry. Part 1 of this four-part series is with Doug Dietzman, executive director at the privately-owned Great Lakes Health Connect.

Health information exchanges (HIEs) are at a crossroads in 2014. A recent survey revealed that most HIEs are struggling with the financial costs of interoperability as well as building a sustainable operational model. Less than half of HIEs surveyed by the eHealth Exchange said that dues or fees were their greatest source of funding. Forty-nine percent of all HIEs surveyed said they were sustainable.

The end of federal funding into state-designated HIEs has shifted the landscape. Many public HIEs have been forced to shut down or dramatically shift gears, while others have succeeded in connecting major healthcare providers within and even across state lines. Meanwhile, some are turning to private HIEs for data exchange.

Healthcare Informatics Senior Editor Gabriel Perna spoke with four leading HIE executives –in both public and private organizations – who shared their thoughts on the challenges of running an HIE, the advantages of being public or private, where they’ve succeeded, and where they see the market headed.

Part 1 of this four-part series on HIE is with Doug Dietzman, executive director at the privately-owned Great Lakes Health Connect. Great Lakes Health Connect is a product of two HIEs—Michigan Health Connect and Great Lakes Health Information Exchange—which merged in July of this year. The statewide HIE covers 121 acute-care hospitals that include 80 percent of hospital beds in Michigan, 10,000 providers, various community organizations, and even a food bank.

Below are excerpts from HCI’s conversation with Dietzman:

The last time we spoke with you, you were Michigan Health Connect. Now you are Great Lakes Health Connect. Talk about that merger.

Yup, we were two of the largest HIEs in Michigan. We weren’t the state-designated entity for HIE and they weren’t either. We had conversations in the past (with Great Lakes HIE) about eliminating the confusion of different options in the state. It was never quite the right time. As we got into the end of last year, some of the board members were talking and said, “Let’s come to the table and refresh this conversation.” We felt like there was a reason for us to do this. In January, we signed a letter of intent that basically said assuming the engagement works well, we’ll move toward getting married. It was finalized in July.

It was centered on the fact that our missions were the same, our products and solutions were essentially the same, and the overall feeling that we could do better together what we’re each trying to do individually.

Why does the merger make sense for providers?

For those who may be in some of these communities that were divided, we had a couple of large communities that had large hospital systems that were participating in both, one, or either exchange, it caused for a lot of confusion. It just split those markets. There is a lot of value in consolidating those HIEs to just have the one. It settled things more broadly for the state in that regard since we’re so far-reaching. From a technological point of view, we’re still migrating to a single technical platform but it’s easier to exchange and you can do different things when everyone is on the same system, rather than exchanging between two different systems.

How have you been able to create a model of sustainability?

The old fashioned way. When you build a business, you say what services are needed and how can I provide those services at a price someone is willing to pay for. Many HIEs are running after the theory of health information exchange and what the book tells you have to have. “We need a master-patient index (MPI), so we’re going to build one.” “What are you going to do with it?” “I don’t know but the book says we have to have it.” They end up with this stuff built from millions of dollars of funding and then they ask if someone wants it and no one does.

We started off much more boring. One of the key issues we found was results delivery. We knocked on doors…told providers if they gave us one feed of clinical results and we’ll figure out how it needs to get out to various providers, whether it’s a paper-based practice or whatever EMR they might be using. From there, it extended into requests from hospitals to get lab orders from EMRs and we’d continue to add services like that. You don’t need an MPI to deliver results or to deliver a lab order from the EMR. There were pieces that we didn’t put into place until we needed them. When we did, there was a specific purpose and customers were willing to fund it. We’ve ended every fiscal year, as did Great Lakes HIE, in the black, based on focusing on those defined services.

Now we’re finding that as the industry continues to evolve and change, physician organizations that used to be used for contracting purposes are being required through payer incentive programs to do a whole lot more care management and population health. They aren’t prepared for or have done a lot. We’re entering that void and seeing where we can help out.  By meeting those specific needs, each organization understands that the money they are spending on the HIE values their organization.

What are the advantages you see to being in a private HIE vs. being in a public one?

The requirements for public funding mean that you have to have everyone sitting around table to be considered all inclusive. But what I saw happening way back when is the more people you have sitting around the table, the less focus you can drive. Everyone just wants their thing and you ended up sitting there talking a lot without much direction on what to build. I saw one of the advantages of being a private regional exchange is that we could stay focused. We’re serving a wide group of stakeholders but we don’t have all those stakeholders sitting at the table and helping define where we’re going. Being able to be focus in governance helped us target certain things and grow the business.

Secondly, the money is great when you have those millions coming in. However, there is just something about being scrappy at the beginning and not having the money which forces you to do the things that are important. It’s easy with coiffeurs to not be as efficient as you ultimately might want to be. If you have that money from the beginning, you’re maybe not able to look far down the curb at a sustainability model. People working with you have had it for free and it’s hard to make that transition.

Any downsides?

Well it is a great asset. When you start private and doing it with the money you are getting the money from operations, you have to build more incrementally. When you have larger dollars there are places you can go faster. Also, when you see the tension between public and private/regional exchanges, the public side will inherently have some of the state backing them. Some states have even gotten aggressive from a legislative point-of-view, mandating that you have to use the public exchange.

Do you work with the public HIE in Michigan?

We do. The state-designated entity here is the front door into the state immunization and lab records. We’re doing that with them. We’re working on newborn screening and a cancer registry with them.

Where do you see the HIE market headed? Will it stabilize, will we see more mergers, or will some HIEs die off?

Good question. I don’t know how many viable exchanges will merge verse how many will will fizzle out. There are so many struggling from a sustainability standpoint that I tend to imagine they will go away on their own accord and something will have to fill the void.

If you think about the ATM networks, every bank used to have one and you’d have trouble using a card on a particular ATM. What ended up happening are those that did a good job regionalized and merged, and now you can go to any ATM and any card will work. If you turn over your card, you’ll see the names of those networks that did a good job. You don’t need to know or care anymore who they are.

In the HIE world, we’re at the point that everyone has one and we don’t need as many as we have. Ultimately, those that have figured out the right model will regionalize and make it so you don’t need to know anymore.

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