How the incentives for HIE are misaligned against the provider

By Alex Huff, VP, Health Technology Innovation, Texas Hospital Association Foundation

It is generally agreed upon that the flow of health information between providers in the US is not where it was projected to be by now. Well-meaning stakeholders across the care spectrum and Federal regulators have been pushing against a foot-dragging EMR industry toward a set of bare minimum goals.   The explanations given as to why those goals are not being met do not address what I feel should be more of a discussion than I have seen in the discourse on the topic. There is a fundamental conflict in the system, as designed, that disincentives providers from making this a priority. Beyond the technical and financial burden of having to install and maintain interfaces, and the workflow issues with clunky patient lookups and impartial/imperfect data, there is a fundamental imbalance between the benefits of HIE to the patient, the provider, and the payer. I believe that as long as this unbalance exists, the way this initiative has been progressing, or not progressing, will continue.

A shared-savings model in which the payer must distribute a portion of their savings to the providers could offer the positive incentive the system is currently lacking while resulting in a net decrease in the total cost of care overall.

The Patient and the Payers vs. The Provider

Many in healthcare are focused on the benefit of HIE for better patient care. Having the longitudinal health record of any patient, regardless of where they present, can significantly improve the care they receive as the physicians and clinical staff have a complete picture of that patient’s medical history. This is the core will behind the push for HIE. 

There is also a clear benefit of HIE realized by the payer by lowering the cost of care. That comes not only from avoiding duplicate testing, medication reconciliation, earlier diagnosis and efficient treatment, but also through penalties in value-based care contracts that are becoming the norm. For this reason, many payers are in a powerful position when it comes to HIE.

The providers, on the other hand, are being asked to collaborate in a competitive industry. In many cases, they do so financially to their own detriment, facilitating easier transitions for patients to providers outside their organization. Moreover, the sending organization is providing uncompensated value to competitors by allowing them to use information they worked to produce (think in terms of intellectual property (IP)). On the receiving end, providers are being robbed of services they could otherwise bill for, which negatively impacts their top-line revenue. Some of the time, however, providers can conversely leverage HIEs to shift the burden of unfunded patients outbound. While that benefits those providers, in that case, the public does not benefit and it perverts the idea of HIE in that respect.

A Potential Regulatory Solution as a Thought Experiment

This imbalance in the benefit of HIE between the patient, payer, and provider could be resolved if providers can monetize their participation in HIE through fractional reimbursement, to both the sending organization for sharing test results and medical records, and the receiving organization for leveraging that information. It is true that some could argue the bundled payments of ACOs attempt to equate for this disbursement. I would argue that model has much more to do with capping payment than incentivizing providers to exchange information (although that is certainly a biproduct).   

Extracting money from the payer portion of the equation back into the actual domain of providing healthcare is a culturally acceptable idea, as payers are often seen as middlemen siphoning crucial dollars for administrative overhead (albeit at a regulated margin) away from those with skin in the game. As technology and medical advancements continue to develop more and more expensive medications, diagnostic tests, and treatments, the efficient use of those tools becomes ever more necessary to contain healthcare spending. A shared-savings model in which the payer must distribute a portion of their savings to the providers could offer the positive incentive the system is currently lacking while resulting in a net decrease in the total cost of care overall.   

Personal Health Record

I can’t discuss this topic without commenting on the disruptive and potentially game-changing factor, the portable Personal Health Record. With the ubiquity of smartphones and the necessary infrastructure already in place (see Apple’s HealthKit), the fact that each patient can become the true owner of their comprehensive health data, with full discretion and the ability to send that information to any provider they choose, is all that is needed to solve this problem once and for all.  In many cases, this is already happening, but it has struggled to gain wide use outside of the tech-savvy consumers. I would speculate that these consumers are probably also much younger and healthier as a population, which further diminishes the current impact. But make no mistake, adoption/use will continue to grow and at some point in the future, there should reach a critical mass in which it becomes the norm. If and when that happens, I believe query-based HIE fraught with patient matching issues and incomplete data will be a thing of the past.