HIEs Still In Shaky Condition

Posted on May 22, 2011 I Written By

Katherine Rourke is a healthcare journalist who has written about the industry for 30 years. Her work has appeared in all of the leading healthcare industry publications, and she's served as editor in chief of several healthcare B2B sites.

For several years, I’ve been citing dismal statistics on the growth of health information exchange networks. Perhaps, back then, I was too hard on them. After all, fledgling, starry-eyed HIE groups were facing tough odds, given how few physicians and hospitals were even wired enough to support their efforts.

Fast forward to today, and it seems little has changed. Though hospitals and medical practices are going online in large numbers, the HIE business model still seems to be shaky.  The latest evidence of this comes from a study from the Harvard Business School, which concluded that — surprise, surprise — that most HIEs still aren’t financially viable.

The study, which collected survey results from 165 HIE groups, concluded that just 75 of these organizations were actually up and running. Those 75 groups are probably working very hard, but still only reach 14 percent of U.S. hospitals and three percent of smaller medical practices. And get this: only three of the 75 groups offer a data exchange model which supports Meaningful Use standards. Wow.

Not only that, most of the HIEs studied don’t seem to have a sustainable business model. Two-thirds of the operating HIEs ended up in poor financial shape once they burned through initial hospital and physician funding, the study’s authors found.

Now, it’s worth noting that the study’s authors collected their data in late 2009 and early 2010, and heaven knows EMR penetration, interoperability and health data exchange are moving targets. If HIEs were just starting out now they might have had more momentum.

The unfortunate truth is, however, that HIEs have faced a nasty chicken-and-egg problem; if they wait for providers to get up to speed they’dllnever get rolling, but they’re having trouble making it without enough provider support.

At some point, the provider community’s going to have to decide how serious it is about data sharing, and whether leaders are willing to invest in this model over the long term.  Waffling, posturing and playing chicken (i.e. “let’s see if anyone else is willing to spend money on this”) obviously aren’t going to work.