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Electronic Health Information Exchange Poised for Major Growth, Experts Say

By Nellie Bristol, CQ HealthBeat Associate Editor

February 8, 2012 -- While progress has been slow on sharing patient health information electronically, experts recently said that new payment and service delivery models could drive rapid adoption in the next several years.

"We want to see exchanges take off this year," said Claudia Williams, director of the State Health Information Exchange for the Health and Human Services Office of the National Coordinator for Health Information Technology. She spoke at an event sponsored by the Brookings Institution.

Policy analysts have long dreamed of a system in which basic components of the health care system—hospitals, doctors, pharmacists, insurers, nursing homes and so on—are tied together in an electronic data network that can instantly share clinical data and handle reimbursement claims. The aim is to ensure speedy and accurate transmittal of test results, medical imaging, prescriptions and other medical data, and so avoid duplicate testing and medical errors that occur from inaccurate or incomplete information.

For example, one major barrier to this information exchange is a business model based on payments for volume of services that rewards providers for doing duplicate tests. "In a health care system that pays for volume and not quality, it's very rational not to see a lot of exchange occurring," Williams said. "There's not a strong business case under that model."

But as changes to the health care system encourage greater coordination of care, "we're seeing a great increase in interest and a great increased focus in exchange, and really the value case is there," she said.

Janet Marchibroda, chairwoman of the Health Information Technology Initiative at the Bipartisan Policy Center, agreed. "Right now we reward doing more, volume as opposed to quality and outcomes, so it makes no sense for a hospital or a physician from a business standpoint to check to see whether a lab test result has already been done or an MRI—one just does one over. So we've got to tackle that first, and that's probably the biggest thing," Marchibroda said.

While the federal government has long been interested in encouraging both information exchange and electronic health records, difficulties in establishing common digital communication standards and ensuring patient privacy have slowed the effort.

"We're not in great shape," Williams said. She said that "even the most basic care coordination tasks like getting a discharge summary when your patient is discharged" from the hospital occurs slowly. "We see that about a quarter of the time that occurs within two days, and almost never electronically," she added. Those summaries are critically important to improving care and reducing readmissions, she said.

In addition, only about 19 percent of hospitals have mechanisms to share clinical information outside their own systems. "We are starting at a fairly low bar, and we have a lot of improvement to make," Williams said.

Both private payers and the Centers for Medicare and Medicaid Services are encouraging new models that will require greater health data exchange, Marchibroda said. "We've got a business case on the horizon with payment reform and delivery system reform and for the first time . . . I see an appetite for coming to agreement around a set of policies [and] standards," she said.

HHS is expected to publish regulations within a month for stage two of the "meaningful use" payment incentive program to encourage providers to use health information technology to improve care and cut costs.

Under the program, eligible providers, including physicians and hospitals, that meet certain milestones, such as electronic prescribing and providing patients with electronic copies of their health information, receive higher payments from Medicare and Medicaid. Williams also said her office will publish this quarter proposed rules outlining standards for the Nationwide Health Information Exchange Network.

Brookings released a report last week that examines state health information exchanges. It found that while efforts to create exchanges have made progress, significant barriers remain. "Many states and localities have experienced difficulties in producing consensus on strategies and approaches, and identifying consistent revenue streams," the report says. "Some question whether the state level is the proper unit for [health information exchanges] given natural marketplaces centering on localities or regions. Until those problems are overcome, it will be impossible for [exchanges] to achieve their full potential."

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