The most recent annual report that tracks organizations working on health information exchange initiatives across the country provides new specific detail on a variety of areas impacting this industry. The 2009 report, "Migrating Toward Meaningful Use: The State of Health Information Exchange," (Report) was released by eHealth Initiative.
The Report states that not only has there been a sharp increase in the number of organizations involved in health information exchange initiatives (HIEs), but more HIEs are reporting that they are not as dependent on federal funding. According to the Report, there are a total of 193 HIEs currently pursuing health information exchange efforts throughout the country. Although HIPPA-related issues of privacy and confidentiality have risen as major challenges, HIEs also face significant challenges in developing sustainable business models.
Typically, HIEs may be structured in a variety of ways, including nonprofit corporations, for-profit corporations, limited liability companies, partnerships and contractual "virtual" models. The Report indicates that for a majority of HIEs it took two to three years to become operational, although this time period lasted as long as four or more years in some instances. The amount of start-up funds received by the HIEs participating in the survey varied considerably from less than $200,000 to more than $5 million. The primary source of start-up funding was from state government grants and contracts, with hospitals closely following as a primary source of start-up funds. Federal government grants and contracts were ranked third as a source of start-up funding for HIEs, which represented a shift downward from prior years when the federal government was the top source. For operational HIEs, the sources of ongoing revenue remained mostly unchanged from 2008. Hospitals, physician practices and private payers were cited as the top three sources for ongoing revenue for HIEs. Significantly, there was a decrease in ongoing funding from public federal sources such as federal government grants and contracts and Medicare/Medicaid. The majority of HIEs, however, indicated that they did not depend upon federal funding during the most recent year.
The Report highlights that, although most HIEs did not depend upon the federal government for sustainability, many are keeping a keen eye on funds that may be available as part of the American Recovery and Reinvestment Act of 2009 (Act), the federal stimulus package passed in February 2009. As part of the Act, Congress enacted legislation designed to promote health information technology development and information exchange. Included was a stimulus intended to be used to increase the use of electronic health records by physicians and hospitals, known as the Health Information Technology for Economic and Clinical Health Act (HITECH).
The White House administration and Department of Health & Human Services recently announced that grants totaling approximately $598 million will be available beginning in 2010 to establish around 70 health information technology regional extension centers to provide technical assistance and support to healthcare providers in their efforts to become meaningful users of electronic health records. Another $45 million will be available in subsequent years for such regional extension centers, which must be affiliated with a nonprofit organization. In addition, it was announced that $564 million will be awarded through state cooperative agreements to support efforts to achieve widespread and sustainable health information exchange within and among states and to develop a nationwide system of health information networks. These two federal programs (Health Information Technology Extension Program and State Health Information Exchange Grant Program) will account for more than half of the $2 billion set aside in the stimulus act for health information technology grants and programs.
Of the 150 HIEs providing information for the Report, 72 hope to receive stimulus funds, and 18 are sure that they will "definitely" will receive funding through the stimulus act. Noteworthy was the response that 32 HIEs have considered becoming regional extension centers and are currently prepared to do so if selected. An additional 27 HIEs would need more preparation or support if selected to be a regional extension center. Although a majority of HIEs did not depend upon federal funding during the most recent fiscal year, many are hoping to directly benefit in the next few years from the federal government's interest in health information technology and available stimulus funds.
A detailed look at the availability of tax-exempt status for nonprofit HIEs, such as regional health information organizations (RHIOs), can be found at this link.
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