Health information exchanges: Multiple benefits, no downside to early payer involvement

What are the pros and cons of getting to the table early on health information exchange (HIE) development and implementation? Consensus opinion is "there really is no downside," says James Bogdan, senior vice president of sales at NaviNet Inc., a real-time healthcare communications network that has created a provider/payer HIE in New Jersey in collaboration with health insurers, America's Health Insurance Plans (AHIP) and the Blue Cross Blue Shield Association. "Sitting back and watching the agenda take shape was not seen as advantageous. So there is opportunity for payers to step forward." Bogdan gleaned this and other consensus opinions serving as a panelist at the NaviNet-sponsored morning session, "Payers and HIE: Health Plans as Key Players in Reducing Costs, Improving Outcomes and Driving Adoption," during the recent AHIP conference.

The current reality is that payer involvement in HIEs has been limited to date, Bogdan told me. "Payers either (1) have not been invited to the table or (2) have been reluctant step forward and enter into those discussions." One key issue hindering payer participation is the "perception that the data that payers bring to the table is not as comprehensive or as good as what the exchanges have." A second critical issue involves money. "In a number of cases as exchanges have formed, payers have been looked to as a funding mechanism, and that obviously has a number of payers concerned or hesitant," he said.

However, the ongoing implementation of the Patient Protection and Affordable Care Act should help bridge the divide between payers and the provider community, said Bogdan. "It's hitting the healthcare delivery side, and it is hitting payers as well."

Bogdan offered the following examples of benefits that HIEs can bring to payers:

• More electronic transactions. The driving force behind HIEs is "promoting the utilization of electronic transactions," said Bogdan. "Payers have a vested interest in electronic transactions. They improve the quality of the data, and they reduce costs significantly to the extent that there are transactions taking place, as many are today, that are fax or phone calls."

• Improved outcomes and reduced medical costs. HIEs can improve payers' ability to manage outcomes and reduce medical costs because "there is a lot more data circulating," he noted. HIEs often have "a complete group of stakeholders from hospitals, physician groups and other healthcare organizations."

• Better care coordination. "Payers are actively engaged in coordinating care between transitions (e.g., hospital stays, outpatient visits, etc.) to reduce costs and improve quality," said Bogdan. "HIEs can facilitate care coordination because you have all the right stakeholders at the table, engaged."

• Potential payment reform catalyst. Payers are actively developing new payment models beyond standard fee-for-service. These include patient-centered medical homes, accountable care organizations and pay-for-performance initiatives, said Bogdan. "Under the right set of circumstances, with the right data, I think providers will be more open, more receptive to payment reform, which allows payers the opportunity to engage with them more openly."

• Improved provider relations and member satisfaction. "As electronic transactions increase, the accuracy of the information improves," said Bogdan. Consequently, there are fewer back-and-forth phone calls that can often frustrate providers and lead to upset members, he pointed out.

To succeed, HIEs need a sustainable business model, said Bogdan. "HIEs all start out with government funding. However, no one knows how long that is going to last. It may sustain an HIE's activities for a year, or it may sustain it for six months." Sustainability requires revenue sources and a strong business model, he added. The business model can vary according to the needs of the HIE, "but there seemed to be agreement that it can't be dependent on one stakeholder." HIEs also have to drive adoption, he said. Getting providers to adopt requires providing them with the "right time, right place, right information," said Bogdon. And some established HIEs haven't been able to achieve that.

Rather than initiating a pure funding discussion, payers should focus the initial discussion on finding the right sustainable model, adoption and looking at best practices," suggested Bogdan. In addition, "it is definitely beneficial for more than one payer in a region or state to come to the table. No one payer typically has enough data on its own to bring that as a huge value. But several payers can certainly do that. The payer community brings much more value than any one payer typically does." - Caralyn