Healthcare in the United States is entering a new era of collaboration between payers and their provider networks. Recent regulatory reforms requiring technology use, information exchange and new payment structures have created an environment where data sharing is a must. All stakeholders now have more incentive to work together to achieve federal and proprietary cost and quality goals.
Some are connecting with providers through health information exchanges (HIE), of which there are several variations. Payers should be particularly cognizant of whether they operate on open or closed architecture, and if they have a clinical data repository.
Open-architecture HIEs tie together multiple systems, many of which are using different vendor solutions, and there are both publicly and privately funded versions. State HIEs commonly fall into this category, and would be considered public. There are also some very large region-wide private HIEs, and some that are smaller and more local. Click here to see profiles of a dozen more successful HIEs.
Most health systems operate in a more closed environment where they share information seamlessly among owned entitles or like systems, and can also transfer information in and out of their systems using a continuity of care document (CCD). Some of them may collaborate and set up a HIE to manage this exchange of data.
There is another variation of HIEs of which payers should be aware. Some HIEs are designed as a pass-through to exchange information among entities. Others have a community data repository, which aggregates data for population health analyses and community-wide quality reporting.
While each of these variations have their value to payers, the more open architecture solutions with clinical data repositories may be the most compelling, as they provide a means of connecting their providers who are using more than 400 electronic health record solutions, and aggregating data among them. This solution also provides a means for complying with regulations like the Affordable Care Act’s (ACA) requirements for medical loss ratios (MLRs).
A common concern is about the sustainability of the public, open architecture HIEs. Since most HIEs were started entirely with grant funding, payers are concerned that they may be unable to transition to a financial position where the majority of revenues are based on fees collected for services rendered. In fact, this is possible and, according to the eHealth Initiative and POCP research, in 2011 out of the 196 HIE initiatives that responded to the annual survey, 24 were sustainable, and another 51 to 59 were operational but not yet sustainable. So, sustainability is possible but certainly not uniform at this stage of development. An investment by payers will certainly help.
Payers should consider such an investment, as sustainable HIEs strike a compelling balance between cost and quality, and supporting them is becoming a powerful vehicle for achieving payers’ strategic goals of growth and profitability. But this hasn’t always been the case. Until recently, payers have been content to sit on the sidelines of HIE evolution. The perception of differing business goals combined with the uncertain business models of many HIEs gave payers plenty of reasons to shy away.
The healthcare landscape looks different now. There is widespread use of health information technology (HIT); more standards and specifications for exchanging information; and a stronger focus on care management, care coordination and care transitions. These developments and the requirements to form accountable care organizations (ACOs) are driving payers to invest in HIE.
Where payers were once reticent to work with community and regional HIEs, they are now more willing to come to the table and even to invest. Payers can leverage HIE investments for such quick wins as:
• Addressing the demands of large employers who are seeking to obtain more value and lower costs from their provider network. Employers are focusing more on quality and efficiency forcing health plans to work with providers to effectively manage the health of their population, and provide the measures to prove it.
• Supporting ACOs. Payers are viewing accountable care as the next generation of value-based payments; a key tool to control medical expenses. Commercial payers are a major source of growth of ACOs. It’s estimated that the majority of the 500-1,000 ACOs expected to be in operation by 2014 will have commercial health plan support. HIE capabilities are required to support accountable care organizations (ACOs).
• Improving quality by investing in IT and simultaneously complying with medical loss ratios. Certain investments in IT that facilitate HIE may be allocated to a payer’s medical expenses, thereby helping the payer to meet the minimum loss ratios required by the ACA to avoid paying out premium rebates to members.
So how are payers pursuing HIE? Payers with access to the capital needed to support HIE are typically taking two approaches:
• Working with HIEs demonstrating long-term viability. Payers will only engage after an HIE shows it has a substantial footprint in its community and has adopted the attributes of a sustainable business. Active examples include Rochester Regional Health Information Organization, Indiana Health Information Exchange and the Wisconsin Statewide Health Information Network.
• Investing in HIE technologies. Some payers are taking more control over the health information exchange infrastructure. Companies like Aetna, United Health, WellPoint and other leading health insurers are extending their portfolios to include the HIT needed to support population health and care management functions. These acquisitions are helping build the foundation for the ACOs in which they are making substantial investments.
Given these developments, some large payers are armed with assets that surpass the capabilities of the closed HIE vendors. These payers now have a solid exchange infrastructure and have access to claims on millions of members. Using these data, clinical decision support (CDS) technologies can produce actionable communications to providers about potential gaps in care within their patient panels. When the claims data are combined with clinical data from electronic health records (EHRs), CDS applications become even more meaningful to clinicians at the point of care. Whether they know it or not, payers and HIEs together are accumulating the claims and EHR data assets needed to operate the most effective population health and CDS applications.
Interestingly, this puts companies like Aetna, United Health and other large payers in a powerful position with respect to larger health systems that have embraced a closed HIE model inherent in technologies like Epic, Cerner and NextGen. These health systems will at some point need access to claims repositories and CDS technologies to support their ACOs. Considering the large payers are investing millions of dollars to aggregate and exchange electronic patient records sourced from claims and EHRs, and the EHR vendors provide the applications used by care providers, these giants will find themselves having to work together to enable their mutual stakeholders to share data.
The takeaway from all of this is that payers are beginning to recognize that a robust HIE infrastructure is critical to the future success of their provider networks. Some payers have decided to provide the HIE technologies themselves, but others see teaming up with a community HIE as the best strategy. After diving into these waters and swimming around a bit, many payers are realizing that these new capabilities and payment options can be used to offer physician groups an alternative to the large health system.
A payer-supported HIE, accompanied by one or more ACOs, can build trust with independent providers by allowing them a level of autonomy unavailable to those choosing to align with a large health system. It won’t be much longer before we see this new breed of HIE take hold. The open networks, infused with massive amounts of clinical and administrative data, will elevate the standards for HIE. When this occurs, the playing field will be leveled and unaffiliated providers and facilities will have placed themselves in a more comparable—and competitive—position with respect to the data exchange capabilities of the integrated delivery system behemoths.