The federal government has pushed health information exchange incentives onto the healthcare industry, providing more than $26 billion to promote the adoption of HIEs among providers. However, barriers to adopting HIEs — largely the lack of interoperability — still remain.
Niam Yaraghi, a fellow in the Brookings Institution's Center for Technology Innovation, writes that interoperability, and subsequently HIEs, are more of an economic and political issue than a technological one. He writes, "As long as the long-term economic benefits of all the medical providers are not adequately addressed, neither the development of new IT standards, nor allocating more financial incentives, would drive them to effectively engage in the electronic exchange of medical information."
Mr. Yaraghi writes that IT systems are theoretically beneficial for cost savings, such as reducing the likelihood of reordering tests, since the physician can see what tests have previously been ordered. However, in the current fee-for-service model, reducing the number of tests ordered equals a reduction in revenue. "Federal incentives to promote interoperability will certainly cover the initial investments and potential losses, but are very unlikely to cover the future reductions in potential revenue," he writes.
Additionally, providers do not have an economic interest to use EHRs because "providing better care at a lower cost is not necessarily their best financial decision," Mr. Yaraghi argues. While using EHRs and HIEs in patient care may be beneficial for the patient, and even the hospital's revenue stream, providers are not directly rewarded for their use of the technology. The provider has created financial savings for the hospital but does not see the return to him or herself directly.
In his paper, Mr. Yaraghi outlines a new HIE business model that generates revenue from two sources: real-time data services to different healthcare providers and asynchronous data analytics and customized reports.
The model reflects successful strategies of the financial sector, according to Mr. Yaraghi, and creates revenue streams by independent, for-profit businesses that create value by analyzing raw healthcare data and turning it into summaries that can be used. Such a model is self-sufficient, so HIEs would no longer rely on federal and state financial support.
More articles on HIEs:
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Senators question HIE funding as implementation lags
Physicians who use HIEs less likely to order repeat tests